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PIL against Govt for inaction in tax havens case - Govt to file affidavit by Monday; Income tax dependent agent case - SC issues notice to Sony Entertainment TV Satellite (Singapore) Pte Ltd; Income Tax (11th Amendment) Rules- depreciation on machinery and plant for water supply project allowed from April 1, 2010; Egypt withdraws preventive fee of 25% of CIF value on Indian cotton yarn and sugar; Battle intensifies in Lanka; UN perturbed about safety of civilians trapped; UNEP presents 'Champion of Earth' awards for 2009; CBEC gives addl charge of Service Tax Commissioner to Mr Sushil Solanki, Commissioner (CX); Price Waterhouse ropes in former bureaucrats; sets up Advisory Board; UK decides to name and shame tax evaders: Chancellor of Treasury; India, China key drivers of global growth: WB; India to log 4.5% growth in 2009; IMF; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Renting of Immovable Property Service Tax The Elusive Delhi High Court order English wins! Bringing India's lost wealth from tax havens: Can BJP rise up to magnitude of the Task? RBI CIRCULAR Foreign Direct Investment in India - Transfer of Shares / Preference Shares / Convertible Debentures by way of Sale - Modified Reporting Mechanism; MIXED BUZZZ Egypt withdraws preventive fee of 25% of CIF value on Indian cotton yarn and sugar; Battle intensifies in Lanka; UN perturbed about safety of civilians trapped; UNEP presents 'Champion of Earth' awards for 2009; |
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NOTIFICATION Income Tax (11th Amendment) Rules- depreciation on machinery and plant for water supply project allowed from April 1, 2010; CASE LAWS CIT, Chennai Vs M/s Chakiat Agencies Pvt Ltd (Dated: March 24, 2009) Income tax - Sec 147 - Assessee is a shipping agent - files revised return - claims deduction u/s 80-O - Revenue allows - Reassessment u/s 147 initiated for disallowing Sec 80-O benefits - held, since the reassessment is not initiated on any additional information gathered by the AO and the escapement of income is alleged on the basis of information furnished in the revised return by the assessee, such an act amounts to change in opinion - it is not allowed as per provisions of law - Revenue's appeal dismissed Revenue alleges Tribunal allows benefits despite the fact that no income was earned in foreign exchange - held, since the assessee received commission for booking cargo by contacting foreign shipping companies in foreign exchange or exporters sending the cargo abroad had entire transactions in foreign exchange paid the commission to the assessee which was converted into rupees by banks it cannot be said that the assessee did not earn its income in convertible exchange - foreign exchanged saved is foreign exchange earned - benefits allowable: MADRAS HIGH COURT; 2009-TIOL-248-ITAT-MUM.pdf + global story.pdf Infor Global Solutions [India] Ltd Vs DCIT, Mumbai (Dated : February 18, 2009) Deduction u/s 10A has to be construed with regard to the income which is directly derived from the industrial undertaking and it cannot be extended to income which is merely incidental or ancillary to the industrial undertaking. This issue is covered against the assessee in decisions of the Bombay High Court in the case of in the case of CIT vs. Sterling Foods and also M/s Pandian Chemicals Ltd. vs. CIT wherein the Hon'ble High Court has explained the term derived from and has held that it has to be directly derived from the industrial undertaking. This view had been confirmed by the Supreme Court.: MUMBAI ITAT; M/s Hindustan Aeronautics Ltd Vs ACIT, Bangalore (Dated : February 13, 2009) Income tax - Sec 115JB - Assessee claims Sec 80HHC benefits - AO first sets off unabsorbed depreciation and then allows exports benefits - Sec 154 - rectification of mistake - eligible profit for Sec 80hhc benefits becomes negative - CIT(A) agrees with the AO - held, Sec 115JB has an overriding effect and since as it is held by the Special Bench (2007-TIOL-96-ITAT-MUM-SB) , the MAT provisions themselves allow exports benefits against the adjusted book profit u/s 115JB, what may not have been allowed under general provisions of law, is to be allowed - Assessee's appeal allowed: BANGLORE ITAT; ACIT, Bangalore Vs M/s IBC Knowledge Park Pvt Ltd (Dated : February 27, 2009) Income Tax - Sec 24 Assessee is in the business of developing and selling property - AO disallows depreciation on DG sets, transformers, elevator etc - CIT(A) allows depreciation on all except elevator - held, lift also requires day-to-day maintenance and attendance - depreciation to be allowed on lift also ACIT, Coimbatore Vs M/s Lakshmi Card Clothing Manufacturing Company Pvt Ltd (Dated : December 19, 2008) Deduction u/s 80 HHC Cl. (baa) Interest, fabrication charges, service charges and miscellaneous income to be excluded from profits. Obiter dicta of Supreme Court binding precedent; While computing the deduction u/s 80HHC, Assessing Officer excluded interest receipts from profits of the business since there was no nexus between export earnings and interest income. Tribunal upheld this view following decision of Madras High Court in Dollar Apparels Vs ITO. While computing the deduction u/s 80HHC, Assessing Officer reduced 90% of fabrication and service charges in view of cl. (baa) to that section. CIT(A) decided the issue in favour of assessee following the decision of Bombay High Court in Bangalore Clothing Co. On further appeal before ITAT, the recent decision of Apex Court in the case of K. Ravindranathan Nair was brought to the notice and argued that the principle will be applicable. However, assessee cited decision of ITAT Mumbai bench in ACIT Vs Star India P. Ltd. and argued that the decision of Apex Court is not applicable. After detailed argument Tribunal distinguished decision of Mumbai bench and agreed with the Department holding that the Apex Court has given a clear cut finding on the interpretation of this provision and hence is binding on all lower authorities.: CHENNAI ITAT; |
