Purchase of Immovable Property in India by Persons of Indian Origin – Grandmother added! (See 'DDT' Column)

Simplification of procedure for payment of pension and other benefits to All India Service Officers retiring from Government of India/State Governments - bearing the liability of arrears related to Sixth Pay Commission.;

Action Taken on 23rd Report of the Departmental Related parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice on the Government's Policy of Appointment on Compassionate Ground.;

Irregular availment of Cenvat credit on certain activities not amounting to manufacture-reg;

Govt to set up working group on foreign investments; invites comments;

CBDT invites applications for Director-level post in Board;

Inflation shoots up to 7.31% in December;

Market Access Initiative: Govt to spend Rs 550 Cr during XI th Plan;

Nepal peace process caught in imbroglio due to mistrust: UN;

Sahar Airport Customs arrests pax coming from Dubai with jewellery worth Rs 1.21 Cr and FC worth USD 10000;

TIOL COMMENTARY

ddt jan 14.pdf

Cotton bathmats/rugs for grant of duty credit scrip under VKGUY/FPS – DGFT clarifies;

cobweb.pdf

Foreign posts for Revenue Boards - Does FM really think it's a luxury for Indian economy?

CASE LAW+ ANALYSIS

2010-TIOL-02-SC-CT.pdf + sc story.pdf

State Of Bihar Vs Kalyanpur Cements Ltd (Dated : January 8, 2010)

Sales Tax – Promise of exemption – promissory estoppel – state bound to give Exemption; The State Government had been consistently giving assurances not only to the Company but also to the financial institutions that the necessary Sales Tax exemption notification will be issued. The Company had laid a clear, sound and a positive foundation for invoking the doctrine of `promissory estoppel'. The Company as well as the financial institutions were entitled to rely upon the repeated assurances given by the State Government. However, since the promised notification was not forthcoming, the Company was constrained to file the writ petition. When the State Government gives an assurance and undertaking, in form of a policy then in fact it allures person/industries to enter into the individual ventures, invest money on the assurances contained in the policy, would it be justified on the part of the State Government to say later on that on a second thought they were withdrawing the policy and the benefits flowing from that policy? We are unable to agree to this argument.

Taxes collected to be deposited with Government: The amount was collected from the consumer to offset the tax liability. Such amount cannot be permitted to be retained by the company. Exemption and refund of tax are two different legal and distinct concepts. The objective of the exemption is to grant incentive to encourage industrialization. It is to enable the industry to compete in the market. On the other hand, refund of tax is made only when it has been realized illegally or contrary to the provisions of law. Tax lawfully levied and realized cannot be refunded.:SUPREME COURT;

6th Pay Commission Office Memorandum

office_memorandum.pdf

Simplification of procedure for payment of pension and other benefits to All India Service Officers retiring from Government of India/State Governments - bearing the liability of arrears related to Sixth Pay Commission.

WELFARE SCHEME

Appointment Compassionate Ground.pdf

Action Taken on 23rd Report of the Departmental Related parliamentary Standing Committee on Personnel, Public Grievances, Law and Justice on the Government's Policy of Appointment on Compassionate Ground.;

MIXED BUZZ

mbuzz1217.pdf

Govt to set up working group on foreign investments; invites comments;

mbuzz1216.pdf

Market Access Initiative: Govt to spend Rs 550 Cr during XI th Plan;

mbuzz1215.pdf

Nepal peace process caught in imbroglio due to mistrust: UN;

DEPUTATION POST

vacancy_director.pdf

Filling up the post of Director in CBDT-regarding;

CASE LAWS

2010-TIOL-24-ITAT-DEL.pdf + 10A story.pdf

Global Vantedge Pvt Ltd Vs DCIT, New Delhi (Dated: December 17, 2009)

