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Wealth Tax - most breached tax legislation - time to abolish it! Also notify National Tax Tribunal (See 'Budget Run-Up') 2% interest subvention for exports: RBI extends it to September 30, 2009; Cabinet okays India, UK Customs Cooperation pact; Cabinet hikes retirement age of SEBI Members to 65; Cabinet gives nod to Criminal Tracking Network Project; Review of Coastal Security measures: Cab Secy to head panel; Sahar Airport Customs seizes two parcels with flash memory cards with Rs 1.82 Crore coming from HK; CII appeals to corporates to take over municipal schools; National Dairy Research Institute, Karnal, produces world's second cloned buffalo named 'Garima'; |
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Dear Member, Sending you following files: |
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TIOL COMMENTARY Verification of new IEC Number DGFT instructions; Wealth Tax - most breached tax legislation - time to abolish it! Also notify National Tax Tribunal; Employment Fund: An idea 'well-employed'; CASE LAWS + ANALISIS 2009-TIOL-311-HC-DEL-FEMA.pdf + fera story.pdf M/s Veekay Leather Industry Vs Director Of Enforcement Directorate (Dated : May 11, 2009) Assessee, marketing agent of a distillery Turnover tax payable by the distillery was claimed as deduction by the assessee AO rejected the claim since assessee is receiving only commission from sales and it was not the liability of assessee to pay turnover tax on sales made by the distillery According to the assessee, it was sharing profits with the distillery and the turnover tax was payable as per the mutual agreement entered into with the distillery On appeal, Tribunal held that even if such liability pertains to the assessee, it is only contractual in nature and it accrues only when the basis of quantification is settled. Interest on funds diverted to sister concerns Tribunal followed decision of Supreme Court in S.A. Builders Vs CIT (288 ITR 1) = (2006-TIOL-179-SC-IT) and held that only if the assessee proves commercial expediency for making such advances, the disallowance can be deleted Assessee failed to prove the business necessity Disallowance upheld. Sale of shares whether business income or capital gains According to the assessee company, since one of its business activities as per its Memorandum of Association was to carry on trading in shares, it is business income CIT(A) negative the claim since no Board Resolution was passed by the company to carry on such business On appeal Tribunal held that assessee being a private limited company need not pass any Board resolution for carrying out any objects Matter remitted to AO it verify whether the shares were purchased in trading account or investment account. Difference in commission received as per TDS certificates and as per P&L a/c treated as income Initially assessee took a stand that part of the commission pertains to sister concerns Lateron assessee shifted the stand and claimed that part of the commission was offered for tax in earlier years Assessee failed to substantiate any of the claims made, with supporting evidence Action of AO in treating the difference as income, upheld.:DELHI HIGH COURT; RBI NOTIFOCATION 2% interest subvention for exports: RBI extends it to September 30, 2009; MIXED BUZZ Cabinet okays India, UK Customs Cooperation pact; Cabinet hikes retirement age of SEBI Members to 65; Cabinet gives nod to Criminal Tracking Network Project; Review of Coastal Security measures: Cab Secy to head panel; CII appeals to corporates to take over municipal schools; |
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NOTIFICATION Disclosure of information regarding assessees - CBDT notifies Superintendent of Police in Vigilancer Bureau in Jharkhand under I-T Act; CASE LAWS 2009-TIOL-14-ARA-IT.pdf + ara story.pdf M/s Hyosung Corporation (Dated: June 17, 2009) Mere collaborative effort and the overall responsibility assumed by the applicant for the successful performance of the project is not sufficient to constitute an AOP ; the distinct identity of each Party was throughout maintained. The requisite cohesion, unity of action and above all, the common objective of sharing the revenue or profit are very much lacking in the present case. The sale of equipments and materials took place outside the territories of India and the income in relation thereto cannot be said to accrue or arise in India ; in accordance with the contractual stipulations, the transfer of title to the equipment and materials took place while the goods were outside the territory of India. The events match with the nomenclature - off-shore supply contract and