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Manufacture on Job Work Basis - Board seeks Opinion from Field Formations + 'Cab Sec' Asks IAS Officers to Introspect (See 'DDT' Column) Doctors cannot endorse pharma products: Minister; Definition of rape not being diluted: P Chidambaram; CBEC Tariff Value of Brass Scrap increased and poppy seeds decreased; Verification Mechanism and monitoring of export obligation under duty exemption / reward Schemes – reg; India, EU FTA negotiations at advanced stage: Minister; India-Japan CEPA: Next round of meeting next month; Panel on ports calls for no competitor pvt port in 100 km radius: Minister ; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Manufacture on Job Work Basis - Board seeks Opinion from Field Formations; Service Tax levy on Construction: Challenging the Constitution? MIXED BUZZ Doctors cannot endorse pharma products: Minister; India, EU FTA negotiations at advanced stage: Minister; India-Japan CEPA: Next round of meeting next month; Panel on ports calls for no competitor pvt port in 100 km radius: Minister; |
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2010-TIOL-15-ARA-IT.pdf + gain story.pdf M/s Umicore Finance Luxembourg(Dated : March 12, 2010) Income tax - Sec 2(47), 45, 48, 47(xiii), 47A - Applicant is a tax resident of Luxembourg - buys shares of an Indian partnership firm and makes it a wholly owned subsidiary - the partnership firm is converted into a private limited company - whether the conversion of the firm into a registered company will be treated as transfer u/s 2(47) - whether it would give rise to capital gains liable to tax - whether it is eligible for exemption as per the provision in clause (d) of proviso to Sec 47(xiii) : ADVANCE RULING; Rallis India Ltd Vs ACIT, Mumbai (Dated : March 4, 2010) Income tax - Sec 147, 148, 36(1)(vii), 36(2) - Assessee claims deduction for bad debts - also computes book loss u/s 115JB - return revised to increase the quantum of loss - Scrutiny - AO partly disallows the bad debts but also allows the claim to some extent - CIT(A) allows the appeal - cross appeals pending before the Tribunal - Revenue meanwhile issues notice u/s 148 for reopening the assessment - takes the ground that the assessee had claimed bad debts and advances and also the assessee had not debited any sum on account of write off of bad debts to P & L A/c - held, on the date on which the Assessing Officer purported to exercise his power to reopen the assessment under Section 147, the legislative amendment by the insertion of clause (i) to Explanation (1) to Section 115JB had not been brought into force on the statute book - therefore, the subsequent amendment could not have been and is not a ground which has been taken by the Assessing Officer, while reopening the assessment. The validity of the notice issued by the Assessing Officer in seeking to reopen the assessment must be determined with reference to the reasons which are found in support of the reopening of the assessment. These reasons cannot be allowed to be supplemented on a basis which was not present to the mind of the Officer and could not have been so present on the date on which the power to reopen the assessment was exercised - Assessee's appeal allowed:BOMBAY HIGH COURT; Godrej Agrovet Ltd Vs DCIT, Mumbai (Dated : February 11, 2010) Income tax - Sec 80M, 147, 115O - Assessee is a registered company - receives dividend income from another domestic company on intercorporate deposits - claims deduction u/s 80M - AO disallows certain part of dividends received on the ground of administrative expenditure incurred on earning it - CIT(A) restricts the disallowance to 2% of dividend income - issue goes to Tribunal - meanwhile, AO gives effect to CIT(A) order - Tribunal allows deduction - Revenue initiates Sec 147 proceedings on the ground that the assessee had paid dividends after due date and the dividend received by it is taxable as per provisions of Sec 115O - held, invoking Sec 147 on the extraneous ground like applying Sec 115O is not sustainable - Assessee's appeal allowed:BOMBAY HIGH COURT; CIT Vs Gora Mal Hari Ram Ltd (Dated : February 15, 2010) Income tax - Sec 43(5), 73 - Assessee incurs loss on bargain settlement - AO and CIT(A) treat it as 'speculative transaction' falling within the meaning of Sec 43(5) and disallow the set off of the claim - Tribunal takes the view that it was a loss arising out of regular course of business with regard to breach of contract - allows set off for loss against regular business income - held, no infirmity in Tribunal's order - however, even if it is presumed that it is speculative transaction, Section 43(5) merely defines as to what a speculative transaction is for the purposes of Section 28 to Section 41 - It is only when the speculative transaction, as defined in Section 43(5), matures into a speculative business as appearing in Explanation 2 to Section 28 that any effects would flow from the said definition. In case the speculative transaction matures into a speculative business, then the loss in such a transaction can only be set off against the gains or profits of a speculative business in terms of Section 73 of the said Act - Revenue's appeal dismissed:DELHI HIGH COURT; M/s Tiruvengadam Investments P Ltd Vs CIT, Chennai (Dated : February 9, 2010) Income tax - Sec 67 of VDIS Scheme - assessee files declaration under the scheme but fails to pay tax with interest within three months period - Revenue rejects the declaration - held, it is settled principle of law that between equity and law, the court has to follow the latter - since the assessee fails to pay tax within the due period, it cannot seek extension of the same and the court cannot extend it by exercising its writ jurisdiction under Article 226 - assessee's petition dismissed : MADRAS HIGH COURT; |
