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Serious slowdown in credit offtake to MSME may hurt GDP: FIEO CBDT shortlists vendors for issuing biometric PAN cards; UN welcomes pause in Lankan military operations to save civilians; Calicut Airport Customs seizes 7 kg saffron worth Rs 13 lakh from pax coming from Dubai by Air India flight; Emergency declared in Bangkok; PM's carcade attacked; OECD Composite Leading Indicator indicates 'reinforced' slowdown in India; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Services provided to SEZ developers/units by Small Scale Service providers – Value to be included or excluded; Alliances are instruments to make history! Tax Reform: Let's focus on two-sided 'bad penny' - corruption and evasion! MIXED BUZZZ Serious slowdown in credit offtake to MSME may hurt GDP: FIEO UN welcomes pause in Lankan military operations to save civilians; |
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CBDT issues transfer order of four CITs; CASE LAWS Richardson Hindustan Ltd Vs CIT, Bombay (Dated: March 18, 2009) Income tax -Sec 35C benefits - Assessee is a 'vicks' manufacturer - uses mentha oil extracted from a plant as input - runs a Mentha Research Demonstration Centre - also sets up its own farm and assists local farmers for scientific cultivation of "Mentha Arvensis" - claims weighted deduction of expenses u/s 35C(b) - AO disallows and Tribunal upholds the same - held, even if a wide interpetation to Sec 35C is given, yet expenses on research, distillation services and scientific farming cannot be brought into the ambit of the term "goods, services or facilities" as contained in section 35-C (b) of the Act - Assessee's appeal disallowed :BOMBAY HIGH COURT; M/s Procter & Gamble India Ltd Vs CIT, Bombay (Dated: March 18, 2009) Income tax - Sec 35C - Assessee claims weighted deduction for depreciation on motor vehicle used for dissemination of information - held, since it is related to the activities covered under this Section, weighted deduction u/s 35C cannot be disallowed - Assessee's appeal partly allowed :BOMBAY HIGH COURT; Ingersoll Ran India Ltd Vs CIT, Bombay (Dated: April 4, 2009) Income tax - Sec 15 of Payment of Bonus Act - Assessee is a manufacturer - claims deduction for allocation made to the reserve fund for this purpose - AO disallows - held, since the deduction claimed is not an accrued liability but only a provision under Section 15(1) of the Payment of Bonus Act to meet a future liability, if any. It is, therefore, not certain nor is it capable of being ascertained with reasonable certainty. It is a contingent liability. The judgment in Bharat Earth Movers (2002-TIOL-123-SC-IT) is clearly distinguishable and, therefore, not applicable. Assessee's appeal dismissed:BOMBAY HIGH COURT; 2009-TIOL-220-ITAT-MAD.pdf + cairn story.pdf M/s Cairn Energy India Pvt Ltd Vs ACIT, Chennai (Dated : February 20, 2009) Income tax - TDS - Assessee is an Australian Company, engaged in prospecting and exploitation of mineral oil - signs production sharing contract (PSC) with other partners, including Govt of India - reimburses expenses to parent company on actual cost basis - AO disallows expenses u/s 40(a)(i) as TDS was not deducted on the payments - AO takes the view that there was a profit element in the sum reimbursed and the same is liable to tax deduction at source - CIT(A) agrees with the AO - held, ++ What is chargeable to tax is the income of a person. A sum can be said to be chargeable to tax only when it contains an element of profit. If element of profit is embedded in any payment, then the assessee is bound to deduct the tax at source at the rate prescribed or at a lesser rate allowed by the Assessing Officer. However, if there is no element of profit embedded in such payment then, it cannot be said that the sum so paid is chargeable to tax and consequently the provisions of section 195 of the Act would not be applicable. ++ Reimbursement of expenses: No income can be said to accrue or arise to the assessee; ++ Production Sharing Contract (PSC) - Sec 42: The fact that even capital expenditure is allowable as deduction under section 42 itself shows that it overrides the provisions of section 37 of the Act. Thus, the scheme of the Act makes it clear that the provisions of section 42 would prevail over general provisions of computing the income contained in sections 30 to 38. ++ The provisions of section 40 cannot be invoked where the income is to be computed under section 42 of the Act. There is no dispute that the payment was