Tax Evasion - Canada Ishtyle! (See 'DDT')

Service tax - Air Travel Agents - taken for a ride? (See 'DDT' column')

RBI projects 6% growth in current fiscal but hints at worsening perception for manufacturing;

India-Syria DTAA: Anti-abuse provisions inserted in revised DTAA;

No Service Tax on Renting of Immovable Property – Delhi High Court order not yet available in public domain;

Spain can become major trading partner of India: CII Study;

UNEP urges Govts to invest in 'new green deal';

Balwinder Singh, IPS of AP Cadre, joins CBI as Addl Director;

Telgi, one police official and 7 others sentenced to RI in fake stamp paper racket case;

TIOL COMMENTARY

ddt 21 April.pdf

Air Travel Agents – taken for a ride;

stgst.pdf

Service Tax: Does Revenue really need power of arrest?

editorial.pdf

Tax Haven issue: Our political parties need to watch rising temperature of vox populi!

RBI CIRCULAR

rbi08cir062.pdf

External Commercial Borrowings Policy – Liberalisation Issue of Guarantee for operating lease;

MIXED BUZZZ

mbuzz0407.pdf

India's tele-density takes a jump in March, 2009;

mbuzz0406.pdf

RBI projects 6% growth in current fiscal but hints at worsening perception for manufacturing;

mbuzz0405.pdf

Spain can become major trading partner of India: CII Study;

mbuzz0404.pdf

UNEP urges Govts to invest in 'new green deal';

Press Release.pdf

India-Syria DTAA: Anti-abuse provisions inserted in revised DTAA;

CASE LAWS

2009-TIOL-190-HC-MUM-IT.pdf

CIT, M umbai Vs Kotak Mahindra Finance Ltd (Dated: March 25, 2009)

Income tax - Sec 32 - Assessee is into leasing business - purchases breakers and leases out the same - claims depreciation - AO disallows on the ground that the breakers were purchased towards the end of the FY and were never 'used' for the purpose of business - Tribunal disagrees with the AO and CIT(A) on the basis of the fact that the depreciation can be allowed for the reduction in the usable value of assets due to wear and tear, efflux of time and obsolescence - allows the relief to the assessee - held, the expression ''used'' does not mean actual use of equipment by the assessee - as long as assets are used for the purpose of business, it is to be considered valid for claiming depreciation. Since the assessee is into the leasing business and had leased equipments and earned rental income against them, it is to be accepted that the assessee had ''used'' the leased equipment for the purpose of business - Revenue's appeal dismissed: BOMBAY HIGH COURT;

2009-TIOL-241-ITAT-MAD.pdf + tds story.pdf

DCIT, Chennai Vs M/s Venkat Shoes Pvt Ltd (Dated : March 06, 2009)

Income Tax – No TDS on payment for services rendered abroad - when there is no income chargeable to tax the question of deduction at source does not arise: the services by the non-resident were outside India and as per the provisions of law in this regard, such amounts are not exigible to tax in India. As per the provisions of Income Tax Law in this regard, such amount is not exigible to tax in India. The receipt in the hands of the recipient can also not be treated as income deemed to accrue or arise in India as per provisions of section 9 of the Income Tax Act in this regard. It is also not the case of the Revenue that the payment is not remitted directly abroad. It is also not the case that the payments were received by or on behalf of the agent in India. Hence, the sum which has been paid to the non resident here being for services rendered outside India can by no stretch of imagination be said to be payment of sum chargeable under the Income-tax Act, 1961. Hence, the provisions of sec ,195 (2) are not applicable here.: CHENNAI ITAT;

2009-TIOL-240-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s IPCA Laboratories Ltd (Dated : February 23, 2009)

Income Tax - Assessee claims deduction u/s 80IB by including Export incentives - A.O holds that such export incentives are not income derived from business of the undertaking - CIT(A) holds that export incentives are income derived from assessee's industrial undertaking and therefore eligible for deduction u/s. 80 IB - Held, assessee  eligible for claiming deduction u/s. 80 IB on the export incentives, duty drawback and DEPB received by it.

