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100-day Agenda: Ministry of Tourism issues guidelines for promotion of caravan and heliport tourism; CBDT notifies 632 as Cost Inflation Index for 2009-10; DGFT puts restrictions on import of energy; Expenditure Management - Tightening the Belt - Babus have less to spend ; Sibal launches Copyright Office website; Online applications can now be filed; BSNL, MTNL deny news about forming consortium to buy stake in Kuwaiti telecom Zain; Guidelines on Classification of Exposures as Commercial Real Estate (CRE) Exposures; Govt to develop National Web Portal to act as virtual job market: Labour Minister; NELP-VIII - bids likely to be awarded by December: Deora; UN releases list of '10 Stories The World Should Hear More About'; FM approves 9 FDI proposals worth Rs 75 Crore; |
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| Dear Member, Seding the following files: |
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TIOL COMMENTARY Board wakes up to reality- amends CENVAT Credit Rules relating to availment of Credit on clearances from 100% EOU; DTC: Obnoxious provisions galore! Economy slipping into slowdown-resource shortfall syndrome; RBI NOTIFICATION RBI Notifi For CRE Exposures.pdf Guidelines on Classification of Exposures as Commercial Real Estate (CRE) Exposures; MIXED BUZZ 100-day agenda: Ministry of Tourism issues guidelines for promotion of caravan and heliport tourism; NELP-VIII - bids likely to be awarded by December: Deora; UN releases list of '10 Stories The World Should Hear More About'; |
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NOTIFICATION CBDT notifies 632 as Cost Inflation Index for 2009-10; CASE LAWS Shri Rajesh Kumar Vs CIT, New Delhi (Dated: April 9, 2009) Income Tax - Section 158BC and Section 158BE - Tribunal finds assessment completed within the period of limitation - also sustains it in the light of APEX Court decision in the case of Sahara India (Firms) vs CIT - Assessee contends that in his own case, the Apex Court has decided that the opportunity of hearing has to be granted to the Assessee before proceeding under Section 142(2A), and thus, the impugned assessment framed u/s 158BC is barred by limitation within the meaning of the provisions contained in Section 158BE r/w Section 142(2A) - Held, appellant case is covered by the SC decision in Sahara India case - Tribunal's order upheld and Assessee's appeal dismissed.:DELHI HIGH COURT; Mahavir Rolling Mills Pvt Ltd Vs Income Tax Settlement Commission (Dated: August 17, 2009) Income tax - sections 220, 245D(6A) - valuation of closing stock The petitioner Company engaged in the business of trading and manufacture of hot rolled steel products- had filed Settlement Application pertaining to Block period from 20.8.1992 to 20.9.1995.- The Settlement Commission passed final order on the issues raised- aggrieved with the findings relating to (i) Excess stock due to inflated burning loss(ii) Unaccounted sale on basis of weighment slips of third parties(iii) Under valuation of closing stock of finished goods and raw material(iv) Unaccounted cash advances to employees out of cash available in books(v) Interest under Section 220(2) of the Income-tax Act petitioner filed writ petition. Held, the scope of the enquiry whether by the High Court under Article 226 or before the Supreme Court in the appeal under Article 136 is only to consider whether the order of the Settlement Commission is contrary to the provisions of the Income-tax Act, and if so whether it has prejudiced the petitioner, apart from grounds of bias fraud and malice which constitute a separate and independent category-Except the issue regarding under valuation of closing stock of finished goods and raw-materials no other issues deserve any consideration as they are all in the realm of facts and it is difficult to hold that the finding of the Settlement Commission is contrary to the provisions of Income-tax Act, 1961. As for valuation of closing stock- the Settlement Commission had not accepted the method of valuation only on the ground that freight and octroi was not included while valuing the same- However, even while valuing the opening stock of finished goods and raw-materials the freight and octroi charges have not been included- Hence such non-inclusion of freight and octroi would not affect closing stock and bring it within the ambit undisclosed income-The Settlement Commission has also not considered the submission that if the value of the stock have been enhanced then appropriate set off by way of increased value in the opening stocks should be granted- Order of Settlement Commission set aside on this issue and the matter remanded for reexamination.: GUJARAT HIGH COURT; 2009-TIOL-556-ITAT-PUNE.pdf + hypto tax story.pdf ITO, Aurangabad Vs Lukas Fole (Dated: February 27, 2009) Income tax - Sec 16 - Assessee is an expat employee from Czechoslovakia, hired by an Indian subsidiary of a non-resident company - claims deduction for social security charges and hypothetical tax paid by the employer from basic salary - AO disallows them as they are not eligible deductions u/s 16 - CIT(A) allows the appeal - held, social security charges are paid by the employer on behalf of the employee and are eligble deduction for the employee as decided by the Tribunal in an earlier case Hypo tax - it is a settled law that it is an allowable deduction from tax perquisite and not from basic salary - Assessee's appeal allowed:PUNE ITAT; DCIT, Mumbai Vs Smt Darshana M Jatania (Dated: January 20, 2009) Income tax - Sec 145 - Assessee earns interest income on FDRs with banks - TDS benefit is claimed as per bank certificate - AO insists since TDS credit is availed, the interest income on accrual basis be added to the income - assessee argues it follows cash account method and interest income not to be added on accrual basis - CIT(A) deletes additions - held, as per Sec 145 the method of accounting is a choice with the assessee, and when the assessee has been following cash method since inception, the Revenue cannot force the assessee to switch over other method of accounting - as per cash method of accounting the interest income to be taxed only on maturity and TDS credit cannot be denied - Revenue's appeal dismissed: MUMBAI ITAT; |
