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General Transfers 2010: CBDT asks officers to fill up online form; Ludhiana Income Tax raids business premises and detects huge cash; claims detecting undisclosed income of Rs 28 Crore; Global Forum Steering Group meet in New Delhi: India wraps up Tax Information Exchange Agreement with Bermuda, a tax haven; More such TIEAs lined up; AP Budget proposes no new tax but cuts outlays for power and irrigation; Interest on Cenvat Credit: CBEC may consider deleting 'OR' in Rule 14 of CCRs; Centre approves 521 Schemes for reclamation of waterlogged areas in various States; Commonwealth Games 2010: Govt grants Customs exemption to various types of sports goods, GPS Communication systems, Satellite phones etc; Judiciary - Good governance needs 'policing': Moily; Allocation of spectrum for technologies: TRAI receives proposal for DECT; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Valuation of Free Samples of the products covered under MRP - Board Clarifies; MRP-based assessment: The Pharmaphobia; Budget 2010: Make it a prelude to GST roll out in 2011; A good compilation of case laws favouring Revenue; How does Financial Inclusion benefit an Aam Aadami? Interest on Cenvat Credit: CBEC may consider deleting 'Or' in Rule 14 of CCRs! Judiciary - Good governance needs 'policing': Moily; MIXED BUZZ Civil Services: Fire in belly required to be agent of change, says Minister; Allocation of spectrum for technologies: TRAI receives proposal for DECT; |
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CIT, Jaipur Vs Rajasthan Rajya Bunkar S Samiti Limited (Dated: February 16, 2010) Income tax - Sec 80P - Assessee is an Apex Society - carries on the activity of manufacturing of cloth by supplying raw materials to weavers who are members of the primary societies who in turn are members of the assessee society - weavers produce cloth strictly in accordance with the quality control prescribed by the assessee - assessee pays weaving charges to the weavers - during the relevant period, the cloth was sold under the Janata Cloth Scheme of the Central Govt - assessee claims deduction of weaving charges u/s 80P(2)(a)(ii) and Sec 80P(2)(a)(vi) - AO disallows - Now question is whether the assessee was engaged in a cottage industry or whether it was engaged in the collective disposal of labour of its members? - held, the answer to these questions lie in the bye-laws of the societies which the Revenue has failed to examine - Revenue directed to decide the issue after studying the bye-laws for future AYs and the orders of the courts below are not disturbed - Revenue's appeal dismissed:SUPREME COURT; TRF Limited Vs CIT, Ranchi (Dated: February 9, 2010) Income tax - Sec 36(1)(vii) - deduction for bad-debts - held, the legal position prior to 1st April, 1989 was that the assessee had to establish that the debt advanced has become irrecoverable. However, this position of law was altered by deleting the word 'established' and post April 1st, 1989, the assessee need not establish so - if bad debts are written off in books, it is enough to become eligible for deduction - But in this case the AO has failed to examine whether bad debts or part thereof have been given write-off treatment in the books of account - matter remanded to only this extent - Assessee's appeal allowed:SUPREME COURT; 2010-TIOL-95-ITAT-BANG.pdf + wipro story.pdf Wipro BPO Solutions Ltd Vs DCIT, New Delhi (Dated: January 29, 2010) The set off of loss as mentioned in section 72 says that carry forward of the loss is to be set off against the profits and gains of any business or profession carried on by the assessee and assessable for the subsequent asst, year: Thus, 90% of the deduction as computed u/s 10B is admissible as per second proviso for the asst. year 2003-04 and 10% of such deduction becomes assessable for the asst. year 2003-04. Once such income becomes assessable for the asst. year 2003-04, then loss of earlier year can be set off in view of section 72(1)( i ). Hence, the loss of asst. year 2001-02 is required to be set off as claimed by the assessee. Thus, it is held that the CIT( A) was not justified in disallowing the carry forward loss of asst, year 2001-02:BANGALORE ITAT; ACIT, Faridabad Vs M/s Faridabad Entertainment Pvt Ltd (Dated: December 31, 2009) Income tax - Sec 37 - Assessee is a Cable TV Signal distributor - distributes signals to cable operators on behalf of Siti Cable Network Ltd - also acts as a collection agent and gets management charges from Siti Cable - files loss return - Revenue disallows operational expenses - CIT(A) deletes the disallowance - held, the CIT(A) has also examined the month-wise details of operational expenses with respect to the agreement between Siti Cable Network Limited and the assessee company, and found that operational expenses have been genuinely and accurately arrived at as per various clauses of the agreement. Since no defect in the regular books of account was pointed out by the AO, nor any discrepancy in the operational charges arrived at by the assessee company, in terms of these agreements were pointed out, the CIT(A) deleted the disallowance - no infirmity in the CIT(A) order - Revenue's appeal dismissed:DELHI ITAT; British Airways Plc Vs ADIT, New Delhi (Dated: October 30, 2009) Income tax - Sec 90(2) - India-UK DTAA - Article 8 - Assessee is a non-resident airline - engaged in the business of transportation of passengers in international traffic - also earns income by providing engineering and ground handling