Advance Estimates of National Income, 2009-10 (See 'DDT Column')

Master Circular - Prudential Guidelines on Capital Adequacy and Market Discipline – New Capital Adequacy Framework (NCAF);

DGFT amends FTP to ease ICB requirement for Mega Power Project ;

Allahabad High Court CJ Justice C K Prasad elevated as SC Judge;

CBEC directs Customs to clear frozen green peas only after phytosanitary clearance;

External Commercial Borrowings (ECB) Policy - Liberalisation;

Exim Bank's Line of Credit (LOC) of USD 100 million to Bank for Development and Foreign Economic Affairs (Vnesheconombank), Russia;

FM to chair CCM of Colombo Plan;

Montek hints at roll-back of economic stimulus package;

Financial crisis calls for 'clean' growth in developing nations: UN;

TIOL COMMENTARY

ddt 9 feb.pdf

Regional exemptions – J&K Gets extended with more value addition rates;

guest column.pdf

Can Special Purpose Vehicle drive away judicial arrears of India!

RBI NOTIFICATION

RBI Master Circular.pdf

Master Circular - Prudential Guidelines on Capital Adequacy and Market Discipline – New Capital Adequacy Framework (NCAF);

RBI CIRCULAR

rbi09cir033.pdf

External Commercial Borrowings (ECB) Policy - Liberalisation;

rbi09cir032.pdf

Exim Bank's Line of Credit (LOC) of USD 100 million to Bank for Development and Foreign Economic Affairs (Vnesheconombank), Russia;

MIXED BUZZ

mbuzz1294.pdf

FM to chair CCM of Colombo Plan;

mbuzz1293.pdf

Financial crisis calls for 'clean' growth in developing nations: UN;

2010-TIOL-68-ITAT-MUM.pdf + tp story.pdf

CA Computer Associates Pvt Ltd Vs DCIT, Mumbai (Dated: January 28, 2010)

Income tax - Transfer Pricing - Sec 92 - Assessee is a 100% subsidiary of a USA-based software company - engaged in business of licensing infrastructure software products of the parent company - also sets up Technical Support Centre to provide support services to end users on behalf of the parent company - also develops customised software - file loss return - Scrutiny - AO finds cross-border transactions with AEs and refers the case to TPO u/s 92A(1) for determining ALP - royalty payment to the parent company - TPO reduces the quantum of royalty payment on the ground that when some of sales did not fructity for various reasons, and the same were written off by the assessee in the same financial year, there is no question of paying royalty on such sales merely on the basis of raising invoices - assessee tries to justify the same but the AO makes adjustments in ALP based on TPO's report as regards the royalty payment - CIT (A) agrees with the AO:MUMBAI ITAT;

2010-TIOL-67-ITAT-MUM.pdf

Larsen & Toubro Infotech Ltd Vs DCIT, Mumbai (Dated: December 8, 2009)

Income tax - Sec 10A, 72, 263 - Assessee is in the business of software development - AO determines its total income in negative figure and allows carry forward of the same to the subsequent years - CIT invokes powers u/s 263 and disallows the carry forward of excess deduction and restricts the deduction u/s 10A to the extent of total income available - held, no infirmity in the CIT order as the excess deduction does not have the same character as the loss which is contemplated by Sec 72. If the deduction exceeds the total income, the excess simply lapses and there is no provision which permits carry forward of the same - to be eligible to carry forward a loss u/s 72(1), the loss is to be computed as per the provisions of Sec 30 to 43D - Assessee's appeal dismissed.:MUMBAI ITAT;

2010-TIOL-66-ITAT-MUM.pdf

Shri Navratan Mistry Vs ITO, Mumbai (Dated: January 21, 2010)

Income Tax - Sec 145(3) - Assessee is a proprietor of a firm which acts as a furniture contractor - AO rejects the book results - Considering the GP rate of 25.09% for the A.Y. 2001-02, 22.77% for the A.Y. 2002-03, 10.19% for the A.Y. 2003-04 and 8.69% shown by the Assessee for the A.Y. 2004-05, the AO holds that estimation of GP rate at 13.88% being the average GP for A.Ys. 2002-03 to 2004-05 on a turnover and makes addition to the total income of the Assessee being the difference in gross profit - CIT(A) directs the AO to adopt the GP rate of 10.19% as declared by the Assessee for the A.Y. 2003-04 as reasonable for the impugned A.Y - Held, CIT(A) is justified in upholding the action of the AO as regards the rejection of the book result is concerned. Adoption of 10% GP rate as against 10.19% held by the CIT(A), will meet the ends of justice.. The ground raised by the Revenue dismissed and that of Assessee is partly allowed.

