CBDT all set to notify perquisite rules soon + invites applications for four posts of Ombudsmen;

Applications invited for posts of CBEC Member;

Direct taxes grow by 3.71% till November end;

Govt takes steps to safeguard SMEs from Chinese goods;

Defence Ministry blacklists seven foreign equipment suppliers;

HP Governor Smt Prabha Rau gets additional charge of Rajasthan;

Advance Passenger Information System is in place at six key airports; to be implemented at all 26 international airports in Phase II: Govt;

MTNL announces pay-per-second plan today for both prepaid & post-paid cards;

PM condoles passing away of Rajasthan Governor S K Singh;

TIOL RUN UP TO GST

gst story.pdf

GST: Does this system promise docile taxpayers and dragons of tax evaders?

TIOL COMMENTARY

ddt 2 dec.pdf

Can a CESTAT Member who has not completed probation be sent home just like that?

stgst column.pdf

What officers look for in Service Tax?

CASE LAW + ANALYSIS

2009-TIOL-645-HC-MAD-FEMA.pdf + fema story.pdf

Ka Manshoor Vs Assistant Director, Enforcement Directorate, Chennai (Dated: November 24, 2009)

FEMA – Summons issued by the Department in exercise of the power vested in them cannot be quashed: FEMA – Summons issued by the Department in exercise of the power vested in them cannot be quashed: a writ of prohibition will issue to prevent a tribunal or authority from proceeding further when the authority proceeds to act without or in excess of jurisdiction; proceeds to act in violation of the rules of natural justice; or proceeds to act under a law which is itself ultra vires or unconstitutional. The petitioner in essence seeks for a writ of prohibition against the department for having issued the summons by the exercise of the powers vested on them under section 37 read with section 131 of the Income Tax Act. The attack made against the summons issued by the Department cannot be countenanced by this Court.:MADRAS HIGH COURT;

MIXED BUZZ

mbuzz1081.pdf

Govt takes steps to safeguard SMEs from Chinese goods;

mbuzz1080.pdf

Defence Ministry blacklists seven foreign equipment suppliers;

mbuzz1079.pdf

Rising sea-level: Panel for island protection zone policy;

POSTING ORDER

cbdtorder174_2009.pdf

CBDT posts two officers to Mauritius & Singapore;

DEPUTATION POST

post_ombudsman.pdf

CBDT all set to notify perquisite rules + invites applications for four posts of Ombudsmen;

cbdt_press_release.pdf

Direct taxes grow by 3.71% till November-end;

CASE LAWS

2009-TIOL-29-ARA-IT.pdf + ara story.pdf

Dana Corporation(Dated: November 30, 2009)

Income Tax - Sections 45, 48, 92 - Whether transfer of shares of Indian Subsidiaries of an American company without consideration in a scheme approved for bankruptcy proceedings in an American Court will attract capital gains - whether transfer pricing provisions can be applied in such transactions: ADVANCE RULING;

2009-TIOL-123-SC-IT.pdf + sc story.pdf

CIT, Kanpur Vs M/s Sahara India Savings & Investment Corporation Ltd (Dated: November 24, 2009)

Income tax - AY 1992-93 - interest income - Sec 2(7) - Assessee is a registered company - set up as non-banking company with the objective to buy, sell, invest or deal in securities, bonds or fixed deposits - earns interest income on bonds and debentures - Revenue treats the assessee as a 'credit institution' as defined in Sec 2(5A) of the Interest Tax Act and levies tax on interest income under Sec 2(7) - held,

++ The words "any other financial company" have also been defined under the 1974 Act vide section 2(5B) to mean a company being a hire-purchase finance company or an investment company or a housing finance company or a loan company, or a mutual benefit finance company or a miscellaneous non-banking company. On a bare reading of sections 2(5A) and 2(5B), it is clear that a residuary non- banking company did not figure in section 2(5A) and 2(5B) of 1974 Act.

++ There is no merit in the Revenue's contention that the assessee is covered under sub-clause (vi) of section 2(5B). Under section 2(5B)(vi), in order to constitute a miscellaneous finance company, it has to be a company which carries on exclusively two or more classes of business referred to in the preceding sub-clauses (i) to (v).

