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Member (Customs) J K Batra resigns and joins as Member at Authority for Advance Rulings; Addl charge goes to Mr Rakesh Sharma; Transfer of surplus clearing funds using electronic mode: RBI clarifies on levy of service charges; Lankan Army finally confirms Prabhakaran, Prabhakaran's son and six other top leaders of LTTE killed; DMK wants Centre to put more pressure on Lanka; India to airlift medical aid worth Rs three crore to Sri Lanka; President dissolves Lok Sabha; PM resigns; Dr Manmohan Singh should induct new faces in Cabinet; Swine flu infections: Global tally rises to 8480; India tests 65 persons - just one positive case detected so far; North
Block fully geared up for Budget 2009; Budget
Session to continue till August; No Monsoon Session this time; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Nexus with Exported Products under Target Plus Scheme – DGFT Clarifies! Income only from salary: Why to file return and burden tax administration? Appeal to High Court: Condonation powers of High Court stand curtailed! The 'weak' Prime Minister is back in action! Will Nitish turn out to be Obama for India in future? RBI Transfer of surplus clearing funds using electronic mode: RBI clarifies on levy of service charges; Agenda finalised for UN-backed review of NNPT next year; WTO hosting 'Data Day' to highlight significance of good quality data; Dr Manmohan Singh should induct new faces in Cabinet; UN Chief calls for bold steps to end human trafficking; Interpol arrests two members of Pink Panthers, international jewel thieves; |
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Coronation Flour Mills Vs ACIT (Dated: March 4, 2009) Income tax - Sec 40A(2) - Assessee is a partnership firm - manufactures Maida, Suji and Bran - makes payment for repair and maintenance of machinery - AO disallows a part of payment on the ground that the payment recipient was related to one of the partners of the firm - Tribunal goes with the AO - held, since the assessee fails to provide any account and evidence of services received, no infirmity in the Tribunal's order - Appeal dismissed Disallowance of legal and consultancy fee u/s 40A(12) - Assessee pays a sum to CA for professional work - AO disallows the sum exceeding the statutory deduction of Rs 10,000 - Tribunal agrees with the AO - held, the use of the phrase 'any proceedings under the Act' in the provision of Sec 40A indicates that the applicability of the section is very wide and there is no infirmity in the Tribunal's decision - Assessee's appeal disallowed:GUJARAT HIGH COURT; CIT Vs Shri Raj Kumar (Dated: May 14, 2009) Income tax - Sec 2(22)(e) - deemed dividend - assessee is a proprietory concern, engaged in manufacture of kitchen equipment - assessee is also MD and holds 65% equity in a private limited company - Company gives trade advances to the assessee for customised manufacture of equipment for its clients - assessee shows certain 'advances from customers' in its balance-sheet - AO treats the same as deemed dividend - CIT(A) and Tribunal disagree with the AO - held, the word 'advance' which appears in the company of the word 'loan' only means that it carries with it an obligation of repayment. Trade advance which are in the nature of money transacted to give effect to a commercial transactions would not fall within the ambit of the provisions of Section 2(22)(e) of the Act - Revenue's appeal dismissed:DELHI HIGH COURT; 2009-TIOL-305-ITAT-MAD.pdf + 147 story.pdf M/s Lakshmi Machine Works Ltd Vs ACIT, Coimbatore (Dated: March 27, 2009) The power to make assessment or reassessment, where the initiation has been made within four years would be attracted even in cases where there has been a complete disclosure of all relevant facts: Where, however, the said period of four years has not expired, the conduct of the assessee regarding disclosure of material facts need not be the basis for initiating the proceedings and they can be commenced if the A.O has 'reason to believe' that the income has escaped assessment notwithstanding that there was full disclosure of material facts on record. The assessee in such cases cannot defend the initiation of action on the ground that the facts were already placed on record and that the A.O must have or ought to have considered them. The power to make assessment or reassessment, where the initiation has been made within four years of the end of the relevant assessment year, would be attracted even in cases where there has been a complete disclosure of all relevant facts upon which a correct assessment might have been based in the first instance, and whether it is an error of fact or law that has been discovered or found out justifying the belief required to initiate the proceedings. 