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Mandatory e-payment and e-filing of returns for Central Excise and Service Tax - Hyderabad CC's Press Note (See 'DDT' Column) Government allows Rebate under Rule 18 on clearances made to SEZs ; Cabinet approves revised budget for six new AIIMS-like institutions and upgradation of 13 more; CCEA gives nod to oil companies to acquire PI in Venezuela project; Cabinet okays proposal to drop setting up of National Police University; Tax transparency - India figures in first list for country-by-country review by Gloabl Forum; India, Brazil reaffirm commitment to provide duty-free market to LDCs; Initiative to integrate US-India Small Businesses into Global Supply Chain launched; Indian navy deploys INS Nirdeshak for hydrographic assistance to Mauritius; Union Cabinet likely to approve hike in DA for Govt employees today; |
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| Dear Member, Sending the following files: |
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TIOL COMMENTARY Import of Ships & Moveable Capital Goods under SFIS Scheme - DGFT clarifies to clear confusion of Customs Authorities; MIXED BUZZ Cabinet approves revised budget for six new AIIMS-like institutions and upgradation of 13 more; CCEA gives nod to oil companies to acquire PI in Venezuela project; Cabinet okays proposal to drop setting up of National Police University; Tax transparency - India figures in first list for country-by-country review by Gloabl Forum; India, Brazil reaffirm commitment to provide duty-free market to LDCs; Indian navy deploys INS Nirdeshak for hydrographic assistance to Mauritius; Initiative to integrate US-India Small Businesses into Global Supply Chain launched; |
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2010-TIOL-17-ARA-IT.pdf + dtaa story.pdf HMS Real Estate Pvt Ltd (Dated : March 18, 2010) Income tax - Sec 195, 9(1)(vi) & (vii) - India-USA DTAA - Article 12 - Applicant is a real estate company - proposes to construct an international quality commercial office/hotel complex in Gurgaon - enters into an Agreement with a non-resident limited partnership for provision of Architectural design services - agreement also provides for appointment of a local Architect as associate Architect - Whether the payments made to non-resident are for outright sale of designs - whether the payments are fees for included services - whether the payments made to the associated artichect but received by the second party in the agreement is taxable as per Article 12.4 in India As per agreement, the Payments to the local associate Architect are to be made separately and are not under consideration in the application. As per the agreement, both, HOK - the Architect and RSP - the Associate Architect, have been retained “to work jointly and on a cooperative basis in order to perform the entire design, construction documents and construction administration for the Project, each responsible for its share of work but jointly responsible in providing the entire design, construction documents and construction administration service necessary to complete the Project. There is also a provision for rendering additional services not otherwise included in the Agreement or not customarily furnished as per the prevailing architectural practices. For such additional services, additional payment has to be made according to an agreed formula. Reimbursable expenses are also specified in the Agreement: ADVANCE RULING; 2010-TIOL-175-HC-DEL-IT.pdf + hypo tax story.pdf CIT Vs Dr Percy Batlivala (Dated : December 16, 2009) Income tax - hypo tax - Assessees are non-residents - enter into agreementw with their foreign employers before coming to India on deputation - As per the agreement the assessees are promised extra payment for tax liability if any arises in India in excess of the tax liability being paid by them in their resident countries - Assessee discharge their tax liabilities in India as per the income earned - since the tax rate is lesser than than foreign countries in India, the employers save the difference between the tax laibilities in their resident countries and India which is known as 'hypothetical tax' - AO raises demand - Tribunal deletes the additions - held, no infirmity in the Tribunal's order - no question of law - Revenue's appeals dismissed:DELHI HIGH COURT; M/s Airline Financial Support Services (India) Pvt Ltd Vs ITO, Mumbai (Dated: February 4, 2010) Income tax - Sec 10A, 80HHE - Assessee is engaged in the activity of processing, documenting and recording revenue accounts of foreign airlines - located in Export Processing Zone - claims Sec 10A benefits - AO disallows - Assessee pleads before the CIT(A) with an alternative benefit u/s 80HHE - matter remanded but AO again denies benefits u/s 80HHE - Tribunal allows the Sec 10A benefits - however, assessee pursues the case of benefits u/s 80HHE as well for merely academic interest - held, since the Sec 10A benefits have been allowed, the petition is rejected and the assessee advised to file Misc Application for re-considering the benefits u/s 80HHE - Assessee's appeal rejected:MUMBAI ITAT; DCIT, Mumbai Vs Late Shri Yash B Johar (Dated: February 5, 2010 ) Income Tax -Section 37 - Assessee