++ In other words, if there is a company which is investment company and also finance company, it can fall under section 2(5B)(vi). Therefore, a residuary non-banking company cannot fall within sub-clause (vi) as contended by the Department as the said sub-clause specifically says that a miscellaneous financial company should carry two or more classes of business referred to in the preceding sub-clauses.

++ Moreover, unlike residuary non-banking companies, none of the companies mentioned in sub-clauses (i) to (v) are empowered to accept deposits. In the circumstances, sub-clause (vi) did not cover residuary non-banking companies prior to 1.4.1993.

++ In the present case, it is not in dispute that after 1.4.1993, respondent herein has been filing its returns under the Interest Tax Act, 1974. : SUPREME COURT;

2009-TIOL-750-ITAT-MUM.pdf

ACIT, Mumbai Vs M/s Kalchuri Corpn (Dated: April 15, 2009)

Income tax - Sec 45 - Assessee shows income from sale of plot of land - declares capital gains - AO treats the same as business income on the ground that the assessee firm was engaged in the business of construction and land development and any investment of this nature is an adventure in the nature of trade - CIT(A) allows the appeal - held, no infirmity in the CIT(A) order as the plot was purchased by the partners of the firm before they joined the firm from their own funds and no fund was borrowed for the same and even bank account was opened after the sale - it is a case of long-term investment - such income to be treated as capital gains - Revenue's appeal dismissed: MUMBAI ITAT;

2009-TIOL-749-ITAT-DEL.pdf

M/s Business Engg & Software Vs ITO, New Delhi (Dated: October 20, 2009)

Income Tax - Assessee company files return - AO questions it on various grounds - AO disallows depreciation holding that no evidence was proffered showing the use of such assets in the concerned previous year and further the AO made addition to assessee's income on the ground that closing stock was undervalued - CIT(A) upheld the order AO has rightly declined to accept the work-in-progress which was computed on estimated basis - Held, similar addition was made in the earlier and assessee's claim was accepted, therefore, ordered AO to accept assessee's claim in this year too - Held, w.r.t. disallowance expenditure under the head legal & professional charge and also under the head ‘salary', it has been rightly disallowed as no evidence was provided by assessee to show the actual nature of services rendered - Assessee's appeal partly allowed.: DELHI ITAT;

2009-TIOL-748-ITAT-MUM.pdf

ACIT, Mumbai Vs Blue Dart Express Ltd (Dated: October 20, 2009)

Income tax - deferred expenditure - Assessee is engaged in the business of integrated air and ground transporation of time sensitive shipments to various destinations - enters into sales alliance agreement with DHL Worlwide Express India Pvt Ltd for five years - incurs expenses and claims the same pro-rata basis over the period - claims the entire expenditure as deductible - AO disallows but CIT(A) allows the appeal - held, the expenditure incurred by the assessee is on account of travelling, professional fees, conveyance expenses, printing & stationery and others in connection with agreement entered into. This expenditure is of revenue in nature and incurred in the course of business. Therefore, the entire amount is allowable on the basis of incurrence of the liability. Revenue's appeal dismissed: MUMBAI ITAT;

2009-TIOL-747-ITAT-DEL.pdf

DCIT, New Delhi Vs M/s Bharti Aquanet Ltd (Dated: July 24, 2009)

Income Tax - Assessee  is a company, engaged in the business of laying optical fibre cable and internet service - claims various expenses as revenue expenditure - also claims loss in the return of income - AO disallows loss on the ground that the business of the assessee had not been set up and consequently, the claim of the revenue expenditure not allowable - CIT(A) allows assessee's claim - Held, the assessee had no manpower during the relevant A.Y as no salary or wages were paid nor had any plant & machinery if one examines the balance sheet. The assessee also had no office premises as it had only paid advance for the same but did not get the possession. Assessee not entitled to claim revenue expenditure but the alternative claim for capitalising the same and claim for depreciation on the same is allowable - Revenue's appeal allowed: DELHI ITAT;

cbec_member_post.pdf

Selection for the post of Members of the Central Board of Excise and Customs under the Department of Revenue– reg;

SERVICE TAX SECTION

2009-TIOL-646-HC-ALL-ST.pdf + introspective detective story.pdf

M/s Introspective Detective Private Ltd & Another Vs General Manager, BSNL, Gorakhpur & Others (Dated: November 20, 2009)