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Expenditure Management - Economy Measures and Rationalization of Expenditure;
SERVICE TAX SECTION 2009-TIOL-1431-CESTAT-AHM.pdf + sengupta story.pdf M/s Shrinandnagar Co-Op Housing Society Ltd Vs CST, Ahmedabad (Dated: July 3, 2009) Service Tax – Construction of residential complex by cooperative housing societies for its members not liable to service tax – Tax paid initially available as refund – Matter remanded to original authority to determine unjust enrichment and correctness of claims: AHMEDABAD CESTAT; 2009-TIOL-1430-CESTAT-BANG.pdf M/s India Vision Satelite Communications Ltd Vs CCE, Cochin (Dated: April 28, 2009) Service Tax – Contention of appellants that service tax already paid by supplier of inputs and order traversed beyond SCN to be looked into at final hearing – No reasonable grounds for waiver of pre-deposit except huge accumulated losses – Pre-deposit of Rs 10 lakhs ordered: BANGALORE CESTAT; Jet Speed Audio Pvt Ltd Vs CCE, Mumbai-I (Dated: May 29, 2009) ST - service recipient - Assessee receives IPR service from a foreign company - Revenue imposes tax on royalty and levies penalty - held, no power was vested in the Revneue to levy tax on service recipient prior to 18.4.2006 when Sec 66A was inserted in the Finance Act, 1994 - since the period is prior to 18.4.2006, no demand is sustainable and penalty is set aside - Assessee's appeal allowed: MUMBAI CESTAT; CCE, Chandigarh Vs M/s Bindra Tent Service (Dated: July 13, 2009) ST - Pandal & Shamiana Service - Income Tax authorities conduct Survey on assessee's premises - Assessees surrender certain sums - Service Tax authorities raise demand - Commissioner (A) observes it cannot be presumed that the surrendered sum was earned by providing taxable service - held, it is rightly held by the Commissioner(A) that the onus is on the Revenue to establish that the sum surrendered is related to the taxable service - demand cannot be sustained on the basis of presumption - Revenue's appeal dismissed: DELHI CESTAT;
CENTRAL EXCISE SECTION 2009-TIOL-1427-CESTAT-MUM.pdf + tata story.pdf M/s Tata Motors Ltd Vs CCE, Pune-I (Dated: August 11, 2009) Cenvat Credit cannot be allowed on the inputs used by the job worker for processing of goods received under Rule 4(5)(a) of the Cenvat Credit Rules, 2004 – CESTAT orders pre-deposit of fully amount of duty demanded. Tribunal's observations – The principles laid down by Supreme Court in Escorts case [ 2004-TIOL-72-SC-CX ] have not been applied correctly in Sterlite case [ 2005-TIOL-305-CESTAT-Mum-LB ] . Rules cannot be given a go bye to avoid additional paper work. The case of M/s Sterlite Industries (supra) has not taken into account the laws laid down in this regard by the Hon'ble Apex Court in UOI vs. Dharamendra Textile Processors [ 2008-TIOL-192-SC-CX-LB ] and the High Court in CCEx vs. Spectra Electronics Pvt. Ltd. [ 2008-TIOL-697-HC-HP-CX ] . We do not intend to go beyond the plain reading of the Rules. The Legislature, in its wisdom, has nowhere provided under the Rules that a job worker is entitled to the Cenvat Credit on the inputs used in the manufacture of goods, which are cleared under job work challans used Rule 4(5)(a) of Cenvat Credit Rules without payment of duty to the principal manufacturer. Compliance with the Rules is mandatory (even if it is mechanical and involves additional paper work) and non-compliance will result into denial of the Cenvat Credit. Applicants have not made out an irresistible case for the waiver of the full amount of duties, interest and penalties – Pre-deposit ordered of entire amount of duties demanded: MUMBAI CESTAT; CCE, Patna Vs M/s New Swadeshi Sugar Mills (Dated: April 2, 2009) Central Excise – Claim of accumulated CENVAT credit lying in balance after merger of units – Credit on common inputs not deniable on ground of usage in both dutiable and exempted goods as there is no correlation between inputs and final products – No infirmity in impugned order: KOLKATA CESTAT; M/s Rane Trw Steering System Ltd Vs CCE, Trichy (Dated: April 17, 2009) Central Excise – differential duty paid on goods cleared to sister units on finalisation of the provisional price adopted – Interest is payable under Section 11 AB of Central Excise Act. : CHENNAI CESTAT; M/s Ambaji Metal Industries Vs CCE, Pune-II (Dated: July 2, 2009) Rule making authority has acknowledged the non-applicability of Rule 25 of the CER, 2002 to registered dealers inasmuch as a special penal provision was incorporated against dealers under Rule 26 w.e.f 01.03.2007 – Since rule 26 not invoked, appellant has made out a prima facie case against penalty – Pre-deposit waived and Stay ordered.:MUMBAI CESTAT;
CUSTOMS SECTION NOTIFICATION DGFT restricts import of energy; CIRCULAR Policy related to Import of waste paper; CASE LAWS M/s Air Impex Cargo Agency Vs CC, New Delhi (Dated: May 12, 2009) Customs – Over invoiced imports lying uncleared with Customs and allegation of facilitating transfer of funds overseas – Statements recorded from directors / evidences do not impute evidence of omission or commission necessitating confiscation under Section 111 of Customs Act – No evidence adduced against CHA for abetment of imports – Penalties set aside :DELHI CESTAT; |
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