services to third party airlines - whether such income is also exempt as per Article 8 of the DTAA - whether the assessee can avail tax treaty benefits on income resulting from activities not listed in the DTAA: DELHI ITAT; Income Tax Officer, Mumbai Vs M/s Big Apple Clothing Pvt Ltd (Dated: December 18, 2009) Income Tax - Sec 10(33), 14A, 147 - Assessee files loss return - notice u/s 148 - AO holds that in the instant case, the exemption u/s 10(33) on the dividend income is claimed without deducing the expenditure which is related to dividend income, meaning thereby the 'gross dividend' is claimed as exempted, which is not correct. The AO observed that the expenditure is to be allowed against the each head of income separately, irrespective of the fact whether or not the income from the particular head is taxable/exempt. Thereafter, the AO disallows interest component relating to dividend income from the business income and the same has been allowed against the income from other sources. In respect of unsecured loan, the AO adds the same in the income of the Assessee in absence of any proof. Likewise, the addition is also made on account of sundry creditors - CIT(A) holds the assessment void ab-initio on the ground that the AO cannot resort to Section 147 only for making disallowance u/s 14A and once the reasons fail to empower the AO to take action u/s 14A, the whole basis of the assessment goes away and that no other additions made by the AO are warranted - Held, the AO has clearly mentioned that income is always taxable after deducting the expenditure relating to the earned income. Since interest expenditure on the loan taken for investment in exempt securities were not reduced out of dividend income, he reduced the interest income and allowed exemption u/s 10(33) with respect to the net dividend income earned. Nowhere the AO has invoked provisions of Section 14A for disallowing the interest expenditure. In the reasons recorded for reopening, the AO has not stated the reasons with regard to escapement of income on account of unsecured loans and the creditors for which addition was made during the course of reassessment proceedings. No valid basis for the CIT(A) for annulling the assessment. Matter remanded to CIT(A) for deciding the issue afresh, in terms of the observations. Revenue's appeal allowed: DELHI ITAT; ITO, Mumbai Vs M/s IAL Shipping Agencies (Mumbai) Ltd (Dated: January 19, 2010) Income tax - Assessee is an agent of a UK-based shipping company - AO treats it as an independent company and makes additions - CIT(A) disagrees with the AO and deletes the additions - held, since another Bench of the Tribunal has ruled against the Revenue in assessee's case only for earlier years, CIT(A) order upheld - Revenue's appeal dismissed: MUMBAI ITAT; |
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CCE, Lucknow Vs M/s Awadh Transformers Pvt Ltd (Dated: January 5, 2010) ST - GTA Service - Assessee avails GTA Service but fails to pay tax - On being pointed out, pays tax with interest before issue of SCN - Revenue imposes penalties - Commissioner(A) sets aside fine and penalty u/s 76 and reduces penalty u/s 78 - held, for GTA Service the tax can be paid by either the service provider or the recipient or the one who dispatches the goods and therefore, there was scope for misunderstanding - the fact that the assessee has paid tax with interest before issue of SCN and also that penalties under service tax are not mandatory, it calls for leniency - Commissioner(A) order upheld - Revenue's appeal dismissed:DELHI CESTAT; M/s Bansal Alloys & Metals Ltd Vs CCE, Chandigarh (Dated: July 27, 2009) ST - Cenvat Credit - Assessee is a manufacturer - avails credit on input, capital goods and input service as per Rule 3(1) - also avails credit on tax paid on GTA service - removal of inputs as such - assessee reverses all cenvat credit except the input service - Revenue imposes penalty - held, Rule 3(5) does not indicate for payment of equal amount in respect of credit of input service. Assessee's appeal allowed:DELHI CESTAT; CCE, Kanpur Vs M/s Geeta Inds (P) Ltd (Dated: October 5, 2009) Service Tax – Stay/Dispensation of pre-deposit – CENVAT credit on invoice issued after 10.9.2004 in respect of structural work undertaken prior to 10.9.2004 – Considering the nature of the work, the description of the service provided, it is difficult to accept the contention on behalf of the appellants that all such services could have been rendered only after 10th September, 2004 and, therefore, prima facie, there is no fault in the finding arrived at by the authorities below – pre-deposit of the tax amount ordered – deposit of interest and penalty waived: DELHI CESTAT;
Dabur India Ltd Vs CCE, Ghaziabad (Dated: January 11, 2010) ST - Management Consultancy Service - Assessee enters into a contract with a foreign concern for use of trademark - held, going by the definition of the management consultancy service, this is not a fit case to order pre-deposit - no recovery during pendency: DELHI CESTAT;
