Import vs export of services - Microsoft loses in Delhi HC against CESTAT order; Pre-deposit of Rs 70 Cr upheld;

Kerala HC judge Justice V Giri puts in his papers for 'personal reasons';

FM to inaugurate Economic Editors' Conference tomorrow;

Govt asks SFIO to stop probe into Satyam case;

New UN campaign aims to save over 5 mn children from pneumonia deaths CAT praised for good work; may cover PSUs and bank employees cases in future;

Corruption in settling drawback claims: CVC asks CBEC to provide officers detailed checklists;

India, Saudi Arabia ease visa norms for bilateral trade;

SC Collegium drops Justice Dinakaran's name for promotion to SC;

India, Cyprus decide to enhance bilateral economic, commercial ties;

TIOL COMMENTARY

edit.pdf

Make Disaster prevention an integral part of daily life;

vigilance story.pdf

Corruption in settling drawback claims: CVC asks CBEC to provide officers detailed checklists;

MIXED BUZZ

mbuzz0987.pdf

New UN campaign aims to save over 5 mn children from pneumonia deaths;

mbuzz0986.pdf

CAT praised for good work; may cover PSUs and bank employees cases in future;

mbuzz0985.pdf

UN Chief expresses concern over non-implementation of Nepal's peace process;

NOTIFICATION

it09not081.pdf

Sec 10(6C) exemption granted to royalty or fees for technical services to two non-residents;

2009-TIOL-585-HC-KAR-IT.pdf

CIT, Bangalore Vs M/s Measurement Systems Pvt Ltd (Dated: October 5, 2009)

Income tax - Sec 139(1), 139(5) - Assessee files revised return and reduces its taxable income - AO notices huge sales transactions with two companies but finds errors in the entry of such sales in the books of account - makes additions and charges interest - also levies penalty - CIT(A) allows assessee's appeal on the ground of earlier AY order - Tribunal does not entertain the appeal by relying on earlier years' order in the assessee's own case - held, since the facts need to be independently examined, the Tribunal order is set aside and the order is remanded:KARNATAKA HIGH COURT;

2009-TIOL-584-HC-ALL-IT.pdf

CIT, Varansi Vs M/s Banaras Hotel Ltd (Dated: October 28, 2009)

Income tax - Sec 80HHD - Assessee is a star hotel - claims deduction on profit earned in convertible foreign exchange by providing services to foreign tourists - AO excludes room rent for allowing benefits - Tribunal allows the same - held, providing room equipped with all other necessary furnishings and facilities is an integral part of the hotel service and room rent cannot be excluded from the domain of profits eligible for deduction. There is no ambiguity in Sec 80HHD in this regard, and the same is supported even by the Explanation - Revenue's appeal dismissed: ALLAHABAD HIGH COURT;

2009-TIOL-583-HC-DEL-IT.pdf

CIT Vs Ericssion Communications Pvt Ltd (Dated: September 25, 2009)

Income tax - Sec 37 - Assessee is into the business of commissioning of telecommunication projects - makes provision for warranty - claims deduction for the same u/s 37 - AO disallows on the ground that there is no scientific basis of such provision which is a contingent liability - Tribunal allows Assessee's appeal - held, since the assessee company follows certain scientific principles and a consistent policy applied by it throughout the world, it is entitled to make provision for warranty charges which are allowable business liability during the years under consideration - Revenue's appeal dismissed:DELHI HIGH COURT;

2009-TIOL-582-HC-MUM-IT-LB.pdf + hc story .pdf

Plastiblends India Limited Vs ACIT, Mumbai (Dated: October 16, 2009)

Income tax - Whether the assessee has claimed current depreciation or not has no bearing in determining the quantum of deduction allowable under Section 80IA of the Act: Thus, on analysis of all the decisions referred hereinabove, it is seen that the quantum of deduction allowable under section 80- IA of the Act has to be determined by computing the gross total income from business, after taking into consideration all the deductions allowable under section 30 to 43D of the Act. Therefore, whether the assessee has claimed the deductions allowable under Sections 30 to 43D of the Act or not, the quantum of deduction under Section 80IA has to be determined on the total income computed after deducting all deductions allowable under Sections 30 to 43D of the Act.

Section 80IA is a Code by itself: it is clear that Section 80IA is a Code by itself and the deduction allowable under Section 80IA is a special deduction which is linked to profits, unlike deductions contained in Chapter IV of the Act which are linked to investments. The deduction under Section 80IA is allowed at a percentage of the business profits computed in the manner specified in that Section and other provisions contained in Chapter VIA. The Apex Court has held that section 80- IA contains both substantive and procedural provisions for computation of the special deduction and any device adopted to reduce or inflate the profits, of eligible business has to be rejected.

