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Indo-Sweden DTAA - fee for technical consultancy services - Is such income taxable in India? (Look for High Court decision in 'Breaking News' tomorrow) The Customs DOSO! (See 'Special Column') CBEC finally orders action against agents of corruption in Kolkata Customs (See 'The Insider' in Pitara) A boost to real estate sector and exports may do a world of good to feel-good-factor in economy! (See 'Budget Run-Up') SMS Service for reservation inquiry launched; Home MInister asks West Bengal Govt to give powers to Police to snatch back Lalgarh from Maoists; USA brackets India with 52 other nations for not doing enough to stop human trafficking; 42 mn people uprooted worldwide in 2008: UN; Everyone must participate to remove cyber hatred: UN Chief ; India is a priority country for Swiss economy: Ambassador; |
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Dear Member, Sending the following files: |
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TIOL COMMENTARY Repeal Cell Phone Tax – IRS tells Legislature; A boost to real estate sector and exports may do a world of good to feel-good-factor in economy!The Customs DOSO! CBEC finally orders action against agents of corruption in Kolkata Customs; MIXED BUZZ SMS Service for reservation inquiry launched; 42 mn people uprooted worldwide in 2008: UN; Everyone must participate to remove cyber hatred: UN Chief ; India is a priority country for Swiss economy: Ambassador; |
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2009-TIOL-376-ITAT-DEL.pdf + TP story.pdf Schefenacker Motherson Ltd Vs ITO, New Delhi (Dated: June 11, 2009) Transfer Pricing - Arm's Length Price is the price which will be paid or charged by unrelated parties for a similar transaction in similar circumstances as are prevailing between related parties carrying international transaction. Under provisions of Section 92(1) of the Act and Rule 10B , income of international transaction between associated concern is to be computed having regard to arm's length price. Arm's Length Price, in turn, is the price which will be paid or charged by unrelated parties for a similar transaction in similar circumstances as are prevailing between related parties carrying international transaction. So an exercise is required to be carried to compare price charged or paid in a controlled transaction with price charged or paid in a similar uncontrolled transaction (i.e. a transaction between unrelated parties). In other words, controlled activities are compared with uncontrolled activities of independent parties. But comparison would serve its purpose only if transaction or entities under comparison are found to be similar or almost similar and this “almost” representing differences are evaluated and adjustments are made to bring transaction or enterprises to the same level. If a similar uncontrolled transactions is available for comparison, then arm's length price is determined by taking such price of similar uncontrolled transaction carried in similar circumstances. As similar transactions are not easy to find, and, therefore, an attempt is made to find entities carrying similar functions and their profit margin or mean of such margin from a range of entities, is taken into account and compared with profit margin of entity involved in International transaction called tested party. TP - Depreciation - It is nowhere provided that deduction of depreciation is a must . In the present appeal, arm's length price of transactions carried was to be determined by comparing net profit of the taxpayer (tested party) with mean net profit of comparables. Only receipts and expenditure, having connection with international transactions, were required to be taken into account. Any receipt or expenditure having no bearing on price or margin of profit could not be taken into consideration. It is nowhere provided that deduction of depreciation is a must. Depreciation can be taken into account or disregarded in computing profit depending upon the context and purpose for which profit is to be computed. There is no formula which would be applicable universally and in all circumstances. “Net profit” used in Rule 10B can be taken to mean commercial profit as held by the TPO and confirmed on appeal by the CIT( A).:DELHI ITAT; DCIT, Mumbai Vs M/s Voltas Ltd (Dated: January 14, 2009) Income Tax—Assessee made provisions for expenses to be incurred during the warrantee period in respect of sale and supply of various items—AO disallowed the expenditure—CIT(A) allowed assessee's appeal—Held, the same issue has already been decided in favour of the assessee in its own case and the tribunals have allowed the deduction claimed on account of provisions made for expenses to be incurred during the warrantee period—Held, it is the profit eligible for deduction u/s. 80HHC is allowed as deduction not the actual quantum of deduction—Held, provisions of section 91 will be applicable even if the income in India is charged under the deeming provision under section 115JB which deems the book profit as total income but the conditions mentioned under section 91 are required to be fulfilled for availing relief under that