CENTRAL EXCISE SECTION 2010-TIOL-138-HC-MAD-CX.pdf + delay story.pdf Appeal before CESTAT – Condonation of delay - technicalities shall not stand in the way of a party getting the relief before the appropriate forum. What is important is that the substantial justice should be rendered – Delay condoned – It is well settled principle of law that when the technicalities and substantial justice are pitted against each other and the Courts would always lean in favour of substantial justice rather than technicalities for non-suiting the petitioner on the ground that the appeal has not been filed within the time stipulated in spite of the fact that the authorities are conferred with the power to condone the delay. Likewise, the limitation prescribed is not for destruction of statutory right and is only to give finality without protracting the matter endlessly.:MADRAS HIGH COURT; Sal Steel Limited & Anr Vs UoI (Dated : October 28, 2009) (RECENTLY we had carried the above case in our portal. We had been informed by some very concerned and vigilant netizens that the order we carried was not the final one and was the judgement of only one of the judges. As the other Judge had differed the matter was referred to the Third Member. On further enquiries we have found that the matter was indeed referred to a third Member, though the copy of the judgement with us did not mention anything about the difference of opinion between the two members of the Bench. And the order of the dissenting Member does not seem to be in public domain. Anyway the position now is that the matter is with the Third Member and we will have to wait for the final outcome. We regret the confusion caused inadvertently and we profusely thank the Netizens who brought the matter to our notice.:GUJARAT HIGH COURT); 2010-TIOL-302-CESTAT-MUM.pdf + snuff story.pdf CCE, Nagpur Vs M/s Bombay Snuff Pvt Ltd (Dated: Novermber 19, 2009) Luxury Tax on Snuff challenged by assessee and deduction not claimed from Assessable value u/s 4 of the CEA, 1944 – Once challenge failed and luxury tax was paid, the same is entitled for deduction from AV – Refund of Central Excise duty proper: MUMBAI CESTAT; M/s APCPDC Ltd Vs CCE, Tirupathi (Dated: September 7, 2009) Central Excise – Valuation – Clearance of PSCC poles for captive consumption without following valuation @ 115% of cost of production as per Rule 8 of Valuation Rules, 2000 – Short payment of duty occurred owing to ignorance of appellants – Penalty under Section 11AC not leviable – Interest liable to be paid on differential duty in terms of Section 11AB – Demand of duty and interest sustained – Penalty under Section 11AC vacated:BANGALORE CESTAT; M/s Audco India Ltd Vs CCE, Chennai (Dated: September 8, 2009) Central Excise – Cenvat Credit of Service Tax paid on outward transportation is admissible in view of the Larger Bench decision:BANGALORE CESTAT; 2010-TIOL-295-CESTAT-MUM.pdf + Neco story.pdf CC & CCE Vs Neco Schubert & Salzer Ltd (Dated: November 4, 2009) Revenue woefully lost sight of the correct facts and ventured to file a mis-conceived appeal – Appeal dismissed along with stay application: MUMBAI CESTAT; CCE, Visakhapatnam Vs M/S Hindustan Zinc Ltd (Dated: May 11, 2009) Central Excise – CENVAT Credit not deniable on plates, angles, steel straps used in maintenance & repair works of pipes and furnace shells – No merit in Revenue appeal : BANGALORE CESTAT; 2010-TIOL-293-CESTAT-DEL.pdf + geeta story.pdf CCE, Kanpur Vs M/s Geeta Inds (P) Ltd (Dated: August 28, 2009) Central Excise - CENVAT Credit - removal of used capital goods - the assessee is required to pay only proportionate amount of credit - no case to demand full credit originally availed on the ground that the capital goods are removed as such in terms of Rule 3(5) of the CENVAT Credit Rules 2004 - If the Department's view is accepted and literal meaning of Rule 3(4) of Cenvat Credit Rules,2002/Rule 3(5) of Cenvat Credit Rules, 2004 is adopted, it would lead to absurd results, as even when the cenvated capital goods are cleared as used capital goods after, say, ten years of use at a small fraction of their original price, still full Cenvat credit originally taken would be required to be reversed, which would defeat the very purpose of grant of Cenvat credit facility in respect of capital goods.: DELHI CESTAT;
CUSTOMS SECTION NOTIFICATION Import of sports goods meant for Commonwealth Games exempted; CASE LAW M/s Lanco Kondapalli Power Pvt Ltd Vs CC, Visakhapatnam (Dated: September 2, 2009) Customs – Project Import – Import of plant and machinery for setting up of 355 MW Combined Cycle Power Plant – Inclusion of additional payments to suppliers in the transaction value – Commissioner did not consider any of the voluminous evidence placed by the appellants – Specific directions in Tribunal's remand order to consider all evidences of assessee ignored – Matter remanded once again for de novo consideration of all evidences relied upon by assessee – No penalty imposable on Managing Director unless charges against company are proved : BANGALORE CESTAT; M/s Shree Kuberappa & Sons Vs CC, Bangalore (Dated: June 17, 2009) Customs – Valuation – Allegation of over-valuation of export of natural silk mixed sarees under DFIA scheme and readymade garments 100% cotton men's shirts under drawback scheme – Mis-declaration of export goods accepted by appellants – Enormous evidences collected and relied upon by adjudicating authority that inputs imported under DFIA for goods exported were not utilized by appellant as they had mis-declared export goods – Reasoned order passed by adjudicating authority – Since appellants were in judicial custody for more than ten months, export goods confiscated and advance money lying in custody of DRI, penalty on firm reduced and penalty on proprietor of firm set aside – Redemption fine modified for release of confiscated goods – Confiscation of advance money upheld and redemption fine imposed by Commissioner not interfered with.: BANGALORE CESTAT; |
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