Montek says decontrolling petro prices may help curb inflation;

Climate change - India has full confidence in IPCC Process: PM;

CBDT revenue target to be Rs four trillion for current fiscal;

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

TIOL COMMENTARY

ddt 5 feb.pdf

Draft service Tax Audit manual Released;

spl down.pdf

Latest circular on service tax refunds for exporters could actually create more difficulties;

budget story.pdf

Budget 2010: Some direct and a few indirect expectations!

MIXED BUZZ

mbuzz1287.pdf

CBDT revenue target to be Rs four trillion for current fiscal;

mbuzz1286.pdf

India, UNIDO sign pact to phase out polluting chemicals;

CORRIGENDUM

corrigendum_it10cir01.pdf

Income Tax Deduction from salaries during the F.Y. 2009-10 under section 192 of the Income Tax Act.

CASE LAWS

2010-TIOL-59-ITAT-DEL.pdf + bbc story.pdf

BBC Worldwide Ltd Vs DDIT, New Delhi (Dated: January 15, 2010)

Income tax – India-UK DTAA - Article 5 - PE - if the correct arms length price is applied and paid, nothing further would be left to be taxed in the hands of the foreign enterprise. Morgan Stanley - ( 2007-TIOL-125-SC-IT ) and SET Satellite - 2008-TIOL-414-HC-MUM-IT correctly followed . CBDT Circular No. 23 of 1969 is eloquently clear providing that if the value of the profit attributable to the services rendered by the agent is fully represented by the commission paid, it should, prima facie extinguish the assessment .:DELHI ITAT;

2010-TIOL-58-ITAT-DEL.pdf

ITO, New Delhi Vs M/s Omega Biotech Ltd (Dated: December 31, 2009)

Income Tax - Sec 68 - Assessee is engaged in the business of manufacturing of medicines. During the relevant financial year the Assessee receives share application money - AO holds that it is not a normal transaction. The amount received as share capital is a camouflaged transaction and adds the same as unexplained cash credit u/s 68 – CIT(A) deletes the addition - Held, no further evidence  available to give a finding that the cash credit during the year has been proved, and since the authorities below also failed to conduct necessary enquiries in this regard, matter remanded to AO to examine the nature of credit and then to satisfy whether the credit is properly explained or not. The Assessee directed to place necessary evidence so as to justify the identity and creditworthiness of the creditor and genuineness of the transaction.:DELHI ITAT;

2010-TIOL-57-ITAT-DEL.pdf

Smt Manisha Sharma Vs ITO, Muzaffarnagar (Dated: September 18, 2009)

Income Tax - Sec 147, 148 - Assessee is a partner in partnership firm - claims loss being 70% share in the loss of firm's business - sets off loss against short-term capital gains and interest income - AO notes that the share of loss of a person from a partnership firm is not to be included in the total income of the person u/s 10(2A) - loss cannot be set off against the other income. After recording reasons u/s 147 notice issued - AO makes assessment and concludes that the loss cannot be set off against other incomes - CIT(A) after considering the submissions of the Assessee and the provisions contained in sections 75 and 78, concludes that the loss from a partnership firm cannot be set off in the hands of the assessee - Held, following the ratio of the decision in the case of Mahanagar Telephone Nigam Ltd. v. Chairman, CBDT of Delhi High Court and Asstt. CIT v. Rajesh Jhaveri  Stock Brokers (P.) Ltd, of Apex Court the learned CIT(Appeals) was right in upholding the reopening of the assessment. Assessee's ground dismissed.:DELHI ITAT;

2010-TIOL-107-HC-ALL-IT .pdf

M/s Gopaliji Ambika PD Vs CIT (Dated: January 4, 2010)

Income tax - valuation of closing stocks - assessee is a trader - deals in spices - AO finds stocks shown is less than the stocks pledged to banks - assessee pleads the excess stock belongs to others - AO makes additions - CIT(A) orders for valuation of excess stock either at cost price or market price whichever is lower - Tribunal confirms the CIT(A) order - held, no error in the CIT(A) order - assessee's appeal dismissed:ALLAHABAD HIGH COURT;

2010-TIOL-106-HC-HP-IT.pdf

CIT, Shimla Vs M/s Teknika Components (Dated: January 5, 2010)

Income Tax - Sec 263, 80IA - Assessee is a partnership firm - derives income from manufacture and sale of main shaft of watches, latch links for MCBs and weighing scale parts. On sales, a gross profit @ 75.8% is declared - claims Sec 80IA deduction - AO disallows benefits on interest income - CIT invokes powers u/s 263 - Tribunal sets aside the CIT order - held,, it was not that the Commissioner had concluded that the return submitted by the Assessee firm was incorrect and, therefore, had exercised its revisional jurisdiction accordingly, but it had only concluded that keeping in view the infirmities in the return submitted by the Assessee, the case deserves to be considered afresh by the AO, and such findings, cannot be said to be incorrect in any manner. While exercising its appellate jurisdiction, the ITAT had set aside the order of the CIT without giving its detailed findings in regard to the observations of the CIT and accordingly the order passed by the ITAT is liable to be set aside .Revenue Appeal allowed.:HIMACHAL PRADESH HIGH COURT;

