Govt notifies 10 standards for biodegradable plastics ;

Govt sets up new panel headed for Justice B N Srikrishna on AP political crisis ;

Govt to implement Bharat Stage III norms from April 1, 2010 in 11 metros ;

NRI - Not required Indian - BJP wants IT exemption limit at 3 Lakhs (See 'DDT')

ICAI announces results of PEE-II, PCE and IPCE for exams held in 2009;

MCA Secretary R Bandyopadhyay gets addl charge of Secretary, I&B Ministry;

AP HC Chief Justice Justice Anil Ramesh Dave goes as CJ of Bombay HC;

TIOL COMMENTARY

ddt 3 feb.pdf

Laughter – The best medicine;

edit.pdf

Budget should draw curtains over all cesses and surcharges;

stgst.pdf

Size zero, not service tax …

MIXED BUZZ

mbuzz1282.pdf

Govt sets up new panel headed for Justice B N Srikrishna on AP political crisis;

mbuzz1281.pdf

Govt notifies 10 standards for biodegradable plastics;

mbuzz1280.pdf

Govt to implement Bharat Stage III norms from April 1, 2010 in 11 metros;

2010-TIOL-03-ARA-IT.pdf + ara story.pdf

GMP International GmbH ( Dated : January 29, 2010)

Income tax - India-Germany DTAA - Assessee is engaged in the business of providing architectural designs and drawings - participates in a tender floated by TN Govt for preparation of designs and drawings for the construction of Legislative Assembly - gets selected as 'consultant for supply of architectural design - appoints an Indian company as sub-contractor for part of the work - whether payments made to the non-resident are fees for technical services - Whether the payments are to be treated as business profits as per the DTAA in the absence of PE :ADVANCE RULING;

2010-TIOL-54-ITAT-DEL.pdf + pioneer story.pdf

M/s Pioneer Overseas Corpn Vs ADIT, New Delhi (Dated: November 30, 2009)

Income Tax – Sec 2(1A), 10(1) - agricultural income - assessee is tax resident of the USA - sets up branch office in India to conduct agri- genetic research to develop new products and to make available parent seed to JV company under a parent seed charge arrangement - files return - claims exemption u/s 10(1) - AO disallows it - Appeal to Tribunal - held,

++ Creation and sale of hybrid parent seeds not agricultural activity. The expression "agriculture", has got to be understood as connoting the integrated activity of basic operations upon the land.

++ From the nature of activity carried out by the assessee, it is clear that the breeder seeds developed or produced by the assessee are sown to obtain large quantities of parent seeds, which are being supplied to joint venture Company for a price. The assessee undertakes the production of parent seed through multiplication of breeder seed, which are developed by the assessee after a long drawn process of combining two or more traits of different seeds into one seed.

++ The assessee was allowed permission under section 29(1)(a) of the Foreign Exchange Regulation Act, 1973 for opening a branch office in India by the Reserve Bank of India vide letter dated 18 November, 1992. The CIT(A) has rightly held that the assessee's activity of producing the parent seeds, which were of hybrid nature and were sold to joint venture company for producing hybrid commercial seeds, are non-agricultural activity. :DELHI ITAT;

2010-TIOL-53-ITAT-MUM.pdf

Schenectady Specialities Asia (P) Ltd Vs ACIT, Mumbai (Dated: September 10, 2009)

Income Tax - Sec 41(1) - Rectification of mistake - assessee sets up unit in a backward area eligible for sales tax incentive scheme - deferment of sales tax payment - Assessee files Miscellaneous Application for rectification of the Tribunal order on the ground that section 41(1) is not attracted in the present case since there is no cessation of liability - Held, the view taken by the Tribunal is a possible one and, if this view is disturbed based on a Misc. Application filed, it would in effect result in a review and not a rectification of mistake. Once the arguments advanced by the assessee before the various authorities are recorded by the Tribunal and thereafter a conclusion reached by the Tribunal, it can only be considered that such arguments and pleadings were indeed considered while reaching such a conclusion, though specifically not commented upon or explicitly dealt with in the order, at length. The thought process that took place while disposing of the grounds of the assessee, definitely included the aspects of the two issues viz., Sales-Tax Tribunal Order and benefit in settlement of a future dues at its NPA, now argued to have been not considered. The assessee is effectively seeking a review of the order of the Tribunal under the guise of a rectification proceeding. The arguments taken by the assessee has been recorded by the Tribunal in its order. No mistake apparent from record warranting any rectification. Assessee Misc. Application dismissed. :MUMBAI ITAT;

