Feedback on Direct Taxes Code: FM to meet industry, others on October 9;

President appoints Justice Asok Potsangbam and Justice Pranoy Kumar Musahary as Additional Judges of the Guwahati High Court;

Clarification on some important issues related to the ceramic tile industry;

Broadband subscriber-base grows by 2.7% in August;

Drawback fraud case: Mumbai DRI raids and seizes Rs 60 lakh cash from premises of Customs Superintendent posted at Nhava Sheva ;

Exim Bank's Line of Credit of USD 30 million to the Government of the Republic of Mozambique;

Smart card-based driving licence: Centre tells States deadline is Dec 31, 1009;

Asia-Pacific nations should join hands to combat cyber crime: UN Forum;

TIOL COMMENTARY

ddt 25 sept.pdf

Service Tax on construction of canals by Government agencies - Board Clarifies;

icecube.pdf

Don't treat Integrated Energy Policy like any other reform;

RBI CIRCULAR

Exim Bank's Line of Credit of USD 30 million to the Government of the Republic of Mozambique;

MIXED BUZZ

mbuzz0885.pdf

Broadband subscriber-base grows by 2.7% in August;

mbuzz0884.pdf

Smart card-based driving licence: Centre tells States deadline is Dec 31, 1009;

mbuzz0883.pdf

Asia-Pacific nations should join hands to combat cyber crime: UN Forum;

2009-TIOL-513-HC-DEL-IT.pdf

Shipra Srivastava Vs ACIT (Dated: September 8, 2009)

Income tax - Sec 147 - Assessees are husband and wife - both are employed as doctors with a leading hospital - AO reopens assessment on the ground that the assessees were given rent-free accommodation by their employer which they did not disclose as perquisites in their return - held, it is a case of non-application of mind by the AO - assessees had vacated the accommodation provided by the employer long back and they stayed in their own flat before they were posted out of Delhi - when the assessees stayed at their work place in a house not owned by them, the ALV of their flat in Delhi is to be taken as NIL as per Section 23(2)(b) - Assessee's appeal allowed and a cost of Rs 25000 imposed on Revenue: DELHI HIGH COURT;

2009-TIOL-512-HC-DEL-IT.pdf

Triveni Engineering & Industries Ltd Vs CIT, New Delhi (Dated: September 11, 2009)

Income tax - valuation of closing stock - Assessee changes method of valuation - AO objects - held, a company can change and adopt any method for valuation of the closing stock, but, such valuation of closing stock has to be adopted on a consistent basis and cannot be changed to suit the convenience of the assessee so as to deprive the revenue of legitimate tax - it is seen that the assessee changes the method of valuation in the year when there is huge profit - it is not legally sustainable - Assessee's appeal dismissed: DELHI HIGH COURT;

2009-TIOL-511-HC-ALL-IT.pdf

M/s Desh Raj Udyog Vs ITO, Ghaziabad (Dated: August 25, 2009)

Income Tax - Sec 147/148 - Assessee is a partnership firm engaged in manufacture and sale of RCC pipes - returns business income income and rental income - Sec 143(1) notice issued - Reassessment notice issued - writ - assessee alleges change of opinion - held, given the fact that the Revenue issued Sec 143(1) notice for intimation, no opinion was formed by the AO which later noticed excessive business expenditure claimed to bring the profits even less than the rental income - Revenue has valid reasons to reopen the assessment and the sufficiency of materials cannot be gone into at the stage of issuing notice - Assessee's petition dismissed: ALLAHABAD HIGH COURT;

2009-TIOL-587-ITAT-MUM.pdf

ADIT , Mumbai Vs M/s Citibank NA (Dated: August 5, 2009)

Income tax - Sec 36(10(vii) - Assessee is a bank incorporated in the USA - claims deduction for bad and doubtful debts - the proviso to section 36(1)(vii) lays down that the amount that will be allowed as deduction on account of bad debts written off cannot exceed the actual debt written off in the books of account of the previous year including the provision for bad debts which is claimed as deduction u/s. 36(1)(viia) - AO allows deduction for provision for bad debt as it was within the 5% range - CIT(A) disagrees and deletes additions - held, given the fact that the assessee cannot get more deduction than the actual debts written off in the books, if the assessee gets the same by way of provisions for bad debts and also the actual debts written off, it cannot, under any circumstances, exceed the total figure written off as irrecoverable in the books - CIT(A) order upheld - Revenue's appeal dismissed: MUMBAI ITAT;

2009-TIOL-586-ITAT-DEL.pdf + srf story.pdf

SRF Ltd Vs DCIT, New Delhi (Dated: June 26, 2009)

Income Tax – Excise Duty deposited in PLA, though not due – allowable deduction under section 43B - deduction for tax, excise duty etc. is allowable under section 43B on payment basis even before incurring liability to pay such amount. Since in the present case the amount is already paid by way of excise duty, though lying in PLA balance, yet the same is payment towards excise duty and hence allowable in terms of section 43B of the Act.

Prior period expenses allowed irrespective of the year in which it pertains as the liability got crystallized during the relevant previous year; Since the bills or claims were made during the year, it can be said that the liability became known for the first, time when such claim was made. Accordingly, the same is allowable in the year in which the liability got crystallized.

