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S Sundareshan IAS(KL:76) is New Secretary, Ministry of Petroleum and Natural Gas; CBEC invites applications for Director (Customs); Kolkata DRI seizes red sanders wood; arrests four persons on Indo-Nepal border; Bad news for IT industry: Obama reiterates no tax sops for Cos outsourcing jobs abroad; Favourable tax structure for food-processing industry; SAIL signs MoU with Korean Export Insurance Corporation; Interpol for global anti-corruption initiative to curb serious crime; National Mission for Delivery of Justice and Legal Reforms rolls out; 42 undertrial prisoners released in Delhi today; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Service Tax on Renting of Immovable Property - Board promises Delhi HC to revise instructions; Dear FM, let Budget 2010 unveil tax amnesty scheme to tap offshore funds to overcome swelling fiscal deficits! Comments of the Department of Revenue (DoR) on the First Discussion Paper on GST; 14 FDI Proposals Approved; MIXED BUZZ Favourable tax structure for food-processing industry; SAIL signs MoU with Korean Export Insurance Corporation; Interpol for global anti-corruption initiative to curb serious crime; |
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2010-TIOL-45-ITAT-MUM-SB.pdf + sb story.pdf The Maharashtra State-Co-Operative Bank Ltd Vs ACIT, Mumbai (Dated: January 22, 2010) Income tax - Sec 80P, 244A - assessee is a cooperative bank - claims deduction for certain investments made out of statutory reserve fund - AO initially allows the same but later invokes powers u/s 147 and denies the same - assessee deposits tax but later the issue is settled by the Tribunal in assessee's favour - assessee receives huge interest u/s 244A on income tax refund - claims deduction for the same u/s 80P by holding that since it arises out of normal banking fund which would have otherwise generated normal profits of the business, the interest income will also have the character similar to the 'profits and gains of business' - AO disallows and CIT(A) holds that the interest income falls under the head 'income from other sources' :MUMBAI ITAT 'SPECIAL BENCH' ; ACIT, Gurgaon Vs M/s Texsa India Ltd (Dated: December 4, 2009) Income Tax - Sec 36(1)(vii) and section 3(1)(vii) r/w Section 36 (2) - Assessee carries out water proofing work - writes off an amount as bad debt - A.O. observes assessee has cleverly tried to use coloulrable device to hoodwink the Department by not paying legitimate taxes - makes addition - CIT(A) holds that the assessee has reconciled the differences and there is no difference in the amount accounted for - also holds addition cannot be made for bad debt - Held, existence of the statement of understanding has not been controverted by bringing any material on record. It also cannot be disputed that the assessee had accounted for all the receipts received by it. The CIT (A) has given a finding that the assessee has been able to reconcile all the differences. The conditions for allowability of bad debt has been described of the order of CIT (A) which are stated to be fulfilled. In view of the decision of High Court in the case of Autometers Ltd the requirement of the assessee to prove that a bad debt has become bad debt is dispensed with by 1989 amendment in Section 36(1)(vii) and, thereafter, all that assessee has to do is to write off a bad debt as irrecoverable in its account. There is no infirmity in the order of the CIT (A) - no addition called for - Revenue's appeal dismissed.:DELHI ITAT; CIT Vs Saden Vikas India Ltd (Dated: January 15, 2010) Income tax - Sec 41(1) - Assessee receives a manufacturing order from an automobile company - also receives a sum as advance towards capital cost to be incurred for putting in place the infrastructure - immediately after the advance payment was made, the auto company runs into labour unrest - later assessee is intimated to subscribe debentures of sister concern of the auto company for exactly the sum advanced earlier - assessee follows the arrangement - after some time the relationship betwen the auto company and its sister concern runs into trouble - assessee receives no return on investment and writes off the sum invested - AO makes disallowance - CIT(A) and Tribunal go with the assessee - held, no infirmity in the Tribunal's order as the assessee never took any benefit of the advance given to it nor it was an income