New TDS Regime – CBDT gives up – postpones indefinitely (See 'DDT' )

The Central Excise Baby DOSO (See 'Special Column' by Mr D D Rishi, IRS)

Amend Income Tax law on charity (See 'Budget Run-Up')

Income Tax Ombudsmen appointed - Pramod Kumar gets Banglore; Mumbai goes to A K Handa; Usha Gupta gets Kanpur; A K Jain (Delhi) and M C Katheriya (Ahmedabad);

FM approves FDI worth Rs 85 Crore;

Govt reviews ECB Policy; disallows automatic route to violators;

TRAI constructs roadmap for mobile number portability;

External Commercial Borrowings (ECB) Policy;

Export of Goods and Software – Realisation and Repatriation of export Proceeds - Liberalisation;

Service Tax – Construction of Dam, Roads and tunnel as part of a Power Project - No Tax : Commissioner

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

TIOL COMMENTARY

ddt 01 July.pdf

Deduction under section 80IB (10) in respect of undertakings developing building and housing projects – CBDT Clarifies;

spl down.pdf

The Central Excise Baby DOSO;

budgetrunup20.pdf

Amend Income Tax law on charity;

RBI CIRCULAR

rbi08cir071.pdf

External Commercial Borrowings (ECB) Policy;

rbi08cir070.pdf

Export of Goods and Software – Realisation and Repatriation of export Proceeds - Liberalisation;

FDI

21 FDI Proposals Approved.pdf

FM approves FDI worth Rs 85 Crore;

MIXED BUZZ

mbuzz0617.pdf

Govt reviews ECB Policy; disallows automatic route to violators;

mbuzz0616.pdf

TRAI constructs roadmap for mobile number portability;

2009-TIOL-422-ITAT-DEL.pdf + microsoft story.pdf

M/s Microsoft Regional Sales Corpn Vs ADIT, New Delhi (Dated: April 30, 2009)

Indo-USA DTAA - Assessee is a non-resident company - 100% subsidiary of Microsoft Corp - undertakes distribution of computer software in Asia, including India - files return of income - claims business profits but since it has no PE in India, it is not taxable - AO issues intimation u/s 143(1) and proceeds to assessee the income - treats the income as royalty under Article 12(7) in place of business profit under Article 7 and raises demand with interest - CIT(A) agrees with the AO - held, while acting under Sec 143(1) the AO is not vested with power to change the character of the income from business profits to royalty - such a change can be done only during the course of regular assessment u/s 143(3) - since the creation of demand by amending the nature of income is beyond the scope of Sec 143(1), both the orders are set aside - Assessee's appeals allowed :DELHI ITAT;

2009-TIOL-421-ITAT-BANG.pdf

M/s Techvac Engineering Pvt Ltd Vs ITO, Mysore (Dated: April 30, 2009)

Income tax - return filed with audit report u/s 44AB - xeroxed copy of audit report certified by Director in absence of the CA - AO objects to photocopy of audit report not signed by CA - initiates penalty u/s 271B - held, since there was reasonable and bona fide cause for failure to comply with the provisions u/s 273B and the AO fails to find any difference between the photocopy and the original later furnished by the CA, the AO should have issued a defect memo rather than initiating penalty - Assessee's appeal allowed :BANGALORE ITAT;

2009-TIOL-420-ITAT-MAD.pdf

Harvey Heart Hospitals Ltd Vs ACIT, Chennai (Dated: January 30, 2009)

Sec. 153C – Both regular and undisclosed income to be assessed – No requirement that assessment to be completed to be on the basis of incriminating materials found during the course of search.

Sec. 32(2) - Unabsorbed depreciation relating to A.Y. 1997-98 to 2000-01 could be carried forward and set off only against business income and that too for a limited period of 8 years from the end of the A.Y.

Profit on sale of depreciable assets – To be assessed as Short-term Capital Gains u/s 50 and not as Business income u/s 41(2).