is a film producer - AO disallows claim of medical expenses incurred on the treatment of the Assessee during the course of outdoor shooting of film - CIT(A) allows the – Held, the issue stands covered in favour of the assessee by the decision of the jurisdictional High Court in the case of Mehaboob Productions Pvt. Ltd. vs. CIT. Revenue ground dismissed :MUMBAI ITAT; Devaki Multifilms Pvt Ltd Vs ITO, Mumbai (Dated: December 10, 2009) Income Tax Act, 1961 – Guidelines to be followed while disallowing expenditure u/s 36(1)(iii) of the Act Section 36(1)(iii) – Whether interest on loans and advances on loans given to sister concern on interest-free basis can be disallowed under Section 36(1)(iii)? During assessment, the AO noticed that the assessee had applied funds amounting to Rs. 3,79,750/- into investment in shares of sister concern. It was further noticed that the loans and advances to its sister concern and others were given to the tune of Rs. 76,40,480/- on interest-free basis. The AO held that borrowed funds, for which the assessee has incurred expenses were not for the purpose of business, therefore, he made the addition of Rs. 15,84,284/- by disallowing assessee's claim of financial charges. The CIT(A) partly accepted the assessee's contention and directed the AO to disallow proportionate interest on interest-free advances of Rs. 8,37,588/- and Rs. 66,74,060/- given to Devaki Polyfilm P. Ltd. and Om Lamipack P. Ltd. On appeal to the ITAT, it was held: ++ that the case was to be remitted back to the files of the AO with a direction to calculated the disallowance as per the ratio in the case of H.P. Shah & Co. in (2009-TIOL-338-ITAT-MUM) . In that case, it was held that “ if an assessee having sufficient interest free funds, in the form of capital reserves and other funds without interest bearing from relatives and friends not related to business, to cover funds given interest free or utilized other than for business purposes, no disallowance is warranted. If the own funds are not sufficient to cover interest free advances, a proportionate disallowance is warranted. While examining interest free funds available with assessee and interest free funds given a care is required to be taken that these funds were not related to business of the assessee” :MUMBAI ITAT; |
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SERVICE TAX SECTION M/s Tanaton Vision Vs CCE, Surat-I (Dated: February 5, 2010) ST - Cable operator - Assessee's premises are visited by the preventive team - two concerns found to be operating from the same premises - common show cause notice issued - penalty under Sections 77 & 78 imposed - tax with interest paid - commissioner reviews the order and imposes penalty under Sec 76 - held, Commissioner has no power to levy penalty if lower authorities have not imposed it under Sec 76 - Assessee's appeal allowed:AHMEDABAD CESTAT; M/s Samtel Colour Ltd Vs CST, Ghaziabad (Dated: January 18, 2010) ST - service recipient - assessee pays commission to foreign company - Revenue raises demand from 2002 to 2007 - assessee argues the liability arises only from 1.10.2005 and deposits the tax - Revenue further alleges the assessee provided clearing and forwarding agent service between 2002 to 2003 - Held, since the assessee has already deposited a major part of the demand, waiver from pre-deposit granted:DELHI CESTAT;
CENTRAL EXCISE SECTION 2010-TIOL-425-CESTAT-MUM.pdf + gimatex story.pdf M/s Gimatex Industries Pvt Ltd Vs CCE, Nagpur (Dated: February 10, 2010) Refund - Duty paid twice – in view of self-assessment and Central Excise officers having not served an order, challenging of order does not arise at all – Proposition that “assessment” includes “self assessment” is not correct for purpose of appeal under section 35 of the Central Excise Act, 1944:MUMBAI CESTAT; CCE, Hyderabad Vs M/s Aurobindo Pharma Ltd (Dated: October 29, 2009) Central Excise – Bulk drugs are also medicines as per the Drugs (Price Control) Order 1995 – As they are mentioned in lists 3 & 4 of Notification No.21/2002 , they are entitled to exemption in terms of Sl. No.47A of Notification No.4/2006-CE dated 01.03.2006 – No merit in Revenue appeal :BANGALORE CESTAT; M/s Ambika Cotton Mills Ltd Vs CCE, Madurai (Dated: October 30, 2009) Central Excise – 100% EOU – Denial of CENVAT Credit on capital goods to the EOU for the period prior to issue of Notification No.18/2004-CE(NT) dated 06.09.2004 is justified:CHENNAI CESTAT;
CUSTOMS SECTION CIRCULAR Government allows Rebate under Rule 18 on clearances made to SEZs ; DGFT PUBLIC NOTICE Amendment of para 2.59 relating to procedure for import under the Tariff Rate Quota Scheme and para 2.59.1 relating to eligible entities for allocation of quota of HBP Vol.I , 2009-2014. CASE LAWS 2010-TIOL-426-CESTAT-MUM.pdf + abdul story.pdf CC, Mumbai Vs Abdul Hassan Mohammed Khan (Dated: January 28, 2010) Rover sports Car stolen in UK and imported into India as brand new – Owner of vehicle making application as Intervener for re-export of Car – Re-export allowed but redemption fine not imposed by adjudicating authority – Non-imposition of RF is not proper - One lakh rupees ordered to be deposited as RF:MUMBAI CESTAT; |
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