Quantum of deduction upon the assessee claiming or not claiming depreciation: The quantum of deduction under Section 80IA is not dependent upon the assessee claiming or not claiming depreciation, because, under Section 80IA the quantum of deduction has to be determined by computing total income from business after deducting all deductions allowable under Section 30 to 43D of the Act. In the present case, the assessee is disclaiming depreciation neither with a view to be charitable nor with a view to pay more tax than what is legally payable. In the present case, the assessee by disclaiming depreciation, seeks deduction under section 80- IA at Rs.100 /- instead of Rs.20 /- which is legally permissible. Therefore, whether the assessee has claimed current depreciation or not has no bearing in determining the quantum of deduction allowable under Section 80IA of the Act and once it is found that disclaiming depreciation is not in the interest of the assessee, the AO was justified in allowing current depreciation to the assessee.:BOMBAY HIGH COURT (FULL BENCH);

2009-TIOL-580-HC-MAD-IT.pdf

V Akilandeswari Vs CCIT, Coimbatore (Dated: June 9, 2009)

Income tax - Writ - Sec 234A, 234B & 234C - Assessee is Director of a textile spinning mill - since he had lost his father, he failed to pay advance tax - later, voluntarily deposits tax and files application for waiver of interest - application rejected by the Revenue on the ground that the assessee had paid advance tax even after the death of his father and it cannot be a valid ground for waiver of interest - held, the fact that the assessee had lost his father when he was a minor and his mother was a housewife and he also paid tax voluntarily it is a fit ground for waiver of interest - Assessee's writ allowed:MADRAS HIGH COURT ;

SERVICE TAX SECTION

2009-TIOL-1765-CESTAT-BANG.pdf

M/s Overseas Air Travel & Tour Operators Trivandrum Vs CCE, CC & ST, Cochin (Dated: June 30, 2009)

Appeals – Assessee cannot be put to hardship for mistakes of counsels – Appeal restored:BANGALORE CESTAT;

2009-TIOL-1764-CESTAT-KOL.pdf

M/s MSP Sponge Iron Ltd Vs CCE, CC & ST , Bhubaneswar-II (Dated: August 12, 2009)

Service Tax - Penalty - service tax along with interest paid before the issue of show cause notice - there is no finding in the order of the Commissioner (Appeals) on the contention of the appellants that as  per CBEC circular dated 3.10.2007, no penalty can be imposed and the proceedings deemed to be concluded under Section 73(3) of the Finance Act, 1994 - matter remanded.:KOLKATA CESTAT;

2009-TIOL-1761-CESTAT-DEL.pdf

M/s Om Transport & M/s Om Shiv Transport Vs CCE, Allahabad (Dated: August 3, 2009)

Service Tax - Goods Transport Agency - Cargo Handling Service - Stay / Dispensation of pre-deposit - The service receiver has deposited tax on GTA - As interest of Revenue is protected and stay has been granted in similar issue, stay granted in the instant case.:DELHI CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-579-HC-MUM-CX.pdf + mrf story.pdf

CCE, Goa Vs M/s MRF Ltd (Dated: August 27, 2009)

Central Excise – Modvat Credit – Furnace Oil used in manufacture of Animal Drawn Vehicles – Input eligible for credit :BOMBAY HIGH COURT ;

2009-TIOL-1767-CESTAT-AHM.pdf

M/s Mega Fine Pharma Pvt Ltd Vs CCE, Vapi And Ahmedabad-I (Dated: June 23, 2009)

Central Excise – No bar in claiming CENVAT of duty paid on inputs procured indigenously even when raw materials are imported under DFIA – Notification bars availment of credit only on goods imported under DFIA:AHMEDABAD CESTAT;

2009-TIOL-1766-CESTAT-MAD.pdf

M/s Pentafour Products Ltd Vs CCE, Pondicherry (Dated: May 27, 2009)

Central Excise – Condonation of delay -applicants have not offered any acceptable explanation for the delay in preferring the appeal before CESTAT after the expiry of three months - Bonafide belief that since the company was being taken over by the Court Receiver appointed by the Hon'ble Court, and none of the records were available with them is not acceptable.:CHENNAI CESTAT;

CUSTOMS SECTION

2009-TIOL-581-HC-MUM-CUS.pdf + pen story.pdf

M/s Engineering Enterprise Vs UoI (Dated: October 1, 2009)

Fibre tip pens exported by the petitioner fall under Chapter Heading 96 of the Drawback Schedule entitled for duty drawback: The goods are exported by the petitioner by branding them as “fibre tip pens” in the export bills and are accepted by the purchasers as such. The High Court did not find any justification for applying the test of use by hand for determining whether the petitioner's product is “fibre tip pens”. The respondents applied the test which is unsustainable in law for holding that the petitioner's product was not “fibre tip pens”. :BOMBAY HIGH COURT;

2009-TIOL-1763-CESTAT-MAD.pdf

M/s Sundaram Dynacast Pvt Ltd Vs CC, Chennai (Dated: July 6, 2009)

Customs - valuation – payment of technical licence fee and Royalty is not a condition for the sale of goods imported – not includable in the value.:CHENNAI CESTAT;

2009-TIOL-1762-CESTAT-BANG.pdf

CC, Cochin Vs M/s Swadeshi Imports & Exports (Dated: May 25, 2009)

Customs – Import of polished marble slabs contrary to provisions of FTP – Impugned order reducing fine and penalties upheld as revenue has not appealed against previous order of appellate commissioner which was followed in the impugned order:BANGLORE CESTAT;