DG (Safeguard Duty) recommends 10% duty on import of cheap aluminum products;

Justice G P Mathur authorised to act as Chairman of NHRC;

Govt is committed to take fiscal steps to curb cheap import of steel: New MoS;

Meira Kumar joins distinguished panel of LS Speakers, unanimously elected as Speaker for new Lok Sabha;

States place orders for 14695 buses under JNNURM;

CBDT gives addl charge of Member (L & C) to C S Kahlon, Member (A & J);

ITAT Member P Mohanrajan promoted as V-P and shifted from Hyderabad to Chandigarh Bench;

TIOL COMMENTARY

ddt 3 july.pdf

ITAT - The Bench shall Pronounce the Order! – Deemed Pronouncement;

spl down.pdf

Leaving IRS only to join New York Bar!

MIXED BUZZ

mbuzz0534.pdf

CII sets up regional task force on internal security;

mbuzz0533.pdf

States place orders for 14695 buses under JNNURM;

mbuzz0532.pdf

CII believes India is next destination hub for technical textiles;

2009-TIOL-330-ITAT-MUM.pdf + chicago story.pdf

M/s Chicago Pneumatic Tool Company Vs DDIT, Mumbai (Dated: December 22, 2008)

Income tax - Proviso to Sec 112 - Assessee is incorporated in the USA - transfers shares of Indian company to an Indian investment company - long-term capital gains - deducts costs involved in the transfer like merchant banker fee and the cost of acquisition - claims application of 10% tax rate as per proviso to Sec 112 - AO says proviso to Sec 112 is not applicable to non-resident - CIT(A) agrees with the AO - held,

++ as per Second Proviso to Sec 48 where where Long Term Capital Gain arises from transfer of shares or debentures of an Indian company to a non-resident, the benefit of indexed cost of acquisition and indexed cost of improvement cannot be allowed. But as per Proviso to Sec 112 where the tax payable in respect of transfer of a Long Term Capital asset being listed securities or units exceeds 10% of the amounts of capital gain then such excess shall be ignored.

++ the significance of the words 'before giving effect to the second proviso to Section 48' is manifested by the fact that the rate is to be determined by computing capital gain by adopting the cost of acquisition and cost of improvement or the indexed cost of acquisition and the cost of improvement as a case may be. Since, in the case of non-resident on transferring shares of an Indian company the second proviso to Section 48 is not applicable in as much as the benefit of indexation cannot be granted, the mandate of the proviso to Section 112 will simply be to the effect that the tax payable has to be computed and such tax in excess of 10% is to be ignored. : MUMBAI ITAT;

2009-TIOL-329-ITAT-BANG.pdf

Sri M Rajendra Vs ACIT, Mysore (Dated: February 05, 2009)

Income Tax - Addition u/s 23 - Assessee owns three houses and a marriage hall - one house was occupied by assessee's  brother who was also working as manager with Assessee – AO adds the income under head “Income from House Property” – AO also adds certain income as rent not declared by the Assessee from marriage hall - further some  addition was also made in respect of three creditors  - CIT(A) upholds the order of AO - held, there is no material on record to show that the house property was treated as commercial asset – secondly, Assessee not able to explain the mismatch in dates of billing and marriage – further, despite opportunity being given Assessee not able to file confirmation from creditors – Assessee's Appeal dismissed: BANGALORE ITAT;

2009-TIOL-328-ITAT-BANG.pdf

ITO, Bangalore Vs M/s Margasoochi Chits Pvt Ltd (Dated: January 16, 2009)

Income tax - Assessees are subscribers of a Chit Fund - all subscribers contribute a fixed sum to the fund for a fixed period - bidding is done and one of the subscribers collects the sum after participating in the bid - the surplus sum which if added to the bid amount works out to the face value of fund in a month is equally distributed among all subscribers as dividend - AO takes the view that such distribution of dividends is in the nature of interest which attracts provisions of Sec 194A - but CIT(A) disagrees with the AO - held, the instalments in chit fund contributed by the subscribers being non-refundable in nature cannot be equated with the deposits and consequently, the dividend or discount credited to the account of the subscriber would not constitute interest. Revenue demand under section 201(1) and 201(1A) not justified by holding the dividends as in the nature of interest attracting provisions of section 194A - Revenue's appeals dismissed : BANGALORE ITAT;

2009-TIOL-327-ITAT-HYD.pdf

Addl CIT, Hyderabad Vs M/s Rohit Extractions (Dated: April 9, 2009)