Section 68 - On the issue of CIT(A) confirming the addition on account of gift being considered as unexplained cash credit - Held, there is immediate cash deposit before making the gift to the Assessee. It is also a fact that the donor does not have any immovable property or any valuable movable property. Therefore, the gift is against human probability. Decisions of the Apex Court in the case of Sumati Dayal vs. CIT and CIT vs. Durga Prasad are squarely applicable. No infirmity in the order of the CIT(A) in confirming the addition made by the AO u/s. 68 - Assessee's ground dismissed.:MUMBAI ITAT;

2010-TIOL-65-ITAT-DEL.pdf

Shri Om Prakash Bhargava Vs CIT, Haldwani (Dated: December 4, 2009)

Income Tax - Section 263 - The Assessee is an individual, engaged in the business of trading of vehicles - assessment order u/s 143(3) passed whereby total income is determined after making various disallowances/additions - CIT invokes sec 263 on the ground that Assessee's agricultural income receipts not being verifiable, the payment of commission to his daughter not inquired by the AO and same allowed without making any discussion in the order and no further investigation has been made in respect of sundry creditors - cancels the assessment order and directs the AO to frame a fresh assessment examining the case de novo in toto – Held, AO has accepted the accounting entry as it is without any inquiry in respect of commission paid by the Assessee to an individual who is covered under sec. 40A(2)(b). Certainly this would make the assessment order erroneous and prejudicial to the interest of the revenue in view of the Apex Court's decision in the case of Malabar Industries . The issue in respect of agricultural income CIT has made the observations after verification of the record and these observations are not disproved. AO has not decided the issue logically rather he has recorded contradictory findings. If any show-cause notice in respect of these issues were issued by the AO and Assessee has filed detailed submissions, those submissions were considered by the AO and thereafter he accepted the stand of the Assessee without making any discussion in the order but the Assessee at the time of hearing was unable to demonstrate this position. Asessee's appeal dismissed.:DELHI ITAT;

2010-TIOL-64-ITAT-DEL.pdf

M/s Super Oil Seals India Ltd Vs ACIT, New Delhi (Dated: January 8, 2010)

Income tax - Sec 32, 271(1)(c) - Assessee manufactures oil seals - turns sick company - claims depreciation on assets treated as 'kept ready' for use - AO disallows and initiates penalty proceedings - CIT(A) confirms the order - held, merely for claiming depreciation on 'ready to use' assets, penalty cannot be imposed as there is no wrong furnishing of information nor concealment of income - Assessee's appeal allowed:DELHI ITAT;

SERVICE TAX SECTION

2010-TIOL-01-ARA-ST.pdf + ara story.pdf

M/s Cae Flight Training (I) Pvt Ltd ( Dated : February 4, 2010)

Service Tax – institute conducting aircraft-specific type rating training, not covered under exclusion of which issues a certificate recognized by law, nor covered as a vocational training institute: the Certificate of Course Completion issued by CFTI cannot be said to be a certificate which is recognized by law for the time being in force. The fact that such a certificate may be taken into account by the DGCA - approved Examiner for the purpose of evaluating the experience and content of training, will not make it statutory in character. It is incorrect to claim on behalf of CFTI that a trainee pilot can directly obtain employment after completion of the course. The activity which enables the CPL holder to get the employment is the endorsement on the licence by the DGCA. If a similarity has to be drawn, a motor vehicle driver cannot legally obtain employment as a driver merely after undergoing training in a driving school unless he has obtained a driving licence from the State Transport Authority.:ADVANCE RULING;

2010-TIOL-226-CESTAT-MAD.pdf

M/s Bhari Metal Fabrication Pvt Ltd Vs CST, Chennai (Dated: September 23, 2009)

