Income Tax - Surplus from land contributed as capital contribution liable to pay tax - Real Estate Giant DLF in Mega SB decision of the ITAT (See 'DDT' Column)

FM, Empowered Committee meet on GST going on; Deadline for implementaiton all set to be postponed;

NRIs, PIOs may get voting rights by next polls: PM;

MoU signed - Gujarat to set up petro chemicals complex at Dahej;

Filing of false Income tax returns - CBI files charge sheet in Satyam case (See 'DDT')

PM holds dialogue with members of Global Advisory Council;

Central Revenue Sports meet takes off on colourful note;

TIOL COMMENTARY

ddt 8 jan.pdf

Surplus from land contributed as capital contribution liable to pay tax - Real Estate Giant DLF in Mega SB decision of the ITAT;

stgst.pdf

Summons proceedings under Service Tax : An intimidating tool of Revenue;

MIXED BUZZ

mbuzz1196.pdf

NRIs, PIOs may get voting rights by next polls: PM;

mbuzz1195.pdf

MoU signed - Gujarat to set up petro chemicals complex at Dahej;

mbuzz1194.pdf

PM holds dialogue with members of Global Advisory Council;

mbuzz1193.pdf

Central Revenue Sports meet takes off on colourful note;

2010-TIOL-23-HC-AHM-IT.pdf

Ketan Construction Ltd Vs UoI (Dated: December 1, 2009)

Income Tax - Explanation to Sec 80IA (4) - assessee challenges the vires of Explanation inserted by Finance No.2 Act, 2009 to Section 80-IA(4) - pray for stay against respondents giving effect to the provisions of Explanation to Section 80-IA(4) – Held, the challenge to the amendment is the subject matter of the respective petitions, already admitted by this Court and the issue regarding the constitutional validity of the provisions will be considered at the time of final disposal of the petitions. In the present Civil Applications, the prayer for stay against the implementation of the said provision or the suspension thereof cannot be granted. However, if, on the basis of amended provision, the IT Department proceeds to raise any demand, at least to that extent the interest of the petitioners is required to be protected. No stay granted against the further proceedings initiated for assessment and/or reassessment but, if any demand is raised as a result of such action, and if such demand has any nexus with the applicability of Explanation to Section 80IA (4), such should be put in abeyance till final disposal of all these petitions.:GUJARAT HIGH COURT;

2010-TIOL-22-HC-MAD-IT.pdf

CIT, Chennai Vs M/s FL Smidth Ltd (Dated: December 7, 2009)

Income tax - Sec 37 - Assessee manufactures and supplies cement plant, engineering and structural drawings - claims deduction for provision for warranty - AO disallows - held, in view of Apex Court decision in the case of Rotork Controls India Pvt Ltd if trhe warranty is an integral part of the sale price, the warranty provision is an obligation - deduction cannot be denied - Revenue's appeal dismissed :MADRAS HIGH COURT;

2010-TIOL-21-HC-MAD-IT.pdf

CIT, Coimbatore Vs The Coonoor Tea Estates Company Ltd (Dated: December 14, 2009)

Income tax - Sec 32 - Assessee is engaged in the business of manufacture and sale of tea - claims depreciation on tea bushes - AO disallows the same on the basis of retrospective amendment done to remove tea bushes from the defintion of 'plant' and makes adjustment u/s 143(1)(a) - Tribunal disagrees with the AO - held, it is settled law that where a return is filed, the law applicable would be the law as it stood on the date of filing of the return. The retrospective amendment made to the definition of plant introduced by the Finance Act, 1995 for the assessment year 1994-95 was not available to make the disallowance under prima facie adjustment. No infirmity in Tribunal's order. Revenue's order dismissed:MADRAS HIGH COURT;

2010-TIOL-16-ITAT-DEL-SB.pdf + sp bench.pdf

DLF Universal Ltd Vs DCIT, New Delhi (Dated: January 4, 2010)