2010-TIOL-101-HC-DEL-IT.pdf

Smt Urmila Gambhir Vs CIT, New Delhi (Dated: December 23, 2009)

Income tax - Sec 132, 158BC - Assessee is a company - Revenue searches its office premises and residential premises of its promotors - loose paper seized - AO makes additions for purchase of land out of unexplained investment - CIT(A) agrees with the AO - Tribunal examines the evidence and papers and upholds the additions - held, going by the findings of three concurrent authorities that the disputed sheet of papers relates to actual transactions and the fact that the assessee fails to establish its proposition relied on, the loose papers cannot be treated as a dumb paper - additions are sustainable - Assessee's appeal dismissed :DELHI HIGH COURT;

2010-TIOL-100-HC-MUM-IT.pdf

CIT, Mumbai Vs M/s TIPS Industries P Limited (Dated: January 22, 2010)

Income tax - Sec 132, 69C - Assessee is a manufacture of blank audio cassettes and musical software - Revenue conducts search operation u/s 132 - loose papers seized from Director's premises - Statements recorded - AO makes additions for unaccounted expenditure claimed to have been incurred by the assessee towards clearing wage bills during the relevant FY - CIT(A) goes with the AO - Tribunal partly allows the assessee's appeal - held, the AO disbelieving the claim of the assessee is self defeating, because, if the notings are not the expenditure incurred by the assessee then no addition of undisclosed income could be made in the first instance. The Tribunal has held that having made addition on the basis that the unaccounted expenditure was incurred out of the unaccounted income, it was not open to the assessing officer to hold that the source of expenditure was not explained, especially when the seized papers itself contain the names of the persons who are claimed to be the employees of the assessee - no infirmity in Tribunal's order - Revenue's appeal dismissed:BOMBAY HIGH COURT;

2010-TIOL-99-HC-MUM-IT.pdf

CIT Vs M/s Contractor & Company (Dated: January 4, 2010)

Income tax - Sec 55(2)(b)(1) - capital gains - assessee buys a theatre with land and machinery in 1948 - attributes major chunk of consideration towards building and claims depreciation - sells the same in 1995-96 - attributes major chunk of sale consideration towards land - long-term capital gains - re-assessment - AO holds since assessee has claimed depreciation it is not entitled to claim benefit of cost indexation and the fair market value - CIT(A) holds since the assessee has claimed depreciation on machinery and building, the cost of acquisition to be treated as Nil - Tribunal holds the assesse is entitled to bifurcation of the sale consideration and can also adopt fair market value as on 1st April, 1981 and since the asset was acquired before the date it can adjust it by capital gains indexation factor - it is statutory right which cannot be denied to the assessee - held, no infirmity in the Tribunal's order - Revenue's appeal dismissed :BOMBAY HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-103-HC-P&H-ST.pdf + st import story.pdf

CCE, Ludhiana Vs M/s Bhandari Hosiery Exports Ltd (Dated: November 17, 2009 )

Service Tax – Import of services – No tax prior to 18.04.2006: Till the time Section 66A was enacted only the person who rendered the service was liable to pay tax and not the recipient of the service. Accordingly, the revenue did not have any authority to levy service tax on the assessee. The aforesaid view of the Bombay High Court has been followed and applied by a Division Bench of Delhi High Court in the case of Unitech Ltd. v. Commissioner of Service Tax, Delhi , - ( 2009-TIOL-293-HC-DEL-IT ). :PUNJAB AND HARYANA HIGH COURT;

M/s Dr Reddy's Lab Ltd Vs CCE, Hyderabad (Dated: September 18, 2009)

