CBDT to focus on MAT cases to boost revenue collections in Q4;

Undervaluation of Petroleum products by Oil Companies - Board prefers CESTAT to Supreme Court and withdraws Instructions (See 'DDT' Column)

Bhopal Income Tax raids dozens of official and residential premises of five top IAS officers in Madhya Pradesh and Chattisgargh;

DGFT issues guidelines for re-credit of 4% SAD;

India to produce 8 lakh tonnes e-waste by 2012;

Bachelor of Rural Medicine & Surgery Course: No compromise with quality, says Minister;

Govt to place Finance Commission Report in Parliament on Feb 25;

Kirit Panel on pricing of sensitive petroleum products submits report to Petro Minister;

N N Kumar, IRS, 1984 Batch, is appointed as Deputy Chairman, JNPT;

Shivaji Rakshit of 1975 batch takes over as Railway Board Chairman;

TIOL COMMENTARY

ddt 4 feb.pdf

Undervaluation of Petroleum products by Oil Companies – Board prefers CESTAT to Supreme Court and withdraws Instructions;

cobweb.pdf

Taxpayers' services - A tell-tale mark of under-currents of mindset-change in Income Tax Department!

budget story.pdf

Taxing agri income: Dear Mukherjee, it's time to blow off the bluff and reveal emperor's hidden clothes!

RBI NOTIFICATION

RBI Notification for Money Laundering.pdf

UCBs - Prevention of Money-laundering (Maintenance of Records of the Nature and Value of Transactions, the Procedure and Manner of Maintaining and Time for Furnishing Information and Verification and Maintenance of Records of the Identity of the Clients of the Banking Companies, Financial Institutions and Intermediaries) Amendment Rules, 2009 - Obligation of banks / Financial institutions;

MIXED BUZZ

mbuzz1285.pdf

India to produce 8 lakh tonnes e-waste by 2012;

mbuzz1284.pdf

Bachelor of Rural Medicine & Surgery Course: No compromise with quality, says Minister;

mbuzz1283.pdf

Kirit Panel calls for hike in LPG and Kerosene prices;

2010-TIOL-04-ARA-IT.pdf

Yongnam Engineering & Construction (PTE) Ltd ( Dated : February 1, 2010)

Income tax - India-Singapore DTAA - Applicant is a sub-contractor for L&T which is a contractor for DIAL for construction of a new passenger terminal building at IGI Airport - applicant gets sub-contract for the structural steel work - seeks advance ruling on income received / receivable for the supply and delivery of overseas fabricated items sold on high-sea sale basis - held, the applicant had come to the authority in the past on the same issue and the application was rejected for lack of information and unwillingness of the applicant to provide details of transactions - though there is no bar on the Authority to entertain second application on the same issue but the applicant has once again not provided complete details required to pass a ruling - considering their application at this stage would amount to placing premium on the negligence and indifference - Application rejected u/s 245R(2):ADVANCE RULING;

2010-TIOL-08-SC-IT.pdf + sc story.pdf

ACIT Vs M/s Hotel Blue Moon (Dated : February 2, 2010)

Income tax - Sec 132, 143(2) - Search - undisclosed income detected - block assessment - AO fails to serve Sec 143(2) notice before completing block assessment - CIT(A) and Tribunal hold non-issue of notice u/s 143(2) is only a procedural irregularity and the same is curable - HC holds the provisions of Sec 142 and Sec 143(2) & (3) to have mandatory application where AO in repudiation of return filed in response to a notice u/s 158BC(a) makes an inquiry - Appeal to Apex Court - held,

++ Section 158 BC(b) provides for enquiry and assessment. An analysis of this sub section indicates that, after the return is filed, this clause enables the assessing officer to complete the assessment by following the procedure like issue of notice under Sections 143(2)/142 and complete the assessment under Section 143(3). This Section does not provide for accepting the return as provided under Section 143(i)(a). The assessing officer has to complete the assessment under Section 143(3) only:MUMBAI ITAT;