Income tax - surplus arising to the assessee from the transaction of contribution of land held by it to a firm as capital contribution shall be assessable to tax as profit or gains under the head “capital gain” : Held that the surplus arising from making over assessee's personal asset, i.e. said plot of land in question, to the firm as his contribution to its capital account is a profit or gain accrued to the assessee and is chargeable to tax. The surplus arising to the assessee from the transaction of contribution of land held by it to a firm as capital contribution shall be assessable to tax as profit or gains under the head “capital gain” under section 45 of the Income Tax Act, and for that purpose, the amount of 11.50 crore recorded in the books of accounts of the partnership firm as the value of the land shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the land as so provided under sub-section (3) of the section 45 of the Act, effective from the A.Y. 1988-89. Even otherwise, the surplus arising to the assessee from the transaction of contribution of land as capital contribution to a firm in which the assessee became a partner shall be chargeable to tax. even in case it is otherwise held that the land contributed by the assessee to a firm towards capital contribution should be treated as stock in trade even during the course of making the transaction of transferring or contributing the land to the partnership firm as capital contribution, the surplus arising to the assessee from the said transaction of contributing stock in trade to a firm shall then be assessable under the head “business” in the view of the colourable device or ruse adopted by the assessee to convert stock in trade into money for its own benefit. : DELHI ITAT 'SPECIAL BENCH';

DCIT, Mumbai Vs M/s Tower Capital Securities Pvt Ltd (Dated: December 23, 2009)

Income tax - Deemed dividend - Sec 2(22)(e) - AO notices from the return of the assessee that one Natwarlal Ambani holds 48.78% shares of PHPL and 35.47% equity in the assessee's company - therefore holds that the loan received by the assessee company from PHPL is hit by the provisions of Sec 2(22)(e) - CIT(A) deletes the addition - held, in view of the Special Bench decision in Bhaumic Colour Pvt Ltd [ 2008-TIOL-641-ITAT-MUM-SB ] , 'deemed dividend' can only be taxed u/s 56 in the hands of a shareholder - Revenue's appeal dismissed: MUMBAI ITAT;

SERVICE TAX SECTION

2010-TIOL-49-CESTAT-MAD.pdf

M/s Indusind Bank Ltd Vs CST, Chennai (Dated : September 22, 2009)

Service Tax – Stay/Dispensation of pre-deposit – Banking and Financial Service – pre-closure charges cannot be prima facie equated with interest payment – pre-deposit of 85 lakhs ordered. : CHENNAI CESTAT;

2010-TIOL-48-CESTAT-BANG.pdf

M/s Hindustan Coca-Cola Beverages (P) Ltd Vs CCE, Hyderabad (Dated : June 11, 2009)

Service Tax – ‘Outdoor caterer service' provided in canteen of manufacturer and ‘Rent-a-cab service' are input services – Service tax paid thereon available as CENVAT Credit – Issue no longer res integra – Impugned order unsustainable, liable to be set aside:BANGALORE CESTAT;

2010-TIOL-46-CESTAT-MUM.pdf + lupin story.pdf

Lupin Ltd Vs CCE, Large Taxpayer Unit (Dated : September 9, 2009)

Cenvat Credit – BAS (Export Commission) – there seems to be a nexus between clearance of the finished goods and payment of export commission - prima facie satisfies definition of input service – CESTAT: MUMBAI CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-47-CESTAT-MAD.pdf

M/s Greaves Cotton Ltd Vs CCE, Chennai (Dated : October 20, 2009)

Central Excise – Stay/Dispensation of pre-deposit – Input service distribution – impugned order has been passed on the premise that credit must relate to the goods manufactured in a particular unit – prima facie, there is no such stipulation - pre-deposit waived. :CHENNAI CESTAT;

2010-TIOL-45-CESTAT-BANG.pdf + Indian Oil Story

M/s Indian Oil Corpn Ltd Vs CCE & CC, Visakhapatnam (Dated : August 12, 2009)

