CBEC makes attempt to fill up vacancies of Commissioner on ad hoc basis: DoP&T sits over the file;

Use of primates in experimentation showing signs of upward climb: Jairam Ramesh;

CBDT issues master circular on TDS for salary u/s 192 ;

DGFT make amendment in appendices 37A, 37C, and 37D, Column Heading titled ‘Admissible Date of Export' at the beginning of the Appendix is replaced as ‘Admissible Date of Export/Period'.;

DGFT replaces the word onwards at the end of Para 3.15

India Signs revised DTAA with Finland;

Flowers export grows substantially;

370 mn indigenous peoples suffer from exponentially higher rates of poverty ;

CCEA gives nod to 10% disinvestment in EIL + ONGC Videsh's investment in Nigerian exploration blocks;

TIOL COMMENTARY

ddt 15 jan.pdf

Availment of CENVAT Credit when certain activities do not amount to Manufacture – CBEC clarifies;

stgst.pdf

Cenvat trauma at cost of exchequer;

RBI CIRCULARS

rbi09cir026.pdf

Remittance of Salary - Relaxation;

MIXED BUZZ

mbuzz1222.pdf

India Signs revised DTAA with Finland;

mbuzz1221.pdf

Use of primates in experimentation showing signs of upward climb: Minister;

mbuzz1220.pdf

Flowers export grows substantially;

mbuzz1219.pdf

CCEA gives nod for 10% disinvestment in EIL;

mbuzz1218.pdf

370 mn indigenous peoples suffer from exponentially higher rates of poverty;

CIRCULAR

it10cir01.pdf

CBDT issues master circular on TDS for salary u/s 192 ;

CASE LAWS

2010-TIOL-26-ITAT-DEL.pdf + penalty story.pdf

DDIT, New Delhi Vs M/s Sutron Corpn (Dated: November 20, 2009)

Income tax - Sec 92, 271(1)(c) - Indo-USA DTAA - PE under Article 7 - Assessee is an US-based company - provides hydrological and metrological data for managing water resources - enters into contracts with AP Government for supply, installation, erection and commissioning of the project with four-year AMC - seeks advance ruling - ruling says income attributable to the PE is taxable in India - hires E&Y Pvt Ltd for transfer pricing study which suggests cost + 10% mark-up - files return and declares 30% profit of its global gross profit - AO disagrees and hikes the magnitude of profit to 60% on estimate basis - also initiates penalty proceedings - CIT(A) disagrees with the AO - held,

++ where there is no admission of the assessee that the amount added was its income or concealed income, the mere fact that the addition had been agreed to cannot justify the imposition of penalty.

++ Thus it is a case of one estimate against the another estimate but the basis of estimate are the facts as declared by the assessee itself and not something new found out by the AO which results into higher estimate of income.

++ there is complete disclosure in respect of contracts entered into by the assessee. There is no attempt by the assessee to conceal any particulars of income or furnish inaccurate particulars thereof. No incorrect particulars of any expenditure have been submitted by the assessee either in the tax return or during the course of the assessment proceedings. Further, no finding is recorded by the AO either in the assessment order or in the penalty order that incorrect particulars of income were submitted by the assessee. Accordingly, the penalty is not leviable.

++ the assessee has demonstrated that he has acted honestly as well as exercised reasonable care, so as to satisfy the conditions prescribed under section 271(i)(c), therefore the penalty cannot be imposed.

++ It is by now settled law that the considerations that arise in penalty proceedings are different from those in assessment proceedings. As such, the findings given in assessment proceedings, though relevant and admissible material in penalty proceedings cannot operate as 'res judicata'.

++ non-filing of appeal itself does not justify levy of penalty u/s 271 (1)(c). There is no revised computation filed before AO but in the original return itself, the assessee estimated the profit at 30% of global operation. Thus it is incorrect on the part of DR to contend that the assessee filed revised return before AO.: DELHI ITAT;

2010-TIOL-25-ITAT-MUM.pdf

M/s Jindal Drugs Ltd Vs ACIT, Mumbai (Dated: December 24, 2009)

Income Tax -Sec 80HHC - AO disallows deduction in respect of profit earned on account of DEPB scheme - Held, the issue in respect of DEPB profit for the purpose of deduction u/s 80HHC has been decided by the Special Bench in the case of Topman Exports. AO directed to allow deduction u/s 80HHC.

AO treats interest income under the head income from other sources against business income shown by the assessee. By treating interest income as income from other sources, the AO disallows deduction u/s 80HHC - CIT(A) confirms the action of the AO - Held, funds were required for business purposes and as per pre-conditions of the bank, margin money was deposited in the shape of FDRs for availing overdraft facility and therefore, it has direct nexus with business activity and accordingly, it has to be treated as income from business income and since there is a direct nexus between the earning of interest and expenditure of interest then netting of interest has also to be allowed in view of the decision of the Special Bench in the case of Lalsons Enterprises AO  directed to recalculate the deduction u/s 80HHC - Assessee's ground allowed.: MUMBAI ITAT;

2010-TIOL-44-HC-ALL-IT.pdf

CIT, Kanpur Vs M/s Saran Engineering Co (Dated: December 16, 2009)

Income tax - Sec 37(1), 30(a)(ii) - Current repairs - assessee is a sugar factory - gets roof of large industrial shed replaced by new GC Sheets - claims deduction for the same in two AYs because the suppliers raise the bills in two years - Revenue holds it as capital expenditure - Tribunal allows the assessee's appeal - held, it is found that the assessee has replaced the worn out GC Sheets in the relevant AYs, as necessitated by the day to day wear and tear. If it is major repair, it may involve considerable amount of money. But the amount of money spent alone cannot be a factor to determine whether the expenditure falls under “Current Repairs” or not. Since the expenditure is incurred only to preserve and maintain the existing asset, it is allowable deduction - Revenue's appeal dismissed : ALLAHABAD HIGH COURT;