Service Tax – Stay/Dispensation of pre-deposit – Erection, commission or Installation service – no prima facie case has been made out for extending the benefit under Notification No 12/2003 ST dated 20.6.2003 – pre-deposit ordered.:CHENNAI CESTAT;

2010-TIOL-225-CESTAT-AHM.pdf

M/s Sushant Gupta Vs CST, Ahmedabad (Dated: October 30, 2009)

ST - Consulting engineering service - delay in filing return and also payment of service tax - demand raised - assessee pays tax with interest - held, it is a fit case for invocation of Sec 80 as the assessee is an individual and he had undergone surgery which resulted in the delay - penalty set aside - assessee's appeal allowed : AHMEDABAD CESTAT;

CENTRAL EXCISE SECTION

2010-TIOL-230-CESTAT-MUM.pdf + tata story.pdf

Tata Metaliks Ltd Vs CCE, Pune-II (Dated: January 12, 2010)

Iron Ore Fines and Coke Breeze obtained on screening of Iron Ore and Coke whether result of manufacturing activity – rule 6(3)(b) of CCR, 2004 whether applicable – Matter remanded for final decision on merits. :MUMBAI CESTAT;

2010-TIOL-229-CESTAT-DEL.pdf

CCE, Jaipur Vs Sh Pankaj Kumar Jain (Dated: September 14, 2009)

Central Excise - Denial of CENVAT Credit on goods received for reprocessing – Order passed by lower authority cryptic and unable to convey different aspects of issues on hand – Matter remanded to adjudicating authority to test the proposal to deny credit on both counts i.e. under Rule 6 of CENVAT Credit Rules, 2002 and Rule 16 of Central Excise Rules, 2002 and pass a speaking order: DELHI CESTAT;

2010-TIOL-228-CESTAT-BANG.pdf

CCE, Hyderabad Vs M/s Srinivasa Frozen Foods Ltd (Dated: September 4, 2009)

Central Excise – Allegation that goods were kept in factory without entries in records with an intention to clear them without payment of duty not supported by any evidence – Not liable for confiscation – Assessee liable to pay penalty under Rule 226 of CER, 1944 for violation of Rules: BANGALORE CESTAT;

2010-TIOL-227-CESTAT-AHM.pdf

M/s R S Jhaveri & Co Exports Vs CCE, Vadodara (Dated: September 2, 2009)

Central Excise – Procurement of goods from 100% EOU against CT-2 Certificate/Annexure I – No legal obligation on purchasers to disclose supplier is a 100% EOU – Buyer cannot know if 100% EOU is entitled to sell goods in DTA – When invoice prominently displays that goods are from 100% EOU Revenue's allegation of suppression of facts with an intention to evade payment of duty not sustainable – If goods procured are used in manufacture of final products which are exported and entitled for refund of duty paid on raw materials, entire transaction is revenue neutral – Penalties imposed under Rule 26/209A set aside – Appeals by purchasers allowed – Appeal by 100% EOU not prosecuted, dismissed for non-prosecution : AHMEDABAD CESTAT;

CUSTOMS SECTION

CIRCULAR

cuscir10_002.pdf

CBEC directs Customs to clear frozen green peas only after phytosanitary clearance

DGFT NOTIFICATION

dgft09not028.pdf

Amendment in Chapter 8 of FTP regarding Mega Power Project;

DGFT PUBLIC NOTICE

dgft09pn039.pdf

Amendment in Appendix 22 C and Appendix 27 regarding Mega Power Projects;

CASE LAWS

2010-TIOL-231-CESTAT-MUM.pdf + imitiaz story.pdf

CC Vs Imtiyaz Pothiawala (Dated: January 11, 2010)

Vehicles having special cavities for concealing smuggled goods can be confiscated if they are found in the Customs area – when no owners are forthcoming for the said vehicles, the Revenue could have confiscated and disposed the same – it is not Tribunal's concern to advise the department – CESTAT

Before any money is seized as being the proceeds of sale of smuggled goods, it must be established that there was a sale of goods which were smuggled, and that the money in question is established to be the proceeds of sale of such goods. … It was however up to the officers of the Directorate of Revenue Intelligence to conduct proper investigation to establish a credible basis for the claim that the money was the proceeds of sale of gold. :MUMBAI CESTAT;