Income tax - Transfer Pricing - Sec 92 - Assessee is a subsidiary of Mauritius-based company which is in turn a wholly-owned subsidiary of a Bermuda-based company - provides IT-enabled services and is eligible for Sec 10A benefits as a STPI unit - enters into an agreement with an US-based company in which parent company holds more than 26% stake - as per provisions of Sec 92, they become AEs - US-based company gets BPO business and passes on the same to the assessee as it does not have requisite infrastructure - Once work order is obtained by the US company the same is handled by the assessee - gets 90.6% of revenue earned by US-based company - also earns income from independent clients which is computed to be 18% of its total revenue earned in FY 2002-03 - AO makes a reference u/s 92CA(1) to the TPO for computation of ALP - TPO holds that AE not to be treated as tested party rather the assessee be treated as tested party - TPO makes adjustments by taking into account the average operating margins of 11 comparables and the loss percentage of the assessee - AO makes adjustments on the basis of TPO report - CIT(A) partly rules in favour of the assessee by holding that the total adjustment together with the ALP cannot exceed the total revenue earned by the appellant and its associated enterprise from third party independent clients - held, since the assessee and the Revenue fail to controvert the findings of the CIT(A), and no flaw in determination of ALP is pointed out, the CIT(A) order is upheld

Unabsorbed depreciation or unabsorbed business loss in respect of eligible 10A unit or division or undertaking is to be set off against the profit of the same eligible 10A unit or undertaking for the purpose of determining the amount of deduction available u/s 10A: the tribunal did not find any justification cause to interfere with the order of the CIT(A) whereby he has upheld the order of the A.O. in setting off of unabsorbed business losses or unabsorbed depreciation in respect of eligible unit brought forward from assessment year 2002-03 against the profit of same eligible unit for the purpose of determining the amount of deduction available u/s 10A to the assessee in the present assessment year 2004-05.:DELHI ITAT;

2010-TIOL-03-SC-IT.pdf

Navin Jindal Vs ACIT (Dated : January 11, 2010)

Capital loss on renunciation of right -whether the same is long term or short term

The assessee, holding 1500 equity shares in Jindal Iron and Steel Company Limited (JISCO), received an offer to subscribe to 1875 PCDs of JISCO on Rights Basis on the declaration of a rights issue in 1992. He renounced his right in favour of a company and received Rs 56,250 for the same. In the case of Miss Dhun Dadabhoy Kapadia vs. Commissioner of Income-Tax, Bombay 63 I.T.R. 651,the supreme Court took the view that, for computing capital gains on renunciation of right to subscribe for additional shares, diminution in the value of original shares would be regarded as the cost of acquisition for such right .In this case,the cum-right price of the shares of JISCO was Rs 625 and ex-rights price being Rs 425, there was a diminution in the value of shares by Rs 200 per share and the assessee claimed capital loss of loss of Rs 3,00,000.The net capital loss was claimed at Rs 2,43,750. He had also long term capital gains(LTCG) form shares of Rs 23,18,200 . The assessment year involved was 1992-93 and at that time section 48(2) envisaged a deduction of 60% of the long term capital gains in excess of Rs 15,000. The LTCG therefore came to Rs 9,21,280 and after deduction the loss of Rs 2,43,760 therefrom, the net capital gains was calculated at Rs 6,77,530.The A.O, on the other hand adjusted the loss on renunciation of rights against the long term capital gains and gave the statutory deduction under section 48(2) from the balance amount whereas the assessee considered the loss from the renunciation as short term capital loss and accordingly the statutory deduction claimed under section 48(2) was higher.:SUPREME COURT;

2010-TIOL-41-HC-MAD-IT.pdf

CIT, Chennai Vs M/s Bharat Overseas Bank Ltd (Dated: December 22, 2009)

Income tax - Sec 244A, 234D - Assessee is a public sector bank - AO disallows a part of interest u/s 244A and levies interest u/s 234D - CIT(A) and Tribunal disagree with the AO - held, since the Revenue has not taken clearance from the CoD, the case is dismissed but the Revenue has liberty to come back to the court after obtaining the clearance - Revenue's appeal dismissed:MADRAS HIGH COURT;

2010-TIOL-40-HC-MAD-IT.pdf

Coimbatore Cosmopolitan Club Vs ACIT, Coimbatore (Dated: December 22, 2009)

