Transfer Pricing - It is nowhere provided that deduction of depreciation is a must: ITAT (Look for latest TP case tomorrow in 'Breaking News')

Service Tax on renting: A kink in history of judicial pronoucements on tax statutes (See 'ST se GST tak' Column' by veteran Sr Advocate Mr Arvind P Datar)

Income Tax: Budget needs to trim cobweb of provisions for data furnishing; Simplify TDS (See 'Budget Run-Up')

MoC notifies guidelines for administrative setup in SEZ ports and for clearing cargo from such ports;

CBEC amends Transfer Policy; Curbs on deputations removed; Noida, Ghaziabad to remain part of North Zone;

CBEC issues transfer order of 20 AC/DCs;

President appoints Justice K S Ahluwalia as full-time judge of P&H HC;

Growing tally of Swine Flu cases: India for screening of all outbound pax from USA;

Swine Flu: Govt issues advisory; urges people not to go abroad till pandemic is over;

CBI books Divisional Manager of United India Insurance; Huge assets recovered;

TIOL COMMENTARY

ddt 16 June.pdf

CENVAT Credit on structural items – Amendments round the corner;

budgetrunup07.pdf

Income Tax: Budget needs to trim cobweb of provisions for data furnishing; Simplify TDS;

stgst column.pdf

Service Tax on renting: A kink in history of judicial pronoucements on tax statutes;

CASE LAW + ANALYSIS

2009-TIOL-307-HC-MAD-FEMA.pdf + fe story.pdf

A Michael Vs UoI (Dated : April 24, 2009)

FERA – Appeal filed by Director is appeal by Central Government; 'Government of India' includes all the officers functioning under the three wings and that the Deputy Director, Enforcement Directorate is an officer of the Government of India and is not independent of the Government of India; he is an Officer of the Union and his acts and duties are only official and he is acting for the Government of India. When the appeal is filed by the Union of India represented by the Director, then the appeal is filed by the Central Government and the Central Government is the aggrieved party.

Possession of foreign exchange not illegal; going to Burma Bazar with foreign exchange does not mean, the respondents were going there to sell it; Here, the possession of the foreign exchange cannot be said to be illegal because they were authorized signatories and could have been rightly in possession of the foreign exchange. They had not at the moment when they were apprehended selling or purchasing foreign exchange. The only thing that might be said against them is that they were in Linghi Chetty Street, which is somewhere in the vicinity of Burma Bazaar. They were proceeding on the cycle. It is difficult to accept the case of the appellant that the only conclusion that we can draw from this is that they were attempting to illegally sell the foreign exchange in Burma Bazaar.

Unexplained Travellers' cheques: There were no documents to support the case that the travellers' cheques in question had been delivered to eligible passengers, who had inadvertently discharged the travellers cheques. The destruction certificate was not in their possession at the time of interception. Neither in their retraction letters nor at any point of time have the noticees mentioned anything about the destruction certificate. The rules relating to travellers cheques which show as to how encashment can be avoided do not in any way strengthen the case of the respondents. The possession of the discharged travellers cheques, when not supported by any evidence regarding the details of the passengers who discharged the travellers cheques and the reason why so many travellers cheques were in their possession strengthens the case of the Department. The story that there was non-availability of cash and that one party refused to accept the value in cash is too vague a piece of evidence to absolve the respondents of the contravention alleged.: MADRAS HIGH COURT;

MIXED BUZZ

mbuzz0574.pdf

CBEC amends Transfer Policy; Curbs on deputations removed; Noida, Ghaziabad to remain part of North Zone;

mbuzz0573.pdf

Job creation depends on political leadership: UN Agency;

mbuzz0572.pdf

FM urged to harmonise income tax with financial sector needs;

CBDT Order 073_2009.pdf

CBDT promotes 47 DCITs as JCITs and issues posting order;

CASE LAWS

2009-TIOL-371-ITAT-DEL.pdf + consultancy story.pdf

ACIT, New Delhi Vs M/s Cincom System India Pvt Ltd (Dated: April 13, 2009)