Service Tax – Security Service – BSNL directed to pay Service Tax amount with interest, to the service provider who has to pay it to the government: The B.S.N.L. is not disputing its liability to pay the service tax. This being so, they are required to pay the service tax amount to the petitioner so that the petitioner may deposit the same with the Excise Department; writ of mandamus is issued commanding the B.S.N.L. to pay the service tax amount to the petitioners and also pay the interest for late payment at the rate of 18%. The petitioner is directed to deposit the service tax amount with the Central Excise Department.: ALLAHABAD HIGH COURT;

2009-TIOL-1975-CESTAT-BANG.pdf

M/s Master Kleen Vs CST, Bangalore (Dated : June 10, 2009)

Service Tax – No evidence to suggest suppression of facts with intention to evade payment of service tax – Tax paid before issue of show cause notice – Penalty under Section 78 not sustainable – Penalty imposable under Section 76 when assessee aware of tax liability and collected tax from customers but failed to discharge service tax liability within due date – Penalty however reduced from Rs. 200/- per day to Rs. 100/- per day : BANGALORE CESTAT;

2009-TIOL-1974-CESTAT-BANG.pdf

M/s Hindustan Aeronautics Ltd Vs CST, Bangalore (Dated : May 29, 2009)

Service tax – When there is distinction between sale of materials and labour charges with evidence of sales tax paid thereon, not includible in value of taxable service of maintenance & repair – Impugned order not sustainable, liable to be set aside: BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2009-TIOL-1973-CESTAT-BANG.pdf

M/s SLR Steels Ltd Vs CCE, Bangalore-II (Dated : June 30, 2009)

Central Excise – Duty paid on items like steel plates, angles, TMT bars in coils, channels and cement used in construction of storage tanks and pollution control equipment eligible as CENVAT credit – Impugned order set aside and order of original authority upheld : BANGALORE CESTAT;

2009-TIOL-1972-CESTAT-MUM.pdf

CCE, Raigad Vs M/s Navnitlal Pvt Ltd (Dated : October 7, 2009)

Credit under rule 9(1)(b) of CCR, 2002 can be denied only if duty was not paid due to suppression of facts, willful mis-statement etc. and subsequently paid – since there was no suppression and there could not have been any inducement to evade duty, when credit was admissible on de-bonding, entire exercise revenue neutral - denial of credit incorrect – accordingly imposition of penalty and interest does not arise – Revenue appeal rejected : MUMBAI CESTAT;

2009-TIOL-1971-CESTAT-MUM.pdf

M/s Star Coolers And Condensers Pvt Ltd Vs CCE, Nashik (Dated : October 7, 2009)

Although protest was not specifically recorded at the time of payment of duty, yet the fact remains that the duty was paid on the directions of preventive officers who visited the factory – very fact that appellant contested the demand indicates that the payment was not voluntary – Time bar does not apply – appellant entitled to refund.: MUMBAI CESTAT;

2009-TIOL-1970-CESTAT-MUM.pdf

M/s Techno Economic Services Pvt Ltd Vs CCE, Mumbai-III (Dated : October 29, 2009)

Cenvat credit is available in respect of inputs used in manufacture of final products being exported irrespective of the fact that the final products are otherwise exempt – Bombay HC decision in Repro India [ 2007-TIOL-795-HC-MUM-CX ] squarely covers the case - Appeal allowed with consequential relief.: MUMBAI CESTAT;

CUSTOMS SECTION

ORDERS

Adjudiction_Orders.pdf

Adjudicating authority appointed for DRI cases;

DGFT NOTIFICATION + PUBLIC NOTICE

dgft09not018.pdf

Permission for export of edible oil in small consumer packs;

dgft09pn021.pdf

Export of Finished Leather- Revised Leather Norms;

CASE LAWS

2009-TIOL-1969-CESTAT-MUM.pdf

CC, Mumbai Vs M/s Shantilal C Mehta (Dated : October 14, 2009)

Lower appellate authority has while holding that respondents are entitled to refund arising out of correction of clerical mistake only directed the original authority to re-examine the refund claim in accordance with section 27(2) of Customs Act and limitation period – such an order cannot be called as a remand order – No infirmity in the order – Revenue appeal/stay petition disposed of.: MUMBAI CESTAT;