On the issue of CIT (A) allowing deduction u/s. 80HHC without reducing the amount on which assessee has claimed deduction u/s. 80IB - Held, AO is correct in computing eligible deduction of the assesses u/s. 80 HHC after deducting the deduction given to it u/s. 80 IB - Revenue Appeal partly allowed.: MUMBAI ITAT;

2009-TIOL-239-ITAT-BANG.pdf

M/s Pointec Writing Instruments Pvt Ltd Vs ITO, Bangalore (Dated : October 23, 2008)

Income Tax - Sec 80IB - Assessee is engaged in the manufacture and export of ball point pens - AO denies  deduction for duty drawback received by the assessee on the ground that the duty drawback is not derived from the industrial undertaking - CIT(A) confirms it - Held, having regard to the rule of Interpretation that where two views have been laid down, the view in favour of the assessee has to be adopted,  AO  directed to allow the deduction u/s 80IB in respect of the duty drawback - Assessee's appeal allowed: BANGALORE ITAT;

2009-TIOL-238-ITAT-MAD.pdf

Smt N Illamathy Vs ITO, Erode (Dated : January 06, 2009 )

Sec. 150(2) - Time limit for Issue of notice u/s 148 – extended time available if such notice issued in pursuance to directions issued by CIT(A)

While disposing off the appeal for A.Y. 2002-03, CIT(A) deleted the addition made u/s 41(1) and directed AO to re-open the assessment for A.Y. 1997-98 to bring to tax unaccounted commission receipt pertaining to that year. Accordingly AO initiated re-assessment proceedings u/s 148 ie. after expiry of 7 years from the end of the assessment year.

Provisions of sec. 150(1) discussed in detail along with relevant case laws and held that a notice u/s 148 for reassessment of a particular assessment year can be issued in consequence of the directions of the appellate authority even after the expiry of limitation as prescribed by sec. 149 if the reassessment otherwise could have been made and was not barred by limitation at the time the order which was the subject matter of the appeal, reference or revision in which such direction is given. Considering the legal position it was held that issue of notice u/s 148 is valid and was well within time.

It was further held that since assessee did not file any appeal against the order of CIT(A) for A.Y. 2002-03 in which such specific direction were issued to the AO, assessee is barred from questioning the validity of jurisdiction in the present appeal.: CHENNAI ITAT;

SERVICE TAX SECTION

2009-TIOL-636-CESTAT-AHM.pdf

M/s Choice Sanitaryware Industries Vs CCE, Bhavnagar (Dated: February 27, 2009)

Service tax – Service tax paid on GTA service for bringing empty containers into factory premises and tax paid on handling/agency charges at the port of export entitled for credit – Impugned order set aside: AHMEDABAD CESTAT;

2009-TIOL-635-CESTAT-BANG.pdf

M/s Grand Ashok Vs CST, Bangalore (Dated: January 12, 2009)

Service Tax – Food/beverage supplied to Airlines; the service, would indeed come under Outdoor Caterer Service – however, service tax not leviable on the values of food/beverages supplied, on which VAT already paid – Apex Court decision in BSNL Ltd. the department cannot charge Service Tax on the cost of the food/beverages supplied to the airlines. From the records, it is very clear that these costs are separable and can be identified. In respect of the food/beverage supplied to the airlines, they would amount to sale of goods and the appellant had already paid the VAT on those values. In such circumstances, Service Tax cannot be levied on them.: BANGALORE CESTAT;

2009-TIOL-634-CESTAT-DEL.pdf

M/s Bharat Heavy Electrical Ltd Vs CCE, Meerut-I (Dated: March 4, 2009)

ST - Consulting Engineer Service - Assessee receives services from non-resident companies - held, since the services were provided prior to 1.1.2005 and the non-residents have no office in India, the service is not liable to tax - Assessee's appeal allowed: DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-54-SC-CX.pdf + circular story.pdf

CCE, Mumbai Vs M/s Hindoostan (Dated: April 16, 2009)

Board Circulars are not binding on Courts – matter remanded to decide the matter keeping in view applicability/relevance of Ratan Melting case: Circulars and instructions issued by the Board are no doubt binding in law on the authorities under the respective statutes, but when the Supreme Court or the High Court declares the law on the question arising for consideration, it would not be appropriate for the Court to direct that the circular should be given effect to and not the view expressed in a decision of this Court or the High Court. So far as the clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. It is for the Court to declare what the particular provision of statute says and it is not for the Executive. Looked at from another angle, a circular which is contrary to the statutory provisions has really no existence in law.:SUPREME COURT;

2009-TIOL-633-CESTAT-MUM.pdf

CCE, Belapur Vs M/s Deepak Fertilizers & Petro Corporation Ltd (Dated: March 20, 2009)

Release of ammonia into the atmosphere by flare system or otherwise does not amount to ‘removal' in terms of rule 9(1) of the CER, 1944 – Board Circular no.246/80/96-CX dated 01.10.1996 clarifying that such gases are not liable to duty relied upon – Revenue appeal devoid of merits and not maintainable - Tribunal.

