Government issues fresh instruction on Gender Budgeting;

SEBI to set up separate Stock exchange for SMEs;

India and Indonesia to cooperate in textile machinery;

India extends concessional customs duty regime to two more LDCs from Africa;

FTP restrictions on state trading enterprises shall not apply to SEZ manufacturing units;

Central processing of income tax returns at Bangalore to go online in a couple of months, says CBDT Member S S Khan;

Intense back-room deliberations are in full swing for GST, says CBEC Chairman V Sridhar;

Telecom sector contributes 1.5% plus to India's GDP , says MoS (Communication & Information Technology)

TIOL COMMENTARY

ddt 7 Aug 09.pdf

CAG auditors inadvertently open doors for avoiding service tax on works contract while trying to safeguard revenue;

potpourri_020.pdf

Our Constitution defaced and defiled under WTO Regime;

MIXED BUZZ

mbuzz0732.pdf

SEBI to set up separate Stock Exchange for SMEs;

mbuzz0731.pdf

Government issues fresh instruction on Gender Budgeting;

mbuzz0730.pdf

Govt to set up two regional Directorates of companies;

mbuzz0729.pdf

Telecom sector now accounts for 1.5% of GDP: Minister;

2009-TIOL-395-HC-MAD-IT.pdf

CIT, Chennai Vs Shri Krishna Sarafs (Dated: July 7, 2009)

Income tax - Sec 132B(4)(a) - Assessee's premises searched u/s 132 - Reveue makes seizure of a diary, cash, jewellery and other instruments of investments - Notice u/s 143(2) - return filed and assessment order passed - appeal filed - giving effect to the appellate authority order AO determines the sum refundable to the assessee but fails to grant interest as per Sec 132B(4)(a) - ROM filed u/s 154 - CIT(A) holds that the omission of grant of interest is a mistake apparent on record - Tribunal agrees with the CIT(A) - held, going by the fact that the seizure was made at the premises of the assessee, the interest u/s 132B(4)(a) cannot be denied and the findings of CIT(A) and Tribunal do not call for interference

Sec 154 - held, in view of the fact that the interest u/s 132B(4)(a) was admissible to the assessee but the same was omitted in the AO's order, it was a mistake apparent on record, and the same can be rectified by the AO himself or on rectification application filed by the assessee - Sec 154 is invokable in the instant case - Revenue's appeal dismissed.: MADRAS HIGH COURT;

2009-TIOL-500-ITAT-MAD.pdf + sify story.pdf

ITO,Chennai Vs M/s Sify E-Learning Ltd (Dated: May 26, 2009)

Income tax – Amortization of license fee expenditure on software over a period of three years – Where revenue expenditure results in a continuing benefit to assessees business over a period of time, allowing expenditure in the year in which it is incurred will distort profits of that year, amortization of expenses permissible under concept of ‘matching principle' – No reason to interfere with order of Appellate Commissioner

Income tax - Revenue earned by assessee from software and consultancy services recognized on delivery of goods/services – Accounting principle followed in terms of AS 9 in conformity with provisions of s. 145(2) – Appellate Commissioner's deletion of unearned income upheld.: CHENNAI ITAT;

2009-TIOL-499-ITAT-MAD.pdf

M/s Bengorm Nilgiris Plantations Co Vs ACIT (Dated: February 27, 2009)

Deductibility of amount paid towards Mesne profits, interest on mesne profits and legal expense connected with the same.

Mesne profits were paid to legal heirs of the deceased partner in lieu of not paying any amount towards their legally entitled share – Suit filed by legal heirs finally settled by Apex court - On appeal, Tribunal held that the suit was against the other partners of the firm who enjoyed the benefits of the firm to the exclusion of the legal heirs of the deceased partner – Since firm was not in wrongful possession of the property, it need not have to pay any mesne profits and what was paid by the assessee firm was only application of income for the personal cause of partners – Such expenditure was not incurred wholly and exclusively for the purpose of the business.: CHENNAI ITAT;

2009-TIOL-498-ITAT-MUM.pdf

DCW Ltd Vs DCIT, Mumbai (Dated: February 18, 2009)

Income Tax Appellate Tribunal – Additional Ground – Held that, where the additional ground raises a question of law which arises from the undisputed facts as found by the income tax authorities and has a bearing on the tax liability of the assessee it merits tto be admitted – Held further that Supreme Court decision in the case of Goetze (India) Ltd 284 ITR 323 (SC) will not impinge upon powers of ITAT to admit additional gorunds as the same was concerned with the assessee's claim filed by way of letter before the AO and in that context, AO's authority to entertain the said claim was under consideration before the Hon'ble Supreme Court

