Dear FM, do you really think Revenue Secretary, privy to budget making, should retire on Jan 31 st? (See 'THE COB(WEB)' Column)

No PAN? Pay TDS @20% - CBDT reiterates Law (See 'DDT' Column)

DRI Hqs seizes 14 kg heroin on Delhi border; arrests two persons;

CCEA gives nod to Alstom Power Holdings SA, France Rs 490 Cr proposal to set up JVs with Bharat Forge;

Measures to safeguard SMEs from Chinese goods are in place: Govt ;

Cabinet gives nod for setting up National Knowledge Network;

Rising death toll of homeless due to cold wave in New Delhi causes concern among UN rights experts ;

CBI nabs Central Excise Supdt taking bribe of Rs 1.5 lakh;

TIOL COMMENTARY

ddt 21 jan.pdf

Does amount collected as prepaid brokerage attracts service tax?

cobweb.pdf

Dear FM, do you really think Revenue Secretary, privy to budget making, should retire on Jan 31 st?

MIXED BUZZ

mbuzz1245.pdf

Measures to safeguard SMEs from Chinese goods are in place: Govt ;

mbuzz1244.pdf

Cabinet gives nod for setting up National Knowledge Network;

mbuzz1243.pdf

Rising death toll of homeless due to cold wave in New Delhi causes concern among UN rights experts;

2010-TIOL-65-HC-MAD-IT.pdf + rom story.pdf

CIT, Trichy Vs M/s Lakshmi Vilas Bank (Dated: December 18, 2009)

Rectification of mistake – error apparent on record – ‘record' not defined – includes the record available with AO: The expression used in Section 154 of the Income Tax Act regarding the mistake apparent from the record will have to be construed to be a mistake which is very clear, distinct and apparent. The said mistake should be manifest and could be identified by a mere look and which does not need a long drawn out process of reasoning. It is no doubt true that a mere mistake by itself cannot be a ground to invoke Section 154 of the Income Tax Act 1961. It is also true that an issue which is debatable also cannot be decided under Section 154. However when the mistake is glaring and in a case where facts are not in dispute then the said mistake being one apparent on the fact of the record will have to be rectified under Section 154

The word 'record' has not been defined under Section 154 or in the defined Section. Therefore the said word will have to be given a wider import by including the record that is available with the assessing officer. It is neither necessary nor possible to set out exhaustively all the material that can possibly be regarded as forming part of the "record" for the purpose of examination under section 154(1) of the Act. The expression used in Section 154 of the Income Tax Act regarding the mistake apparent from the record will have to be construed to be a mistake which is very clear, distinct and apparent. The said mistake should be manifest and could be identified by a mere look and which does not need a long drawn out process of reasoning. It is no doubt true that a mere mistake by itself cannot be a ground to invoke Section 154 of the Income Tax Act 1961. It is also true that an issue which is debatable also cannot be decided under Section 154. However when the mistake is glaring and in a case where facts are not in dispute then the said mistake being one apparent on the fact of the record will have to be rectified under Section 154 The word 'record' has not been defined under Section 154 or in the defined Section. Therefore the said word will have to be given a wider import by including the record that is available with the assessing officer.

It is neither necessary nor possible to set out exhaustively all the material that can possibly be regarded as forming part of the "record" for the purpose of examination under section 154(1) of the Act. : MADRAS HIGH COURT;

2010-TIOL-64-HC-MAD-IT.pdf

CIT, Madras Vs M/s V Ramakrishna & Sons Limited (Dated: December 23, 2009)

Income Tax - Section 36 (1)(vii) - Assessee is engaged in money lending business - AO disallows the claim of the bad debts on the ground that when the interest is not received for earlier A.Y, the payment of further advances in favour of the subsidiary company cannot be construed as an advancement of loans during the course of business and therefore the Assessee not entitled to claim bad debt - AO also holds that the amount having been given only to tide over the financial difficulties of the subsidiary company, the same cannot be construed as a loan or advance made in the course of business - CIT (A) allows assessee's appeal by holding that there is no dispute regarding the genuiness or bonafides of the transactions, the fact that for the subsequent advances no interest received by itself cannot be a ground for disallowance as bad debt and the amount having been given towards commercial expediency in order to protect the interest of the Assessee to prop-up the sagging business of the subsidiary company, the same would amount to a bad debt allowable u/s 36 (1) (vii) - Tribunal confirms CIT(A) order - Held, both the First Appellate Authority as well as the Tribunal have considered the materials on record and came to the conclusion that the transactions involved are true and genuine. They have also held that the advances have been made during the course of the business and they have become irrecoverable as bad debts and hence the Assessee is entitled to the benefit u/s 36 (1) (vii). The said decision being based upon findings of facts, the same cannot be agitated before this Court. The question as to whether a debt had became bad or not is a pure question of fact and therefore the same cannot be construed as a question of law. Revenue's appeal dismissed both on facts and law. : MADRAS HIGH COURT;

2010-TIOL-63-HC-HP-IT.pdf

M/s D M Ajay Kumar Vivek Kumar, A B Kullu Vs ACIT (Dated: December 15, 2009)

Income tax - Sec 144 - Assessee deals in herbs - files return of income - AO asks for purchase vouchers of herbs and names of sellers - assessee fails to provide supporting documents - AO rejects the books of accounts and makes additions based on best judgement method - CIT(A) deletes addition - Tribunal goes by the Apex Court's decision in the case of Kachwala Gems and allows tax at the rate of 33% of profit - held, since the assessee fails to support its claims, and the fact that the best judgement method involves some elements of guess work, no interference to Tribunal's order is called for - Assessee's appeal dismissed : HIMACHAL PRADESH HIGH COURT;

