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India Inc paying 'commission' to whole time or independent Directors on surge in sales : CBEC clarifies such 'Commission' is not liable to service tax; Govt imposes provisional anti-dumping duty on Carbon Black + polypropylene imports; Companies Bill 2009: India Cos may merge with foreign companies ; Revenue Hqs finally issues joining orders for new CBDT and CBEC Members - Mr P N Vittal Dass + Mr S D Majumder for CBEC and Mr Narendra Singh for CBDT; CBEC Chairman P C Jha retires; Guidelines for dealing with “Requests for change in area of SEZs”; Guidelines regarding “Proposal for FDIs”; Misconduct by Chartered Accountants - CVC has no role in taking action: Minister; Beware of Fictitious Offers, Cheap Fund Offers: RBI ; BHEL to augment capacity to 20,000 MW ; DPE approves Rs 15115 crore for revival of 35 PSEs ; CBEC finally grants NFSG benefits to 144 officers in Junior Selection Grade; CBDT issues local transfer order of 47 CITs; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Income Tax - execution of power projects on turnkey basis – CBDT withdraws a 1989 Instruction; Unintended fall-outs of new PAN system; MIXED BUZZ Companies Bill 2009: India Cos may merge with foreign companies; Misconduct by Chartered Accountants - CVC has no role in taking action: Minister; DPE approves Rs 15115 crore for revival of 35 PSEs; BHEL to augment capacity to 20,000 MW; |
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CBDT issues local transfer order of 47 CITs; CASE LAWS Thakur Devi Investment Pvt Ltd Vs CIT, Ludhiana (Dated: July 8, 2009) Income tax - Sec 104(2) - AO applies statutory rate of tax on the ground that the assessee failed to declare the dividend - CIT(A) and Tribunal agree with the AO - held, once a satisfaction is arrived at that the profits distributed as dividend were less than the statutory profit, statutory rate of tax could be invoked, except in a case, which falls in one of the three clauses of sub section (2). The Tribunal having held that case of the assessee does not fall under sub section (2) of Section 104 of the Act and that the assessee fails to declare dividend in terms of sub section (1), the invocation of statutory rate could not be held to be beyond the provisions of Section 104 of the Act - Assessee's appeal dismissed : PUNJAB & HARYANA HIGH COURT; CIT, Jalandhar Vs M/s Soccer International Ltd (Dated: July 21, 2009) Income tax - Assessee is into manufacturing of sports goods - AO disallows certain labour charges on the suspicion that they are bogus - CIT (A) and Tribunal delete additions - held, lower appellate authorities have given a finding of facts based on reasons which the AO fails to see - no perversity in Tribunal's order - Revenue's appeal dismissed : PUNJAB & HARYANA HIGH COURT; 2009-TIOL-486-ITAT-BANG.pdf + NRI story.pdf Shri Manoj Kumar Reddy Nare Vs ITO, Bangalore (Dated: April 3, 2009) Income Tax – ‘Non resident' status – computation of sixty days – first day to be excluded; If the word 'from' is used then the first in a series of days will stand excluded and if the word 'to' is used, then it will include the last day in a series of days or any other period of time. Thus there are two views in respect of ignoring the fraction of a day. When one has to compute the period for which an assessee is in India, one has to start the counting from a particular day and to end the same with specific day. The period is to be counted from the date of arrival of the assessee in India to the date he leaves India. Thus, the words 'from' 'to' are to be inevitably used for ascertaining the period though these words are not mentioned in the statute. As per General Clauses Act, the first in a series of a day is to be excluded if the word 'from' is used. Since for computation of the period, one has to necessarily import the word 'from' and therefore, accordingly, the first day is to be excluded. In the instant case, if the first day i.e. 31st January, 2005 is excluded then the period of stay will be 59 days. Since the period of stay will be less than 60 days, therefore, section 6(1 )( c) will not be applicable and the status of the assessee will be non-resident. Remuneration paid by an employer who is not a resident of USA will be taxable in India if the employee is resident of India: salary, wages and similar remuneration is taxable in the country on which the assessee is a resident in case the services are rendered in that country. If the employment is exercised in other country, then one has to see Article 16(2). The remuneration paid by an employer who is not a resident of USA will be taxable in India if the employee is resident of India. The DTAA does not provide exclusively that the salary or remuneration will be taxable only in USA : BANGALORE ITAT; DCIT , New Delhi Vs M/s Starion India (P) Ltd (Dated: May 22, 2009) Income tax - Sec 92CA - Assessee is a South Korean FMCG company - enters into international transactions with its associated enterprise for manufacture of refrigerator, ACs and washing machines - TPO rejects computation of Arm's Length Price (ALP) - net operating margin shown by the assessee not accepted - TPO finds assessee has declared cost plus method in Form No 3CEB but the CA firm which computed the ALP has suggested TNMM - after pointing out many discrepancies in the computation of ALP, the TPO makes adjustment in the trasfer price - CIT(A) disagrees with the TPO - held, no substance in the Revenue's appeal as CIT(A) has in great details discussed all the issues relating to most appropriate method for the instant case and selection of uncontrolled comparables - Revenue's appeal holds no water - dismissed: DELHI ITAT; DCIT, Bangalore Vs M/s Daimler Chrysler Research & Technology India Pvt Ltd (Dated: May 1, 2009) Income tax - Sec 10A - Assessee is into development and export of computer software - avails simultaneous incentives of Sec 10A and Sec 80HHE - held, once Sec 10A deduction is availed, it ousts others deductions like Sec 80HHE and this issue is settled - CIT(A) order set aside and Revenue's appeal allowed : BANGALORE ITAT;