2010-TIOL-43-HC-MUM-IT.pdf

Mrs Gauri Deepak Patel Vs New India Assurance Co Ltd (Dated: December 17, 2009)

Income tax - Section 194A(3) (ix) - Applicants are the widow, two minor children and the mother of the deceased - Motor accident - award - TDS deduction on interest on award money - held, Insurance Company directed to spread the interest amount over to the relevant financial years for the period from the date of filing the claim petition till the date of deposit, and if interest in any FY exceeds Rs 50000, TDS to be deducted - in case of refund in the case of any of the applicants, Revenue directed to do the needful in expeditous manner - Applicants' appeal allowed:BOMBAY HIGH COURT;

2010-TIOL-42-HC-DEL-IT.pdf

CIT, Delhi-IV Vs Industrial Finance Corporation Of India Ltd (Dated: September 4, 2009)

Income Tax Act – Section 37(1) – Forward Contracts – Year of deductibility – Assessee entered into forward contracts for purchase of foreign currency – Held that difference between forward contract rate and exchange rate on date of entering into contract has to be recognized as income or expense since it is ascertained and definite as per the terms of the contract – Held further that the expense is to be allowed as a business expense in the year of entering into the forward contract although as per the terms of the contract part payment is to be made in the subsequent year.:DELHI HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-45-HC-KAR-ST.pdf

CST, Bangalore Vs BPL Ltd (Dated: December 03, 2009)

Service Tax – Tax payable only when service charges are received from customers – Receipt of charges from customers, filing of returns etc are questions of fact – Orders passed by CESTAT and Commissioner set aside and matter remanded to Commissioner to ascertain facts :KARNATAKA HIGH COURT;

2010-TIOL-89-CESTAT-AHM.pdf

M/s Sahjanand Tours & Travels Vs CST, Ahmedabad (Dated : November 9, 2009)

Service Tax – Tour operator service – Tax liability under tour operator service to be decided at the time of final hearing – Since issue is arguable and stay was granted on similar issue in case of appellants sister concern, full waiver of pre-deposit ordered and stay granted:AHMEDABAD CESTAT;

2010-TIOL-88-CESTAT-BANG.pdf

South Paw Security And Mantech Services Vs CCE, Cochin (Dated : May 1, 2009)

Appellants provided security services to M/s BSNL - sole reason behind the delay in payment of service tax has been the extraordinary delay in payment of their security bills by M/s.BSNL, Ernakulam who withheld payments over a sustained period of 4 1/2 years - appellant also had to pay a huge amount of interest - appellant's company is run by a retired defence officer – Penalty set aside in exercise of powers conferred under Section 80 of the Finance Act – CESTAT :BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-46-HC-MUM-CX.pdf + sony story.pdf

CCE Vs M/s Sony Music Entertainment India Pvt Ltd (Dated: December 03, 2009)

Central Excise - manufacture - pre-recorded audio/video compact discs imported in bulk and packed in jewel boxes with inlay cards - the activity of packing does not amount to manufacture - no fault can be found with the CESTAT order - the question framed is answered against the revenue and in favour of the assessee.: BOMBAY HIGH COURT;

2010-TIOL-92-CESTAT-BANG.pdf

M/s IOCL Vs CCE, Hyderabad (Dated : September 14, 2009)

Central Excise – Section 11D - Selling of duty paid stock of petroleum products at revised prices at depots/retail outlets – No evidence produced by Revenue to show that excess price collected represented amount of excise duty – Impugned order set aside :BANGALORE CESTAT;

2010-TIOL-91-CESTAT-MUM.pdf

Krishna Fabrications Pvt Ltd Vs CCE, Pune-I (Dated : October 19, 2009)

Cenvat credit of service tax paid in respect of mobile phone - Respondents claim for use of mobile phone not supported with evidence so as to bring it under definition of ‘input service'- Burden to prove the same inescapable to avail benefit – Appeal allowed by way of remand.:MUMBAI CESTAT;

2010-TIOL-90-CESTAT-DEL.pdf

M/s Pepsico India Holdings Pvt Ltd Vs CCE, Meerut-II (Dated : July 17, 2009)

Central Excise – Clearance of glass bottles broken during storage and handling without payment of duty – Percentage of loss (0.15%) less than the limits (0.5%) prescribed by CBEC – Quantity of loss reported in monthly returns filed from time to time – Duty demand not sustainable, liable to be set aside:DELHI CESTAT;

CUSTOMS SECTION

NOTIFICATION

ctariff10_003.pdf

Rawatbhata nuclear power plant granted customs exemption;

cnt10_006.pdf

Tariff value of brass scrap and poppy seeds revised;

DGFT PUBLIC NOTICE

dgft09pn034.pdf

DGFT make amendment in appendices 37A, 37C, and 37D, Column Heading titled ‘Admissible Date of Export' at the beginning of the Appendix is replaced as ‘Admissible Date of Export/Period'.;

DGFT NOTIFICATION

dgft09not025.pdf

DGFT replaces the word onwards at the end of Para 3.15

dgft09not024.pdf

Amendment in chapter 8 of FTP regarding mega power projects;

CASE LAWS

2010-TIOL-87-CESTAT-MUM.pdf + Jayendra story.pdf

CC Vs Jayendra Chandulal Thakkar (Dated : December 14, 2009)

Reasonability of opportunity granted by the Commissioner was assessed and accordingly the matter was remanded for granting one more opportunity of being heard – No mistake rectifiable under Customs Act – CESTAT throws out ROM application of Revenue. :MUMBAI CESTAT;