'Reason to believe' cannot mean that the A.O should have finally ascertained the facts by legal evidence: The words 'reason to believe' appearing in section 147 cannot mean that the A.O should have finally ascertained the facts by legal evidence. They only mean that the AO forms a 'belief' from the examination he makes and if he finds from any information that he receives, that the taxable income has escaped assessment, it would amount to saying that he has 'reason to believe' that such income has 'escaped assessment'. The justification for his belief is not to be judged from the standards of proof required for coming to a final decision. At the stage where he finds a cause or justification to believe that such income has escaped assessment, the A.O is not required to base his belief on any final adjudication of the matter. The 'reasons' should, no doubt, have a rational connection with the formation of the 'belief.:CHENNAI ITAT; DCIT, Ranchi Vs Shri Ashok Kr Singh (Dated: February 12, 2009) Income Tax - Circular No 279/Misc.-64/05-ITJ - Revenue summits that the Board's Circular restricting the revenue effect for filing an appeal before the Tribunal should not be a hindrance in not filing an appeal - Held, the tax payable in respect of grounds of appeal by the Department is less than Rs.2 lakhs and as per revised Instruction of the CBDT No. 279, the revenue should have refrained from filing second appeal before the Tribunal. Appeal is contrary to the policy decision of the Department and as such the appeal filed by the Department is dismissed in limine.:RANCHI ITAT; ACIT, New Delhi Vs M/s Continental Carriers Pvt Ltd (Dated: January 9, 2009) Income tax - Depreciation - AO allows 25% depreciation on computer peripherals and makes additions - CIT(A) allows 60% - held, although the I-T Act has not defined Computer but it does talk about computer system in the Explanation to Sec 36(1) and it has already been held that the printer and scanner are an integral part of the computer system and they are to be treated as computer for the purpose of allowing higher rate of depreciation - CIT(A) order upheld:DELHI ITAT; |
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SERVICE TAX SECTION M/s Taj View Hotel Vs CCE, Kanpur (Dated: April 15, 2009) ST - Mandap Keeper Service - Assessee is registered with the Department as mandap keeper and regularly paying tax since 1997 - After Convention Service introduced in 2001 Revenue insists on reclassification of the assessee's service - Assessee argues there is no change in its service and also invokes time-bar provisions - held, prima facie, there is no reason for the Revenue to reclassify the service - time-base is also disputed - stay granted with waiver of pre-deposit :DELHI CESTAT; M/s Kiran Motors Ltd Vs CCE, Vadodara (Dated: April 8, 2009) ST - Authorised Service Station - Assessee is a dealer of Maruti Udyog Ltd - provides free services to purchaser of vehicles during warranty period - Revenue raises demand - held, issue is no longer res integra as it is essentially a sale and the transaction attracts sales tax and since service is a small part of the sale transaction which is indivisible, no demand can be sustained against such a transaction - Assessee's appeal allowed:AHMEDABAD CESTAT; 2009-TIOL-67-SC-CX.pdf + sc cx story.pdf M/s Kushal Fertilisers (P) Ltd Vs CC & CCE, Meerut (Dated: May 6, 2009) Central Excise - Suppression of fact is a question of fact, not a Substantial Question of Law - finding of fact by the Tribunal is final. It would be binding on the High Court while exercising its appellate jurisdiction: Whether non furnishing of information was willful and would amount to suppression of material fact in terms whereof the extended period of limitation as provided for in Section 11-A of the Customs Act, 1944 could be invoked or not, was not a substantial question of law. The finding of fact arrived at by the Tribunal should have been treated to be final. It would be binding on the High Court while exercising its appellate jurisdiction. A `substantial question of law' would mean - of having substance, essential, real, of sound worth, important or considerable. It is to be understood as something in contradistinction with - technical, of no substance or consequence, or academic merely.:SUPREME COURT; CCE, Delhi – III Vs Bright Brothers Ltd (Dated: January 23, 2009) Central