See 'TIOL TOP' for different shades of opinion on latest Delhi HC decision on levy of service tax on renting of immovable property;

Nhava Sheva Customs detects import and export of prohibited goods worth Rs 10 Crore;

CBDT Chairman to interact with 314 IRS officers through video conferencing tomorrow;

Satyam saga: Raju's favourite modus operandi was to generate false invoices to inflate sales, says CBI;

Noted author Girish Ahuja inaugurates Voice of CAs;

CBDT promotes D P Kar of 73 batch as CCIT; posts him to Durgapur;

E-payment of taxes – with efforts of Excise Department;

Shoe attack becomes rampant in India; Computer engineering student throws shoe at PM in Gujarat;

India willing to buy IMF bonds worth USD 10 bn: Montek;

Vehicle loan: RBI asks NBFCs to make recovery conditions more transparent to loan seekers;

'Digital Marshall Plan' proposed at ITU to extend broadband to all corners;

SC rules circumstantial evidence cannot be enough for conviction;

TIOL COMMENTARY

ddt 27 April.pdf + board_circular.pdf

Simplified procedure for sanction of refund of unutilized credit/rebate claims in cases of export;

tiol top_1.pdf

The dent in rent!

tiol top_2.pdf

Service Tax on Renting – A New Dimension Or Not?

tiol top_3.pdf

ST on Renting after Delhi HC decision : A case of misplaced euphoria?

guest.pdf

Service Tax Administration - Radical Reforms Required;

sunday story.pdf

Economic crisis pushes 35 mn people back in poverty in Europe and Central Asia: WB & IMF;

MIXED BUZZZ

mbuzz0425.pdf

Nhava Sheva Customs detects import and export of prohibited goods worth Rs 10 Crore;

mbuzz0424.pdf

CBDT Chairman to interact with 314 IRS officers through video conferencing tomorrow;

mbuzz0423.pdf

Noted author Girish Ahuja inaugurates Voice of CAs;

mbuzz0422.pdf

E-payment of taxes – with efforts of Excise Department;

mbuzz0420.pdf

'Digital Marshall Plan' proposed at ITU to extend broadband to all corners;

2009-TIOL-255-ITAT-MUM-SB.pdf + spl bench story.pdf

M/s Mahindra & Mahindra Limited Vs DCIT, Mumbai (Dated : April 9, 2009)

Income - India-UK DTAA - TDS u/s 195 - Assessee comes out with two Euro issues - hires services of two lead managers for various services like marketing, organisining and backroom services besides reimbursing out of pocket expenses for travelling and telephone expenses - Revenue treats the payment as fee for technical services u/s 9(1)(vii) and also under Art 13 of the DTAA - since the assessee failed to deduct tax at source, it was held as assessee in defaut u/s 201(1) - held,

++ what is pre-requisite for the Revenue to satisfy before treating an assessee in default is to find out whether the payee's income is liable to tax or not? And if it is, then the Revenue needs to find out whether the payment made by the payer is the only source of income? If yes, then it is to be verified whether the payee has paid the tax on the same. If yes, then the payer cannot be held as an assessee in default.

++ If the payee has other streams of income and the same is liable to tax, and the tax liability is more than the TDS deducted by the payer, such payment is nothing but the credit of tax paid by the payee. And if the payee has paid the tax on his entire income, then the payer even if has failed to deduct tax at source cannot be held as assessee in default as the tax dues from the payer have been realised to the Revenue's kitty.

++ What is important is that whether the payer has failed to deduct tax at source and the payee has also not paid its tax dues despite being liable to tax, in such circumstances the payer can be declared as assessee in default and can be subjected to various other provisions of law.

++ section 195 (I) casts duty on the person responsible for paying or crediting to the account of a non resident any sum chargeable to tax under this Act for deducting tax at source. On failure to deduct or pay to the Government after deducting, the person responsible is treated as assessee in default u/s.201(1).

++ "Any such person" referred to in section 201 (1) extends not only the person deducting and failing to deposit the tax but also the person failing to deduct the tax at source.

++ Where no time limit is prescribed for taking an action under the statute, the action can be taken only within a reasonable time by harmoniously considering the scheme of the Act.

++ Tax recovery proceedings are initiated only after the passing of order u/s.201 (1) and that too if the person responsible fails to comply with notice of demand u/s.156.

++ The order u/s.201(1) is akin to the assessment order,"Assessment" includes reassessment.

++ the reasonable time for initiating and completing the proceedings u/s 201(1) has to be at par with the time limit available for initiating and completing the reassessment the assessment includes reassessment.

++ The maximum time limit for initiating the proceedings u/s 201 (1) or (1A) is the same as prescribed u/s.149 i.e. four years or six years from the end of the relevant assessment year, as the case nay be depending upon the amount of income in respect of which the person responsible is sought to be treated as assessee in default.

++ Any order passed u/s201 (1) or (1A) cannot be held as barred by limitation if it is not passed within four years from the end of the relevant financial year.