for the assessee - writing off the sum only leads to cessation of liabilities - Revenue's appeal dismissed:DELHI HIGH COURT; CIT, Mumbai Vs M/s Rachna Udhog (Dated: January 13, 2010) Income tax - Sec 80IB - Assessee claims deduction for Duty Drawback, Export Entitlement, DEPB Licence and exchange rate difference - AO disallows but Tribunal allows them - held, in view of Apex Court decision in Liberty India case, deduction is not allowable on DEPB, Duty Drawback and Export Entitlement - however, benefits are admissible for exchange rate difference because it is directly linked to the sales proceeds of goods manufactured by the industrial undertaking - Revenue's appeal partly allowed:BOMBAY HIGH COURT; M/s Davangere Maganur Bassappa Vs ITO, Davangere (Dated: December 3, 2009) Income tax - Capital gains - Assessee is a partner in a partnership firm - dissolution of the firm - distribution of assets - AO levies capital gains - CIT(A) confirms the same - Tribunal goes with the CIT(A) and also dismisses the plea for quantification of capital gains as the assessee fails to challenge the same in appeal memo - held, since the assessee has not challenged the quantification of capital gains done by the CIT(A) which also granted some relief, the same cannot be done at the HC stage - assessee's appeal dismissed:KARNATAKA HIGH COURT; |
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DEPUTATION POST CBEC invites applications for Director (Customs)
SERVICE TAX SECTION SSIPL Retail Ltd & Ors Vs UoI (Dated: December 18, 2009) Service Tax on Renting of Immovable Property - Board promises Delhi High Court to revise instructions: TRU letter directing field formations to collect service tax in spite of the High Court quashing it - the respondent could not instruct their officers to peruse the matter with tax payers calling upon them to pay service tax or to resort to other means under the law to protect the Revenue. The manner in which the letter are written clearly indicate that the payment of tax is demanded and the threat is also extended that if there is no compliance, Department would initiate further necessary against them. Respondent assures that corrective steps shall be taken by issuing further instructions, in supersession of earlier instructions, to the officers not to write such letters demanding the payment of service tax or threatening coercive steps. :DELHI HIGH COURT; 2010-TIOL-162-CESTAT-MUM.pdf +semco story.pdf M/s Semco Electrical Pvt Ltd Vs CCE, Pune (Dated : December 17, 2009) Rent a cab service, outdoor catering service, air travel booking, telephone/mobile services and steamer agent qualify as "input service" – Refund of un-utilised Cenvat credit admissible – CESTAT:MUMBAI CESTAT; CCE, Guntur Vs M/s Jocil Ltd (Dated : August 12, 2009) Service Tax – GTA Service – Abatement of 75% available for payment of service tax in terms of Notification 32/2004-ST – Service tax on GTA service can be discharged utilizing CENVAT Credit A/c – Issues no longer res integra – No reason to interfere with impugned orders:BANGALORE CESTAT; M/s Hindustan Coca-Cola Beverages Pvt Ltd Vs CCE, Hyderabad (Dated : May 1, 2009) Service Tax – Eligibility of input credit of service tax paid on mediclaim policy, security at depots, vehicle insurance, car rentals, pest control activities – All services which are related to business activity would be entitled for credit – LB decision in GTC Industries = 2008-TIOL-1634-CESTAT-MUM-LB followed : BANGALORE CESTAT;
CENTRAL EXCISE SECTION 2010-TIOL-159-CESTAT-MUM.pdf + kirloskar story.pdf M/s Kirloskar Pneumatic Co Ltd Vs CCE, Pune III (Dated : January 7, 2010) A show cause notice under section 11A(1) of the CEA, 1944 should result from the successful conclusion of investigations rather than from a mere report of an auditor – Arithmetically blunderous demand – CESTAT CESTAT's findings – ++ That the show-cause notice was issued purely on the basis of audit objections without necessary investigation which must precede action under section 11A of the Act. ++ The internal auditors of the department are not investigators. They are rather fact-finding experts, whose practice it is to verify records and cull out the relevant facts. The department, has an investigating agency of its own, whose job is to book cases against suspects and gather the relevant facts by way of investigation including examination of witnesses . There is a clear distinction between