Service Tax - Air Travel agent, Rent-a-Cab Operator scheme, Outdoor catering service and Servicing of motor vehicles are input services – Service tax paid thereon eligible as input credit – Impugned order incorrect, liable to be set aside : BANGALORE CESTAT;

CENTRAL EXCISE SECTION

CIRCULAR

excircular913.pdf

Valuation of MS and HSD sold amongst OMCs – MOU – Withdrawal of instructions dated 14-2-2007- regarding;

CASE LAWS

2010-TIOL-102-HC-DEL-CX.pdf + cbec story.pdf

Vinay Wires And Poly Products Pvt Ltd Vs Member (Central Excise) Central Board Of Excise And Customs New Delhi And Another (Dated: January 22, 2010)

Central Excise – Deterrent Action against tax evaders – Copies of relied upon documents must be provided to the assessee - Opportunity of hearing means an effective opportunity – CBEC Member's order set aside: the notification itself stipulates that the noticee has to be given an opportunity of being heard and that his representation must be considered before the recommendation is made to the Director General. Opportunity of hearing means an effective opportunity of hearing and in this case it means that the petitioner ought to have been supplied with the documents so that he could have made an effective representation against the contemplated action. :DELHI HIGH COURT;

2010-TIOL-197-CESTAT-BANG.pdf + sagar story.pdf

Sagar Sugars & Allied Products Ltd Vs CCE, Guntur (Dated: September 25, 2009)

Central Excise – CENVAT Credit – Eligibility of credit on capital goods used for setting up of co-generation plant received prior to operationalization of sugar mill – Assessee cannot be denied credit holding that non-dutiable electricity was final product at the time of receipt of capital goods – Sugar mill not being operational on date of receipt of capital goods does not disentitle credit – On erection of entire facility, dutiable excisable goods were final products manufactured using electricity produced by co-generation plant – Impugned order not consistent with law, liable to be set aside : BANGALORE CESTAT;

2010-TIOL-196-CESTAT-DEL.pdf

CCE, Lucknow Vs M/s Reliance Industries Ltd (Dated: September 7, 2009)

Central Excise - Refund under Rule 5 of the CENVAT Credit Rules, 2004 - there is no stipulation under the CENVAT Rules that the refund is admissible only on the inputs used as per the SION norms - matter remanded to examine the documents. :DELHI CESTAT;

2010-TIOL-195-CESTAT-BANG.pdf

M/s Progressive Systems Vs CCE, Bangalore (Dated: August 17, 2009)

Central Excise – CENVAT Credit – Availment of CENVAT Credit on capital goods while simultaneously availing benefit of SSI exemption notification – SSI unit not barred from accumulating credit of duty paid on capital goods till it reaches exemption threshold and utilize the same after crossing exemption limit – No prescription in Rule 4(2) that credit to any extent has to be availed in the year of receipt of capital goods – As per Rule 4(2), an assessee can avail credit upto 50% in the year of receipt of capital goods and balance in the subsequent financial years – Availment of 100% credit in the year subsequent to the year of receipt not inconsistent with Rule 4(2) of CCR – Impugned order not in accordance with law, liable to be set aside : BANGALORE CESTAT;

CUSTOMS SECTION

2010-TIOL-193-CESTAT-MAD.pdf

CC, Chennai Vs M/s Micro Labs Ltd (Dated: November 9, 2009)

Customs – Confiscation of measuring tapes imported – As per Section 47 (1) of the SWM Act, 1976, no dealer shall export or import any weight or measure unless he is registered under the Section – The importer is covered under the definition of dealer under Sec 2(c) of the SWM Act - Confiscation under Section 111 (d) or Customs Act, 1962 is upheld. : CHENNAI CESTAT;

2010-TIOL-192-CESTAT-MAD.pdf

M/s Arun Vyapar Udyog Ltd Vs CC, Chennai (Dated: October 16, 2009)

Customs – Confiscation – Heavy Melting Steel Scrap – importers produced Pre-shipment Inspection Certificate issued by the Agency which is not a prescribed agency as per the Hand Book of Procedures – confiscation and penalty set aside following the ratio of Gujarat High Court in case of M/s Senor Metals Ltd. : CHENNAI CESTAT;