the express stipulation that the transfer of title to equipment and materials shall pass on to Power Grid at FOB Port of shipment with the negotiation of shipping documents. Activities incidental to the supply of imported goods such as transportation, storage and delivery ought not to be attributed to the PE: it is held that on the basis of facts presented by the applicant, the applicant cannot be said to have a Permanent Establishment within the meaning of Art. 5.3 of DTAA . However, if it is found on the basis of further inquiry that may be made by the assessing authority (for which the liberty is given to a limited extent) that a PE exists, then the profits attributable and confined to the operations of PE have to be estimated and subjected to income-tax in India. It is made clear that the activities incidental to the supply of imported goods such as transportation, storage and delivery ought not to be attributed to the PE.: ADVANCE RULING AUTHORITY; 2009-TIOL-310-HC-UTTRANCHAL-IT.pdf + foramer story.pdf CIT, Dehradun Vs M/s Foramer France (Dated : June 12, 2009) Income tax - Indo-French DTAA - Assessee is a non-resident company - enters into contract with ONGC - execution of contract is over - gets another contract after a gap of several years - meanwhile, earns interest on income tax refund - files NIL return but claims deduction for expenses and also set off for business loss u/s 71 for earlier years - AO disallows as the assessee had no PE in India during the lull period - ITAT allows the appeal - held, merely doing correspondence for fresh contracts does not amount to doing business in India and since the assessee has given affidavit in one of the relevant AYs that it has stopped doing business in India it cannot be claim deduction for expenses nor set off of business loss u/s 71 when there is no PE in India - Revenue's appeal allowed :UTTARAKHAND HIGH COURT; Kotak Mahindra Bank Ltd Vs ACIT, Mumbai (Dated: February 2, 2009) Income tax - long term capital gains - Sec 48 - assessee acquires certain shares of a company - after holding it for few years it transfers the shares to its subsidiary - later subsidiary transfers the same back to the assessee - capital loss - AO allows the same but later invokes Sec 147 - makes additions on the ground that the benefit of cost indexation to be allowed from the year when the shares were transferred back to the assessee - held, the cost indexation to be allowed to the assessee from the date the shares were originally acquired by the assessee company and the transfer from the assessee to the 100% subsidiary company and retransfer from the said company has got to be ignored, as provided under Section 49(1)(e) read with proviso to Section 48 - Revenue's appeal dismissed:MUMBAI ITAT; ACIT ,Mumbai Vs M/s Mafco Ltd (Dated: February 19, 2009) Income Tax - exemption u/s 10(29) - Assessee is a fully owned State undertaking and is engaged in the business of marketing of dairy products, processing of fruits, vegetable, meat, poultry, warehousing, cold storage etc - Assessee claims exemption u/s. 10(29) in respect of its income from the warehousing - Assessee files the return of income declaring loss and at the same time claims exemption u/s. 10(29) - AO considers assessee not to be entitled for claiming any exemption as there is overall loss projected by the assessee and rejects the claim of the assessee in respect of exemption u/s 10(29) by applying the provisions of section 14A - CIT(A) directs the AO to adopt the net profit @ 22% in respect of the total warehousing / cold storage receipts and to compute the exempt income u/s. 10(29) - Held, the CIT(A) has not admitted any evidence, but only appreciated the statement of accounts filed before the AO. The CIT(A) has considered the allocation of the head office expenses and, worked out the net profit ratio attributable to the cold storage / warehousing and directed the AO to adopt the same. Revenue Appeal dismissed :MUMBAI ITAT; M/s D C Johar & Sons Pvt Ltd Vs ACIT, Coimbatore (Dated : March 31, 2009 ) Assessee, marketing agent of a distillery Turnover tax payable by the distillery was claimed as deduction by the assessee AO rejected the claim since assessee is receiving only commission from sales and it was not the liability of assessee to pay turnover tax on sales made by the distillery According to the assessee, it was sharing profits with the distillery and the turnover tax was payable as per the mutual agreement entered into with the distillery On appeal, Tribunal held that even if such liability pertains to the assessee, it is only contractual in nature and it accrues only when the basis of quantification is settled. Interest