Dear FM, let Budget 2010 target meeting common man's expectations;

Monetary Policy Review: Should RBI indeed go for interest rate hike?

Import of metal toys: DGFT makes it free but subject to certain conditions ;

Panel on CRAs for strengthening existing regulations ;

Budget Session to commence on February 22;

Murli Deora's visit to Nigeria: GAIL shortlisted for USD 30 billion gas master development plan;

Law Minister urges HCs to reduce number of undertrials by two-third in six months;

Govt announces Padma Awards; three bureaucrats, including B K Chaturvedi, also figure in list

TIOL COMMENTARY

ddt 27 Jan 10.pdf

There is no alternative other than co-operation between all those involved in international trade - WCO Secy Genl Kunio Mikuriya ;

task force story.pdf

Law Minister urges HCs to reduce number of undertrials by two-third in six months ;

budget story.pdf

Dear FM, let Budget 2010 target meeting common man's expectations ;

guest column.pdf

Refund of input taxes for Service Exporters - A sigh of relief ;

spl down.pdf

Monetary Policy Review: Should RBI indeed go for interest rate hike? ;

RBI CIRCULARS

rbi09cir028.pdf

External Commercial Borrowings (ECB) Policy ;

MIXED BUZZ

mbuzz1258.pdf

WTO selects 14 institutions in developing countries for Chairs Programme ;

mbuzz1257.pdf

India, Korea sign pact in science & technology ;

mbuzz1256.pdf

Mangalore DRI detects diversion of prohibited fertiliser; five containers detained ;

2010-TIOL-78-HC-MAD-IT.pdf

CIT Vs Thiruvengadam Investments Pvt Ltd (Dated: December 1, 2009)

Income tax - Sec 50C - Assessee is a property promoter - sells a property taken on power of attorney - sets off earlier years' losses and claims capital loss - AO goes by the value taken for registration of the property which is more than the actual transaction - held, since the property was taken on power of attornery and it was never a capital asseet for the assessee, Sec 50C is not attracted in this case - Revenue's appeal dismissed : MADRAS HIGH COURT;

2010-TIOL-77-HC-ALL-IT.pdf

ATS Infrastructure Ltd Vs ACIT (Dated: January 13, 2010)

Income tax - Sec 142(2A) - AO issues an order for special audit with prior approval of the CIT - assessee pleads for assigning reasons - AO fails to do so - held, reasons must be recorded in the order to show that there is application of mind on the part of the officer concerned on the basis of the material available on record and in the absence of reasons in the order for the direction as contemplated under Section 142(2)(a), the order vitiates in law and is not sustainable - Assessee's appeal allowed.: ALLAHABAD HIGH COURT;

2010-TIOL-76-HC-MUM-IT.pdf

CIT Vs M/s Syntel Limited (Dated: December 15, 2009)

Income tax - Sec 80IB - Assessee claims exemption for exchange fluctuation gain - Revenue denies citing Apex Court decision in Liberty India Ltd - held, exchange rate fluctuation gain is not within the teeth of the law laid down by the SC - benefits allowable - Revenue's appeal dismissed : BOMBAY HIGH COURT;

2010-TIOL-43-ITAT-DEL.pdf + pioneer story.pdf

Pioneer Overseas Corpn Vs Dy Asst Director Of Income Tax , New Delhi (Dated: December 24, 2009)

Income Tax- Sections 2(1A), 5(2),9(1)(i), 10(1), 143(1), 147,148, Indo-US DTAA- Articles 5(3)(e),7(1),7(2) - AY 1997-98, 1999-2000, 2000-01 & 2001-02

Whether assessment for assessment year 1997-98 could have been validly reopened based on findings given in the assessment of the A.Y 1998-99 - Whether income from the sale of parent seeds represents agricultural income or not - Whether in a reopened assessment A.O can consider an issue which has not been specifically mentioned in the reason recorded- whether research activities are preparatory and auxiliary in nature - whether there is a business connection and a PE - whether ALP should be used in determining the profits of a branch. : DELHI ITAT;

2010-TIOL-42-ITAT-MUM.pdf

ACIT, Mumbai Vs Shri K K Goel - Huf (Dated: September 14, 2009)

Income Tax - Section 69B - Assessee is HUF - AO makes additions on the basis of documents seized during search and contradictions in the affidavit filed by the karta - CIT(A) holds since the karta has accepted the bogus purchase and declared it as their undisclosed income, no addition can be made in the hand of assessee (HUF) - held, the undisclosed income has already been taxed in the hands of a company related to the Karta of the Assessee  in the AY 2003-04 and that has not been controverted by the Revenue. Once the said amount is taxed in the hands of a company, the same again cannot be taxed in the hands of the assessee as the source of the said amount has been explained by the assessee. CIT(A) order upheld. Ground dismissed.

