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India-Singapore Trade Agreement: CBEC notifies safeguard rules; Income tax - deduction for warranty - provision for warranty integrally linked to sale is allowable deduction u/s 37 if an obligation is based on historical data, outflow of funds to settle obligation and sum reliably estimated: SC (See "Direct Tax Basket") Customs - Foreign Currency seized from two persons in same case - for one person, confiscation quashed and for other upheld - Appellate Authority could not have adopted a schizophrenic approach: Delhi High Court (See "Indirect Tax Basket") CBEC promotes 30 + issues transfer order of 72 Commissioners + 46 locally transferred; CBDT issues transfer order of 73 ACIT/DCITs; IOCL questions Petro and Natural Gas Regulatory Board's pricing methodology before Energy Tribunal; IAF Mig-27 crashes near Jodhpur; Pilot ejects safely; Business confidence is back: CII Survey; Hierarchy at the Supreme Court: Problem of judicial decorum; UN partners with filmmakers to give voice to women suffering in silence; Govt revokes FIPB approval given to M/s ByCell Telecommunication India Pvt Ltd; RBI reduces economic growth projection to 7.5% for next 10 years ; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Service Tax Demand Notices being served through private couriers; OECD on misuse of Indo-Mauritius tax haven route; MIXED BUZZ UN partners with filmmakers to give voice to women suffering in silence; Business confidence is back: CII Survey; |
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ORDER CBDT issues transfer order of 73 ACIT/DCITs; INSTRUCTION TDS on commission paid by MTNL/ BSNL to owners of PCO under section 194-H of Income-tax Act, 1961; CASE LAWS 2009-TIOL-64-SC-IT.pdf + sc story.pdf M/s Rotork Controls India (P) Ltd Vs CIT, Chennai (Dated: May 12, 2009) Income tax - Sec 37 - Assessee is a manufacturer of value actuators - offers standard warranty linked to sales - makes provision for warrantly - in case actual expenditure is less than the provision made for warranty, the excess sum is reversed to P&L account - claims deduction - AO disallows on the ground that it is contingent liability - CIT(A) agrees with him but Tribunal allows the appeal on the ground that the same has been allowed in the past and the same is based on historical data - however, HC rules agaisnt the assessee as it was no accrued liability - held, ++ provision is a liability that can be measured only by using a substantial degree of estimation. A provision is recognised when an enterprise has a present obligation resulting from a past event; may require outflow of resources to settle the oblogation and a reliable estimate may be made of the amount of the obligation. If these parameters are not satisfied, no provision for warranty is to be allowed as deduction u/s 37 of the I-T Act. ++ In the case of a manufacture and sale of one single item the provision for warranty could constitute a contingent liability not entitled to deduction under Section 37 of the said Act. ++ However, when there is manufacture and sale of an army of items running into thousands of units of sophisticated goods, the past event of defects being detected in some of such items leads to a present obligation which results in an enterprise having no alternative to settling that obligation. ++ If warranty is an integral part of the sale price of the goods and the warranty is attached to the sale price of the product, obligations arising from past events have to be recognized as provisions. These past events are known as obligating events.: SUPREME COURT; CIT Vs Alfa Lamination (Dated: March 30, 2009) Income tax - Sec 80IB benefits - asssessee manufactures transformer core from raw materials purchased - AO disallows on the ground that no manufacturing activity is involved in slitting and cutting of CRGO coils - Tribunal rejects the Revenue's appeal by majority - held, there is no infirmity in the Tribunal's decision based on facts as the raw materials are put through several stages of processes and the end-product has a distinct name, commercial identity and specific use - unless contrary evidence is produced by the Revenue, courts should not reject the opinion of technical experts which is in favour of the assessee - Revenue's appeal dismissed:GUJARAT HIGH COURT; IIC Technologies Pvt Ltd Vs DCIT, Hyderabad (Dated: January 23, 2009) Income Tax - Section 10B (6) would come into play after the tax holiday period only :HYDERABAD ITAT; M/s Mahindra & Mahindra Financial Services Ltd Vs ITO,Mumbai (Dated: December 15, 2008) Income Tax - Assessee's assessment was reopened after the expiry of 4 years u/s 147 - AO added income accrued on NPA as the assessee was following mercantile system of accounting - CIT(A) upheld reopening of assessment and confirmed addition - Held, twin conditions of Sec. 147 not fulfilled as the issue in respect of the interest income arising on NPA was deliberated upon by the Assessing Officer in the original assessment proceedings and reassessment merely because of change of opinion is not warranted by Sec 147 - Assessee's appeal partly allowed.:MUMBAI ITAT; |
