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New Direct Taxes Code: Is CBDT going to be a low-profile 'Agency' outside Central Govt? Is IRS going to be cut down to size? (See "Common Basket") Service Tax - Finance (No.2) Act to come into force from 1st September 2009; Definition of India expanded in Export of Services Rules; MoC issues guidelines for relaxation of contiguity criteria for SEZs; Cabinet eases guidelines for States to borrow upto 4% of GSDPs; Capital Goods manufactured within EOU - Board clarifies; Revival of Hindustan Prefab Ltd gets Cabinet nod; Guidelines regarding “land acquisition for SEZs”; Guidelines regarding “conditions for relaxation of contiguity criteria in respect of SEZs"; Enforcement Directorate looking for Legal Adviser; President of India finally gives assent to Finance Bill 2009 on August 19th; Sugar prices skyrocketing; Govt may raise levy sugar quota to perk up supply soon; |
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Dear Member, Sending the following files: |
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TIOL COMMENTARY SCOMET – Export – Permission of Government before entering into agreements; New Direct Taxes Code: Is CBDT going to be a low-profile Agency outside Central Govt? Is IRS going to be cut down to size? RBI CIRCULAR Exim Bank's Line of Credit of USD 17.34 million to the Government of Lao People's Democratic Republic MIXED BUZZ Cabinet eases guidelines for States to borrow upto 4% of GSDPs; Revival of Hindustan Prefab Ltd gets Cabinet nod; Two-day Meet on administrative reforms to share experiences; |
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2009-TIOL-527-ITAT-BANG.pdf + tds story.pdf Bangalore Water Supply & Sewerage Board, Bangalore Vs ITO, Bangalore (Dated: May 12, 2009) Income Tax Act – Section 10A – Computation of deduction – Held, that all profits which have a direct nexus with the profits of the undertaking will qualify for deduction u/s 10A – Held further that assessee had given FDR's to bank for obtaining credit facilities and thus interest income earned on such FDR's had nexus with business of the undertaking and fell under the head “Profit and Gains from Business and Profession” as having relation with carrying on of the business – Accordingly held that assessee was entitled to claim benefit u/s 10A in respect of said interest income.:MUMBAI ITAT; Livingstones Jewellery (P) Ltd Vs DCIT, Mumbai (Dated: May 12, 2009) Income Tax Act – Section 10A – Computation of deduction – Held, that all profits which have a direct nexus with the profits of the undertaking will qualify for deduction u/s 10A – Held further that assessee had given FDR's to bank for obtaining credit facilities and thus interest income earned on such FDR's had nexus with business of the undertaking and fell under the head “Profit and Gains from Business and Profession” as having relation with carrying on of the business – Accordingly held that assessee was entitled to claim benefit u/s 10A in respect of said interest income.:MUMBAI ITAT; Sabre Inc Vs DDIT (Dated: June 19, 2009) Indo-USA DTAA - Assessee owns and runs a CRS - has a PE in India - pays commission to agents for promoting its business - attribution of a part of total global receipt to Indian operations - in the absence of any statutory formula for attribution of revenue, how much of global receipt can be attributed to India, and after paying commission to agents, is there any income left to be taxed in India? Assessee's CRS software is gloablly known as 'Sabre' - Six players like customer, travel agent, main distributor, airlines and the assessee are linked in a chain to do this business - main computers which process the requests for ticket or hotel reservation are located in the USA - assessee also has a PE which trains and monitors Indian operations - business connection u/s 9(1)(i) - AO takes the view that since the entire business is done in India, the total receipt of the assessee is taxable in India - since no expenditure is claimed, Revenue does not allow any deduction - held, as a similar issue has been decided by the Delhi HC in Galileo International case, and the Tribunal's decision to attribute only 15% of total receipts to the Indian PE as the main database is located outside India which does the final processing and is also updated through computer networks with airlines, has been upheld, in the instant case the assessee pays 60% commission to its agent in India, no income is left to be taxed in the hands of the assessee - Assessee's appeal allowed:DELHI ITAT; ACIT, New Delhi Vs Jai Parabolic Springs Ltd (Dated: July 6, 2009) Income Tax Act – Section 37(1) – Advertisement Expenditure - Assessee in its books of account had shown advertisement expenses under the head "deferred revenue expenses" and only part thereof was claimed in the books but for tax purposes it was claimed in the year in which expenses were incurred – AO held that the same are allowable as an expense over a period of six years – AO also held that development of samples for new products was an expenditure which was likely to benefit the company, not only in the year in which expenses were incurred but also in the following years – Held that it is well settled preposition that question whether claim of expenditure is to be allowed or not, has to be considered as per statutory provision and not on the basis of entry made in the books of account – Also held that there is no dispute in the present case that expenditure in question was incurred for development of samples used by the assessee for carrying on its business more effectively and more efficiently. Expenses were incurred for purposes of business. Samples like advertisement may be beneficial to the assessee not only in the year in which expenses are incurred but in other years also. But on that account, expenses cannot be treated as of capital nature – Held revenue appeal dismissed.:DELHI ITAT; |
