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RBI allows EEFC Account facility with 100% Credit to SEZ developers + adds Namibia Diamond Trading Company in list for advance remittance without any limit; Dr Kelkar submits 13 th Finance Commission Report to President; Cabinet approves revision of pay scales of faculty of Autonomous Medical Education Institutions; Govt giving finishing touches to National Consumer Policy; FM approves 9 FDI proposals worth Rs 523 Crore; UN-backed container-profiling project leads to seizure of drugs, counterfeit goods; Copenhagen fails but UN aviation agency pushes emissions curbs; Two scientists die in fire at Bhabha Atomic Research Centre; |
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| Dear Member, Sending the following files: |
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TIOL RUN UP TO GST Works Contracts in GST Scenario; TIOL COMMENTARY Customs - Application of Kimberley Process Certification Scheme (KPCS) to Semi-cut diamonds – CBEC Clarifies; Changing face of Precedent! RBI CIRCULARS RBI allows EEFC Account facility with 100% Credit to SEZ developers ; Import of diamonds: RBI adds Namibia Diamond Trading Company in list for advance remittance without any limit; FDI PROPOSALS FM approves 9 FDI proposals worth Rs 523 Crore; MIXED BUZZ Cabinet approves revision of pay scales of faculty of Autonomous Medical Education Institutions; Govt giving finishing touches to National Consumer Policy; Dr Kelkar submits 13 th Finance Commission Report to President; UN-backed container-profiling project leads to seizure of drugs, counterfeit goods; Copenhagen fails but UN aviation agency pushes emissions curbs; |
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CIT Vs M/s Eastern Book Company (Dated: December 9, 2009) Income tax - revenue vs capital receipt - Assessee is a publisher - receives certain compensation for infringement of copyrights - treats the same as capital receipt - AO disallows but Tribunal allows the assessee's appeal - held, since the compensation is not towards the loss of copyrights which is intact but only on account of loss of business, it is to be treated as revenue receipt - Tribunal order not sustainable - Revenue's appeal allowed: ALLAHABAD HIGH COURT; 2009-TIOL-806-ITAT-MUM.pdf + royalty story.pdf M/s Asiavision Home Entertainment Pvt Ltd Vs ACIT, Mumbai (Dated: December 7, 2009) Income tax - Sec 9(1)(vi), 40(a) - Assessee enters into an agreement for sale and distribution of cinematographic films on DVD and VCD - makes payment of royalty to an US-based copyright holder - whether TDS is to be deducted on royalty paid - Will it attract rigours of Sec 40(a) if no tax is deducted at source? Assessee pays Guaranteed Licence Fees and the same is calculated on per piece basis - the sum paid in advance is adjusted against sale of each DVD and VCD - once full advance is squared up, fresh payment is made - assessee argues such payment is not royalty per se as it does not meet the definition of royalty given in Explanation 2 of Sec 9(1)(vi) - however, AO is not satisfied and disallows the expenditure - CIT(A) agrees with the AO Issue goes to the Tribunal where the assessee argues that as per Explanation to the said provisions “royalty” shall have the same meaning as in Explanation 2 to clause (vi) of subsection (1) of section 9 of the Act. The counsel for the assessee argues that the assessee does not fall under any of the clauses. Referring to the copy of the agreement, he contends that it is only rental distribution and sale and not for TV or radio broadcasting. He further contends that even though the assessee has paid royalty, however, TDS is not required to be made since such payment is outside the definition of “royalty” as per the provisions of section 40(a) of the I.T. Act, 1961. Having heard the parties the Tribunal holds that, ++ there is no dispute to the fact that the assessee as per the licence agreement has paid royalty during the year. ++ as per clause (1) of the licence agreement the programmes which are subject of the licence agreement refer to the feature length and non feature motion pictures for which the licensor owns or controls the necessary rights in the territory. As per clause (6) of the said agreement the licensees shall exploit the programmes for rental and sale through distribution. ++ royalty has not been paid for any TV or radio broadcasting. ++ Revenue fails to point out as to under which of the clauses of Explanation 2 to section 9(1)(vi) of the Act the payment of royalty falls so as to bring it into the definition of royalty. ++ although royalty has been paid as per the agreement, however, such “royalty” is outside the definition of royalty as per Explanation 2 to sub clause (vi) of sub-section (1) of section 9 and therefore, provisions of section 40(a) are not applicable.:MUMBAI ITAT; Embassy Development Corpn Vs ACIT, Bangalore (Dated: May 8, 2009) Income Tax - Assessee, a partnership firm engaged in real estate business, borrows medium term loan from KSIIDC and diverts a part of it to its sister concern (DDPL) without charging any interest - AO disallows interest on the loan, holding that assessee failed to show that the loan was used for business purposes - CIT(A) upholds AO's order - Held, no formal agreement had been signed between the assessee and DDPL for sale of flats by DDPL to the assessee - claim of the assessee that it was advance amount for purchase of flats was a devise evolved to reduce the tax liability to the extent possible - Assessee's appeal dismissed.:BANGALORE ITAT; ACIT, Chennai Vs Shri T R Srinivasan (Dated: November 20, 2009) Income tax - Sec 49(1)(iii)(c), 147 - assessee makes capital gains - AO invokes powers u/s 147 - assessee had purchased shares of a company which goes in liquidation - company distributes immovable property to all shareholders according to their share-holdings - assessee sells the property - while computing capital gains assessee takes the cost of acquisition of the land on the basis of value of shares purchased by it - AO takes the view that since the immovable property was taken over by the assessee, as per Sec 49(1)(iii)(c), the cost of acquisition must be taken at which the previous owner acquired the land - CIT(A) goes with the assessee - held, there are two transactions involved in this