Excise – No contrary evidence to suggest that capital goods are not obtained from a manufacturing company – Capital goods credit not deniable as Rule 57 R (3) not applicable – MODVAT credit not deniable merely on the ground that a particular procedure is not followed : PUNJAB & HARYANA HIGH COURT; M/s Gallaps Text Bombay (P) Ltd Vs CCE, Mumbai (Dated: February 6, 2009) Exports through merchant exporters - Declaration that they do not claim draw back under the Customs & Excise Duties (Drawback) Rules, 1995 should be made by appellant on the ARE-1 at the time of clearance of the goods and post facto declaration is of no consequence – Refund of deemed credit rightly rejected by Commissioner(A) – Appeal rejected.:MUMBAI CESTAT; CCE, Chennai Vs M/s Madhusudhan Industries (Dated: March 5, 2009) Central Excise – Demand – Extended Period - Limitation – The original authority has rendered a categorical finding that the department is aware of the marketing pattern adopted by the respondents and that they have been periodically paying differential duty on goods sold through depots. The bona fide conduct of the respondents is beyond doubt; there is no intention on the part of the respondents to evade payment of duty. Extended period not invokable. (Para 3):CHENNAI CESTAT; 2009-TIOL-771-CESTAT-AHM.pdf + scrap story.pdf Parekh Aluminex Ltd Vs CCE, Vapi (Dated: February 2, 2009) Central Excise - Waste and Scrap - appropriate duty - condition of clearing the waste and scrap on payment of appropriate duty under Notification 43/2001 CE (NT) - the appellant are entitled to clear the waste and scrap by availing exemption under any other Notification - The Commissioner has picked up the word " appropriate duty" from the Notification, but has failed to apply it correctly in the assessment.:AHMEDABAD CESTAT;
CUSTOMS SECTION NOTIFICATION Tariff Value of Brass Scrap and Poppy seeds increased; CASE LAWS 2009-TIOL-66-SC-CUS.pdf + customs story.pdf M/s Radhay Shyam Ratanlal Vs CC (Adjudication), Mumbai (Dated: May 6, 2009) Customs – Valuation: deemed value Section 14(1) would prevail when the price declared does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation: the provisions of sub-Section (1) of Section 14 would prevail when the transaction value required to be determined under Rule 4 does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. There cannot be any dispute with regard to said interpretation that it is the provision which will always prevail. In other words the deemed value contemplated under Section 14(1) would prevail when the price declared does not reflect the price at which such or like goods are ordinarily sold or offered for sale for delivery at the time and place of importation. Under Rule 5, it is inter alia provided that the value of imported goods shall be the transaction value of identical goods sold for export to India and imported on or about the same time, good being valued subject to provisions of Rule 3. It is also provided in the said Rule that in applying the said rule the transaction value of identical goods and sale at the same commercial level and substantially of the same quantity, would be used to determine the value of the imported goods.:SUPREME COURT; 2009-TIOL-250-HC-MUM-CUS.pdf + cha story.pdf A S Vasan & Sons Vs UoI (Dated: April 29, 2009) Customs – Renewal of CHA Licence – No Appeal; Writ permissible in High Court; In absence of any other remedy it is open to the High Court to exercise its extraordinary jurisdiction in case where an application for renewal is rejected. Hearing must before order: There can be no dispute that the order rejecting application has visited the petitioner with civil consequences. In a case where an order, whether it be administrative or quasi judicial, visits the party with civil consequences in absence of any statutory exclusion under the Regulations, there would be a right to a hearing. The right to hearing would include right to a person being heard in person if such a request is made:BOMBAY HIGH COURT; Vijaya Diagnostic Centre & Cancer Hospital Vs CC, Mumbai (Dated: January 27, 2009) Even subsequent cancellation of CDEC (Customs Duty Exemption Certificate) would result in denial of the benefit of notification 64/88-Cus as the goods ab initio were imported without the certificate from DGHS – ROM application dismissed. Customs authorities not required to look into the question as to whether the DGHS had committed breach of principles of natural justice in relation to cancellation of CDEC.:MUMBAI CESTAT; |
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