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MoC not to force SEZ on Goa: Chief Minister; CBDT Joint Secretary (TPL-II) Ashutosh Dikshit to hold addl charge of TPL-1; The Tale of DTC Authors And The Time Machine! CBEC bans export of edible oil in branded packs of 5 kg; State of Civil Services Report : Online Survey (See 'DDT' Column) India receives 2.4% less foreign tourists in last six months: Minister; Koda case: Hawala deals and unaccounted properties detected, says Govt; DGFT again amends FTP for import of metallic waste and scrap; Cabinet approves special package for drought-hit Bundelkhand + re-inclusion of cotton seed as essential commodity; Veteran journalist H K Dua and Dr Ashok Sekhar Ganguly nominated for Rajya Sabha; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Import of Metallic Waste and Scrap – DGFT makes minor amendments; Taxing 'Fee for technical services' – Is it very technical? The Tale of DTC Authors And The Time Machine! RBI NOTIFICATION Know Your Customer (KYC) norms/ Anti-Money Laundering (AML) standards/ Combating of Financing of Terrorism (CFT)/ Obligation of Authorised Persons under Prevention of Money-Laundering Act, (PMLA), 2002, as amended by Prevention of Money Laundering (Amendment) Act, 2009- Money changing activities–Suspicious Transaction Reporting Format; CIVIL SERVICES REPORT State of Civil Services Report : Online Survey; MIXED BUZZ Koda case: Hawala deals and unaccounted properties detected, says Govt; Foreign tourists inflow down by 2.4% in last six months; |
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CBDT Joint Secretary (TPL-II) Ashutosh Dikshit to hold addl charge of TPL-1; CASE LAWS 2009-TIOL-632-HC-ALL-IT.pdf + search story.pdf CIT Vs Smt Vandana Vermai (Dated: October 9, 2009) Income tax - Sec 132(1)(c), 2(31) - Revenue issues warrant of authorisation in the joint name of the assessee and her husband for search of their premises - separate search authorisations also issued to search other persons - books of account, papers, documents and loose papers seized - Notice u/s 158BC served - demand raised - Assessee objects to utilisation of materials seized from third party - CIT(A) agrees with the AO - assessee, for the first time before the Tribunal, objects to the assessment order passed in the assessee's individual capacity whereas the warrant of authorisation was issued in the joint name - Tribunal allows the assessee's appeal - held, ++ that for authorizing action under section 132(1), the conditions precedent are formation of belief and the belief has to be formed on the basis of receipt of information by the authorising officer that the person is in possession of money, bullion etc., which represents undisclosed income. ++ The words ‘reason to believe' under section 132(1)(c) refer to a belief that money or other asset belongs to a particular individual and such money or other asset represents undisclosed income of that individual. What is important is the reason to believe that it is the undisclosed income of a person and not in whose physical possession the same is. ++ 'Any Person' in Sec 132(1)(c): The definition of word “any” has not been defined under the Income-tax Act, 1922 but the meaning of word “person” has been defined under Section 2(31) of the Act. This is an inclusive definition which is much beyond the scope of 'person' as defined in section 2(42) of the General Clauses Act, 1897. ++ The relevant words in the definition of the persons are 'individual' and 'association of persons', which though has not been defined under the Income Tax Act but the expression has been considered by the Apex Court in various cases. ++ Section 2 (31): An ‘Individual' means human being because it is used as something distinct from a joint family, firm and company. One cannot give to the word ‘individuals' in the expression ‘association of individuals' a different meaning to that which the word ‘individuals' bears where it appears in the same phrase. The expression ‘individual' is now a unit of assessment and referable only to a natural person. ++ For forming an ‘association of persons' the members of the association must join together for the purpose of producing an income. An ‘association of persons' can be formed only when two or more individuals voluntarily combine together for a certain purpose. Hence, volition on the part of the members of the association is an essential ingredient. ++ the expression ‘person' includes ‘an Association of Persons (AOP) or Body of Individuals (BOI), whether incorporated or not'. The Legislature had definitely some purpose in mind while specifically including a BOI in the category of persons along with ‘AOP'. It will not be proper to say that ‘BOI' must be given the same meaning as attributed to ‘AOP'. The expression ‘BOI' must be given a definite meaning of its own. ‘AOP' and ‘BOI' convey two different combinations of persons and it will not be proper to try to apply the principle of ejusdem generis to give the same restricted meaning to the newly introduced expression ‘BOI'. The