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SEZ - INSTRUCTION Guidelines regarding “land acquisition for SEZs”; sez09ins027.pdf
SERVICE TAX SECTION NOTIFICATION PSUs made eligible for advance ruling in Service tax Finance (No.2) Act to come into force from 1st September 2009; Definition of India expanded in Export of Services Rules; CASE LAWS 2009-TIOL-1295-CESTAT-MUM.pdf + finolex story.pdf Finolex Industries Ltd Vs CCE, Pune-I (Dated: July 29, 2009) Cenvat Credit – Security Services provided to Director at his residential bungalow, Repair & maintenance of guest house and garden – Prima facie there is nothing to show that there was any connection, directly or indirectly in or in relation to the manufacture or clearance of finished products – CESTAT orders pre-deposit: MUMBAI CESTAT; Shri Chandraprasad Desai Memorial Foundation Vs CST, Ahmedabad (Dated: June 10, 2009) :ST - Commercial coaching and training - Assessee is a charitable trust - provides English-speaking course and other courses and makes profits - Revenue raises demand - held, since the assessee is not a commercial concern and the courses were mainly for poor students, demand is not sustainable - Assessee's appeal allowed:AHMEDABAD CESTAT; CCE, Bhopal Vs M/s M P State Dairy Cooperative Federation (Dated: July 13, 2009) ST - Management Consultancy Service - Assessee is a Federation of Milk Unions - it issues advisories and instructions to unions on various issues - Revenue raises demand - Commission (A) disagrees - held, since the Federation is not commercially providing any service to its member-Unions and never provided any service to outside parties, it is not a commercial entity - no service tax leviable - Revenue's appeal dismissed:DELHI CESTAT;
CENTRAL EXCISE SECTION NOTIFICATION PSUs made eligible for advance ruling in Excise; CIRCULAR Modification in Circular No. 569/6/2001-CX dated 09.02.2001 regarding the Special Procedure for Removal of Liquid Gases-Pass-out System; CASE LAWS CCE, Bhavnagar Vs M/s Ultra Tech Cement Ltd (Dated: August 17, 2009) Central Excise – CENVAT Credit – Inputs used for generation of electricity cleared outside the factory – not entitled for credit:SUPREME COURT; 2009-TIOL-94-SC-CX.pdf + credit story.pdf M/s Maruti Suzuki Ltd Vs CCE, Delhi-III (Dated: August 17, 2009) Central Excise – CENVAT Credit – Inputs used for generation of electricity cleared outside the factory – not entitled for credit: the definition of "input" brings within its fold, inputs used for generation of electricity or steam, provided such electricity or steam is used within the factory of production for manufacture of final products or for any other purpose. The important point to be noted is that, in the present case, excess electricity has been cleared by the assessee at the agreed rate from time to time in favour of its joint ventures, vendors etc. for a price and has also cleared such electricity in favour of the grid for distribution. To that extent, assessee was not entitled to CENVAT credit. In short, assessee is entitled to credit on the eligible inputs utilized in the generation of electricity to the extent to which they are using the produced electricity within their factory (for captive consumption). They are not entitled to CENVAT credit to the extent of the excess electricity cleared at the contractual rates in favour of joint ventures, vendors etc., which is sold at a price.:SUPREME COURT; CCE, Kolkata-III Vs M/s Paul Aquomin & Food Pvt Ltd (Dated: June 3, 2009) Central Excise – Manufacture and clearance of packaged drinking water affixing label indicating name of marketing company – Not to be regarded as branded goods as labels merely indicate goods are marketed by ‘Mother Diary' – No reason to interfere with orders of appellate authority:KOLKATA CESTAT;
CUSTOMS SECTION CIRCULAR Capital Goods manufactured within EOU Ð Board clarifies; NOTIFICATION PSUs made eligible for advance ruling in Customs; SCOMET – Export – Permission of Government before entering into agreements; CASE LAWS M/s Sabari Exim Private Ltd Vs CC, Chennai (Dated: May 20, 2009) Customs – misdeclaration – Heavy melting Scrap Vs Re-rollable scrap – The dimensions of the structures given in report by NML do not conform to the dimensions of re-rolling scrap in standard 13 of IS 2549; 1994- Importer's claim as heavy melting scrap acceptable:CHENNAI CESTAT; CC, New Delhi Vs Taneja Mines Pvt Ltd (Dated: March 26, 2009) Customs – Communication by Assistant Commissioner under instructions of Commissioner not an appealable order before CESTAT - Appeal remedy under Section 129A of Act is essentially against an order or decision under the said Act and not against mere communication of such order or decision:DELHI CESTAT; |
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