Withdrawal of stimulus - A litimus test;

A rose by any other name perfuming path in UN battle for biodiversity;

India signs loan agreements with World Bank for three projects;

Core Group agrees on two sets of Accounting Standards for convergence with IFRS;

Phasing out of stimulus packages: Is it right time for FM to initiate it?

Govt streamlines TV Channel Application System ;

BASIC countries to discuss post Copenhagen scenario on Climate Change ;

TIOL COMMENTARY

stimulus woreking area story.pdf

Withdrawal of stimulus – A litimus test;

edit.pdf

Phasing out of stimulus packages: Is it right time for FM to initiate it?

MIXED BUZZ

mbuzz1253.pdf

India signs loan agreements with world bank for three projects;

mbuzz1252.pdf

A rose by any other name perfuming the path in un battle for biodiversity;

mbuzz1251.pdf

Core Group agrees on two sets of Accounting Standards for convergence with IFRS;

mbuzz1250.pdf

Govt streamlines TV Channel Application System;

mbuzz1249.pdf

BASIC countries to discuss post Copenhagen scenario on Climate Change;

2010-TIOL-01-ARA-IT.pdf + ara story.pdf

Star Television Entertainment Ltd ( Dated : January 21, 2010)

Income tax - Sec 2(1B), 45, 47 - Applicants are non-resident companies incorporated in British Virgin Islands and UAE - all of them are in broadcast business - run entertainment channels - amalgamation of all these companies with Indian company Star India Pvt Ltd - whether such amalgamation results in transfer of shares giving rise to capital gains liabilities - whether the transfer of shares in a case of amalgamation is exempted u/s 47(vi) & (vii) of the I-T Act

Applicants run multiple entertainment channels in India, known as Star Plus, Star Gold, Star One and Star Utsav - decide to consolidate their broadcast business - amalgamatin with Star India Pvt Ltd - seek advance ruling on whether such an exercise would result in transfer of shares giving rise to capital gains taxable u/s 45 of the I-T Act or, such transfer is exempt under Sec 47(vi)&(vii)

Having heard the parties the Authority has held that,

++ the benefit of Section 47(vi) & (vii) of the Income Tax Act cannot be denied to the applicants on the ground that the transfer of shares pursuant to amalgamation is a legally impermissible step adopted by the applicants only with a view to avoid or evade the income tax without there being any commercial or business purpose.

++ no tax liability arises under the Income Tax Act in respect of the transfer of assets/shares pursuant to and as a part of the terms of amalgamation.:ADVANCE RULING;

2010-TIOL-07-SC-IT.pdf + sc story.pdf

CIT, Mumbai Vs Emptee Poly-Yarn Pvt Ltd (Dated : January 20, 2010)

Income tax - Sec 80I - Assessee is a textile company - claims deduction u/s 80I - AO holds twisting and texturising of partially oriented yarn does not amount to 'manufacture' - HC holds that it is 'manufacture' - Revenue goes in appeal to the Apex Court which has held that,

++ POY is a semi-finished yarn not capable of being put in warp or weft, it can only be used for making a texturized yarn, which, in turn, can be used in the manufacture of fabric. POY cannot be used directly to manufacture fabric.

++ According to the expert, crimps, bulkiness etc. are introduced by a process, called as thermo mechanical process, into POY which converts POY into a texturized yarn. If one examines this thermo mechanical process in detail, it becomes clear that texturising and twisting of yarn constitutes 'manufacture' in the context of conversion of POY into texturized yarn.

++ POY simplicitor is not fit for being used in the manufacture of a fabric. It becomes usable only after it undergoes the operation/process which is called as thermo mechanical process which converts POY into texturised yarn, which, in turn, is used for the manufacture of fabric.

++ Under the Income Tax Act, as amended in 2009, the test given by this Court in M/s. Oracle Software's case ( 2010-TIOL-04-SC-IT ) has been recognised when the definition of the word 'manufacture' is made explicit by Finance Act No.2/2009 which states that 'manufacture' shall, inter alia, mean a change in bringing into existence of a new and distinct object or article or thing with a different chemical composition or integral structure.

++ Applying this definition to the facts of the present case, it may be mentioned that the above thermo mechanical process also bring about a structural change in the yarn itself, which is one of the important tests to be seen while judging whether the process is manufacture or not. The structure, the character, the use and the name of the product are indicated to be taken into account while deciding the question whether the process is a manufacture or not.