Income tax - Sec 11, 143(3) - Assessee is a registered company under Sec 25 of the Companies Act - claims exemption for income arising from FDs with banks and hall charges for dinner, mike charges, guest charges etc on the principle of mutuality - AO disallows - CIT(A) and Tribunal agree with the AO - held, issue was settled by the Division Bench in Madras Gymkhana Club case ( 2009-TIOL-415-HC-MAD-IT ) and the assessee is not eligible to claim exemption u/s 11 for income arising from non-members - Assessee's appeal dismissed:MADRAS HIGH COURT;

2010-TIOL-39-HC-KAR-IT.pdf

CIT, Mangalore Vs M/s Udupi Builders Pvt Ltd (Dated: December 1, 2009)

Income tax - revenue vs capital receipt - assessee receives subsidy from the State as part of an incentive package to set up a hotel - AO treats the same as revenue receipt - CIT(A) disagrees - Tribunal goes with the CIT(A) order - held, the state gives subsidy to encourage the assessee to set up a hotel, and the subsidy is paid depending on the budgetary allocation - it has been seen that the State sometimes releases the sum after 10 years, depending on the fund availability - cannot be treated as revenue receipt - Revenue's appeal dismissed :KARNATAKA HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-85-CESTAT-MUM.pdf + parason story.pdf

Parason Machinery (India) Pvt Ltd Vs CCE, Aurangabad (Dated : October 30, 2009)

Photography Services, Air Travel Agent & Tourist Taxi Services are not Input Services – CESTAT dismisses ROM application by saying that if the appellant is aggrieved the only remedy is to file a statutory appeal and not by a ROM application.:MUMBAICESTAT;

2010-TIOL-84-CESTAT-MAD.pdf

S Rajendran Vs CCE, Salem (Dated : October 5, 2009)

Service Tax – Rent-a-cab Operator service – there is no material on record to establish suppression on the part of the assessee – demand barred by limitation.:CHENNAI CESTAT;

2010-TIOL-83-CESTAT-MAD.pdf

The Tamilnadu Cricket Association Vs CST, Chennai (Dated : October 20, 2009)

Service Tax – Stay/Dispensation of pre-deposit – Sale of space and time for Instadia Advertisement – no prima facie case has been made out for waiver of pre-deposit.:CHENNAI CESTAT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular911.pdf

Irregular availment of Cenvat credit on certain activities not amounting to manufacture-reg;

CASE LAWS

2010-TIOL-82-CESTAT-DEL.pdf

CCE, Lucknow Vs M/s Rosa Sugar Works (Dated : September 22, 2009)

Central Excise - CENVAT - Penalty - When the question involved is interpretation of the provisions of the law imposition of penalty is not warranted. (Para 6):DELHI CESTAT;

2010-TIOL-81-CESTAT-MAD.pdf

M/s S A Ivy Multipumps (P) Ltd Vs CCE, Coimbatore (Dated : October 16, 2009)

Central Excise - CENVAT Credit - the raw material stock was declared to the department by the appellants and Show cause notice issued after 33 months later on the basis of audit objection is barred by limitation.:CHENNAI CESTAT;

2010-TIOL-80-CESTAT-MAD.pdf

Lotte India Corpn Ltd Vs CCE, Pondicherry (Dated : September 9, 2009)

Central Excise – CENVAT Credit on tattoos placed inside the pack of Bubble gums is admissible. :CHENNAI CESTAT;

CUSTOMS SECTION

DGFT PUBLIC NOTICES

dgft09pn032.pdf

Insertion of Para 6.31 in HBP v 1 2009-14;

order_437_10.pdf

Adjudicating authority notified for Case against Nidhi Textiles;

CASE LAWS

2010-TIOL-86-CESTAT-MUM.pdf + bilcare story.pdf

M/s Bilcare Ltd Vs CCE, Pune-II (Dated : December 18, 2009)

Since the application for Stay is likely to be posted for hearing only in the month of March, 2010, CESTAT grants ad-interim stay of recovery - Order issued by Dasti :MUMBAICESTAT;