Service Tax - Transport of Goods by Rail - Exempted - Indian Rail vs Indian Revenue + Sub-brokers exempted - not a commission agent;

Service tax - BAS - manufacture of pharmaceutical products - exempted (See 'DDT')

New Direct Taxes Code: Comforting the comfortable! - Is it Income Tax's H1N1?

Fresh allocation of Zonal charges for CBDT Members: Member (A&J) gets North Zone; Member (L&C) gets Central Zone and Member (R) gets Eastern Zone;

CBEC sends fresh panel of three names for DG, DRI post;

TIOL COMMENTARY

ddt 2 sept.pdf

Service Tax - Transport of Goods by Rail – Exempted - Indian Rail vs Indian Revenue;

editorial.pdf

No Service Tax on goods transport by Rail – Train carrying Notification running late by a day;

spl down.pdf

New Direct Taxes Code: Comforting the comfortable! - Is it Income Tax's H1N1?

2009-TIOL-547-ITAT-MUM.pdf + first state story.pdf

First State Investments (Hongkong) Ltd Vs ADIT, Mumbai (Dated: July 23, 2009)

Income-tax - sections 111A, 115AD, 70 - assessee FII had both short term capital gains and short term capital loss upto 30.9.2004 and after 1.10.2004 - Regime of taxation of short term capital gains changed by the Finance ( No2) Act, 2004 w.e.f 1.10.2004 - Whether short term captial loss suffered after 1.10.2004 could be set off against short term capital gains earned before 30.9.2004 - Held, yes.

There is a difference between computation section and the rate of tax. The Tribunal observed that it is simple and plain that the matter of computation of income is a subject which comes anterior to the application of the rate of tax. Only when the income is computed as per the provisions of the Act, that the question of the applicability of the correct rate of income tax comes into being. There being no prohibition in section 70 in the matter of set off of short term capital loss before and after the cut off period of 1.10.2004, the claim of the assessee was alllowed.:MUMBAI ITAT;

2009-TIOL-546-ITAT-MUM.pdf

Precitex Rubber Components Pvt Ltd Vs ACIT, Mumbai (Dated: June 22, 2009)

Income Tax - penalty u/s 271(1)(c) - Assessee company is engaged in manufacturing and selling of aprons and cots which are used by textile industries - files revised return after including a sum on account of difference in closing stock of finished goods - No notice, intimation or communication from the department regarding the discrepancy in stock served on the assessee - AO levies penalty on an amount being additional amount disclosed by the assessee in the revised return and on  an amount being amount of addition on account of undervaluation sustained by ITAT – CIT(A) confirms it - Held, the assessee has rectified mistake before detection and filed revised return voluntarily before issue of any notice or intimation. Therefore, the intention to defraud the revenue cannot be imputed to the assessee. Amount assessed pursuant to revised return cannot be said to represent income in respect of which particulars have been concealed. Therefore penalty u/s. 271(1)(c) cannot be imposed. Secondly, difference in the revised return and assessment is due to difference in valuation of stock and the valuation is based on estimates. Assessee's Appeal allowed: MUMBAI ITAT;

2009-TIOL-545-ITAT-MUM.pdf

Gateway Hotels & Geteway Resorts Ltd Vs DCIT, Mumbai (Dated: April 13, 2009)

Income Tax - deduction u/s 80HHD - assessee runs hotel business - receives major portion of foreign currency by way of Credit card payments - When foreign tourists pay by way of credit cards, the amount is received through collection agents who in turn deduct their commission before making payments to the assessee - AO takes the view that the commission amount has to be reduced from the turnover for the purpose of calculating deduction u/s. 80HHD – CIT(A) holds that the net receipts has to be taken into consideration for the purpose of computing deduction u/s. 80HHD - Held, the issue is squarely covered by the decision of the ITAT in case of J.B. Boda and Co. Pvt. Ltd. Vs. CBDT. AO to compute the deduction eligible u/s. 80HHD on  the gross receipts. Assessee ground allowed: MUMBAI ITAT;

