POWER' for Powerless - Can our FM empower? (See 'Budget Run-Up')

As expected, CBDT again postpones implementation of UTN-based TDS system notified vide Notification No 31; Taxpayers advised to file returns without UTN (See 'Press Release')

Income Tax - Remittances to non-residents - Deductions - CBDT Instructions (See 'DDT')

Service Tax - Value of SIM cards to be included in value of taxable services; since SIM cards are not goods, not liable to sales tax: High Court (See 'ST se GST tak' )

Govt appoints Ms Nirupama Rao as next Foreign Secretary + Mr M N Prasad, IAS of 1972 batch in PMO on contract basis;

CBEC promotes, on ad hoc basis, 510 ACs ad Dy Commissioner;

CBDT posts 7 OSDs in Board - FT & TR, FTD, Inv and V & L;

Filling up of the post of Principal Advisor (Legal) on deputation on foreign basis;

OECD urges all Members to keep doors open for migrant workers to meet future labour needs;

Reddy's 100-day agenda: Excise exemption to public buses; Real Estate Regulator and more houses in Delhi;

CII for higher depreciation on IT products for SMEs

TIOL COMMENTARY

ddt 30 June.pdf

Income Tax - Remittances to non-residents – Deductions – CBDT Instructions;

budgetrunup19.pdf

'POWER' for Powerless – Can our FM empower?

MIXED BUZZ

mbuzz0615.pdf

OECD urges all Members to keep doors open for migrant workers to meet future labour needs;

mbuzz0614.pdf

Reddy's 100-day agenda: Excise exemption to public buses; Real Estate Regulator and more houses in Delhi;

mbuzz0613.pdf

CII for higher depreciation on IT products for SMEs;

cbdt_press_release.pdf

TDS Notn No 31 further postponed;

instruct0904.pdf

Clarification regarding deduction under section 80IB(10) in respect of undertakings developing building and housing projects;

cbdtorder082_2009.pdf

CBDT posts seven OSDs in Board;

CASE LAWS

2009-TIOL-16-ARA-IT.pdf + ara story.pdf

Cal Dive Marine Construction (Mauritius) Ltd (Dated: June 26, 2009)

Advance Ruling - DTAA between India and Mauritius - ‘fixed place of business' should be in existence for a fairly long time – it is implicit in the very concept of PE and the expression ‘fixed place of business' that it should be in existence for a fairly long time and merely carrying on some activities intermittently or for a short while do not impress the place with the character of a fixed place through which the business of the enterprise is carried on.

Applicant was in India for less than 9 months – NO PE – Not liable to pay tax in India - the applicant cannot be said to have permanent establishment within the meaning of para 1 of Article 5 read with clause ( i ) of Article 5.2 of the DTAA between India and Mauritius. When there is no permanent establishment, the question of taxing any part of the business profits in India does not arise in view of the clear provision of Article 7.1 of DTAA . It is not contended and it cannot be contended that payment received by the applicant under the contract constitutes ‘fee for technical services'. Whatever technical services are provided, they were only integral to the performance of the project work.: ADVANCE RULING AUTHORITY;

2009-TIOL-417-ITAT-MUM.pdf + stork story.pdf

DDIT, Mumbai Vs M/s Stork Engineers & Contractors B V India Project Office (Dated: June 16, 2009 )

Income tax - Assessee is a non-resident company, incorporated in Netherland - gets engineering procurement and construction contract in India - claims deduction for HO expenses incurred for setting up project office in India even before the RBI approval is granted - AO disallows it - CIT(A) allows it - held, since the genuineness of expenses is not refuted and the fact that they were incurred in relation to setting up the project office in India and also during the same accounting year it is wrong to term it as prior period expenditure - allowable deduction

AO's main objection in allowing prior period expenditure is non-filing of return - every person, including a company, is liable to file return if its total income assessable under the Act during the previous year exceeds the maximum amount which is not chargeable to income tax. Thus the requirement for filing the return is activated only when there is some income chargeable to tax. If there is no income, then the law does not cast a duty upon a person to file the return of income.

Assessee follows percentage completion - As per Accounting Standard 7, no income need to be offered for taxation if work is not completed upto 25% of project; If there is no income the law does not cast a duty upon a person to file return of income - Revenue's appeal dismissed :MUMBAI ITAT;

2009-TIOL-322-HC-MUM-IT.pdf

CIT , Pune Vs Solapur Nagari Audyogic Sahakari Bank Ltd (Dated : June 16, 2009)

Income tax - Sec 80P(2)(a)(i) - Assessee are cooperative banks - earns interest income from investments in Kisan Vikas Patra and Indira Vikas Patra out of voluntary reserves - claims exemption u/s 80P(2)(a)(i) - Revenue does not consider it as income from banking business on the ground that investments were not made out of statutory reserves and denies exemption - held, as long as investments were made out of funds garnered from banking business it makes no difference whether it was from statutory or voluntary reserves and such interest income is exempt u/s 80P(2)(a)(i) - Tribunal order upheld - Revenue's appeals dismissed :BOMBAY HIGH COURT;

2009-TIOL-321-HC-MAD-IT.pdf

CIT, Trichy Vs Shri P L Gandhi (Dated : June 16, 2009)

Income tax - Notice u/s 143(2) - Assessee alleges limitation - held, since notice is issued beyond 12 months period, it is not valid in law - Tribunal's order upheld - Revenue's appeal dismissed :MADRAS HIGH COURT;

2009-TIOL-320-HC-MAD-IT.pdf

CIT, Chennai Vs ICL Shipping Ltd (Dated : June 8, 2009)