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SERVICE TAX SECTION M/s Jay Ganesh Auto Center Vs CCE & CC, Rajkot (Dated: March 2, 2009) ST - Business Auxiliary Service - Assessee is an authorised service station and also receives incentive for facilitating auto loans to customers - demand raised and penalty imposed - held, since the assessee was under bona fide belief that their service was not covered under the taxable service, it is a fit case to invoke Sec 80 and waive off the penalty under Sec 78 - Assessee's appeal allowed:AHMEDABAD CESTAT; M/s Cinema Art, Studio & Colour Lab Vs CCE, Meerut-I (Dated: March 5, 2009) ST - photography service - refund - held, value of materials is not includable in the taxable value of service - Assessee's appeal allowed :DELHI CESTAT;
2009-TIOL-648-CESTAT-DEL.pdf + eou story.pdf M/s Uniworth Textiles Ltd Vs CCE, Nagpur (Dated: March 24, 2009) Central Excise - Clearances by EOUs in DTA in the guise of rejects - rejection of transaction value upheld - value to be determined under Rule 7 of the Customs valuation rules, 1988 - Departmental Circulars contrary to statutory provisions are not binding - Second show cause notice issued by invoking larger period is not barred by limitation:DELHI CESTAT; 2009-TIOL-647-CESTAT-AHM.pdf + hindalco story.pdf M/s Hindalco Industries Ltd Vs CCE, Vapi (Dated: October 16, 2008) Disposable Aluminium foil container is correctly classifiable under heading 76.15 as articles for table use' and is entitled to benefit of exemption notification 10/2006-CE Tribunal. Tribunal's observations Product in question is prepared from aluminum foil of a sufficient thickness manufactured after die pressing the foil into a shape of cubeoid box open from top into which the lid is placed after packing the required food items in it. Such types of articles are generally used for packing of food items to be served in railways, aero plane, out-door picnics - what is manufactured is not a conventional casserole as a lay man understands the same. Since the tariff is aligned with HSN, it has to be accepted that the recommendations of Harmonised System Committee being of a great persuasive value and have to be considered for the purpose of determination of classification. Judgment of foreign Court has to be considered where the basis is same as held by the Apex Court in the case of Godhra Borough Municipality vs. Godhra Electricity Co. Ltd. reported in AIR 1968 SC 1504. Explanatory note given under the Chapter 73 to cover the table-ware and kitchen ware have to be considered and, therefore, the product manufactured by the appellant is correctly classifiable under heading 76.15 as claimed by the appellant. It is also not disputed that primary use of the product manufactured by the appellant with lid is for serving meals on the table. Further, it also cannot be said that a primary purpose in such cases is packing and not serving meals. Anything used for packing does not get covered by Heading 76.12 as a container . Another point that goes in favour of the appellant is that the container under Heading No.76.12 are mainly to be used as a container whereas as already mentioned main end use of the appellant product is for serving food in Railways/Air-crafts. Therefore, on merit, the classification claimed by the appellant under heading 76.15 has to be upheld. Limitation : In view of the fact that department had been informed of the manufacturing process, claiming exemption and classification declaration were filed and also there was a dispute regarding CENVAT credit on the very same goods, which was adjudicated and there is an order of the Commissioner (Appeals) dt.24.3.05 on this issue, extended period cannot be invoked and penalty is not leviable.:AHMEDABAD CESTAT; M/s Track Pack (India) Ltd Vs CCE, Noida (Dated: February 16, 2009) Central Excise - classification - self adhesive Hologram Sticker / Sheets and Holographic film is classifiable under heading No 3919.00 - demand under extended period is not maintainable.:DELHI CESTAT;
CUSTOMS SECTION NOTIFICATION Govt imposes anti-dumping duty on import of Cold Rolled Flat Products of Stainless Steel for six months;
DGFT amends policy for import of radio communication equipment; CASE LAWS DCW Limited Vs CC, Tuticorin (Dated: March 16, 2009) Customs Import DEPB Licenses Fake/Forged Licenses Limitation Extended Period The demand under extended period can be sustained only if it is established that the transferees had knowledge that the licences purchased by them were fake/forged, that the importers were guilty of any suppression or willful misstatement of facts with intention to evade payment of duty or they were guilty of collusion. There is not even a whisper that the importer had knowledge or reason to believe that the licences purchased from the broker were fake/forged. In these circumstances, the extended period of limitation is not attracted against the appellants. (Para 2): CHENNAI CESTAT; |
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