expression ‘BOI' must receive a wider interpretation than ‘AOP'. ++ The warrant of authorization was issued in the joint name of the assessee and her husband. Since the information available with the signing authority was that both were in possession of undisclosed assets. Since the warrant was issued in their joint name, it is not open to the AO to assessee them individually. Although they are also assessees in their individual capacity but in this case they are to be assessed jointly only as an AOP or BOI as per the definition of 'person'. ++ Since the warrant of authorisation is not issued individually, then the assessment cannot be made in an individual capacity. The assessment will have to be made collectively in the name of both the persons in the status of AOP/BOI. Thus, the Tribunal has rightly held that assessment could not be framed in an individual capacity but it should be framed either as association of persons or as body of individual.: ALLAHABAD HIGH COURT; M/s Jayaram Paper Mills Ltd Vs CIT, Chennai (Dated: November 10, 2009) Income tax - Sec 147/148 - Assessee is a company - its activities include manufacturing of paper and business financing - declares interest income as business income and claims deduction for expenses and also set off against brought forward losses - Notice u/s 148 - CIT(A) and Tribunal allow assessee's appeal - held, the reasons recorded by the AO cannot be said to be vague or a mere doubt. From the return of income, the Assessing Officer had found that the assessee had earned interest on deposits and sought deduction of a sum towards admissible expenses that included the general administrative expenses, vehicle maintenance, salaries etc. The losses brought forward from the previous assessment years were also set off. It is this that prompted the AO to issue a notice under Section 148. Assessee's writ dismissed : MADRAS HIGH COURT; Shri Brij Securities P Ltd Vs ITO, Mumbai (Dated: April 4, 2009) Income Tax - Section 2(22)(e) - Assessee deals in shares and securities - AO disallows part of motor car expenses on account of personal use - CIT(A) enhances the income by applying the provisions of Section 2(22)(e) and directs the AO to initiate the penalty proceedings u/s. 271(1)(c) - Held, the transaction of purchase of car in the name of, Director of the Company, was in the ordinary course of business of the company. Obtaining loan for the car, repayment of the installment of loan, showing loan as secured liability and the car as an asset in the books of the company do not suggest that the transaction of the company with the Director was in a way arranged to give any benefit to the Director of the company, and accordingly the amount cannot be considered as deemed dividend in the hands of the assessee and hence deleted.: MUMBAI ITAT; ACIT, New Delhi Vs Shri Ajay Jadeja (Dated: July 25, 2008) Income Tax - Section 147/143(3) - Assessee is a renowned cricketer - claims exemption in respect of award money and cricketing income for AY 1995-96 - AO accepts the exemption - For A.Y 1998-99 the claim of the assessee for exemption in respect of cricketing income and award money held to be not admissible on the ground that the assessee being a professional cricketer is not eligible for the benefit of Circular No 447 and Instruction No. 1432 issued by the CBDT. – CIT (A) confirms AO order - On the basis of this outcome of the assessment in assessee's own case for AY 1998-99, the assessment for AY 1996-97 reopened. – AO disallows the claim of the assessee for such exemptions to the extent in respect of cricketing income and award money respectively and adds the same to the total income in the assessment completed u/s 147/143(3) - CIT(A) following the order of his predecessor for AY 1995-96 cancels the assessment order passed for AY 1996-97 holding that the same is based on a mere change of opinion - Held, the initiation of reassessment proceedings for AY 1996-97 was bad in law and the assessment made in pursuance thereof by the AO was invalid - CIT(A) order upheld. Revenue's appeal dismissed.: DELHI ITAT; J P Morgan Services India Pvt Ltd Vs DCIT, Mumbai (Dated: June 26, 2009) Income tax - Sec 10A - Assessee is 100% EoU - engaged in development and export of computer software - sets up STPI unit - claims deduction u/s 10A - AO disallows a sum received as exports proceeds six months after the end of previous year - Assessee pleads the six months period stipulated to bring in the exports proceeds was extended by the RBI as per Regulation 9 - held, Regulation 9 is a deeming provision which cannot be extended to Sec 10A. However, since a major part of exports proceeds was received within six months, the same is allowable deduction. As regards deduction for interest claimed by the assessee, it has been decided by the jurisdictional HC that if the surplus exports income is deposited in banks, and interest earned, such income is also eligible for Sec 10A benefits - Assessee's appeal partly allowed: MUMBAI ITAT; |