Income tax - revenue vs capital expenditures - assessee is into software development for its international affiliates - incures expenditure relating to legal and professional charges - AO holds the same as capital expenditure - CIT(A) allows assessee's appeal - held, the basic test for determining the nature of an expenditure is that if it is incurred for enhancing efficiency and no asset is created, it is revenue expenditure - legal and professional charges are not capital expenditure - Assessee's appeal allowed

Depreciation on computer peripherals and accessories - Assessee claims @ 60% - AO allows @ 25% - held, CIT(A) is right in holding that a 'Router' which transfers data packets in LAN and WAN is an integral part of computer system for facilitating high speed internet connectivity and depreciation at the rate of 60% is allowable - Assessee's appeal allowed :DELHI ITAT;

2009-TIOL-370-ITAT-BANG.pdf

M/s D V Steel Corpn Vs ITO, Bangalore (Dated: April 30, 2009 )

Income tax - Penalty u/s 272B - Assessee files quarterly TDS statement in Form No 26Q but fails to give PAN of some deductees - Revenue levies penalty u/s sec 272B(1) for failure to comply with Sec 139A - held, no penalty is called for as deductees fail to furnish PAN and the law provides no mechanism to the assessee to compel the deductees to provide PAN - Assessee's appeal allowed :BANGALORE ITAT;

2009-TIOL-369-ITAT-BANG.pdf

Flowserve Microfinish Pumps Pvt Ltd Vs DCIT, Hubli (Dated: April 30, 2009 )

Income tax - Expln 2 to Sec 10B(iii) - export turnover - exclusion of expenses like packing charges, freight charges and C & F charges - since the assessee had its hub in Hubli and goods were airlifted from Bangalore after being brought from Hublic, AO takes the view that the freight for transporting goods from Hubli to Customs station in Bangalore is not excluded - held, the freight expenses from Hubli to Bangalore cannot be excluded. since packing charges are not included in the items mentioned in the export turnover and therefore, packing charges cannot be excluded from the export turnover - matter remanded for fresh reworking :BANGALORE ITAT;

2009-TIOL-368-ITAT-MAD.pdf

M/s Limitex Vs ACIT, Tirupur (Dated: February 2, 2009)

Income tax - Powers of CIT u/s 263 – Assessment order passed without any enquiry on the issue of allowability of deduction u/s 80IB on duty drawback receipts – CIT can regard the order as erroneous on the ground that AO should have made further enquiries before accepting the statements made by assessee in the return – AO cannot remain passive in the face of a return which is apparently in order but calls for further enquiry – When AO fails to make enquiries, it is an erroneous order.:CHENNAI ITAT;

2009-TIOL-367-ITAT-MUM.pdf

Lokpriya Housing Development Pvt Ltd Vs ITO, Mumbai (Dated: February 11, 2009)

Income Tax - Section 143(3) r.w.s. 147 - Assessee  is in the business of development of real estate - claims to be following project completion method of accounting since its inception -  challenges the reopening of assessments on the ground that  no reasons have been recorded before issuing notice u/s 148 - the reopening is made beyond the statutory time limit - prior approval from the higher authority u/s 151 required to be mandatorily obtained and such approval was not obtained - Held, on the facts for the A.Y 1990-91 and 1991-92 the reopening is bad in law for  the reasons that  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 traced.

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 a conclusion that income escaped assessment does not arise, for permitting reopening. The AO cannot frame an opinion that the income chargeable to tax has escaped assessment as he had no information of the return filed by the assessee for the A.Y 1989-90. Such action and belief of the AO is not only arbitrary but also not based on facts. Such reason, it any, will be untenable in law. 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 reasons cannot be produced adverse inference can be drawn. The reopening of assessments of all the assessment years under appeals is bad in law.:MUMBAI ITAT;

sez_instructions.pdf

MoC notifies guidelines for administrative setup in SEZ ports;

cbecorder127_2009.pdf

CBEC issues transfer order of 20 AC/DCs;

Transfer Policy Amended 2009.pdf + cbec_transfer policy.pdf

Transfer/ Placement Policy of Group ‘A' Officers of Indian Revenue Service (Customs & Central Excise) – Amendments to the Policy;