Apex Court decision in Vazir Sultan Tobacco [ 2002-TIOL-215-SC-CX ] is not apt as the issue of venting out of gases in the atmosphere was not subject matter of decision.

Revenue's contention that it is doubtful whether the ammonia gas in question was, in fact, vented out or not, as ammonia in vapour form cannot be flared by ignition is an altogether new plea which was not the subject matter of the SCN and in appeal Revenue cannot traverse beyond SCN.

No evidence brought on record by Revenue that Ammonia was clandestinely removed by respondents from factory – Commissioner(A)'s order upheld. : MUMBAI CESTAT;

2009-TIOL-632-CESTAT-MUM.pdf

Shwarde Pharmaceuticals Pvt Ltd Vs CCE, Mumbai-II (Dated: January 27, 2009)

Goods actually sold by assessee to other manufacturing units under the latter's brand name – sale is on principal to principal basis and would not attract Board Circular 813 dated 25.04.2005 or the Bombay High Court decision [2006-TIOL-292-HC-Mum-CX] – Pre-deposit ordered and stay granted.

Pharmaceutical products cleared to large scale manufacturing units under the latter's brand name in terms of s.4(1)(a) of the CEA, 1944 – lower authorities holding that these goods were to be distributed ultimately as physician samples and hence are to be valued in terms of Rule 4 of Valuation Rules r/w s.4(1)(b) – Sale is on principal to principal basis and hence Board Circular 813 dated 25.4.2005 and Bombay HC decision [2006-TIOL-292-HC-Mum-CX] is not attracted – pre-deposit waived and stay granted.: MUMBAI CESTAT;

2009-TIOL-631-CESTAT-DEL.pdf

CCE, Delhi – III Vs M/s Usha Amorphous Metals Ltd (Dated: February 5, 2009)

Central Excise - computation of duty on goods cleared by EOU in DTA under Notification No 2/95 CE - duty has to be computed by giving exemption of 50% from each of the duties of Customs -  not at the rate of 50% of the aggregate duties of customs - no infirmity in the order of Commissioner (Appeals).:DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft08not102.pdf

DGFT amends licensing authoirity of different officers subject to value limits of goods;

ctariff09_037.pdf

Govt imposes 20% ad valorem Safeguard Duty on import of Soda Ash;

dgft08cir081.pdf

Export of Sugar – reintroduction of the system of export release orders w.e.f. 1.1.2009 for export under OGL – reg.

CASE LAWS

2009-TIOL-191-HC-DEL-CUS.pdf + cus story.pdf

Bal Bahadur Vs Customs, Air Customs Officer Igi Airport, New Delhi (Dated: April 8, 2009)

Customs have to take consequences of witness turning hostile – There may be practical problems faced by the Customs officials in getting independent witnesses for the searches and recoveries made at the international airport, particularly when passengers are waiting to board flights. Still, if the prosecution has named an independent witness it will have to take the consequence of his subsequently turning hostile.

NDPS conviction confirmed – The prosecution has indeed been able to prove beyond reasonable doubt that the accused was carrying a fairly large quantity of heroin in his body when he was apprehended at the IGI Airport waiting to board a flight to Bangkok. The conviction of the petitioner for the offences is accordingly upheld.

Better legal aid to be provided - right to defence includes right to effective and meaningful defence at the trial. The right to defence includes right to effective and meaningful defence at the trial. The poor accused cannot defend effectively and adequately. Assigning an experienced defence counsel to an indigent accused is a facet of fair procedure and an inbuilt right to liberty and life envisaged under Articles 14, 19 and 21 of the Constitution.:DELHI HIGH COURT;

2009-TIOL-630-CESTAT-DEL.pdf

Siddharth Polymers & Others Vs CC, New Delhi (Dated: February 25, 2009)

Customs – Dispute regarding usage of virgin material/recycled material in signages – Documentary evidence put forth by Revenue including test reports questioned – Revenue directed to produce certification from foreign supplier that formed part of Bills of entry and also enquire with testing centre on genuineness of claims made by importer on submission of samples to testing centre :DELHI CESTAT;