2010-TIOL-56-ITAT-BANG.pdf + tds story.pdf

Smt Kannan Nachal Vs ITO, Bangalore (Dated: November 27, 2009)

Income Tax – non payment of TDS – prior to 1.6.2007, individuals were not liable to deduct TDS; outright purchase of goods is not contract, not liable for TDS – when TDS was not deductible, disallowing expenditure is not correct: the provisions of s.194C (1) do not apply to the case of the present assessee being an individual for the assessment year under dispute; the amended provisions of s.194C (1)(k) brought on the Statute applicable prospectively w.e.f 1.6.2007 & the assessee was under no obligation to deduct tax while making the payment (s). Since the assessee was under no obligation to deduct tax, her case doesn't fall within the ambit of s. 40 (a) ( ia ) of the Act. the lower authorities were not justified in disallowing the sum of Rs.30,33,838 /-. :MUMBAI ITAT;

2010-TIOL-55-ITAT-MUM.pdf

VVF Ltd Vs DCIT, Mumbai (Dated: January 8, 2010)

Income tax - Sec 92 - Assessee is a registered company - has two wholly-owned subsidiaries in Canada and Dubai - gives interest-free loans to its subsidiaries - case referred to TPO who determines 14% interest rate per annum as ALP interest on the sum advanced - CIT(A) agrees with the AO - assessee argues it has given loans out of its own funds and also as per commercial expediency, and therefore, Revenue cannot levy tax on notional interest - held, this is not a question of whether the loan was given from its own fund or borrowed fund - TP regulations are to nullify the impact of inter-relationship between the AEs - the CUP method adopted by the assessee seeks to ascertain arms length price by taking into account prices at which similar transactions have been entered into by the assessee with unrelated parties (Internal CUP) or at which other unrelated parties have entered into similar transactions inter se (External CUP) - The comparable transaction is of foreign currency lending by unrelated parties - matter remanded for fresh computation:MUMBAI ITAT;

2010-TIOL-105-HC-AHM-IT.pdf

Shakti Cargo Movers Pvt Ltd Vs ACIT (Dated: January 19, 2010)

Income tax - AO makes addition on the basis of fall in net profit ration as compared to last year - CIT(A) gives detailed findings and holds the additions are unsustainable - Tribunal summarily rejects the CIT(A) findings and reverses that order - held, Tribunal has not discussed the findings of the CIT(A) and why are they not sustainable - order set aside - matter remanded for passing a speaking order - Assessee's appeal allowed:GUJARAT HIGH COURT;

2010-TIOL-104-HC-KAR-IT.pdf

CIT, Bangalore Vs M/s Karnataka State Constructions Corpn Ltd (Dated: December 3, 2009)

Income tax - Assessee is into construction - gets a contract from the Central Govt - gives the work to a sub-contractor - dispute arises between the assessee and its sub-contractor - arbitration - interim order passed, directing the assessee to make some payments - assessee claims deduction - Revenue disallows on the ground that the same can be claimed from the Central Govt - Tribunal allows the assessee's appeal - held, if the final arbitration order goes in favour of the assessee it would recover the intermi award paid to the sub-contractor and the same would be brought to the book - deduction cannot be disallowed - Revenue's appeal dismissed:KARNATAKA HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-200-CESTAT-AHM.pdf + no bar story.pdf

M/s Vallabh Vidyanagar Concrete Factory Vs CCE & CC, Vadodara (Dated: October 27, 2009)

Central Excise - CENVAT Credit - there is no bar on availing CENVAT Credit on input services by SSI units working under exemption Notification 8/2003 CE dated 1.3.2003 - the restriction under Notification 8/2003 CE is applicable only for inputs, but not for input services or capital goods.: AHMEDABAD CESTAT;

2010-TIOL-199-CESTAT-BANG.pdf

M/s Vikas Coaching Centre Vs CCE, Guntur (Dated: November 30, 2009)

Service Tax – Commercial Training and Coaching Service – Hostel and mess charges collected from students not includible in taxable value – Prima facie case for full waiver of pre-deposit: BANGALORE CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-204-CESTAT-MUM.pdf + kirloskar story.pdf