On the issue of deemed dividend u/s. 2(22)(e) - Held, the amount, presuming the same is in the nature of advance or loan cannot be taxed in the hands of the assessee u/s 56 treating the same as a deemed dividend within the meaning of the Section 2(22)(e). CIT(A) order upheld. Revenue Appeal dismissed. : MUMBAI ITAT;

SERVICE TAX SECTION

2010-TIOL-154-CESTAT-BANG.pdf + IBM story.pdf

M/s IBM India (P) Ltd Vs CCE, Bangalore (Dated : December 14, 2009)

Service Tax – BAS - Commission Agent in India for foreign client – Export of services – Over Thirty Crores Demand Stayed: Indian entrepreneurs engage foreign agents to canvass orders for their products which are exported against such orders. Such services are taxed when imported; the Indian recipient pays service tax under the reverse charge mechanism. When services are similarly provided to a foreign enterprise by Indian agents, it cannot be held that export of services is not involved. Therefore there is no logic in the view that in the instant case export of marketing services (BAS) was not involved. : BANGALORE CESTAT;

2010-TIOL-153-CESTAT-BANG.pdf

M/s ABB Ltd Bangalore Vs CCE, Bangalore (Dated : August 5, 2009)

Service Tax – Recipient of taxable services from outside India not liable to service tax prior to 18.04.2006 – As regards service tax demand after 18.04.2006, since appellant was aware of tax liability on services received from foreign companies during April, 2006 to June, 2006 plea of limitation on the ground of revenue neutrality not acceptable – However, as department was aware of impugned transactions as early as July 2005, extended period of limitation not invokable – Impugned order not sustainable, demand of service tax, interest and penalty, liable to be set aside : BANGALORE CESTAT;

2010-TIOL-147-CESTAT-BANG.pdf

Ms Canara Bank Vs CST, Bangalore (Dated : September 11, 2009)

Service Tax – Services received from outside India not taxable in the hands of the recipient prior to 18.04.2006 – Impugned order demanding service tax for the period 16.08.2002 to 31.07.2005 set aside : BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-79-HC-MUM-CESTAT.pdf + cestat story.pdf

M/s Hindustan Petroleum Corporation Limited Vs UoI, Mumbai (Dated: January 13, 2010)

CESTAT – same member passing different orders on same issue; even a judgement of the Supreme Court interpreted differently in two orders - palpable inconsistency; The Tribunal as a judicial body must follow principles of consistency when it decides cases. The High Court found palpable inconsistency on the part of the Tribunal in dealing with stay applications arising out of diverse appeals. The inconsistency is even more pronounced having regard to the fact that the same judgment of the Supreme Court in Leader Engineering Works has been construed differently by the same member of the Tribunal in the orders dated 11th September 2009 and 20th November 2009. The Tribunal, first and foremost, is duty bound by Article 141 of the Constitution of India to ensure that it follows binding precedent of the Supreme Court. The Tribunal as a judicial body must follow principles of consistency when it decides cases. The lack of consistency is clear on the face of record. : MUMBAI CESTAT;

2010-TIOL-151-CESTAT-AHM.pdf

M/s Western Electrical Co Vs CCE, Vadodara (Dated : November 6, 2009)

Central Excise – Clearance of electric transformers and parts, electrical stampings without payment of duty – Invocation of suppression of facts in second/subsequent show cause notice, applicability of provisions of Section 11AC prior to 21.09.1996, extension of cum duty benefit for computation of duty liability etc not dealt with by Appellate Commissioner – Matter remanded to original authority with specific directions to consider limitation aspect for second show cause notice, applicability of penal & interest provisions under Ss. 11AC and 11AB prior to 21.09.1996 and also extend cum duty benefit while computing duty liability – Quantum of penalty imposable under Rule 209(a) to be determined thereafter – Original authority also directed to consider whether option of payment of duty, interest and penalty to the extent of 25% of duty within thirty days of the adjudication order is required to be extended or not in accordance with law. : AHMEDABAD CESTAT;

2010-TIOL-150-CESTAT-MAD.pdf

CCE, Chennai Vs M/s Bhuwalka Steel Industries Ltd (Dated : November 12, 2009)

Central Excise – CENVAT Credit on short received inputs – matter remanded in view of the Larger Bench decision laying down guidelines for deciding these cases on merit. : CHENNAI CESTAT;

2010-TIOL-149-CESTAT-MUM.pdf + Uma Precision - Story.pdf

CCE, Aurangabad Vs UMA Precision Ltd (Dated : January 06, 2010)

Revenue appeal for enhancement of penalty by Rs.11/- not worth considering – CESTAT : MUMBAI CESTAT;

2010-TIOL-148-CESTAT-MAD.pdf

M/s Kothari Sugars & Chemicals Ltd Vs CCE, Trichy (Dated : September 30, 2009)

Central Excise – exemption under Notification 67/95 CE for molasses used captively for manufacture of Ethyl Alcohol – the proviso of Notification 67/95 is not attracted to Un-denatured Ethyl Alcohol as the same is not excisable and is excluded from the union list – matter remanded.: CHENNAI CESTAT;

CUSTOMS SECTION

NOTIFICATION

dgft09not027.pdf

Import of metal toys: DGFT makes it free but subject to certain conditions ;

CASE LAWS

2010-TIOL-152-CESTAT-MUM.pdf + videocon story.pdf

M/s Videocon International Ltd Vs CC, Mumbai (Dated : November 25, 2009)

Commissioner's ignorance of the basic tenets of judicial discipline is, indeed, pitiable, says CESTAT and sets aside order thus allowing appeal with consequential relief. : MUMBAI CESTAT;

2010-TIOL-146-CESTAT-BANG.pdf

M/s Datex Ohmeda (India) Pvt Ltd Vs CC, Bangalore (Dated : July 29, 2009)

Customs – Import of Anaesthetic Ventilator System under claim of concessional rate of duty under Notification 21/2002-Cus read with Notification 6/2006-CE – Impugned equipment has composite functions with ventilator as the predominant function – From a description of its functions, it is evident that the equipment is a ventilator used with anaesthesia apparatus and hence, entitled to exemption benefit : BANGALORE CESTAT;