Income Tax Act – Section 115JB – MAT – Assessee submitted that there has to be income tax payable on the total income as computed under I.T. Act in respect of previous year before any charge is attracted u/s. 115JB and since in its case there is net loss under the normal computation provisions, the provisions of section 115JB were not attracted – Held that the provisions of Section 115JB, are admittedly charging section. But at the same time, section 115JB is a code by itself and, thus, contains substantive as well as procedural provisions, therefore, which part of the section precisely creates the charge, has to be specifically identified. If closely section 115JB is examined, having due regard to the punctuation, then there is a comma between 'Income-tax' and 'payable' and further there is comma before 'is less'. Therefore, full effect will have to be given to the phrase following comma after the phrase 'Income-tax'. As per the terms of this section, it will be attracted if Income-tax payable in respect of total income computed under the Act is less than seven and one-half percent of its book profit. Thus, tax payable under the provisions of the Act should be less than seven and one-half percent of its book profit. Consequently, if the tax payable is more than seven and one-half percent of its book profit, then this section will not be attracted. Therefore, the dividing line for determining the applicability or non-applicability of the section is seven and one-half percent of its book profit as compared to tax payable, which actually creates the charge. The charge is not with reference to income tax payable but with reference to book profits. Charge under section 115JB is to be determined with reference to 7.5% of book profits. The process of determination of book profit is to be preceded with the comparison of liability for income tax under normal provisions of income tax which may be nil also. The income tax payable cannot be circumscribed by positive figure only. The purpose of comma after the term "Income-tax" and before the term 'less' is to qualify term "payable" by the term "less" and, therefore, to say that those companies, where Income tax payable being Rs.1/- would be covered and not the Zero tax companies, would not be correct. The term 'payable' used in the section cannot be limited only to the positive figure and if the income tax payable is zero still the requirements of section would be met.

Interpretation of statutes - It is equally settled position of law that each general word appearing in a section should be given its full meaning having due regard to the context in which it is used. It should be held to extend to all ancillary or subsidiary matters which can fairly and reasonably be comprehended in it, and in interpreting the same it would not be reasonable to import any limitation on the same. It is also one of the cardinal principles of interpretation that a construction that will render a provision of an enactment wholly or partially meaningless or futile is not to be adopted by the court. The courts should endeavour to interpret the provisions of a statute in a manner that will achieve the object of provision, avoid mischief, advance the cause of justice, provide the remedy intended by the statute, make the law workable and enforceable instead of reducing it to a redundant or dead letter and best harmonize with and effectuate the object of legislation.: MUMBAI ITAT;

2009-TIOL-497-ITAT-MUM.pdf

ITO, Mumbai Vs M/s Juhu Construction Co Ltd (Dated: February 2, 2009)

Income Tax – Section 145 – Percentage Completion Method – assessee was executing projects in buildings named Mittal Park & Megh Apartments which were old projects while land for Ocean View was purchased previous year and construction commenced during the current year - In past the assessee had estimated profit at the rate of 20% in respect of the first two buildings - It estimated profit this year at the rate of 5% as against 20% estimated in past on the ground that there was crash in the real estate market and in respect of Ocean View project it had incurred heavy loss - AO passed the assessment order and relying upon BMC issued occupation certificate in respect of Megh Apartments and the assessee having given possession of three flats held that as the construction of Mittal Park and Megh Apartments was complete the profit from that project was required to be assessed on final basis. While estimating final profit the learned AO did not give any credit for the further expenditure which were claimed by the assessee as yet to be incurred in subsequent years – Held, that mere giving possession of few flats will not lead to a conclusion that the project had completed. Also held that, the AO's assertion that there was no mention of club-house in the agreements was not sufficient to disallow the expenditure. The facility of club-house was mentioned in the construction plans as approved by Bombay Municipal Corporation. The agreements of sale entered into between the assessee and its buyers had to be read with these plans. There was no material relied upon by revenue to show that expenditure on clubhouse was not wholly and exclusively for the purpose of business. It was not the case of revenue that the assessee had any ulterior motive for constructing the club-house. It is for the businessman to decide how to conduct his business and it was not for the assessing officer to advise the assessee as to what expenditure for the purpose of business should be incurred or not incurred – Held further that, the third project was to be assessed in isolation and the loss in that project will have to be allowed. The Assessing Officer himself accepted that there was heavy loss in that project – Also held, that in a case where profits before the completion of project have been and are being assessed, if there is loss it has to be assessed in the same manner.: MUMBAI ITAT;

amendment_2009_III.pdf

Third Amendment Rule (2009) - Dated: August 3, 2009;

SERVICE TAX SECTION

2009-TIOL-1217-CESTAT-DEL.pdf

M/s Martial Security & Detective Services Vs CCE, Meerut (Dated: June 2, 2009)

ST - Assessee provides conductors to UP State Road Transport Corpn - demand for supply of manpower recruitment service raised - held, in view of the Tribunal's decision in Punjab Ex-Servicemen Corpn, Revenue's interest will be prejudiced if a pre-deposit of Rs 15 lakh is not ordered - Assessee's appeal dismissed.: DELHI CESTAT;

2009-TIOL-1216-CESTAT-AHM.pdf

CC & CCE, Vapi Vs M/s DNH Spinners (Dated: July 10, 2009)