on funds diverted to sister concerns Tribunal followed decision of Supreme Court in S.A. Builders Vs CIT (288 ITR 1) = (2006-TIOL-179-SC-IT) and held that only if the assessee proves commercial expediency for making such advances, the disallowance can be deleted Assessee failed to prove the business necessity Disallowance upheld. Sale of shares whether business income or capital gains According to the assessee company, since one of its business activities as per its Memorandum of Association was to carry on trading in shares, it is business income CIT(A) negative the claim since no Board Resolution was passed by the company to carry on such business On appeal Tribunal held that assessee being a private limited company need not pass any Board resolution for carrying out any objects Matter remitted to AO it verify whether the shares were purchased in trading account or investment account. Difference in commission received as per TDS certificates and as per P&L a/c treated as income Initially assessee took a stand that part of the commission pertains to sister concerns Lateron assessee shifted the stand and claimed that part of the commission was offered for tax in earlier years Assessee failed to substantiate any of the claims made, with supporting evidence Action of AO in treating the difference as income, upheld. Appeal by assessee partly allowed:CHENNAI ITAT; |
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SERVICE TAX SECTION Global Telecom Vs CST, Mumbai (Dated: April 1, 2009) Neither ignorance of law nor confusion is a reasonable cause for extending the benefit of Section 80 of the Finance Act, 1994. Non-recovery of tax from clients is also not a valid excuse for non-payment of tax, nor can the plea of ignorance of law be accepted as a defense vis-a-vis the demand of service tax. Fact that assessee had no intent to evade payment of service tax is not relevant to sections 76 and 77 of the Finance Act, 1994 Once the assessee has registered himself with the department, there cannot be any confusion in their mind regarding payment of service tax. Plea that service tax has been paid along with interest before issuance of show cause notice and hence no penalty is imposable is not supported by any case law.:BANGALORE CESTAT; M/s Sree Rama Electricals And Electronics Ltd Vs CCE, Hyderabad (Dated: January 16, 2009) Service tax Liability of service tax on repair of transformers Matter remanded to original authority to consider the issue afresh in the light of Board's Circular 27.07.2005:CHENNAI CESTAT;
CENTRAL EXCISE SECTION 2009-TIOL-938-CESTAT-MAD.pdf + bhel story.pdf CCE, Trichy Vs M/s BHEL (Dated: March31,, 2009) Central Excise classification parts of Boiler cleared in SKD / CKD form are to be classified as Boilers under CSH 8402.10 no merit in revenue's appeal seeking to reclassify the goods as parts of Boilers. :CHENNAI CESTAT; M/s R B Precision Components Vs CCE, Bangalore (Dated: February 2, 2009) Central Excise - Clamps, Plate panel, Washers, Connector pin, Rotor Cover, Support Shelf for freezer, Heater protector, Clip-knob, Buffel cover, Plate timer defrost etc are classifiable under Chapter 73.26 as pressed/stamped articles of iron or steel and not as parts of Refrigerator under 8418.90 :BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION Anti-dumping notification no 134/2008 rescinded; Anti-dumping duty on vitrified and porcelain tiles - some exporters exempted; Anti-dumping duty on ceramic glazed tiles imposed ; SION rates amended for aluminum scrap and ingots; CASE LAWS M/s Saisea Logistics (I) Pvt Ltd Vs CC (Import), Nhava Sheva (Dated: March 23, 2009) Trailers used for transporting four containers which contained various goods neither show cause notice nor the Commissioner's order indicates that the goods contained in the containers were smuggled goods Prima facie , Confiscation u/s 115(2) of Customs Act, misapplied. Section 117 is a residuary provision and it is necessary that there must be a finding of contravention of some legal provisions pre-requisites missing prima facie good case against penalty Pre-deposit waived and stay ordered. :MUMBAI CESTAT; M/s United Telecoms Ltd Vs CC, Bangalore (Dated: January 30, 2009) Customs Import of parts, components and accessories of mobile handsets eligible for exemption under Notification No. 21/2002-Cus Evidence on record to suggest that CDMA Mobile handsets were assembled out of the imported parts/components and loading of requisite software When import price renegotiated from FOB to CIF no requirement of loading freight charges to assessable value Impugned order set aside :BANGALORE CESTAT; |
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