++ texturising or twisting per se in every matter does not amount to manufacture. It is the thermo mechanical process embedded in twisting and texturising when applied to a partially oriented yarn which makes the process a manufacture. : SUPREME COURT;

2010-TIOL-70-HC-AHM-IT.pdf

Ashima Ispat Private Limited Vs DCIT (Dated: December 14, 2009)

Income tax - Sec 40A(3), 147/148, 133 - AO issues notice u/s 148 - assessee challenges the same on the grounds that the satisfaction was recorded by some other officer but notice being issued by another officer and also the fact that the assessee did not make any purchases in cash from the alleged parties mentioned in the notice - held, given the fact that during a Survey it came to the notice of the Revenue that the assessee made purchases from some parties in Mumbai but managed bills from the local parties by paying in cash and statements in this regard being recorded, assessee's argument does not hold water and appellate remedy is available to it - secondly, the AO who has issued the notice has clearly noted that he agrees with his predecessor who had recorded satisfaction for re-assessment and has also recorded the same reason, notice u/s 148 is not vitiated - Assessee's petition dismissed : GUJARAT HIGH COURT;

2010-TIOL-39-ITAT-DEL.pdf

M/s Abhijit Trading Co Ltd Vs ACIT, New Delhi (Dated: January 8, 2010)

Income Tax - Sec 56 - Assessee is into the business of trading shares and making investments - earns interest income - claims deduction for administrative and financial expenses - AO treats the interest income as income from other sources on the ground that the assessee is not into money lending - also reduces the interest paid from interest received - CIT(A) allows part expenditure u/s 57(iii) - held, since the Assessee is not engaged in any business activity and entire surplus funds available with the Assessee company has been advanced as loans, the interest income earned by the Assessee company is assessable as income from other sources and not as income from business. Assessee's appeal dismissed.:DELHI ITAT;

SERVICE TAX SECTION

2010-TIOL-137-CESTAT-MAD.pdf

M/s Shree Suthan Promotors Vs CCE, Trichy (Dated : November 12, 2009)

Service Tax – Penalty – Revision order passed by the Commissioner imposing penalty under Section 78 is set aside as the show cause notice issued by the Commissioner did not allege any one of the five ingredients for imposing penalty under Section 78 – Penalty under Section 76 and 77 upheld, but reduced. :CHENNAI CESTAT;

2010-TIOL-136-CESTAT-MAD.pdf

Shri K S Nagarajan Vs CCE, Salem (Dated : November 13, 2009)

Service Tax – refund – limitation – claim returned to the assessee for filing in proper format – for computing the limitation, date of filing the original claim is relevant – rejection of claim as time barred based on the date of filing the revised claim is not correct – matter remanded to decide the case on merits.:CHENNAI CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-69-HC-AHM-CX.pdf + clerk story.pdf

CCE & CC Vs Harish Maganbhai Patel (Dated: November 25, 2009)

Central Excise - Appeal against setting aside of penalty of Rs. 25000/- on excise clerk – No substantial question of law – appeal not admitted

The substantial question of law before the High Court in this Revenue Appeal:

Whether, in the facts and circumstances of the case, the tribunal is justified in setting aside the personal penalty imposed on the respondent under Rule 209A of the Central Excise Rules, 1944 presently Rule 26 of the Central Excise Rules, 2002 despite the respondent having admitted to have knowingly concerned himself in the illicit and clandestine production, non accountal and removal of excisable goods and evasion of Central Excise duty and having admitted to the commission of the contravention and offences under the Act and the Rules on the directions of the Chairman cum Managing Director of the assessee?

The High Court observed,

“So far as the present respondent is concerned, he is simply an Excise Clerk in the company and having four years service at the time when the incident in question was taken place. In the statement recorded by the Excise authorities, the respondent has categorically stated that he was doing it as per the instructions given to him by Mr. Tyagi . Even the penalty imposed on him was of Rs.25 ,000 /-.

Considering all these aspects, we are of the view that this is not a fit case where the substantial question of law should be formulated by this Court.

For the foregoing reasons, we do not think it just and proper to admit this appeal and formulate the substantial question of law as proposed by the Excise Department.”: GUJARAT HIGH COURT;

2010-TIOL-139-CESTAT-MUM.pdf + Unichem story.pdf

M/s Unichem Laboratories Ltd Vs CCE, Mumbai- II (Dated : December 30, 2009)

Although two appeals were filed, CESTAT had given findings only on one –  Appeal to be re-listed - ROM application allowed. :MUMBAI CESTAT;

2010-TIOL-135-CESTAT-MAD.pdf

CCE, Pondicherry Vs M/s Sigma Pack (Dated : November 5, 2009)

Central Excise – SSI exemption – Notification No 15/2001-CE dated 16.3.2001 restricting the exemption for the month of March to Rs 10 lakhs cannot be given retrospective effect – no infirmity in the order of the Commissioner (Appeals) setting aside the demand. :CHENNAI CESTAT;

CUSTOMS SECTION

2010-TIOL-138-CESTAT-BANG.pdf

M/s S Kushalchand & Co Vs CC, Mangalore (Dated : September 9, 2009)

Customs – Adjudication – Imports of cocoa powder classified under Chapter 1805 without adequate reasoning resulted in denial of DFIA benefits – Letter issued without any proper reasoning detrimental to rights and privileges of assessee – Commissioner directed to hear appellants and pass a speaking order – Matter remanded :BANGALORE CESTAT;

2010-TIOL-134-CESTAT-MAD.pdf

CC, Tuticorin Vs M/s Vishal Cotspin Ltd (Dated : September 23, 2009)

Customs – detention certificate – the respondent importer is fully responsible for not producing the required bank guarantee for clearance of cargo – this is not a case where detention of the impugned goods were for customs examination or for assessment – Impugned order-in-appeal is set aside and order-in-original rejecting the request of the importer is restored. :CHENNAI CESTAT;