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CBEC promotes 30 + issues transfer order of 72 Commissioners + 46 locally transferred;
SERVICE TAX SECTION NOTIFICATON stnot09_014.pdf + stnot09_013.pdf Creation of new Kolhapur Commissionete; CBEC amends notification for service tax purposes; CASE LAWS M/s Tinu Multiple Services Vs CCE, Rajkot (Dated: April 21, 2009) ST - Security service - Assessee has been providing services to Reliance Petroleum Ltd - becomes sub-contractor to a principal service provider which fulfils all tax obligations - demand - held, assessee being a sub-contractor has prima facie a strong case - stay granted:AHMEDABAD CESTAT;
M/s Industrial Cables Vs CCE, Chandigarh (Dated: January 16, 2008) Central Excise – No period of limitation prescribed for availment of credit during the relevant period – Rule 57G of the erstwhile Central Excise Rules, 1944 prescribing limit of six months was introduced on 29.06.1995 and had a prospective effect:PUNJAB AND HARYANA HIGH COURT; 2009-TIOL-765-CESTAT-MUM.pdf + goods story.pdf Prakash M Patel Vs CCE, Nashik (Dated: March 13, 2009) Goods removed clandestinely without payment of any C.Ex. duty – Redemption fine not imposable – Purchaser of goods is aware of non-duty paid character of the goods and hence is liable to penalty under rule 26 of CER, 2002 more so since supplier has conceded the offence and paid up the duty and penalties – Tribunal. Larger Bench decision in Shiv Kripa Ispat Pvt. Ltd. [2009-TIOL-388-CESTAT-Mum-LB] relied upon.:MUMBAI CESTAT; M/s Birla Ericsson Optical Ltd Vs CCE, Gwalior (Dated: January 1, 2009) Central Excise – Order rejecting refund claim based on finalization of provisional assessment on the ground of unjust enrichment not sustainable when assessment not challenged in SCN – Every refund claim to pass the test of unjust enrichment in view of Apex Court decision in Sahakari Khand Udyog Mandal [ 2005-TIOL-48-SC-CX-LB] – Matter remanded to original authority for de novo consideration of unjust enrichment:DELHI CESTAT; CCE & CC, Rajkot Vs M/s Jyoti CNC Automation Pvt Ltd (Dated: March 6, 2009) Central Excise - manufacture - demand of duty on job charges - department has not established that the process amounts to manufacture - in absence of any evidence that the process amounts to manufacture, no case to demand duty - revenue appeal has no merit.:AHMEDABAD CESTAT;
CUSTOMS SECTION NOTIFICATION India-Singapore Trade Agreement: CBEC notifies safeguard rules; Export of Onion; DGFT fixes service charges as 1% of invoice value; Nexus with Exported Products under Target Plus Scheme, Clarification thereof. Automatic Endorsement of permitted imports on duty credit scrips, issued under DFCE for Status Holders Scheme of EXIM Policy RE2003 – Para 3.7.2.1 (vi), and clarification on the condition of nexus with product group exported. CC (Amritsar) appointed as common adjudicating authority; CC & CE, Hyderabad II appointed as common adjudicating authority; CC & CE, Kanpur appointed as common adjudicating authority; CC, Jaipur appointed as common adjudicating authority; Change in adjudicating authority; CASE LAWS 2009-TIOL-246-HC-DEL-CUS.pdf + FC story.pdf Vijay Gulati Vs UoI (Dated: March 20, 2009) Customs - Foreign Currency seized from two persons in the same case – for one person, confiscation quashed and for the other upheld – the Appellate Authority could not have adopted a schizophrenic approach: the jurisdiction of the Customs authorities vis-à-vis the two sets of foreign exchange – one seized near the Airport and the other seized subsequently was on the basis that they formed part of the same transactions or arose out of the statement recorded in the first seizure. Such being the case and the notices having been issued as a part of the same investigation process, the Central Government could not have adopted a schizophrenic approach; on the one hand holding that the confiscation was unauthorized, and on other, upholding the confiscation in the absence of such order in the petitioner's case. The order nowhere discloses that insofar as the petitioner is concerned, there was any such determination by the authorities under FEMA or the RBI , as the case may be. Therefore, Central Government has, in the impugned order disclosed an inconsistent and wholly illogical approach in law which can hardly be commended by this Court. :DELHI HIGH COURT; CC, Nhava Sheva Vs M/s Nandini Impex (Dated: March 26, 2009) Appeal filed by Revenue without proper and specific authorization by the Committee - By an addendum to the authorization letter, the Review Committee authorized the Assistant Commissioner, Customs, CRC, JNCH, Sheva to file an appeal against the O-in-A- Appeal filed proper in law. :MUMBAI CESTAT; |
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