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order_216_2009.pdf + order_215_2009.pdf + order_214_2009.pdf Revenue Hqs finally issues joining orders for new CBDT and CBEC Members; CBEC issues NFSG notification for junior selection grade; Guidelines regarding “putting up of a boundary wall”; Guidelines for dealing with “Requests for change in area of SEZs”; Guidelines regarding “Proposal for FDIs”; Guidelines regarding “Grant of Extension of Validity of in-principle approvals”; Guidelines regarding “Transfer of In-principle or Formal approval issued to a SEZ Developer to its subsidiary or SPV”;
SERVICE TAX SECTION CIRCULAR Service tax on commission paid to Managing Director / Directors by the company; CASE LAWS 2009-TIOL-1168-CESTAT-MUM.pdf + univ story.pdf Swapnashilp Travels Vs CCE, Nagpur (Dated: June 16, 2009) Nagpur University entering into a contract with appellant for transportation of written answer books from district centres to Nagpur – whether appellant a ‘Rent-a-Cab' operator - Prima facie case in favour – CESTAT grants stay.: MUMBAI CESTAT; 2009-TIOL-1167-CESTAT-BANG.pdf M/s South India Corporation (Agencies) Limited Vs CCE, Visakhapatnam-I (Dated: May 1, 2009) Service Tax – Stevedoring service provided in port under licence issued by the Port Trust cannot be treated as authorisation by the port – not taxable under port service - Section 42 (3A) and in Section 123 of the Major Port Trust Act, 1963 – though the issue is pending before the Larger Bench, the High Court order in Konkan Marine case upholding the CESTAT order prevails.: BANGALORE CESTAT; 2009-TIOL-1166-CESTAT-BANG.pdf CCE, Belgaum Vs Karnataka Ex-Servicemen Security Agency Hubli (Dated: March 11, 2009) Service Tax – Service tax discharged before issue of show cause notice – no infirmity in the order of the Commissioner (Appeals) in setting aside the penalty under Section 76 as there is no allegation or ingredients for invoking extended period.: BANGALORE CESTAT; General Precured Treads Pvt Ltd Vs CC & CCE, Trichy (Dated: May 15, 2009) Service Tax – Supply of heated fluid to adjacent companies through pipelines against receipt of heating charges is not taxable under Business Auxiliary Service.: CHENNAI CESTAT;
CENTRAL EXCISE SECTION 2009-TIOL-1164-CESTAT-MUM.pdf + san story.pdf M/s Sanjivani SSK Ltd Vs CCE, Aurangabad (Dated: March 2, 2009) Molasses manufacturer paying Central Excise duty and procurer availing Cenvat Credit – No cause for denying credit by taking recourse to Rule 4(2) of the Central Excise Rules, 2002 Tribunal decision in Sagar Industries & Distilleries Pvt. Ltd. [ 2006-TIOL-2008-CESTAT-MUM ] relied upon. : MUMBAI CESTAT; CCE, Jalandhar Vs M/s Khanna Paper Mills Ltd (Dated: April 23, 2009) Central Excise – Manufacturing entities set up at different points of time coming under same management subsequently, to be regarded as separate units for availing benefit of exemption notifications for paper products – SC decision in Rollatainers Ltd 2004-TIOL-67-SC-CX followed – Impugned order upheld.: DELHI CESTAT; 2009-TIOL-1162-CESTAT-BANG.pdf CCE, Hyderabad Vs M/s Kedia Vanaspathi Ltd (Dated: September 25, 2008) Central Excise – Money Credit accrued to a manufacturer in one unit and remaining unutilized, eligible for utilization by another unit of same manufacturer – No merits in revenue appeal – Impugned order upheld.: BANGALORE CESTAT;
CUSTOMS SECTION CBEC revises tariff value of brass scraps and poppy seeds; Govt imposes provisional anti-dumping duty on Carbon Black; Govt imposes provisional anti-dumping duty on polypropylene imports from Singapore; CASE LAWS Shasun Chemicals & Drugs Ltd Vs CC, Chennai (Dated: May 29, 2009) Customs - Filing an appeal against an order of assessment amounts to protest and refund cannot be denied on the ground of time-bar.: CHENNAI CESTAT; Transocean Offshore International Ventures Ltd Vs CC, (Import), Mumbai (Dated: June 16, 2009) Notification 21/2002-Cus - So long as the imported goods were used for the petroleum operations and were not diverted to any other use, failure to re-export the goods within the specified time limit cannot result in the denial of the exemption - so long as the substantive condition of the use of the goods in the petroleum operation specified in the notification is satisfied, the exemption cannot be denied for delay in re-export of the goods, which at best can be a mere procedural lapse – strong case for waiver of pre-deposit of duty and interest.: MUMBAI CESTAT; |
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