case where capital gains arise and both the transactions take place during the same financial year - one is the extinguishment of shares and the other is the sale of property - since no capital gains are computed and paid on the first transaction, while computing capital gain on the second transaction, the cost to the previous owner be considered in terms of sec.49(1)(iii)(c) of the Act as the cost of acquisition of the land - Revenue's appeal allowed:CHENNAI ITAT; M/s Dimexon Exports Pvt Ltd Vs ACIT, Mumbai (Dated: December 11, 2009) Income Tax - Sec 22 - Assessee is engaged in the business of import & export and manufacture of polished diamonds - AO holds that handing over of the factory by way of Conducting Agreement is nothing but lease of the factory to the another company where the majority of the share-holders are the relative of the directors of the assessee - Since no monetary consideration received/receivable by the assessee as per the agreement, he estimates 15% of the total value of the gross block of the fixed assets given to another company as the ALV of the property - Since the rates and taxes etc., being paid by another company the AO does not allow any deduction - Further since the repairs are already claimed by the assessee which has been allowed under the head business, no allowance for repairs to be allowed - Thus, AO treats the ALV as the income of the assessee from this agreement of lease and assessed the same under the head ‘Income from house property' - CIT(A) directs the AO to recompute the income from house property adopting the ALV at 8.5% - Held, mere non-receipt of rent should not be a conclusive factor to hold that the act of providing the building along with plant and machinery to another company would amount to a lease transaction and income therefrom is assessable under the head “Income from house property”. In order to appreciate as to whether a benefit arising out of handing over of the building and plant and machinery is assessable to tax under the head “Income from house property” or under the head “Profits and gains of business or profession” has to be determined based on facts of the case. The decisions of the AO as well as the CIT(A) in treating the benefit of additional income under the head “Income from house property” is not in accordance with law. The income is assessable to tax under Chapter IV - issue requires to be re-examined by the AO.:MUMBAI ITAT; |
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2009-TIOL-2139-CESTAT-BANG.pdf + lanco infratech ltd story.pdf M/s Lanco Infratech Ltd Vs CST, Hyderabad (Dated: December 4, 2009) Works Contract or Construction - Activities which are concerned with welfare of the citizens of this country has been excluded from the liability of service tax: it is undisputed that the work executed by the appellant is in respect of the irrigation services and is not for any commerce or industry; It can be seen from the clarification given by the Board that the activities which are concerned with welfare of the citizens of this country has been excluded from the liability of service tax.:BANGALORE CESTAT; 2009-TIOL-2138-CESTAT-BANG.pdf M/s Clinigene International Ltd Vs STC, Bangalore (Dated: September 14, 2009) Service Tax – Technical testing and analysis service – Revenue sought to classify the services under consulting service and also testing service in the demands issued for earlier period – Issue to be gone in detail to determine classification of service and service tax liability – No prima facie case made out by assessee for complete waiver of pre-deposit and penalties – Pre-deposit of Rs. 7 lakhs order in addition to Rs. 28 lakhs already paid:BANGALORE CESTAT; M/s R R Treads Vs CCE, Madurai (Dated: September 10, 2009) Service Tax – Exemption Notification – The appellant is paying sales tax on the material component. Benefit of Notification No. 12/2003 allowed. Matter remanded to examine the evidence regarding payment of sales tax. ( Para 2):CHENNAI CESTAT;
CENTRAL EXCISE SECTION CCE & CC, Nashik Vs Motor Industries Co Limited (Dated: October 12, 2009) Claim for refund of duty filed in February, 1995 before finalization of provisional assessment - rejection on ground of unjust enrichment by relying on Mafatlal Industries vs. UOI – 2002-TIOL-54-SC-CX but allowed by Appellate Authority by holding that bar of unjust enrichment not to apply for refund filed upon finalization of provisional assessment. Refund claim premature as assessment finalized on 28.3.1996 however refund of excess duty upon finalization of provisional assessments is unaffected by doctrine of unjust enrichment - Grant of refund by lower authority sustainable though reasons given unacceptable.:MUMBAI CESTAT; M/s Fena (P) Ltd Vs CCE, Pondicherry (Dated: September 17, 2009) Central Excise – CENVAT Credit – common inputs - Rule 6(3)(b) – payment of 10% under Rule 6(3)(b) is not applicable for clearance of exempted by-product.:CHENNAI CESTAT; CCE, Pondicherry Vs M/s Acer India Pvt Ltd (Dated: September 8, 2009) Central Excise – exemption under Notification 10/97 CE for supplies to research institutions – necessary certificates, though not produced at the time of clearance of goods, the same have been produced subsequently – no merit in revenue's appeal.:CHENNAI CESTAT; 2009-TIOL-2133-CESTAT-BANG.pdf M/s Oil And Natural Gas Corporation Limited Vs CC & CCE, Visakhapatnam-II (Dated: April 1, 2009) Central Excise – Section 15 (4) of Oil Industry (Development) Act, 1974 does not contemplate levy of interest on delayed payment of oil cess – Interest not liable to be paid on delayed payment of oil cess – Impugned order not sustainable, liable to be set aside:BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION Customs exchange rate for December notified; CIRCULAR Application of Kimberley Process Certification Scheme (KPCS) to Semi- cut diamonds- reg. CASE LAWS 2009-TIOL-2140-CESTAT-MUM.pdf + rochem story.pdf CC, Mumbai Vs Rochem Separatjion Systems India Ltd (Dated: November 26, 2009) 'Reverse Osmosis Membrane Filtration System' squarely falls within the meaning of ‘plant' used in the definition of ‘Water Supply Project' – Importer eligible for benefit of exemption notification 14/2004-Cus – Revenue appeal rejected by CESTAT.:MUMBAI CESTAT; |
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