Issuance of shares in lieu of interest liability cannot be considered payment towards expenditure – disallowed - The word "expenditure" is not defined under the Act. When the assessee issues shares the assessee does not incur any expenditure as the assessee is not to make any payment legally towards shares issued. Thus by issuance of shares the assessee cannot be said to have incurred any expenditure and hence issuance of shares in lieu of interest liability cannot be considered to have been payment towards expenditure. Accordingly the interest liability discharged is not an allowable expenditure.: DELHI ITAT;

SERVICE TAX SECTION

2009-TIOL-1526-CESTAT-DEL.pdf

M/s Bharat Sanchar Nigam Ltd Vs CCE, Chandigarh (Dated: June 19, 2009)

Service tax - telecom service - Assessee is a PSU - does not realise payment of its services every month - Revenue allows it to operate under provisional assessment scheme and submit the return in Form ST-3A under rule 6 of Service Tax Rules 1994 - assessee adjusts the excess tax paid in one month in other month - Rule 6(4A) comes into force from 16.6.05 - Revenue raises demand - held, since the assessee has been operating under provisional assessment scheme, case is remanded for fresh examination and retrospective application of rule 6(4A) cannot be disallowed to the assessee - Assessee's appeal allowed :DELHI CESTAT;

2009-TIOL-1525-CESTAT-DEL.pdf

CCE, Kanpur Vs M/s Pradeep Enterprises (Dated: June 3, 2009)

ST - Maintenance and repair service - assessee is a proprietorship firm - On being pointed out about the liability the assessee deposits tax with interest - penalty imposed - Commissioner(A) sets aside penalty - held, going by the fact that the assessee was not properly advised by his corporate client and he paid tax with interest immediately on being pointed about the liability, it is a fit case for invocation of Sec 80 - Revenue's appeal dismissed:DELHI CESTAT;

2009-TIOL-1524-CESTAT-AHM.pdf

M/s Aarvee Denims & Exports Ltd Vs CCE, Ahmedabad (Dated: July 21, 2009)

Service Tax - Export - Refund - Scope of Show cause notice  - Show cause notice denies refund on the ground that the services availed by the appellants are not listed services in terms of Notification No.41/07-ST, dt.06.10.07. Adjudicating authority denies refund on a different ground that the service provider is not registered for the various services provided by him. The Commissioner (Appeals) rejects the appeal on another ground that it is not on record that the service provider has actually paid the Service Tax to the Department.

HELD - As per Circular No. 112/06/2009-ST, dt . 12.03.09 even if the service provider is registered for providing one service, refund cannot be denied on the ground that the taxable services provided are not covered under the registration. The documentary evidences showing the collection of Service Tax from the appellant would meet the requirement of the law and the appellants is not expected to produce evidence to show that the service provider has actually deposited the dues with the Government.  Appeals allowed.  (Para 4 & 5):AHMEDABAD CESTAT;

2009-TIOL-1523-CESTAT-AHM.pdf

CST, Ahmedabad Vs M/s Sirhind Steel Ltd (Dated:August 6, 2009)

Service Tax - Goods Transport Agency - Abatement - Conditions of Notification - Compliance - Assesses have produced declarations from the service provider that the service provider has not availed the credit or benefit of the Notification No. 12/03. Hence, benefit of Notification No. 32/04 allowed as the condition attached thereof considered to be satisfied. Revenue appeal dismissed. (Para 2 & 3): AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular899.pdf

Clarification on some important issues related to the ceramic tile industry -reg.;

CASE LAWS

2009-TIOL-515-HC-HP-CX.pdf + deemed story.pdf

M/s Sood Steel Industries Pvt Ltd Vs CCE & Anr (Dated: April 10, 2009)

Central Excise – deemed credit to the assessees availing the benefit of exemption under Notification 1/93 CE – reference to High Court - deemed credit is admissible even after crossing the exemption limit of Rs 75 lakhs-Any manufacturer whose total clearances did not exceed Rs.2 crores was entitled to the benefit of exemption under the notification No.1/93-C.E. and hence is entitled for deemed credit–Department's Trade Notice illegal.:HIMACHAL PRADESH HIGH COURT;

2009-TIOL-1522-CESTAT-MAD.pdf

M/s Ugraa Precision Engineers Vs CC & CCE, Bangalore (Dated: January 21, 2009)

Central Excise – Computer used for designing components/drawing program for processing of components are capital goods – Credit not deniable under erstwhile Rule 57Q of Central Excise Rules, 1944:CHENNAI CESTAT;

2009-TIOL-1521-CESTAT-DEL.pdf

M/s Wintech Taparia Ltd Vs CCE, Indore(Dated: April 20, 2009)

Central Excise – Installation and erection of food processing line at customers site whether amounts to manufacture – Matter remanded to Commissioner to arrive at a decision after following Board's Circular No. 58/1/2002-CX – Commissioner to consider all issues raised by assessees afresh – Impugned order set aside:DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff09_109.pdf

Amends 154/94 to substitute 15 units by 50 units

CASE LAWS

ITC Ltd, Secunderabad Vs UoI, New Delhi (Dated: September 15, 2009)

Customs - Import of hazardous waste: developed nations are trying to dump their municipal waste in the developing countries. Third Round in High Court – Review petition dismissed: The Court had pointed out as to how the developed nations are trying to dump their municipal waste in the developing countries. In the counter affidavit filed by the 7th respondent herein in the Writ Appeal, they themselves have agreed that even if the containers are directed to be re-exported, they cannot be sent to any country. Had this business tactic and cunning intention to segregate and dispose the municipal waste at the Tuticorin Port and disposing off the plastic waste alone to their identified firm, was permitted by this Court, it would have posed a dangerous threat of pollution to our land and water. :MADRAS HIGH COURT;