the two jurisdictions. A show-cause notice under section 11A(1) of the Central Excise Act and, for that matter, one under Section 28(1) of the Customs Act should result from the successful conclusion of investigation rather than from a mere report of an auditor. Reference made to Ram Steel Rolling and Forging Mills vs. CCE, Mumbai-II [ 2006-TIOL-1425-CESTAT-Mum ] ++ The show cause notice in this case is arithmetically blunderous inasmuch as it repeats the auditor's blunder. Both the auditor and the author of the show-cause notice chose to add the figure 2312 kgs to the closing balance (-) 11,412 kg of aluminium ingots to arrive at the total figure of 13,724 kg as the alleged excess quantity of input issued to the floor of the factory during 05-06. ++ The lower authorities chose to repeat the mistake of the auditor in application of Rule 9(5) of the Cenvat Credit Rules, 2004 . Apparently, it was presumed that the burden of proof regarding the admissibility of CENVAT credit to the extent of Rs.3,22,525/- lay on the assessee. The indisputable fact is that, in this case, the assessee consistently denied having taken any such credit. The department, in the absence of CENVAT account, did not make out a fool-proof case of such credit having actually been taken by the assessee either. Order set aside and appeal allowed. :MUMBAI CESTAT; M/s Elforge Ltd Vs CCE, Chennai (Dated : October 12, 2009) Central Excise – finished goods rejected and returned – CENVAT Credit under Rule 16 of the Central Excise Rules, 2002 – since the goods were removed as scrap, and the scrap did not arise due to any processing of the finished goods rejected, demand of credit originally taken is upheld – matter remanded to examine the limitation.:CHENNAI CESTAT; M/s Chemfab Alkalis Ltd Vs CCE, Pondicherry (Dated : October 16, 2009) Central Excise – CENVAT Credit – exempted goods – common inputs – demand of 8%/10% amount under Rule 6(3)(b) of the CENVAT Credit rules on brine solution is upheld as the same is different from the inputs, sodium carbonate and sodium hydroxide – extended period is also upheld.:CHENNAI CESTAT; M/s Ambika Industries Vs CCE, Rajkot (Dated : August 28, 2009) Central Excise – Eligibility of deemed credit on stock of inputs for manufacturers of cotton and man made fabrics – Appellants by mistake declared inputs as stock held in factory when goods were in transit – When inputs are in transit credit available in terms of Board's Circular No.714/30/2003-CX dated 14.5.2003 – Matter remanded to original authority for de novo consideration by appreciating evidences : AHMEDABAD CESTAT;
CUSTOMS SECTION 2010-TIOL-83-HC-DEL-CUS.pdf + cus story.pdf Sudarshan Lohia Vs UoI (Dated: January 22, 2010) Customs – prosecution – A person not concerned with exports cannot be prosecuted for export offence; the petitioner not being an exporter and there being nothing on record to suggest that he was involved in the export concerned; no case is made out against him under Section 135 of the Customs Act. No punishment for false declaration when no document was signed by the petitioner- complaint also time barred – In the present case there is nothing to show that the petitioner made any false declaration or prepared false documents and, therefore, he is not liable to be prosecuted under Section 132 of the Customs Act. In this case, moreover the complaint is barred by limitation inasmuch as per the provision of Section 132 which existed at the relevant time the punishment which could have been imposed for violating Section 132 could have extended for a period of six months or with fine or with both and limitation in such a case as provided under Section 468 of the Cr.P.C . was only 1 year. In the present case, the complaint was filed by the respondent on 31.08.1998 whereas the incident in this case pertains to the year 1997 and, therefore, the complaint was admittedly barred by limitation. This has also been accepted by the learned counsel for the respondent during the course of arguments.:DELHI HIGH COURT; M/s Business Process Technologies (I) Pvt Ltd Vs CC, Bangalore (Dated : September 14, 2009) Customs – 100% EOU – Duty paid on inputs and capital goods after opting out of STPI scheme – Interest not leviable for the period during which capital goods procured without payment of duty were warehoused – Impugned order set aside : BANGALORE CESTAT; |
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