Bad debts and advances written off – issue remitted to AO to given an opportunity to assessee to prove that the decision to write off these amounts was a honest one.:CHENNAI ITAT;

2009-TIOL-419-ITAT-MAD.pdf

F L Smidth Limited Vs ACIT, Chennai (Dated: May 11, 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-418-ITAT-BANG.pdf

M/s Excelpoint Systems Pte Ltd Vs Addl. DIT , Bangalore (Dated: May 28, 2009)

India-Singapore DTAA - Assessee is a LO of parent company based in Singapore - engaged in trading of goods manufactured worldover - LO liaises with Indian customers - LO has offices in many cities in India - Survey u/s 133A conducted - assessee furnishes return on cost plus 5% basis - AO takes statements of sales manager of the assessee on oath - after allowing deduction for expenses of LO and HO in Singapore AO determines income for seven AYs by attributing 45% of global profits as profit for the LO - CIT(A) reduces it to 35% - assessee argues that since its transactions are international trasactions it should be determined at arm' length price and be determined as per transfer pricing regulations - Held, since the assessee seeks more time for completing transfer pricing study and the fact that AO has failed to examine in details where the LO can be treated as a PE of the assessee, it is a fit case to be remanded to the AO - Assessee's appeal partly allowed:BANGALORE ITAT;

SERVICE TAX SECTION

st_order.pdf

No tax on dam, road for power project;

CASE LAWS

2009-TIOL-997-CESTAT-MUM.pdf + ispat story.pdf

Vikram Ispat Vs CCE, Aurangabad (Dated: June 1, 2009)

Cenvat Credit not available on Security services, Rent-a-cab services, Mobile Telephony services as appellants have not adduced evidence to establish the nexus, if any, between the “services” and the manufacture/clearance of the final products – CESTAT.

Sections 11A and 11AB will be applicable where the CENVAT credit in question has been utilized for payment of duty of excise on final products whereas sections 73 and 75 of the Finance Act are applicable where the credit has been utilized for payment of service tax on output services.:MUMBAI CESTAT;

2009-TIOL-995-CESTAT-KOL.pdf

M/s Avian Overseas Pvt Ltd Vs CCE, CC & ST , BBSR II (Dated: March 6, 2009)

ST - BAS and Cargo Handling Service - Assessee is registered and pays tax on site formation services and mining services - for prior period Revenue raises demand under BAS and Cargo handling service - held, BAS does not apply to manufacture of excisable goods and since coal is an excisable good it is not applicable - transportation within the mining area is also outside the service tax net but loading and unloading of goods and transportation outside the mining area are covered under cargo handling service - cum-tax value to be taken into consideration but no penalty as clarificatory circular came later :KOLKATA CESTAT;

2009-TIOL-994-CESTAT-KOL.pdf

M/s Arti & Sons Vs CST, Kolkata (Dated: March 16, 2009)

ST - Business Auxuliary Service - Assessee is into promotion and marketing of lottery tickets - Demand and peanlty - extended period also invoked - Assessee argues it is covered under service tax net only after Explanation to Sec 65(19) w.e.f 16.5.2008 was inserted - held, since the Explanation is only clarificatory in nature, it is not a fit case for waiver of pre-deposit - 25% pre-deposit ordered:KOLKATA CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-323-HC-MUM-CX.pdf

CCE, Mumbai Vs Moosa Haji Patrawala P Ltd (Dated : June 10, 2009)

Endorsed Gate pass – eligible document for taking Credit: According to the Revenue, endorsement should also have been made on the gate-passes on or before 1.4.1994. This objection was rejected by the Tribunal by observing that endorsed gate-pass is not comparable to the issue of gate-pass because what is mentioned in the proviso to the Notification is that documents should have been issued which only means gate-pass should have been issued on or before 1st April, 1994. In view of the language, there is no reason to read in the notification that the endorsement should also have been made on or before 1st April, 1994. :BOMBAY HIGH COURT;

2009-TIOL-996-CESTAT-MAD.pdf + berger story.pdf

M/s Berger Paints India Limited Vs CCE, Pondicherry (Dated: April 15, 2009)

Central Excise – valuation – MRP based assessment – Base Paints cleared to dealers who sell the same after mixing with colourants to the ultimate consumers – Base Paints in non-standard packages is statutorily recognized by including ‘Base paint' in Schedule III to the Standard of Weights and Measures (Packaged Commodities) Rules 1977 by introducing the entry at Sl. No. 20 of the Schedule. – demand of duty by assessing the goods under Section 4 of the Central Excise Act, 1944 is set aside. :CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

cnt09_078.pdf

CBEC revises tariff value of brass scraps and poppy seeds;

CASE LAWS

2009-TIOL-993-CESTAT-MUM.pdf

M/s Saisea Logistics (I) Pvt Ltd Vs CC, Nhava Sheva (Dated: May 29, 2009)

Confiscation of truck trailers belonging to the appellant and imposition of redemption fine and penalty – trailers given on hire/rent basis by the appellant - no mention in the order as to how and which provision of law was contravened and it was not ascertained that the containers contained the smuggled goods and were being smuggled – appellant not covered u/s 115(2) of Customs Act, 1962 – Order set aside and appeal allowed. :MUMBAI CESTAT;