SERVICE TAX SECTION

2010-TIOL-209-CESTAT-BANG.pdf

M/s Hindustan Aeronautics Ltd Vs CST, Bangalore (Dated: September 10, 2009)

ST - Maintenance or Repair Service - Assessee is a PSU - enters into contract with the Ministry of Defence to provide maintenance service to its aircraft engines - Revenue alleges suppression of taxable value by excluding value of materials consumed - interest u/s 75 levied and penalty imposed - held, going by the invoices the assessee clearly mentions the value of consumables and the labour cost as it follows fixed price quotation - eligible for exemption under Notification No 12/2003-ST as it clearly records value of materials utilised for providing the service - assessee has been correctly discharging its service tax liability - Assessee's appeal allowed:BANGALORE CESTAT;

2010-TIOL-208-CESTAT-DEL.pdf

CCE, Indore Vs M/s M P Financial Corpn (Dated: December 7, 2009)

ST - COD clearance - Dispute between the Central Govt and a State Govt entity - held, as per the law laid down by the Apex Court, the CoD clearance is necessary even for a dispute between the Union Govt department and an entity of the State Govt - Revenue's appeal dismissed:DELHI CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-108-HC-MUM-CX.pdf

M/s Mandhana Dyeing Vs UoI (Dated: January 6, 2010)

Central Excise – Settlement Commission – At the time of admission of the Settlement application, the applicant is required to deposit only the admitted amount – Commission's direction to deposit the full amount quashed: any assessee can make application to the Settlement Commission containing full and true disclosure of his liability which was not disclosed by him before the Central Excise Officer. The applicant is expected to deposit additional amount of excise duty admitted to be payable by him as per his own calculations. At the stage of making application, the question of determination of liability by the Settlement Commission does not arise. The provision contemplates a voluntary act on the part of the applicant. Under these circumstances, the amount of additional duty admitted contemplates voluntary admission on the part of the applicant itself.

The object of the legislation is not to close the door for settlement: The object of the Legislature is to open the doors for settlement. It is well settled canon of construction that in construing the provisions of a beneficial legislation, the Court should adopt the construction, which advances, fulfills and furthers the object of the Act rather than the one, which would defeat the same and prevent settlement. Beneficial statutes should not be construed too rigidly as it was for the protection of certain class of persons that the statute was enacted. The intention of the legislature and the policy underlying it has also to be kept in mind.:DELHI HIGH COURT;

2010-TIOL-212-CESTAT-MUM.pdf + ever bright story.pdf

M/s Ever Bright Tube Corporation Vs CCE, Mumbai-II (Dated: November 5, 2009)

Rule 25 of CER, 2002 can be invoked without reference to section 11AC for imposing penalty if any of the grounds enumerated is operative – Remission of duty application rejected by Commissioner but not appealed against – Duty liability unquestionable but penalty and interest u/s 11AC, 11AB not sustainable.:MUMBAI CESTAT;

2010-TIOL-211-CESTAT-MAD.pdf

Sri Kanakadhara Textiles (P) Ltd Vs CCE, Coimbatore (Dated: October 13, 2009)

Central Excise – SSI exemption – a few clearances at the beginning of the financial year on payment of normal duty cannot be construed as opting out of exemption under SSI Notification.: CHENNAI CESTAT;

2010-TIOL-210-CESTAT-MAD.pdf

CCE, Madurai Vs M/s Super Polytex Pvt Ltd (Dated: September 9, 2009)

Central Excise – classification – effective date of 37B order on classification – effective date for new classification is the date of issue of trade notice by the jurisdictional Commissioner.: CHENNAI CESTAT;

CUSTOMS SECTION

2010-TIOL-207-CESTAT-DEL.pdf

M/s Regent Strips (P) Ltd Vs CC, Amritsar (Dated: September 17, 2009)

Customs - refund claim for excess duty paid due to short shipment of goods - Commissioner (Appeals) is not correct in setting aside the lower adjudicating authority's order allowing the refund - Priya Blue Industries case is not applicable to the case of short shipment of goods and refund is admissible as per the P&H High Court order in Bansal Metals and alloys Pvt Ltd case.:DELHI CESTAT;

2010-TIOL-206-CESTAT-BANG.pdf

M/s Wipro Ge Medical Systems 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;