TDS paid to the Government – Return filed late – no penaltyis called for - Revenue's appeal dismissed: HYDERABAD ITAT;

SERVICE TAX SECTION

2009-TIOL-293-HC-DEL-ST.pdf + st hc story.pdf

Unitech Limited Vs CST, Delhi (Dated: May 26, 2009)

ST - Service received from abroad- No tax prior to 18.04.2006 - 2008-TIOL-633-HC-MUM-ST – followed – High Court: in view of the judgment of the Division Bench of Bombay High Court passed in Indian National Shipowners Association vs Union of India - 2008-TIOL-633-HC-MUM-ST it stands declared that the Revenue can collect tax only upon being invested with due legal authority; an event which occurred on the insertion of Section 66A in the Finance Act, 1994 w.e.f . 18.04.2006 by virtue of the Finance Act, 2006. This case is squarely covered by the judgment of the Bombay High Court in the case of Indian National Shipowners Association with which this High Court is in respectful agreement.:DELHI HIGH COURT;

2009-TIOL-850-CESTAT-AHM.pdf

M/s GHCL Ltd Vs CCE, Bhavnagar (Dated: April 22, 2009)

Service tax – Input credit on security service provided to plant, mining area and residential colony available in its entirety in view of Rule 6(5) of CCR as tax invoice covers the period from 10.09.2004 only – Credit on credit card service disallowed – Matter remanded to original authority to determine proportionate credit in r/o repair & maintenance service, management consultancy service, storage service etc – As matter involves interpretation and eligibility, penalties set aside – Original authority to consider imposing penalty afresh after determining eligible and ineligible credits:AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-849-CESTAT-AHM.pdf

M/s General Motors India (P) Ltd Vs CCE, Vadodara (Dated: February 24, 2009)

Central Excise – Credit to be reversed when capital goods are cleared to ancillary units on non-returnable basis – No malafide attributable as non-reversal was not due to any ulterior motive – Duty confirmed but penalties set aside:AHMEDABAD CESTAT;

2009-TIOL-848-CESTAT-MAD.pdf

CCE, Madurai Vs GEE GEE Paints (Dated: March 24, 2009)

Central Excise – Classification - Colouring Oxides – Colouring oxide such as red oxide, green oxide, blue oxide etc. are classifiable under Central Excise Tariff Sub Heading 3206.90. Note 1 to Chapter 32 covers “preparations based on colouring matter of a kind used for colouring any material”, as the product in question is a preparation based on earth colours and not earth colour per se. ( Para 2) :CHENNAI CESTAT;

2009-TIOL-847-CESTAT-MUM.pdf

CCE, Mumbai Vs M/s Apar Industries Ltd (Dated: March 24, 2009)

Common cenvatted input chemicals also used in manufacture of Transformer Oil on job work basis in terms of notification 214/86-CE – proportionate credit reversed while clearing Transformer Oil to principal manufacturer/supplier – No cause for recovering 8% amount under rule 57CC of CER, 1944 in view of LB decision in Nicholas Piramal (I) Ltd. [ 2008-TIOL-1877-CESTAT-Mum-LB ] – Revenue appeal dismissed.:MUMBAI CESTAT;

CUSTOMS SECTION

Corrrigendum.pdf

Corrigendum to Public Notice No.102;

CASE LAWS

2009-TIOL-851-CESTAT-BANG-LB.pdf + LB story.pdf

Subhash Projects & Marketing Ltd Vs CC, Cochin (Dated: January 27, 2009)

Drinking water supply project – Project Import Benefit - issue before Larger Bench – Whether the Project Import benefit under the Project Import Regulations, 1986 under Sl. No.26 – ‘Drinking Water Supply projects for supply of water for human or animal consumption' is to be restricted only to equipments needed for water treatment plant and not for projects for bringing water from the source to the treatment plant and distribution of the treated water.

Competitor of the Appellant not permitted to intervene – however Counsel can address legal submissions: the applicant in the present case cannot be said to be an aggrieved party at this stage. The matter referred to the Larger Bench is a legal question. No doubt, it may have some repercussion in respect of domestic manufacturers. In these circumstances, it cannot be held that the applicant is a proper party without which the issue cannot be examined properly. Moreover, the members of the applicant after all, are competitors to the appellant. Therefore, the Miscellaneous Application for intervention filed by the applicant is rejected. However, there is no objection for the Senior Counsel, who represented the applicant, to address the legal submissions in the proceedings before the Larger Bench. :BANGALORE CESTAT (LARGER BENCH) ;