2010-TIOL-62-HC-MUM-IT.pdf

CIT Vs M/s Automann India Pvt Ltd (Dated: January 5, 2010)

Income tax - business income - assessee lets out business for three years - receives conduction royalty - AO treats the same as Income from Other Sources' on the ground that the entire busines was let out and the assessee does not intend to carry on with the business in future - Tribunal finds that the assessee had kept effective control of the business to itself and the income was business income - held, in view of licences and perimits which remained in the name of the assessee, and the conductor agreeing to vacate the premises with its equipment after three years, Tribunal is right in concluding that it is business income - Revenue's appeal dismissed:BOMBAY HIGH COURT;

2010-TIOL-61-HC-KAR-IT.pdf

M/s H M Constructions Vs Union Of India Ministry Of Finance , New Delhi (Dated: December 8, 2009)

Income tax - search u/s 132 - Revenue conducts search of assessee's premises - documents seized - assessment order passed and tax is paid - second search is conducted - documents again seized - release of documents - held, since assessment orders are passed, and documents are no longer required for any other purpose, Revenue directed to release them within two months: KARNATAKA HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-124-CESTAT-AHM.pdf + jaihind story.pdf

M/s Jaihind Projects Ltd Vs CST, Ahmedabad (Dated : January 5, 2010)

Service Tax - Valuation - Commercial Construction Service - if the value of pipes supplied by the service recipient is not included in the gross amount for the purpose of abatement under Notification 15/2004 ST, the benefit of Notification is not admissible - Section 67 of the Finance Act, 1994 read with the Service Tax (Determination of value) Rule 2006 - the objective of the explanation to Notification 15/2004 ST is to bring parity among all the service providers providing such services.

Limitation - The matter in this case is of interpretation of law and the appellants cannot be found fault with for entertaining a view that value of pipes need not be included and claiming on the basis that they are eligible for exemption- Matter remanded to revise the demand to normal period and to provide an opportunity to the appellant to exercise their option to pay service tax as per exemption notification or as per any other relevant provisions/notification applicable to them.: AHMEDABAD CESTAT;

2010-TIOL-123-CESTAT-AHM.pdf

M/s Pushpan Travels Vs CST, Ahmedabad (Dated : October 30, 2009)

ST - Rent-a-Cab Service - Assessee is an individual - buys a cab on loan - Revenue raises demand and imposed penalty - as soon as tax liability is pointed out, the assessee pays the tax with interest - pleads invocation of Sec 80 - held, since the assessee owns a single cab and is not a very literate person and the fact that he paid tax on being pointed out, it may be inferred that he had no intention to evade tax - a fit case for invocation of Sec 80 - Assessee's appeal allowed : AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-128-CESTAT-MUM.pdf + mahindra story.pdf

Mahindra & Mahindra Ltd Vs CCE, Mumbai (Dated : October 7, 2009)

The Commander rides into sunset with a Central Excise demand of Rs.304 Crores – CESTAT rejects M&M's contention of ‘Commander' being a Public Transport Type Passenger Vehicle and classifies it under heading 8703 of CETA, 1985.:MUMBAI CESTAT;

2010-TIOL-127-CESTAT-MAD.pdf

M/s UCAL Fuel Systems Ltd Vs CCE, Chennai (Dated : September 17, 2009)

Central Excise – interest – limitation – demand of interest is also governed by limitation – demand of interest barred by limitation as the same has been raised without any allegation of fraud, suppression of facts etc.:CHENNAI CESTAT;

2010-TIOL-126-CESTAT-BANG.pdf

M/s Travancore Titanium Products Vs CC & CCE, Trivandrum (Dated : July 13, 2009)

Central Excise – Clearance of exempted goods viz., sulphuric acid on payment of 8% under Rule 6(3)(b) of CENVAT Credit Rules – Demand raised under Section 11D for recovering amounts from customer representing them as excise duty – Merit in appellants contention that demand sustainable only when such amount is realized from customer – Matter remanded to original authority for de novo adjudication – Appellant to produce material evidence of non realization :BANGALORE CESTAT;

2010-TIOL-125-CESTAT-AHM.pdf

M/s Subhnen Decor Pvt Ltd Vs CCE, Vapi (Dated : August 10, 2009)

Central Excise – Valuation – Allegation of undervaluation of pre-laminated boards and decorative laminated sheets – Statements of certain dealers who have deposed in favour of assessee cannot be brushed aside on the ground that they are not relied upon documents – Revenue cannot pick and choose evidences which are in its favour and ignore evidences collected during investigation, which support assessees case – Once Revenue relies upon statements of certain persons such deponents should be offered for cross-examination – Matter remanded for de novo adjudication by following principles of natural justice – Appellants to be given opportunity to cross examine witnesses:AHMEDABAD CESTAT;

CUSTOMS SECTION

2010-TIOL-66-HC-DEL-CUS.pdf + pil story.pdf

PIL Mumbai (India) Ltd Vs UoI (Dated: January 6, 2010)

Agents of containers not connected with Customs or police case about the contents – Containers ordered to be released – It is plain that as far as the Petitioner is concerned, it is merely a shipping line that facilitates the carriage inward of goods in the process of import. There is no liability attached to the shipping line itself for either payment of haulage charges or detention charges to the port authority or to CONCOR . At all times it was understood by the parties that the liabilities, if any, arising out of the import was governed by the terms of the contract between the consignor and the consignee. As far as the shipping line is concerned, it has furnished a bond to the customs authorities for importing the containers, and after unloading the goods carried therein at the destination indicated in the bill of lading, to re-export the containers to the country of origin.: DELHI HIGH COURT;