section—Revenue's appeal dismissed. :MUMBAI ITAT; M/s Sartorius India Pvt Ltd Vs ACIT, Bangalore (Dated: April 30, 2009) Income Tax- Section 80HHC - AO allows the claim of the assessee - CIT invokes powers u/s 263, directing the AO that Expln. (baa) to section 80HHC is applicable to a) shared income and other services, b) service income and c) retention money as items not covered by the Explanation - Held, arithmetical correctness has to be followed when the law specifies that 10% of the expenses are allocable and allowable from the business profits for which the ratio of export turnover to the total turnover has to be applied. AO idirected to compute the deduction u/s 80HHC and comply the direction of the CIT in framing the consequential order in accordance with the provisions of the Act - Assessee's Appeal partly allowed.:BANGALORE ITAT; M/s Praxair India Pvt Ltd Vs ACIT, Bangalore (Dated: April 08, 2009) Income tax - Sec 147 - Assessee is into supply of gas cylinders - claims depreciation @ 100% - loss return filed - AO processes return u/s 143(1) and grants refund - Notice u/s 148 - AO allows depreciation on cylinders only at the rate of 25% - CIT(A) allows assessee's appeal against reduction in depreciation - held, since Sec 147 jurisdiction is assumed on the basis of an audit objection and the facts in the revised return are the same which were furnished in the original return and no other evidence being collected by the AO, invocation of re-assessment jurisdiction is not sustainable - Assessee's appeal allowed :BANGALORE ITAT; ACIT,Mumbai Vs M/s Ganon Dunkerley & Co Ltd (Dated: March 06, 2009) Income tax - AO makes additions for retention money - Assessee argues that retention money cannot be taxed and included in income unless a proper verification of execution of contract is done and satisfied - held, based on Tribunal's order in earlier years in favour of assessee, the assessee has a valid ground and the Revenue's appeal is dismissed :MUMBAI ITAT; |
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SERVICE TAX SECTION 2009-TIOL-926-CESTAT-MUM.pdf + psu story.pdf Mineral Exploration Corporation Ltd Vs CCE & C, Nagpur (Dated:May 5, 2009) Exploration work carried out by PSU for the Ministry of Mines, Government of India for which only Grant-in-Aid is received – whether chargeable to Service Tax – appellant, a Public Sector Undertaking and totally owned by the Government of India, Ministry of Mines has a good prima facie case in their favour and also balance of convenience was lying in their favour – Waiver of pre-deposit of tax, penalties and interest granted and stay ordered by CESTAT :MUMBAI CESTAT; CST, Bangalore Vs M/s Pinnacle India Bangalore (Dated: February 9, 2009) Service tax – Services provided to financial institution engaged in providing commercial vehicle finance whether liable to tax w.e.f 01.07.2003 – Matter remanded to Appellate Commissioner for de novo consideration as the order passed lacks clarity :BANGALORE CESTAT; M/s TIL Ltd Vs CCE, Jaipur-II (Dated: May 6, 2009) ST - penalty - assessee is accused of manipulating reapir and maintenance contract into supply contract - demand - substantial deposit made - held, since there is serious allegation of converting a taxable contract into a non-taxable contract, pre-deposit is ordered but waiver of interest and penalty waive off :DELHI CESTAT;
CENTRAL EXCISE SECTION CCE, Madurai Vs United India Foods (Dated: April 1, 2009) Central Excise – SSI Exemption – Opting out - SSI units which paid duty at normal rate at commencement of financial year are, thereafter, eligible for SSI exemption during same year. (Para 2):CHENNAI CESTAT; Indian Sugar & General Engg Corpn Vs CCE, Faridabad (Dated: January 21, 2009) Central Excise – Turnkey project for installation of reactor in refinery – Design and engineering charges attributable to finished goods viz., reactor only to be included in assessable value – No evidence adduced by revenue to show that entire engineering and designing charges of 2,80,000 US$ relate to reactor only – Impugned order set aside :DELHI CESTAT; CC & CCE, Guntur Vs M/s Osnar Chemicals Pvt Ltd (Dated: December 23, 2008) Central Excise – Conversion of base bitumen into polymer modified bitumen does not result in a complete new product – Process does not amount to manufacture – When service tax is paid on the same process dept cannot attempt to levy excise duty – Impugned order upheld – No merits in Revenue appeal :BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION CBEC notifies Bagdogra for export and import of goods; CASE LAWS 2009-TIOL-923-CESTAT-BANG.pdf + Symphony Story.pdf M/s Symphony Services Corporation (India) Pvt Ltd Vs CC, Bangalore (Dated: January 30, 2009) Customs – Imported goods lying in bonded warehouse damaged and unable to use to be regarded as goods destroyed, remission of duty under Section 23 of Customs Act available – Wider interpretation to be given to the words ‘lost' or ‘destroyed' – In terms of Section 68, when there is relinquishment of title to the goods imported before their clearance, no duty can be demanded – Impugned order not sustainable :BANGALORE CESTAT; |
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