++ Fees for technical services u/s. 9(1)(vii) read with Explanation 2 covers management commission and selling commission allowed to the non-resident in respect of the GDR issue. Underwriting commission does not fall within the definition of fees for technical services u/s. 9(1)(vii). Reimbursement of expenses does not have the income element and hence cannot assume the character of income deemed to accrue or arise in India.

++ If a particular amount is not taxable as per provisions of Double Taxation Avoidance Agreement, such income cannot be taxed in the hands of the non-resident notwithstanding the face that the same is taxable under the regular provisions of the Income-tax Act,1961.

++ Where the technical services are not made available to the Indian party though used by the non-resident for its benefit, the amount of management and selling commission cannot be held to be taxable as per the first DTAA with U.K. .: MUMBAI ITAT (Special Bench);

2009-TIOL-254-ITAT-MUM.pdf

DCIT, Mumbai Vs M/s B I Billimoria & Co Ltd (Dated : January 12, 2009)

Income tax - Sec 14A - Assessee is a civil contractor - borrows funds - invests in shares and properties - earns dividend income exempt u/s 10(33) and profit from properties - AO disallows part of interest paid on funds invested in shares and properties - held, interest paid on borrowed fund invested in shares is to be disallowed u/s 14A but it is to be calculated as per the method decided by the Special Bench under rule 8 and since the income in property was returned as business income the interest paid is to be allowed as business expenditure - Revenue's appeal partly allowed : MUMBAI ITAT;

2009-TIOL-253-ITAT-MAD.pdf

Shri B Babu Manoharan Vs DCIT, Tambaram (Dated : January 02, 2009)

Penalty u/s 158BFA – Failure to disclose undisclosed income in Block return – penalty upheld. During the course of search, Department found investment in construction of house, other properties, unexplained personal expenditure, unexplained gifts, undisclosed bank deposits etc. It was demonstrated that in spite of assessee getting an opportunity to come clean by filing the Block return subsequent to search, assessee did not disclose the undisclosed income in the block return and the additions were confirmed by ITAT since they were on the basis of seized materials. Element of wilfull concealment is not an essential ingredient for imposing the penalty. Decision of Apex Court in Dharmendra Textile Processors & ors. ( 306 ITR 277 ) followed.

CIT(A) justified in deciding the appeal ex parte since sufficient opportunity was provided.

Appeal of assessee dismissed.: CHENNAI ITAT;

2009-TIOL-252-ITAT-MAD.pdf + Westland Creations stroy.pdf

M/s Westland Creations Vs ACIT, Tirupur (Dated : March 31, 2009)

Income tax - When an order passed by an Assessing Officer on an issue which is still in dispute or unanswered to the point, then it cannot be said that his order was erroneous for initiating action under section 263 (review): Apart from the judicial precedents that were available before the Assessing Officer, the CIT could not rely on any other authority while exercising his revisionary powers, to point out that the Assessing Officer's order was erroneous. Though the order of an Assessing Officer is prejudicial to the interests of revenue, it cannot be taken as sole reason for initiating action under section 263, unless it was passed erroneously.: CHENNAI ITAT;

2009-TIOL-198-HC-MUM-IT.pdf

Satpuda Tapi Parisar Vs CIT, Nassik (Dated: April 13, 2009)

Income tax - Sec 206C - constitutional validity challenged and later upheld - During the period of challenge the assessee restrained by HC moved by buyers of goods liable to pay tax from collecting the tax - After winning the case on constitutionality ground the Revenue raises demand against the assessee - held, it is true that the Sec 206C cast an obgligation on the assessee to collect tax but during the operation of interim stay granted by the HC the assessee was prevented from fulfilling its obgligations. If it had done so, it would have amounted to contempt of court. Since the failure to collect tax was attributable to the disability imposed by the interim relief of the HC, Sec 206 is not attracted for this period and the demand of tax is not sustainable - Assessee's appeal allowed: BOMBAY HIGH COURT;

Order 82 of 2009

CBEC issues transfer order of 82 Addl/JCs + local transfer of 38;

SERVICE TAX SECTION

CCE, Nagpur Vs M/s Noble Grain India Pvt Ltd (Dated: January 19, 2009)

Service Tax - Self assessment - When no order capable of being appealed against, had ever been passed, it cannot be said that the assessee could file appeal against the assessment order - Refund sanctioned proper – Tribunal.

Rajasthan High Court decision in Central Office Mewar Palace Orgn Ltd. Vs. Commissioner of Central Excise, Jaipur 2008-TIOL-595-HC-Raj-ST relied upon.