2009-TIOL-544-ITAT-BANG.pdf

M/s Mac Charles (India) Ltd Vs ACIT, Bangalore (Dated: April 30, 2009)

Income Tax - Assessee company, engaged in hotel business files its IT return which is assessed u/s 143 - Subsequent order is passed without any notice u/s 148(1) beyond the period of 4 years - AO disallows revenue expenses on building by holding it as a capital expenditure - CIT(A) confirms AO's order - Held, the reassessment was not bad in law - whether capital or revenue expenditure emerges from circumstances peculiar to the situation and surroundings of each individual assessee - Held, the assessee has been an established hotel business procuring business under international chain brands which are crucial to such business requiring the maintenance of a required standard - Assessee's appeal partly allowed.:BANGALORE ITAT ;

2009-TIOL-543-ITAT-DEL.pdf

ITO, New Delhi Vs M/s Orbital Communication Pvt Ltd (Dated: July 29, 2009)

Income tax - Sec 68 - Assessee receives share application money - AO makes additions for the same in the assessee's hand, alleging that the identity of the share applicant not established - CIT(A) examines the bank statements of the share applicant and finds the returns of income credible and deletes the additions - held, once the creditworthiness of the applicant is established, merely because the applicant was not produced before the AO, the application money does not become the sum of the assessee - in view of the Apex Court decision in the case of Lovely Exports, CIT(A) order upheld and Revenue's appeal dismissed :DELHI ITAT ;

SERVICE TAX SECTION

NOTIFICATION

stnot09_033.pdf + stnot09_034.pdf

Service Tax - Transport of Goods by Rail – Exempted ;

stnot09_032.pdf

Service tax – BAS - manufacture of pharmaceutical products - exempted;

stnot09_031.pdf

Service Tax – Sub-brokers exempted – not a commission agent;

CASE LAWS

2009-TIOL-1377-CESTAT-DEL.pdf

M/s R J Interiors Vs CST, New Delhi (Dated: July 7, 2009)

ST - Works Contract - Assessee claims deduction of 60% of gross value of contract towards materials involved in the work - Revenue raises demand on the gross value - held, since the assessee has failed to provide enough evidence towards involvement of materials in execution of the contract, a pre-deposit of Rs 20 lakh ordered:DELHI CESTAT;

2009-TIOL-1376-CESTAT-DEL.pdf

CCE, Raipur Vs M/s Beekay Engg & Castings Ltd (Dated: June 11, 2009)

Service Tax – Input tax credit not deniable on mobile/landline phones, Rent-a-cab service, General Insurance premium on fire, machinery breakdown, group gratuity, group accident policy etc, Courier (inward freight), C & F service etc – Impugned order upheld:DELHI CESTAT;

2009-TIOL-1375-CESTAT-BANG.pdf

M/s Bharat Sanchar Nigam Ltd Vs CCE, Thiruvananthapuram (Dated: May 7, 2009)

Service Tax – Service tax liability on IUC and other services – Issue covered by various decisions of CESTAT – Pre-deposit of Rs. 15 lakhs ordered out of total demand of Rs. 11 crores tax/penalty and stay granted:BANGALORE CESTAT;

2009-TIOL-1374-CESTAT-BANG.pdf

Mr A Srinivasulu Vs CCE, Visakhapatnam (Dated: May 6, 2009)

Service Tax – Collection of highway toll fee for National Highway Authority of India whether regarded as business auxiliary service – Pre-deposit of Rs. 2 lakhs ordered – Balance amount waived and stay granted:BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1383-CESTAT-DEL.pdf + refund story.pdf

M/s Jyoti Overseas Pvt Ltd Vs CCE, Jaipur-II (Dated: June 2, 2009)