ST - Cenvat Credit - Assessee has invoices issued in the name of head office - held, substantive benefit cannot be denied on the procedural ground - since there is no dispute about the input services received by the assessee, credit is allowable even if the invoice is raised in the name of HO in place of the factory - Revenue's appeal dismissed.: AHMEDABAD CESTAT;

2009-TIOL-1212-CESTAT-MUM.pdf + st story.pdf

Parason Machinery (I) Ltd Vs CCE, Aurangabad (Dated: July 6, 2009)

Xerox machine Maintenance is an Input service but Photography Services, Air Travel Agent & Tourist Taxi Services are not Input Services – Unconventional trade practices cannot bolster Cenvat credit claim – CESTAT: MUMBAI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1213-CESTAT-MUM.pdf

M/s Samrudhi Industries Vs CCE, Nagpur (Dated: June 9, 2009)

Pipes were utilized for supply of water from the reservoir to the water treatment plant and from there partly for human consumption and partly for industrial use - Explanation to sr.no.7 of notification no.6/06CE clarifies that water treatment plant does not include a plant supplying water for industrial purposes –merely because the word “plant” has not been used in clause 3, sr. no.7 of notification 6/2006-CE, the same could not be said to have been excluded from the explanation - prima-facie arguments against the confirmation of duty demand is not convincing – Pre-deposit ordered of duty amount of Rs.5.54 crores – however, since appellants are disputing the interpretation of the provisions regarding the exemption notification, the complete waiver for penalty.: MUMBAI CESTAT;

2009-TIOL-1211-CESTAT-BANG.pdf

M/s Sapthagiri Cements Private Limited Vs CCE, Visakhapatnam (Dated: February 9, 2009)

Central Excise – Issues decided in appeal brought out again in ROM application – Matters already decided by Tribunal after looking into every aspect of the evidence on record – A decision on a debatable point of law or fact, or failure to apply the law to a set of facts, which remains to be investigated cannot be corrected by way of rectifications – Tribunal cannot recall its own order, proper mechanism is to approach a higher court – No merits in ROM application.: BANGALORE CESTAT;

2009-TIOL-1210-CESTAT-MAD.pdf

M/s Tamilnadu Textile Corporation Ltd Vs CCE, Coimbatore (Dated: April 17, 2009)

Central Excise – refund of interest – refund of interest cannot be rejected on the ground that the same is not governed by the provisions of Section 11 B of the Central Excise Act, 1944 – matter remanded to examined the aspect of unjust enrichment.: CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_086.pdf

India extends concessional customs duty regime to two more LDCs from Africa;

ctariff09_085.pdf

Definitive Anti-Dumping Duty on imports of Titanium dioxide, Anatase grade;

cnt09_121.pdf

Adjudicating authority notified for M/s. Kalinga Commercial Corporation;

cnt09_120.pdf

Adjudicating authority notified for M/s GSF Collections Manufacturers;

cnt09_119.pdf

Adjudicating authority notified for M/s. Innovative Printers Products Private Limited;

cnt09_118.pdf

Adjudicating authority notified for M/s. Deep Overseas;

cnt09_117.pdf

Adjudicating authority notified for M/s. Cell On Traders;

cnt09_116.pdf

Adjudicating authority notified for M/s Transcorp International Limited;

cnt09_115.pdf

Adjudicating authority notified for M/s. Gouri International Inc;

cnt09_114.pdf

Adjudicating authority notified for M/s. Samarth Corporation;

cnt09_113.pdf

Adjudicating authority notified for M/s. Pearl Electronics;

cnt09_112.pdf

Adjudicating authority notified for M/s. Texmart India Private Limted;

cnt09_111.pdf

Adjudicating authority notified for M/s. Self Knitting Group of Companies;

cnt09_110.pdf

Adjudicating authority notified for M/s. Unimark Remedies Limited;

cnt09_109.pdf

Adjudicating authority notified for M/s. Softcell Technologies Limited;

cnt09_108.pdf

Adjudicating authority notified for M/s. KDL Biotech Limited;

cnt09_107.pdf

Adjudicating authority notified for M/s. Star Entertainment Private Limited;

cnt09_106.pdf

Adjudicating authority notified for M/s. VVF Limited;

cnt09_105.pdf

Adjudicating authority notified for M/s. Krishna Hengyuan Machines Private Limited;

dgft08not120.pdf

Sugar import to be allowed only through EDI ports;

CASE LAWS

2009-TIOL-1215-CESTAT-MUM.pdf + nitco story.pdf

Nitco Tiles Ltd Vs CC, Mumbai (Dated: January 23, 2009)

Re-labelling of boxes of Vitrified and Glazed tiles with higher MRP consequent to import – Differential CVD duty demand – CESTAT orders pre-deposit of Rs 50 lakhs.: MUMBAI CESTAT;

2009-TIOL-1214-CESTAT-BANG.pdf

Adarsh Realty & Hotels Pvt Ltd Vs CC, Bangalore (Dated: January 1, 2009)

Customs – No error apparent on face of record – If appellant is aggrieved with Tribunal's order then they should file appeal in appropriate forum.: BANGALORE CESTAT;