Income tax - TDS - Assessee is an Indian shipping company - does not deduct tax at source on salary of Indian crew as they were outside territorial water of India for more than 182 days - AO insists on TDS - held, in view of Sec 6 read with clause (18) of Section 3 of the Merchant Shipping Act, 1958 and the fact that the crew offered their services outside India for 182 days, they qualify as non-resident, exempt from taxes in India - no infirmity in Tribunal's order - Revenue's appeal dismissed:MADRAS HIGH COURT;

DEPUTATION POSTS

deputation_advisor.pdf

TRAI looking for Legal Advisor on deputation basis;

CBEC Order 138_2009.pdf

CBEC promotes, on ad hoc basis, 510 ACs ad Dy Commissioner;

SERVICE TAX SECTION

2009-TIOL-318-HC-KERALA-ST.pdf + stgst.pdf

CCE Vs M/s Idea Mobile Communication Ltd (Dated : September 4, 2008)

Service Tax – Value of SIM cards to be included in the value of taxable services, since SIM card are not goods, liable to sales tax: Customer cannot get service without SIM card and it is an essential part of the service. SIM card has no intrinsic value or purpose other than use in mobile phone for receiving mobile telephone service from the service provider. It is not goods sold or intended to be sold to the customer but supplied as part of service. Consequently, the value of SIM card supplied by the respondent forms part of taxable service on which service tax is payable by the respondent.

Bona fide dispute – no penalty: Since the dispute was bona fide and it is settled based on the observations of the Supreme Court, levy of penalty under Section 73 of the Finance Act, 1994 was not tenable.

Not Fit to Appeal to Supreme Court: After pronouncement of judgment, counsel for the respondent made an oral application for certifying the judgment as one fit for appeal to the Supreme Court. Since the decision rendered by the High Court is based on facts found, High Court did not find any substantial question of law arising in the matter.:KERALA HIGH COURT;

2009-TIOL-991-CESTAT-DEL.pdf

M/s Krishna Builders Vs CCE, Raipur (Dated: March 31, 2009)

ST - Refund - assessee is into construction of residential flats - pays tax under protest - files refund claim on the basis of Board's letter that no tax is leviable on such activities - Revenue alleges unjust enrichment - held, since the assessee's activities are to be examined in view of the Board's letter and unjust enrichment issue also requires to be looked into, matter is remanded for fresh examination :DELHI CESTAT;

2009-TIOL-990-CESTAT-DEL.pdf

M/s Khicha Indusrties Vs CCE, Jaipur-II (Dated: May 25, 2009)

ST - Cargo Handling Service - assessee is into transporting, loading and unloading of rock phosphate chips from mines to grinding units - gets registered under BAS and contends it is not covered under the cargo handling service - Revenue pleads since the activities of the assessee are not confined to the mines area they are covered under the cargo handling service - held, the assessee does not have prima facie a strong case but since the entire issue was known to the Revenue and limition is another issue, waiver from pre-deposit is granted:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-319-HC-MUM-CX.pdf + raymond story.pdf

Raymond Limited Vs UoI (Dated : June 16, 2009)

Central Excise – Exemption - Goods falling under Tariff Heading 55.06 manufactured from duty paid inputs falling under Heading 55.01, entitled for exemption under Notification No.30 /2004- C.E - there is nothing in the Notification No 30 /04 to suggest that the term `staple fibre' has been used in a restricted sense so as to apply only to inputs falling under Heading 55.03 / 55.04. On the contrary, reading the Notification as a whole it is seen that the said Notification is issued to ensure effective implementation of the new tax regime so that the manufacturers are required to pay only the mandatory excise duty and not required to pay excise duty at different stages specified in the CET. Therefore, there is no reason to construe the terms `staple fibre' narrowly so as to restrict it to unprocessed staple fibres used as inputs in the manufacture of Tops.:BOMBAY HIGH COURT;

2009-TIOL-992-CESTAT-MUM.pdf

M/s Onkar Furniture Vs CCE, Mumbai-II (Dated: May 6, 2009)

Same reasons which are applicable for non imposition of penalty u/s 11AC of the CEA, 1944 are applicable for non invocation of longer period of limitation - Prima facie extended period of Limitation is not applicable – strong case for complete waiver of pre-deposit of duty and penalty – Tribunal order 2009-TIOL-575-CESTAT-MUM relied upon. :MUMBAI CESTAT;

CUSTOMS SECTION

2009-TIOL-317-HC-MUM-CUS.pdf + cus story.pdf

Hero Cycles Limited Vs UoI (Dated : June 16, 2009)

Customs – benefit of exemption notifications not allowed – Refund without challenging assessment – writ maintainable – The law is well settled that mere statutory remedy even of an appeal by itself, will be no bar to the exercise of the extra ordinary jurisdiction of the High court. The High Court if it finds that there has been a breach of the fundamental principles of justice, would certainly not hesitate to issue a writ of certiorari and the fact that the alternative remedy is available would be no answer. The fact that the Petitioner has paid the duty under mistake of law and or in the instant case by oversight cannot result in being assessed to duty which was otherwise not payable. This will be a case of manifest injustice and on the face of it erroneous.

Assessment ordered to be modified : the relief of refund claimed is not maintainable before the order of assessment is amended or modified as held by the Supreme Court in Priya Blue Industries . The Petitioner no doubt has contended that he has not passed on the duties and as such the question of unjust enrichment would not arise in the matter. Revenue directed to modify the assessment order after which the assessee can apply for refund.:BOMBAY HIGH COURT;