Central Excise – Refund under Rule 5 of the CENVAT Credit Rule 2004 – refund rejected on the ground that the goods exported were exempted – Refund is admissible even if the goods exported are exempted – Rule 6(6) of the CENVAT Rules provides that proviso to Sub-rule (1) of Rule 6 shall not apply in case of exported goods removed without payment of duty cleared for export under bond in terms of Central Excise Rules, 2002.:MUMBAI CESTAT;

2009-TIOL-1382-CESTAT-MUM.pdf

Lower authority allowing cenvat credit in respect of professional services for preparation of pay rolls, rent-a-cab service, management consultancy, chartered accountant service, business auxiliary service used in share marketing, certification of PAN cards of company's employee and banking and financial services - Prima facie , decision allowing the cenvat credit in respect of above services except service rendered for ‘certification of PAN' is correct but since the credit taken is a meagre amount of Rs.77/-, application of Revenue seeking stay dismissed.:MUMBAI CESTAT;

2009-TIOL-1381-CESTAT-MAD.pdf

M/s Taj Madras Flight Kitchen Pvt Ltd Vs CCE, Chennai (Dated: April 16, 2009)

Central Excise – Stay / Dispensation of pre-deposit – packed food delivered in aircrafts – the product is marketable and also has shelf life and hence excisable – however, the said item is covered under Sl No 42 in exemption notification No 3/2006 CE from 04.05.2006 – pre-deposit order in respect of demand for the earlier period:CHENNAI CESTAT;

2009-TIOL-1380-CESTAT-MAD.pdf

M/s Indian Organic Chemicals Ltd Vs CCE & CC, Chennai (Dated: May 11, 2009)

Central Excise – refund – limitation - appeal against the confirmation of duty is to be treated as protest – refund not hit by limitation.:CHENNAI CESTAT;

CUSTOMS SECTION

CIRCULAR

dgft09cir004.pdf

Corrigendum in respect of export of Meat of Sheep/Goat covered under Chapter 2 of ITC(HS);

CASE LAWS

2009-TIOL-1379-CESTAT-BANG.pdf + cus story.pdf

CC, Bangalore Vs M/s Adani Exports Ltd (Dated: February 10, 2009)

Customs – Allegation of mis-declaration in export of gold jewellery against advance licenses – Revenue allegation that export documents show description of goods exported as studded gold jewellery whereas importer at destination port declared them as gold scrap – Documents filed by exporter are attested and have more evidentiary value than documents relied upon by Revenue in SCN procured through Indian Consulate are not – Appeal filed against High Court Order passed by a Single Judge by Revenue not stayed, adjudicating authority taking up matter for disposal during pendency of appeal cannot be faulted, speaking order passed by Commissioner does not require any remand – Order-in-Original passed by Commissioner setting aside duty demand, confiscation and penalties upheld:BANGALORE CESTAT;

2009-TIOL-1378-CESTAT-MUM.pdf

CC & CCE, Goa Vs M/s Kodak India Ltd (Dated: July 2, 2009)

Conversion of free shipping bill to drawback shipping bill is repugnant to the provisions of section 76(1) of the Customs Act and consequently benefit of drawback cannot be granted – Revenue appeal allowed.

Second hand machine imported in 2002 was re-exported under free shipping bill on 22.5.03 and later on respondent requested for conversion of free shipping bill to drawback shipping bill under provisions of Section 149 of Customs Act - Section 76 of the Customs Act mandates ascertainment of market price of goods as on the date of export to rule out grant of drawback, in case, market price of goods is less than amount of drawback – Even if amendment to shipping bill is allowed under Section 149 of the Act on the strength of available documents, the claim for drawback cannot be examined under Section 74 on account of prohibition made under Section 76 as the market value of goods was not ascertained on the date of export.

Preliminary objection of Respondent for invoking Section 76 for first time in the present appeal by the Appellant is not maintainable as it is purely legal plea.: MUMBAI CESTAT;