SERVICE TAX SECTION

2009-TIOL-916-CESTAT-BANG.pdf

M/s GEO Foundations And Structures (P) Ltd Vs CCE & CC , Cochin (Dated: February 2, 2009)

Service Tax – When registration is obtained for both services of residential and commercial construction service, appellant duty bound to pay service tax – Piling work for commercial buildings liable to tax from 10.09.2004 – Matter remanded for re-quantification of tax liability after allowing deductions – Assessee also liable to pay interest on such re-quantified amount – Soil testing and survey work liable to tax under Site formation and clearance service and Survey and map making service w.e.f 16.06.2005 and not under Consulting Engineer service :BANGALORE CESTAT;

2009-TIOL-915-CESTAT-BANG.pdf

M/s SKY Gourmet Pvt Ltd Vs CST, Bangalore (Dated: January 30, 2009)

Service tax – Cost of food supplied to airlines eligible for exclusion for computation of service tax levy under ‘Outdoor catering service' under Notification 12/2003-ST – VAT invoices indicating cost of food and VAT paid thereon sufficient evidence to claim benefit under Notification 12/2003-ST – When two beneficial notifications are available, assessees has an option to choose a notification more beneficial to them – Commissioner's finding that appellant has to avail benefit of abatement under Notifications 20/2004-ST and 1/2006-ST and they are not eligible to claim benefit of Notification 12/2003-ST arbitrary – Impugned order set aside :BANGALORE CESTAT;

CENTRAL EXCISE SECTION

File267_30.pdf

Admissibility of CENVAT Credit on structural items used in the Construction work;

CASE LAWS

2009-TIOL-919-CESTAT-BANG.pdf + Abb Story.pdf

M/s ABB Ltd Vs CCE, Bangalore (Dated: February 20, 2009)

Central Excise – No bar in assessee with LTU to pre-deposit at any of their factories – When Commissioner (Appeals) at Bangalore LTU has power to take up an appeal of Kolkata unit of assessee, pre-deposit made by its Vadodara unit cannot be held as invalid – Matter remanded for consideration of appeal without insisting on further pre-deposit :BANGALORE CESTAT;

2009-TIOL-918-CESTAT-BANG.pdf

CCE, Hyderabad -I Vs M/s Hyderabad Chemical Products Ltd A P (Dated: February 5, 2009)

Central Excise – MS Plates/Angles/Beams/Joists are capital goods eligible for CENVAT Credit – Impugned order upheld :BANGALORE CESTAT;

2009-TIOL-917-CESTAT-BANG.pdf

OTIS Elevator Company (India) Ltd Vs CCE, Bangalore (Dated: February 8, 2009)

Central Excise – Valuation of parts and components cleared from factory to customers sites for erection and installation of lifts, cleared to National Service Centre for Annual Maintenance Contract, and also for modernization as per works contracts with customers – Such contract being an indivisible contract and no sale value of items cleared available, transaction value cannot be determined from total contract value by means of deductions – As value under Section 4(1)(a) not available valuation to be determined as per cost construction method in terms of Rule 11 of Central Excise (Valuation) Rules, 2000 – Adoption of particular method of valuation without notice to assessee is violation of principles of natural justice – Order beyond the scope of SCN – When appellants filed classification list under Rule 173C declaring value there was no suppression of facts – Earlier SCNs issued on same aspect decided by Joint Commissioner by dropping the proceedings and no appeal filed by Revenue against such decision - Invocation of extended period not justified – SCN not sustainable and impugned order set aside :BANGALORE CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt09_066.pdf

CBEC amends tariff value of Poppy Seeds and brass scraps;

cnt09_064.pdf + cnt09_065.pdf

Appointment of DG (Safeguard) + DG (Specific Safeguard);

CASE LAWS

2009-TIOL-914-CESTAT-MAD.pdf

M/s Madura Coats Ltd Vs CCE, Madurai (Dated: April 1, 2009)

Customs – Exemption from Additional Duty of Customs - The provisions of Notification Nos. 30/97-Cus and 82/92-CE should be read harmoniously and supplies against Advance Release Order issued under para 7.4 of the Export-Import Policy should be treated as eligible for exemption from additional duty of customs also. (Para 2) :CHENNAI CESTAT;