Revenue appeal rejected and order of Commissioner(Appeals) upheld.:MUMBAI CESTAT;

2009-TIOL-666-CESTAT-DEL.pdf

M/s Surabhi Travels & Tours Vs CCE, Allahabad (Dated: February 27, 2009)

ST - penalty - assessee pleads illness - held, since the default is at early stage of implementation and the penalty is disproportionate, same is reduced to prevent recurrence of default - Assessee's appeal partly allowed:DELHI CESTAT;

2009-TIOL-663-CESTAT-BANG.pdf

M/s Carin Energy (I) Pvt Ltd Vs CC & CCE , Visakhapatnam (Dated: November 28, 2008)

Service tax – Storage of crude received on behalf of client and transfer through pipe lines to vessels taxable under the category of ‘Transport of Goods through pipeline or conduit service' w.e.f 01.05.2006 – Goods received from factories/premises of the Principal, storage of these goods and dispatches as per orders received from the Principal would be regarded as C & F agency only when relationship of principal and agent exists – Port fee which is a reimbursable expense cannot be subjected to service tax – Subsequent SCNs cannot be issued invoking extended period when department has knowledge of facts – Impugned order set aside:BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-670-CESTAT-MUM.pdf + Subham story.pdf

M/s Subham Polymers Ltd Vs CCE, Nagpur (Dated: March 17, 2009)

If penalty is imposed under section 11AC of the CEA, 1944, further imposition of equivalent penalty under rule 173Q of CER, 1944/rule 25 of CER, 2002 is not warranted – Tribunal.

Tribunal decision in Industrial Adhesive Enterprise vs. CCEx., Mumbai-V 2007-TIOL-1900-CESTAT-MUM referred.

Penalties under rule 173Q where no duty is involved – leniency warranted – quantum halved - Appeals partly allowed.:MUMBAI CESTAT;

2009-TIOL-669-CESTAT-MAD.pdf

CCE, Coimbatore Vs M/s Rallis (I) Ltd (Dated: January 23, 2009)

Central Excise – refund - the respondents had paid the impugned amount of duty not due at the instance of the department on a date subsequent to clearance of the goods – the order of Commissioner (Appeals) holding that the refund is not hit by unjust enrichment does not call for interference.:CHENNAI CESTAT;

2009-TIOL-668-CESTAT-MAD.pdf

M/s Hindustan Unilever Ltd Vs CCE, Pondicherry (Dated: March 11, 2009)

Central Excise – Valuation – MRP – Section 4A – Stay /Dispensation of pre-deposit – In the instant case the goods involved are not sold. So the applicability of Section 4A for assessment of the impugned goods is ruled out. Stay granted. (Para 3):CHENNAI CESTAT;

2009-TIOL-662-CESTAT-DEL.pdf

CCE, Indore Vs M/s Phiroze Sethna Pvt Ltd (Dated: February 12, 2009)

Central Excise – Benefit of SSI exemption not deniable when assessee declared functioning of three units to different jurisdictional offices – Revenues contention that assessee deliberately not declared information to all offices not acceptable when they failed to investigate the facts – Allegation of suppression not sustainable – No reason to interfere with impugned order:DELHI CESTAT;

2009-TIOL-661-CESTAT-DEL.pdf

M/s Arti Electrodes Pvt Ltd Vs CCE, Meerut-I (Dated: February 25, 2009)

Central Excise – Goods manufactured and cleared without excise registration and clearances at high value through trading firm without adequate evidence – Duty demand, confiscation and penalty upheld – First SCN issued for confiscation of seized goods and second SCN issued for demand of duty – No infirmity in invoking extended period, Apex Court decision in Nizam Sugar Factory case distinguished – Trading firm not being an assessee, penalty set aside – Penalty on PoA of trading firm set aside:DELHI CESTAT;

CUSTOMS SECTION

2009-TIOL-197-HC-DEL-CUS.pdf

B S Industries, Orissa Vs UoI (Dated: April 16, 2009)

Customs - export of chrome concentrate - canalizing the export of chrome concentrate/chrome ore through MMTC - prayer for interim relief on the ground that the contracts were entered into on 21st February, 2009 and 23rd February, 2009 based on MOU with foreign buyer on 1st April 2008 - Both these contracts have been entered into well after the policy of canalization come into force - relief prayed for by the Petitioner cannot be granted particularly since it affects the export policy of the government.: BOMBAY HIGH COURT;

2009-TIOL-665-CESTAT-MUM.pdf

M/s Nichrome India Ltd Vs CC, Nhava Sheva (Dated: January 19, 2009)

It is the responsibility of the Shipping line to see that the container is loaded on the vessel only after the receipt and verification of all the documents including the Let Export Order – Prima facie , violation of s. 40 of Customs Act, 1962 established against the shipping line – Pre-deposit ordered towards penalty imposed.

There is no evidence on record to show that the loading of the goods on the vessel was with the connivance or the directions of the exporter or the CHA nor is there any evidence to show that they have colluded with the Shipping line and have ulterior motive or malafide intention – Strong prima facie case - Pre-deposit waived. :MUMBAI CESTAT;

2009-TIOL-664-CESTAT-MUM.pdf

Deendayal Cancer Research Centre Vs CC, Mumbai (Dated: February 4, 2009)

Diagnostic centre is not a ‘hospital' within the meaning of the expression used in notification 64/88-Cus – AP High Court decision in Kailash Diagnostic & Rehabilitation Centre P Ltd. Relied upon - ROM application dismissed.:CHENNAI CESTAT;