Central Excise – Benefit of concessional rate of duty provided to consignments of petroleum products cleared from specified refineries under Notification 29/2002-CE as amended – Benefit not to be denied if goods are received under bond in or more warehouses before they are cleared from the warehouse from which such goods are cleared on payment of concessional duty – Notification does not specify that goods have to be received directly at the warehouse from a specified refinery – Object of notification will be defeated if such interpretation is given – Impugned order not sustainable :BANGALORE CESTAT;

2010-TIOL-44-CESTAT-BANG.pdf

M/s Indian Oil Corporation Ltd Vs CCE, Visakhapatnam (Dated : August 31, 2009)

Central Excise – Valuation – Inclusion of siding and shunting charges in assessable value of Motor Spirit and HSD – Differential duty payable consequent to finalization of provisional assessment under Rule 9B(5) of Central Excise Rules, 1944 – When there is no contest on merits of finalization of assessment and differential duty amount payable, demand under s.11A of CEA not required – Impugned order upheld :BANGALORE CESTAT;

2010-TIOL-43-CESTAT-BANG.pdf

M/s Reva Electric Car Company (P) Ltd Vs CCE, Bangalore (Dated : August 11, 2009)

Central Excise – CENVAT Credit – Eligibility of CENVAT Credit on input rejects and inputs used in R & D – Any rejection of inputs without ulterior motive or oblique purpose does not disentitle an assessee from benefit of CENVAT credit – No finding that R & D has resulted in finished goods which has escaped duty – Credit on inputs used in R & D not deniable – Demand of duty and penalty set aside :BANGALORE CESTAT;

CUSTOMS SECTION

2010-TIOL-25-HC-MUM-CUS.pdf + GKN story.pdf

GKN Sinter Metals Private Limited Vs UoI (Dated: December 19, 2009)

Coercive collection of Customs Duty even while appeal is pending; Department ordered to pay back with interest amount illegally collected amount – If there is delay in regularization and issuance of EODC by the DGFT, the customs authorities cannot penalise the petitioner by resorting to coercive action. coercively collecting customs duty in spite of redemption certificate issued by DGFT in respect of one advance licence and in spite of pendency of the application for regularization and issuance of EODC in respect of other licences and even before the expiry of the period of limitation for filing appeal before CESTAT is highly improper and contrary to the decisions of this Court.

Customs Commissioner hauled for contempt: registry to issue show-cause notice to Shri R. Sekar , Commissioner of Customs, Pune to show cause as to why action should not be taken against him under the Contempt of Courts Act, 1971 for coercively collecting the customs duty and retaining the same in spite of the fact that the DGFT has granted redemption certificate in respect of one of the advance licence and in respect of the remaining licence the applications are pending before the DGFT and in spite of various decisions of this Court brought to the notice of the customs authorities:BOMBAY HIGH COURT;

2010-TIOL-24-HC-KAR-EXIM.pdf

Addl Director General Of Foreign Trade Ministry Of Commerce & Industry New Delhi Vs M/s Pharmed Medicare Pvt Ltd (Dated: November 24, 2009)

Foreign Trade Regulations - Rule 7(1)(b) - Appellant files application for advance licence under Duty Exemption Scheme - Regional DGFT rejects the application under Rule 7(1)(b) - Appeal before Addl DGFT who rejects the same - writ filed - Single Judge allows the appeal on the ground that once the appellate authority found that the refusal of licence under clause (b) of sub-rule (1) of Rule 7 of the Rules was not sustainable, it should not have dismissed the appeals - held, no infirmity found in the Single Judge order - Writ appeal dismissed:KARNATAKA HIGH COURT;

2010-TIOL-42-CESTAT-MUM.pdf + Schwan story.pdf

Schwan Stabilo Cosmetics GMBH & Co Kg Vs CC (Import), Mumbai (Dated : October 28, 2009)

Appellant is the owner/exporter of the goods imported into India by M/s Hindustan Unilever Ltd – they are the only ‘aggrieved person' and have a legal right to challenge the O-in-O before the Commissioner(Appeals) – CESTAT :MUMBAI CESTAT;