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SERVICE TAX SECTION CCE, Meerut Vs M/s Anand Track & Field Equipment Pvt Ltd (Dated: December 15, 2009) Appellate authority has arrived at the finding that assessee has not been enriched by any double claim i.e. drawback on one hand and the refund of Service Tax on the other hand for the same export – No contrary claim available with Revenue - appeal dismissed:DELHI CESTAT; M/s Balasai Travels, Kurnool Vs CCE, Tirupathi (Dated: October 26, 2009) Service Tax – Rent – a – Cab Scheme Service - In round one of litigation Appellate Commissioner waived pre-deposit accepting plea of financial hardship but in remand proceedings insisted on pre-deposit – Offer of pre-deposit of Rs. 35,000/- for tax liability on provision of passenger vehicles accepted – Appellate Commissioner directed to dispose of appeal on merits:BANGALORE CESTAT;
CENTRAL EXCISE SECTION NOTIFICATION Amends Notification No.24/2005-Central Excise (N.T.) dated 13th May, 2005; CASE LAWS 2010-TIOL-409-CESTAT-MUM.pdf + finolex cables story.pdf Finolex Cables Ltd Vs CCE, Pune (Dated: February 22, 2010) Intent to evade payment of duty has to be deciphered from the conduct of the assessee – No clean conduct found on the part of the appellant – Penalty upheld and ROM dismissed :MUMBAI CESTAT; 2010-TIOL-408-CESTAT-AHM.pdf + sarla story.pdf M/s Sarla Performance Fibers Ltd Vs CCE, Vapi (Dated: February 26, 2010) Central Excise – EOUs – Education Cess payable on DTA clearances – Once education cess is added to the customs duties to arrive at aggregate of customs duties, the question of charging education cess again does not arise. Because once it is an enhancement, it is part of the relevant type of the duty. What is required for the purpose of proviso to Section 3 of Central Excise Act, 1944 is to arrive at aggregate of customs duties and once education cess is part of the customs duty and is an enhancement, the question of adding it again does not arise. Education cess is a surcharge - The issue is clearly covered by the decisions in CIT Vs. K. Srinivasan (2002-TIOL-568-SC-IT-LB) and Sarojini Tea Co. (P) Ltd. Vs. Collector of Dibrugarh [1992 (2) SCC 156] and therefore we find ourselves in agreement with the contention that education cess which is a surcharge means an additional imposition which results in enhancement of the tax. Once the levy is a percentage of another duty and what is required to be worked out is the aggregate of customs duties, the percentage addition also once made for the purpose of customs duty, the working of aggregate of customs duty for levy of excise duty is complete. By adding another percentage as the department has proposed to do, the department is adding something extra to the customs duty which is not supported by the proviso to Section 3(1) :AHMEDABAD CESTAT; M/s Omprakash Jaiprakash & Co Vs CCE, Surat-I (Dated: October 22, 2009) Central Excise – refund of accumulated credit under Rule 57 F rejected by the lower adjudicating authority though allowed by the Tribunal - the appellants did not declare all the facts correctly before the Tribunal which led the Tribunal to allow the appeal, and in view of the fact that it was subsequently found that the appellants had claimed rebate on the exports made, the lower authorities have correctly rejected the refund claim:AHMEDABAD CESTAT; CCE, Visakhapatnam Vs M/s Novophalt Construction Pvt Ltd (Dated: October 28, 2009) Central Excise – Conversion of base bitumen into polymer modified bitumen does not result in a complete new product – Process does not amount to manufacture – No infirmity in impugned order :BANGALORE CESTAT;
CUSTOMS SECTION NOTIFICATION CBEC Tariff Value of Brass Scrap increased and poppy seeds decreased; CIRCULAR Verification Mechanism and monitoring of export obligation under duty exemption / reward Schemes – reg; CASE LAWS Shasun Chemicals And Drugs Ltd Vs CC, Chennai (Dated: December 17, 2009) Customs - limitation - failure to fulfill the conditions attached to exemption notification is not a case of non-levy, short levy or erroneous refund covered by the provisions of Section 28 - The appellants are required to fulfill the commitment in the bond executed by them namely to pay the duty on demand - plea of time bar has no merit :CHENNAI CESTAT; |
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