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TDS liability on payments made by TPA to hospitals: CBDT clarifies TPAs are liable to TDS u/s 194J; directs field formations to recover interest and levy penalty on defaulters (Cir no 8); ITAT gets four new VPs; R V Easwar becomes Sr Vice President; posted to Mumbai; CBI nabs Company Law Board Member + Company Secretary on corruption charges Encashment of earned leave alongwith LTC - Clarification; Govt lays down Liberhan Commission English version report in House; Filling up the post of Under Secretary/Senior Technical Officer/Technical Officer in the Central Board of Excise & Customs/CEIB; I&B Secretary promises Govt to ensure orderly growth of film industry; Cyber Tribunal set up, vested with trappings of civil court; Lead contents in paints: Compliance with BIS norms voluntary, says Govt; OECD hails UK's move to table 'Foreign Bribery Bill' in Parliament; CBDT appoints CCIT, Kanpur, Sudha Sharma as CVO for three years; Tiger killings double to 59 this years as compared to 28 last year; MP tops list with 13 killings: MInister; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY CESTAT Member PK Das Discharged; Taxing state of Taxing Statutes! Dispute Resolution Panel for non-resident companies - CBDT needs to be more efficient! Encashment of earned leave alongwith LTC - Clarification; MIXED BUZZ ITAT gets four new VPs; R V Easwar becomes Sr Vice President; posted to Mumbai; I&B Secretary promises Govt to ensure orderly growth of film industry; Lead contents in paints: Compliance with BIS norms voluntary, says Govt; Cyber Tribunal set up, vested with trappings of civil court; |
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CIRCULAR Applicability of provisions under Section 194J of Income Tax Act'61 in the case of transactions by the Third Party Administrators (TPAs) with Hospitals etc; CASE LAWS 2009-TIOL-121-SC-IT-LB.pdf + sc story.pdf M/s Mepco Industries Ltd Vs CIT (Dated: November 19, 2009) Income tax - Sec 154 - Assessee is a manufacturer of potassium chlorates - receives power subsidy - declares it as revenue receipt for two AYs - Following the decision in the case of P.J.Chemicals (2002-TIOL-749-SC-IT) , assessee files review petition u/s 264 and treats the subsidy as capital receipt - CIT allows the claim - Subsequently, Apex Court decides the case of Sahney Steel and Press Works Ltd (2002-TIOL-11-SC-IT) wherein power subsidy is held as revenue receipt taxable u/s 28 - CIT disallows assessee's claim by passing rectification order u/s 154 - whether Revenue is legally right in invoking powers u/s 154 and reversing its earlier decision Assessee pleads CIT cannot pass rectification order u/s 154 to deny a benefit already held allowable - goes in Writ - HC holds that in view of the Apex Court decision in the case of Sahney Steel, Revenue can pass a rectification order to disallow a claim not admissible to the assessee - Decision affirmed by the Division Bench - On further appeal, held: ++ It is settled law that under Section 154 of the Act, rectification cannot be permissible on debatable issue. ++ The nature of the subsidies is very critical to decide whether an income is revenue receipt or not. There is no straight-jacket principle of distinguishing a capital receipt from a revenue receipt. It depends upon the circumstances of each case. In Sahney Steel and Press Works Limited & Ors, the Supreme Court has observed that the production incentive scheme is different from the Scheme giving subsidy for setting up industries in backward areas. In the circumstances, the present case is an example of change of opinion which is not permissible. Revenue has clearly erred in invoking Section 154 of the Act. ++ Rectifiable Mistake: It must be a patent mistake, which is obvious and whose discovery is not dependant on elaborate arguments. Decision on debatable point of law cannot be treated as "mistake apparent from the record".:SUPREME COURT (LARGER BENCH ); CIT Vs Haryana Sheet Blass Ltd (Dated: September 10, 2009) Income tax - Sec 140 - Assessee declares loss - revises return - first return was signed by Company Secretary but the second one by the Managing Director - since the revised return which replaced the original return was filed belatedly, AO ignores the same - Tribunal rules in favour of the assessee on the ground that the revised return should relate back to the date of original return and the original / revised return was within time - held, if the irregularity in the original return is curable, then the doctrine of relation back would apply. But if there is a fundamental defect in the original return, which cannot be cured, then such a doctrine cannot be applied. In this case the secretary has signed the return who is otherwise, as per the provisions of the Companies Act, is competent to sign. The provision of section 140 of the Income-tax Act mandates that the managing director or some other responsible officers can sign. Since the irregularity was curable and the doctrine of relation back was rightly applied.:DELHI HIGH COURT; Smt Susila Ramasamy Vs ACIT, Chennai (Dated: April 2, 2009 ) Income Tax - Section 5(2)(b), 69 - Assessee is a non-resident Indian, holding an Indian passport - Assessee has made substantial NRNR (Non-Resident Non-Repatriable), FCNR (Foreign Currency Non-resident), and NRO SB deposits with Indian Bank - AO initiates proceedings u/s 147 - Assessee files return in Form No. 2D showing total income as nil - AO assesses the deposits as the income of the assessee u/s 69 - CIT(A) confirms AO order - Held, the assessee, who is a non-resident, brings money into India through banking channel. Because of the mode of banking channel, admittedly, used for the remittance in this case, the onus on the assessee u/s 69 stands discharged, and therefore it is not taxable in India u/s 5(2)(b). The CBDT Circular squarely supports the case of the assessee. Addition made by AO deleted. Assesee's appeal allowed.:CHENNAI ITAT; ACIT, Chennai Vs M/s W S Industries (India) Ltd (Dated: August 21, 2009) Income Tax - Section 37(1) - Assessee engaged in the business of manufacturing electro porcelain products - claims deduction for business expenditure incurred for discharge of corporate guarantee obligation and advances not recoverable - AO allows the write off of advances but observes on the issue of corporate guarantee that it has nothing to do with business activity of the assessee - CIT(A) observes that if the assessee had given corporate guarantee for the purpose of business on grounds of commercial expediency, the amount paid for discharge of corporate guarantee would be allowable as deduction u/s 37(1) - Held, giving corporate guarantee is not only one of the objects of the assessee company but the same was given for its subsidiary company and it was in the interest of the assessee company and hence it is a commercially expedient decision. CIT(A) order upheld. Revenue's appeal dsmissed.:CHENNAI ITAT; |
