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Exchange loss - fluctuation in dollar rates - Since assessee was paid advance by non-resident holding company without any obligation, it is not accrued liability - deduction cannot be allowed for notional loss: ITAT (See 'Direct Tax Basket') Cenvat Credit - Rent-a-Cab Service to employees – whether can be treated as Input Service – Argument that transportation of anything other than goods stood impliedly excluded from 'input services' not made before Bench in Cable Corporation case – Matter referred to Division Bench (See 'Indirect Tax Basket') Common input purchased in bulk to reduce cost and cenvat credit taken – when assessee embarked on manufacturing exempted goods, they reversed corresponding amount of credit – Tribunal's order allowing appeal upheld by HC, so Revenue appeal does not survive: Tribunal (See 'Indirect Tax Basket') Regulations for Courier imports and exports through electronic declaration and processing in specified Customs stations – draft issued – rush your comments (See 'DDT') SC dismisses PIL seeking direction to Govt to frame guidelines for political parties making false promises but suggests action can be taken; Ministry of Power issues stern warning to Northern States overdrawing power from Grid; Laloo, Paswan decide to skip Cabinet meeting in protest to Rahul Gandhi's friendly overtures to Nitish Kumar; What is poverty? Law Commission submits report on improving conditions of 'Have-Nots; Tally of people infected by swan flu crosses 2000-mark: WHO; Retail sale of Oseltamivir phosphate (Tamiflu) not permitted in India: Govt; Applications for Income Tax Ombudsman posts: Finance Ministry extends last date to May 15, 2009; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY CBEC's dream walk hand in hand with ADB – To implement mega projects for Scrutiny of Returns and streamlining Audit Wing; CBDT, CBEC Board Members' appointments: Will it be or will it not be ...? RBI CIRCULAR Exim Bank's Line of Credit of USD 25 million to the Government of the Republic of Mozambique; MIXED BUZZ States overdrawing power from Grid: Govt issues stern advisory; What is poverty? Law Commission submits report on improving conditions of 'Have-Nots; Slowdown effect: Anti-dumping cases jump by 17% in second half of 2008, says WTO; Tally of people infected by swan flu crosses 2000-mark: WHO; |
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2009-TIOL-283-ITAT-MUM.pdf + exchange story.pdf A M Todd Company India Pvt Ltd Vs ITO, Mumbai (Dated: March 18, 2009) Income tax - Assessee is a subsidiary of a non-resident company - engaged in export, import and contract researchm development and contract agricultural services - claims deduction for exchange loss due to fluctuation in dollar rates - AO disallows and CIT(A) agrees with him - held, there was no obligation for the holding company to pay advance to the assessee company. The holding company has parked some money with the assessee, which has been described as advance by the assessee company and the said advance has been reflected in the Balance Sheet against the holding company. There is no liability of the assessee to pay to the holding company on account of any transaction by way of sale or import or by way of any loan in respect of which the assesses could be said to have incurred the liability at the end of the previous year. Thus it is not a case of accrued liability unlike the facts in the case of Woodward Governor - notional loss is not an admissible deduction - Assessee's appeal dismissed :MUMBAI ITAT; Lokpriya Housing Development Pvt Ltd Vs ITO (Dated: February 11, 2009) Income Tax - Section-147 and penalty u/s 271(1)(c) - Assessee engaged in the business of Real Estate development - follows project completion method of accounting - declares nil income - AO reopens assessment beyond the statutory time limit – CIT(A) confirms the order and also confirms the penalty u/s 271(1)(c) - Held, , for the A.Y 1990-91 and 1991-92 the reopening is bad in law because the revenue could not produce the exact reasons for reopening despite repeated opportunity given by the bench and has ultimately come out with a letter stating that the records for AY. 1989-90 are not traceable, for the A.Y 1990-91 and 1991-92 the reasons recorded are not available on record. No permission as required is stated to have been obtained by the AO prior to issue of notice u/s. 148 for the A.Y 1990-91 and 1991-92 in terms of section 151 and the addition itself is made on protective basis, so the question of coming to conclusion that income escaped assessment does not arise, for permitting reopening .For assessment year 1989-90, The AO cannot frame an opinion that the income chargeable to tax has escaped assessment as he had not information of the return filed by the assessee It is well settled that there should be reasonable belief and it should be based on record, for coming to a conclusion that income has escaped assessment when the reason cannot be produced, there is no other alternative but to draw adverse inference and agree with the contention of the assessee. Assessments of all the A.Y under appeals is bad in law .Contention of the assessee upheld. The penalties levied based on those assessments have no leg to stand. Assessee Appeal allowed.:MUMBAI ITAT; DCIT, Mumbai Vs Hinduja TMT Ltd (Dated: March 25, 2009) Section 234D is applicable only with effect from the assessment year 2004-05 and interest under section 234D cannot be charged for earlier years, even though regular assessment is framed after June 1, 2003; in the case of ITO Vs. Ekta Promoters P.Ltd .. ( 2008-TIOL-337-ITAT-DEL-SB ) the Special Bench of the Tribunal has held that section 234D is applicable only with effect from the assessment year 2004-05 and that interest under section 234D cannot be charged for earlier