made by the assessee as per the provisions of the PSC. Particular, reference can be made to section 3.1.4 of the PSC. Therefore, the assesee is entitled to deduction in respect of payment made by it to its parent company. :CHENNAI ITAT; ITO, Mumbai Vs M/s Novartis Health Care Pvt Ltd (Dated : February 25, 2009) Income tax - TDS - Sec 194C - Assessee is into trading of cosumer health products - enters into contract with third parties for manufacture of products as per their technical specifications - Survey u/s 133A - Revenue treats the contract as works contract liable to TDS - assessee pleads that they have principal to principal relations with independent manufacturers who have their own factories, labour force and infrastructure to processs the goods as per their specification and quality standards - CIT(A) takes the view that since the tax is paid on the income by independent manufacturers, only interest u/s 201(1A) is to be recovered - held, since it is essentially a contract for sale of goods and no works contract is involved as independent manufacturers buy raw materials on their own, have their own staff and incur risk of business to meet the specifications given to them and also pay excise duty and sales tax on the finished products, it is not covered under the ambit of CBDT Circular 715 - No TDS u/s 194C - Assessee's appeal allowed:MUMBAI ITAT; |
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SERVICE TAX SECTION M/s Infinity Credit Vs CCE, Jaipur (Dated:March 4, 2009) ST - Business Auxiliary Service - Assessee is a proprietary concern - promotes home loan business of bank and earns commission - Demand - Assessee pleads that it was under the belief that a proprietary concern cannot be considered as a commercial concern - held, it is settled law that even a proprietary concern is covered under the tax net and demand with interest is confirmed but since it was under bona fide belief that it was not covered, penalty is not called for :DELHI CESTAT; CC & CCE Vs M/s Scrap Material Handling Co (Dated: February 24, 2009) ST - Cargo handling service - assessee collects material handling charges from customers - Revenue raises demand - Appellate authority holds that mere transportation of goods for purpose of processing within plant cannot be held as cargo handling service - held, no infirmity in the Appellate Authority's order - Revenue's appeal dismissed:DELHI CESTAT; M/s Superior Manpower Services Pvt Ltd Vs CCE, Raipur (Dated: February 20, 2009) ST - Assessee is a manpower recruiting agency - fails to pay tax due to financial hardship - lower authorities fail to consider the same and levy penalty - held, since the assessee has paid the tax with interest and had furnished evidence indicating financial constraints to pay the tax in time, the penalty imposed is disproportionate to the demand - penalty reduced - assessee's appeal partly allowed:DELHI CESTAT;
2009-TIOL-592-CESTAT-MAD.pdf + time bar story.pdf CCE, Pondicherry Vs G Jijith Kumar (Dated: February 11, 2009) Central Excise – refund – limitation – refund claims under Notification 32/2005 CE cannot be denied on the ground that the claims were filed beyond sixty days prescribed under the Notification if they were filed within the time limit prescribed in Section 11B of the Act - By enforcing the subject limitation of sixty days to claim refund, the policy of the government will be defeated - Notification was introduced to effectuate the Government's policy. The authorities are expected to take implemental action which subserves the policy and object of the notification. :CHENNAI CESTAT; 2009-TIOL-591-CESTAT-MUM.pdf + gold plating story.pdf CCE, Mumbai Vs Midas Techniques Pvt Ltd (Dated : March 2, 2009) Gold plating on Imitation jewellery does not amount to manufacture:MUMBAI CESTAT; M/s Alembic Ltd Vs CCE & CC, Vadodara-I (Dated : March 23, 2009) Sharko Ferrol is correctly classifiable under SH 1901.10 as Malt Extract and not under SH 3003.10 as Medicament - Tribunal decision in Coral Laboratories [ 2008-TIOL-529-CESTAT-AHM ] involving identical product and identical dispute relied upon.
CUSTOMS SECTION Notification No. 26/2009-Customs (N.T.); CASE LAWS CC, Mumbai Vs M/s Torrent Pharmaceuticals Ltd (Dated: February 5, 2009) Customs Circular 72/2002 dated 1.11.2002 does not put any embargo to the effect that the re-export should take place from the same port as the port of import – Revenue appeal devoid of merits – Commissioner(A) order upheld.: MUMBAI CESTAT; |
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