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Filling up the post of Under Secretary/Senior Technical Officer/Technical Officer in the Central Board of Excise & Customs/CEIB; Clarification on calculation of NFE as per Rule 53 of the SEZ Rules, 2006;
SERVICE TAX SECTION M/s Pramukh Labour Service Vs CCE & CC, Vadodara (Dated : October 13, 2009) ST - Manpower supply services - Demand raised and penalty imposed - Assessee pleads it is a small time labour contractor and was not aware of the service tax liability - seeks invocation of Sec 80 - also seeks deduction of reimbursable expenses from the gross sum received for levy of tax - Matter remanded for fresh examination:AHMEDABAD CESTAT; CCE, Chandigarh Vs Jai Ram Yadav (Dated : August 17, 2009) ST - Penalty - Revenue is aggrieved by the fact that the Commissioner(A) has given no reason to set aside penalty u/s 76 - held, it has recently been decided by the Tribunal that penalty under both Section 76 & 78 is not immune and since no reason is given by the Commissioner(A), his order is set aside but Revenue to quantify the demand in respect of penalty under Sec 76:DELHI CESTAT;
CENTRAL EXCISE SECTION 2009-TIOL-1922-CESTAT-MUM.pdf + sandoz story.pdf M/s Sandoz Private Limited Vs CCE, Thane-I (Dated : October 8, 2009) Revenue loses Seven crore case in Tribunal: Process of making Multi Drug Therapy (MDT) combi pack is manufacture – Appellants entitled to take Cenvat Credit – CESTAT Tribunal's observations - CCE, Thane-I was wrong in concluding that a similar issue was decided in the Lupin Laboratories case inasmuch upon a reading of the paragraphs 5 and 6 of that decision, it appeared that in that case the tablets/capsules were first packed into separate packing and thereafter different such packs were put into packing in respect of which dispute arose. The anti-tubercular or anti-leprosy drugs sold in the form of a kit are a distinct product with a new name, character and use. This is so because, admittedly individually Rimfampicin has applications in respect of other diseases also. When the different medicines are put in the form of a kit and categorized has been done by the appellants, it has an exclusive use and has a new name also. Nobody would go and ask for 28 tablets of one variety, 13 tablets of one variety and 2 tablets of another variety. One would ask for one kit as MB Adult, MB Child and PB Adult PB Child. These names are totally different from the names of constituents. Each of the product contains Rifampicine which is admittedly not covered in the list -1 of the Notification and once all the formulations are not manufactured from bulk drugs specified in the list, disputed product did not get benefit of exemption We agree that the contention of the appellants that products in question are not eligible for exemption under Notification No. 04/2006-CE dated 01.3.2006 in view of the fact that one of the items in the blister pack is not in the list :MUMBAI CESTAT; 2009-TIOL-1921-CESTAT-MUM.pdf + labs story.pdf M/s Makjai Laboratories Pvt Ltd Vs CCE, Pune II (Dated : October 15, 2009) A presumption under section 114(e) of the Evidence Act is available in respect of the postal acknowledgement card that public proceedings have been regularly and lawfully performed inasmuch as a copy of the Order-in-Original had been served on an agent of the company – Appeal rightly dismissed by Commissioner(A) as time barred:MUMBAI CESTAT; Multi Organics Pvt Ltd Vs CCE, Nagpur (Dated : July 28, 2009) Proforma credit Scheme u/r 56A of CER, 1944 and set-off under notification no.432/86-CE were parallel optional schemes and if an appellant has not been permitted to work under proforma scheme, the appellant would have continued to avail set-off under other scheme – Transfer of input duty credit from set-off register to proforma credit register though not explicitly provided would not cause any prejudice to the revenue as the provisions of notification has to be construed in justice oriented manner – Appeal allowed.:MUMBAI CESTAT; Shri KPS Karunamoorthy Vs CCE, Salem (Dated : August 7, 2009) Central Excise – demand of duty on job worker – since no manufacturer has undertaken the duty liability, demand on job worker is sustainable - Penalty – since it is a case of suppression of facts, no discretion to reduce the penalty – impugned order upheld.:CHENNAI CESTAT;
CUSTOMS SECTION M/s Patel Engg Ltd Vs CC, Chennai (Dated : August 19, 2009) Customs – exemption under Notification No 17/2001 Cus is not admissible to the impugned goods, which were only components of hot mix plant, but not a complete plant – fine reduced and penalty set aside.:CHENNAI CESTAT; 2009-TIOL-1917-CESTAT-BANG.pdf M/s Triveni Steels (P) Ltd & Anr Vs CC, Cochin (Dated : May 28, 2009) Customs – Allegation of mis-declaration of import cargo – Goods under one bill of entry on examination found to be pipes, corroborated by examination by third party surveyors, differential duty leviable – For goods imported under two other bills of entry end use certificate granted by jurisdictional Dy. Commissioner – Once imported items are classified as HMS scrap, it is not appropriate to re-determine their value by considering them as reusable used pipes in the absence of contrary evidence of diversion of materials:CHENNAI CESTAT; |
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