years, even though regular assessment is framed after June 1, 2003. The tax payable by a company who is entitled to tax credit and set off under MAT would be tax payable on the current income less the set off of credit available to the assessee; The first stage for computation of advance tax for any company is to estimate the current income. After determination of current income, the assessee is obliged to work out the tax payable on the current income. This is the stage when the assessee has to take into account the tax credit available under section 115JAA . The tax payable by a company who is entitled to tax credit and set off under MAT would be tax payable on the current income less the set off of credit available to the assessee. That will be the tax payable in advance by the assessee out of which tax deducted or collected at source would have to be deducted and the remaining amount would be tax payable in advance. Therefore, the calculation of interest shall have to be made in case there is any shortfall of advance tax so payable by the assessee.:MUMBAI ITAT; DCIT, Mumbai Vs M/s Dalal Street Investments Ltd (Dated: January 30, 2009) Income Tax – Penalty u/s 271(1)(c) - Assessee company trades in shares and securities – files return claiming various deductions - AO disallows u/s 14 proportionate interest paid on funds utilised for earning exempt dividend income - also disallows loss, alleging dividend stripping - Penalty proceedings initiated - CIT(A) sets aside the AO's order - held, Sec 14A is not applicable to the case as there is no direct nexus between the funds invested in securities from which tax free income was derived and the funds borrowed – preconditions for imposing penalty are also not fulfilled - CIT(A) order upheld - Revenue's appeal dismissed:MUMBAI ITAT; DCIT, Bangalore Vs M/s Cranes Software INT Ltd (Dated: March 25, 2009) Income tax - Sec 154 - Assessee claims deduction u/s 80HHE - AO allows but later notices assessee had received interest from FDs - TDS on interest was claimed and allowed - AO takes the view that since interest is income from other sources it needs to be reduced from profit of business to arrive at deduction u/s 80HHE as the error had allowed excess benefits - Proceedings u/s 154 initiated - held, since the assessee receives interest on FDs and also pays interest on borrowed funds earmarked for business, the netting of interest is to be allowed - whether interest received on FD's kept apart for business purposes, whether business interest or income from other sources is also a debatable point, and any debatable point is beyond the scope of Sec 154 - Revenue's appeal disallowed :BANGALORE ITAT; |
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SERVICE TAX SECTION 2009-TIOL-726-CESTAT-MUM.pdf + credit storyst.pdf CCE, Nashik Vs General Mills India P Ltd (Dated: March 24, 2009) Cenvat Credit - Rent-a-Cab Service to employees – whether can be treated as Input Service – Argument that transportation of anything other than goods stood impliedly excluded from “input services” not made before Bench in Cable Corporation case 2008-TIOL-1180-CESTAT-Mum – Matter referred to Division Bench.:MUMBAI CESTAT; M/s Vipul Travels Vs CCE, Daman (Dated: March 3, 2009) ST - Rent-a-Cab service - demand and penalty - assessee contesting only penalty under Sec 78 - held, since the assessee was keeping only pencil-written accounts so that the same could be manipulated and their plea that service providers only registered under the Motor Vehicle Act are covered under this category is not acceptable - penalty upheld and appeal dismissed :AHMEDABAD CESTAT;
2009-TIOL-729-CESTAT-MUM.pdf + concept story.pdf CCE, Aurangabad Vs M/s Concept Pharmaceuticals Ltd (Dated: March 24, 2009) Common input purchased in bulk to reduce cost and cenvat credit taken – when assessee embarked on manufacturing exempted goods, they reversed corresponding amount of cenvat credit – Tribunal's order allowing appeal upheld by High Court, so Revenue appeal does not survive Tribunal decision in Concept Pharmaecuticals Ltd. Vs. CCE, Aurangabad 2006-TIOL-638-CESTAT-MUM referred.:MUMBAI CESTAT; M/s Pololight Industries Ltd Vs CCE, Vapi (Dated: February 2, 2009) Central Excise - classification - non-cellular rubber sheets used for manufacture of foot-ware - the expression "used in the manufacture of footware" used in TSH 4008.21 refers to the intended used of the goods or the ordinary use of the goods or the kind used in the manufacture of heels & soles etc. The same is only description of the goods required to be classified under the said sub-heading and is not restricted to only those clearances of sheets which are ultimately actually used in the manufacture of heels, soles etc.:AHMEDABAD CESTAT; CCE, Vapi Vs M/s Apar Industries Ltd (Dated: March 26, 2009) Central Excise – Interest not payable on differential duty paid through supplementary invoices issued due to price variation clause:AHMEDABAD CESTAT;
CUSTOMS SECTION Sheth Impex Vs CC, Chennai (Dated: February 4, 2009) Customs – Import – Refund – Unjust enrichment – Documentary proof – Fresh evidence before Appellate authority - The original authority had directed the appellants to establish that the refund claimed had not been passed on to their buyers and to submit a certificate from the Chartered accountant that the impugned amount was recorded in their books of accounts/balance sheet as “Receivables” from Customs. At no stage during the proceedings, the appellants claimed that their financial records had shown the amount claimed as “Receivables” from Customs. In the circumstances, the Chartered Accountant certificate produced before Commissioner (Appeals) cannot be admitted in terms of Rule 5 of Customs (Appeals) Rules, 1982. Appeal dismissed. ( Para 4) :CHENNAI CESTAT; |
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