CCE, Pune Vs M/s Kirloskar Ferrous Inds Ltd (Dated: December 17, 2009)

Interest u/s 11BB of the CEA, 1944 is to be paid immediately after expiry of three months from the date of receipt of the refund application and if there is any subsequent litigation that does not bar the assessee to claim the interest from that date : MUMBAI CESTAT;

2010-TIOL-203-CESTAT-MUM.pdf + sandvik story.pdf

M/s Sandvik Asia Ltd Vs CCE, Pune- I (Dated: December 3, 2009)

'Inserts' missing from bonded warehouse despite tight security – no cause for remission of duty in respect of goods lost in theft – liability of an assessee to pay interest on duty is a statutory liability which requires to be honoured by the assessee without insisting on specific demand : MUMBAI CESTAT;

2010-TIOL-202-CESTAT-DEL.pdf

M/s Rajesh Ispat & Power Ltd Vs CCE, Raipur (Dated: October 5, 2009)

Whether iron ore fine is different from iron ore – contentious matter - Commissioner(A) ordering pre-deposit of Rs. 3 Lakhs which appellant does not comply – Appeal rejected – considering that the demand of Cenvat credit is based on materials on record CESTAT orders pre-deposit of Rs 2 lakhs pursuant to which appeal to be heard by Commissioner(A) – in the event of failure of pre-deposit appeal would stand dismissed as in limine – no opinion expressed on merits of case. : DELHI CESTAT;

2010-TIOL-201-CESTAT-DEL.pdf

M/s Shri Nakoda Ispat Ltd Vs CCE, Raipur (Dated: July 20, 2009)

Central Excise – CENVAT Credit – Eligibility of credit on structural items like angles, channels, beams, joys, plates etc – Merely because goods are used in structural fabrication of plant or factory would not itself lead to a conclusion that such goods are used in the manufacture of final products – Fabrication of structural items not voluntarily disclosed in ER 1 but noticed during Audit, extended period of limitation sustainable – Section 35F requires an assessee to make out a clear case of financial hardship, if any, apart from merely stating that direction to deposit entire amount would cause hardship to the appellants – No factual matrix pleaded and placed on record to justify reduction of duty deposit – Prima facie case not made out by appellants for complete waiver of pre-deposit of duty – Pre-deposit of entire duty ordered but penalty and interest waived in the facts and circumstances of the case : DELHI CESTAT;

CUSTOMS SECTION

DGFT PUBLIC NOTICE

dgft09pn038.pdf

Amendment of paragraph 2.13.1, 3.11.7 and 4.50 of HBP Vol. 1 for revalidation of freely transferable Authorization/ Duty credit scrips and re-credit of 4% SAD thereof.;

DGFT CIRCULAR

dgft09cir022.pdf

DGFT issues guidelines for re-credit of 4% SAD;

CASE LAWS

2010-TIOL-205-CESTAT-BANG.pdf

M/s Vetcare Organics Pvt Ltd Vs CC (Seaport), Chennai (Dated: May 1, 2009)

Customs – Refund claim of excess duty paid on imports where benefit of notification was denied – Assessee unable to produce concrete evidence to show price remained same pre and post importation – Chartered Accountant's certificate produced before the Commissioner (A) has not indicated that disputed amount is ‘receivable from Customs' – No reason to interfere with Commissioner (A) order: BANGALORE CESTAT;

2010-TIOL-198-CESTAT-DEL.pdf

M/s Terra Films Pvt Ltd Vs CC, New Delhi (Dated: November 11, 2009)

Customs - conversion of shipping bills for inclusion of draw back scheme - amendment under Section 149 cannot be claimed as a matter of right - the contention of the revenue that the goods have already been exported during the years 2004 & 2005, to cause verification to fix brand rate under the drawback rules is physically impossible deserves to be taken into account. The Commissioner is right in rejecting the conversion. : DELHI CESTAT;