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2009-TIOL-1901-CESTAT-DEL.pdf + noble story.pdf M/s Noble Grain India Pvt Ltd Vs CCE, Indore (Dated : August 26, 2009) Rule 5 of the Cenvat Credit Rules, 2004 - Appellant manufacturing only exempted goods – no bar on availment of Cenvat Credit and claiming refund of credit lying un-utilized: CESTAT: DELHI CESTAT; M/s Shri Raj Auto Centre Vs CCE, Ahmedabad (Dated : August 28, 2009) ST - Authorised Service Station - Assessee pays tax on services provided - however, pays no tax on services provided against free coupons issued by auto manufacture - when pointed out, assessee deposits tax but contests levy of penalty - held, since there was confusion about the service tax liability during the relevant time, it is a fit case for invocation of Sec 80 - assessee's appeal allowed: AHMEDABAD CESTAT; CCE, Rajkot Vs M/s Target Polymers Pvt Ltd (Dated : October 23, 2009) ST - Penalty under Sec 78 - Assessee acts as one of agents and also as distributor of Reliance Industries Ltd - also acts as dell credere agent - on being pointed out about tax liability assessee pays tax with interest - pleads ignorance about tax liability - held, Commissioner(A) is right in reducing the quantum of penalty as the assessee was not aware of its tax liability and it had reasons for entertaining such an opinion - a fit case for invoking Sec 80 - Revenue's appeal dismissed: AHMEDABAD CESTAT;
CENTRAL EXCISE SECTION NOTIFICATION CBEC exempts biri, matches and cement pipe manufacturers using no power from filing details of annual capacity statement; CASE LAWS Jai Prakash Strips Ltd Vs UoI (Dated: September 29, 2009) Central Excise – Stay – Pre-deposit – when appeal pending in the High Court, tribunal should have granted reasonable time to produce High Court order - Ultimately, the Tribunal is subject to the supervisory jurisdiction of High Court. Appeal was dismissed when the matter was pending before this court by the Tribunal even when its attention was brought to the fact inspite of that the appeal was dismissed. We are aware that it is open to the Tribunal to dismiss an appeal for non compliance. We are also aware of the fact that it is open to the Tribunal in the absence of predeposit by the stipulated date to dismiss the appeal. However, when a party brings to the notice of the Tribunal that an appeal is preferred and is pending judicial exercise to avoid multiplicity of proceedings, would be to grant reasonable time to enable the petitioner to produce an order from this court, and on failure to do so proceed with the matter. Ultimately, the Tribunal is subject to the supervisory jurisdiction of this court.: BOMBAY HIGH COURT; M/s Sri Venkatachalapathy Textiles Vs CCE, Salem (Dated : August 7, 2009) Central Excise – non accountal of production and clearance without payment of duty – duty paid during investigation – show cause notice issued after three years of the visit of the officers is not barred by limitation as extended period of five years is available to the department – Tribunal has no authority to reduce the penalty though duty amount was paid before issue of show cause notice - demand of duty, interest and penalty upheld.: CHENNAI CESTAT; M/s LEO Fasteners Vs CCE, Podicherry (Dated : September 7, 2009) Central Excise – CENVAT Credit on outward transportation is admissible in view of the Larger Bench decision.: CHENNAI CESTAT;
CUSTOMS SECTION NOTIFICATION DGFT again amends FTP for import of metallic waste and scrap; Ban on export of edible oils - exemption for export in branded consumer packs upto 5 kgs - regarding.; Export of Edible Oil in branded packs of upto 5 Kg. – regarding.; CASE LAWS 2009-TIOL-633-HC-KOL-CUS.pdf + drawback story.pdf Dinmay Exim Avenue (P) Ltd Vs UoI (Dated: October 20, 2009) Customs – Drawback stopped based on a letter written by a lawyer – Customs not under any statutory obligation to stop payment on such letter – Ordered to pay drawback with interest: Counsel for the customs has clearly conceded that P.J. Khoshy has not issued the letter dated June 2, 2008 under any statutory provision, and hence customs were not under any statutory obligation to stop payment of balance duty drawback to the petitioner. On the basis of the letter dated June 2, 2008 written by P.J.Khoshy customs could not withhold payment of balance duty drawback to the petitioner. Within a fortnight from the date of communication of this order, customs, especially the Assistant Commissioner of Customs who wrote the letter dated July 21, 2008, shall pay the petitioner the balance duty drawback with interest payable according to law. : CALCUTTA HIGH COURT; 2009-TIOL-1896-CESTAT-BANG.pdf CC & CCE, Guntur Vs M/s Dharti Dredging & Infrastructure Ltd (Dated : May 28, 2009) Customs – Imported dredging pumps, engines, pipes to be classified under respective chapter headings and not as parts of dredger – Appellate Commissioner has not adduced reasons to treat them as integral to dredger – Impugned order set aside and order of original authority restored : BANGALORE CESTAT; |
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