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RBI issues fresh direction to banks to share information with SIT on Black Money (See 'RBI Cir' in What's News) Natural Rubber is in negative list of FTAs, says Minister (See 'Mixed Buzz') China having 'Apple' time in India (See 'Mixed Buzz') ST - Construction of retention wall on bank of Sabarmati river can be considered in a broad sense as renovating or restoring of water bodies - activity falls under exclusion clause of "site formation and clearance, excavation and earth moving and demolition service" - No ST chargeable: CESTAT (See 'Breaking News') CBDT issues transfer order of 20 Addl / JCITs (See 'Transfer' in Pitara) FM to meet CEOs of Public Sector Banks and FIs tomorrow on issue of financial inclusion Amazon decides to invest USD 2 bn to grab larger e-tail space in India Sixth Economic Census provisional results released (See 'Mixed Buzz') Govt repatriates Secretary, Defence Production, Gokul Chandra Pati, to home cadre ST - Renting of Immovable property - lease amount was collected as premium & rental at time of agreement - expressions ‘other similar arrangements' and ‘any other service in relation to such renting' used in s. 65 are expressions of width & amplitude - Pre-deposit Rs 20 Cr ordered: CESTAT (See 'Breaking News') Frivolous Appeals – Bombay HC imposes Costs of Rs 3 Lakhs on Income Tax Department (See ‘DDT’ Column) I-T - Whether expression 'Tax, Duty, Cess or Fee or by whatever name called' mentioned in provisions of Sec 43B brings under its sweep port dues payable by assessee to a government agency - NO: ITAT (See 'Breaking News') Does your decision represent viewpoint of Department? (See 'Guest Column') CX - Registration - Inclusion of pipelines in ground plan of refinery - pipeline is primarily meant for transportation of raw material - No justification for inclusion in ground plan: Tribunal (See 'Breaking News') CBDT Clarification on 'Alternate Investment Funds' having status of non-charitable trusts - Compliance with HC orders (See ‘DDT’) ST - Appellants only collecting ads & same is forwarded to various newspapers - since they are not undertaking any activity connected with preparation & display, they are not Ad Agency - no ST payable: CESTAT (See 'Breaking News') Tax Audit – CBDT prescribes new Forms – 3CA, 3CB and 3CD (See ‘DDT’) PM asks scientists to take lab to field to boost farmers’ income HAL joins hands with Bangalore Business Chamber to set up Skill Development Council for aviation Sector Imports - Trade credits - RBI extends validity of all-in-cost ceiling up to Dec 31, 2014 (See Circular 16 in 'What's New') I-T - Whether amount written off by bank can be straightaway held as income from other sources: ITAT (See '2014-TIOL-482') CBI Court orders 5-yr RI to four Central Excise officers (See 'Mixed Buzz') CST - Whether Form C under CST is required to be issued for transfer of credit in DEPB passbook - YES: HC (See 'Breaking News') Textiles Panel projects USD 300 bn exports by 2025 (See 'Mixed Buzz') CX - Rule 6 - Cenvatted Furnace oil used to generate electricity & steam which is supplied to sister concern & HO - Corporate office is situated in registered premises & sister concern is 100% EOU - reversal of CENVAT credit not warranted: CESTAT (See 'Breaking News') Kanika Sands Transshipment Zone to be operationalised within a year: Minister (See 'Mixed Buzz') ST - appellant, an Apex Body of cooperative sugar mills exercises supervisory control over mills and monitors functions and receives 0.3% of sales turnover from each mill - not liable to ST: CESTAT (See '2014-TIOL-1358') SpiceJet flight gets delayed by five hours; DGCA asks airlines to refund full fare to pax CII seeks PM’s intervention in drug price fixing, alleging unilateral action by NPPA Govt imposes provisional anti-dumping duty on PTA, MTA and QTA (See Notification 36 'What's New') Australia Govt okays Adani’s coal mine project Income-tax (7th Amendment) Rules, 2014: Form No.3CA, Form No.3CB and Form No.3CD substituted (See Notification 33 'What's New') Australia Govt okays Adani’s coal mine project Imphal Airport Customs seizes 1.6 kg gold coming from Myanmar; One person arrested ST - Because there was separate contract for supply of transmission towers, it cannot be deduced that Service contract is pure labour contract - it is not merely nomenclature that should be seen - Service Contract is Works Contract: CESTAT (See 'Breaking News') Service Tax - Appeal - Pre-deposit - Pay or Perish? - High Court recalls its own order and remands case to CESTAT – Another Sad Stay Story (See 'DDT' Column)
 
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Income Tax - How to find out the difference between trader in stocks and investor in stocks

TIOL-DDT 366
19 05 2006
Friday

The CBDT proposes to issue guidelines to determine whether a person is a trader in stocks or an investor in stocks. One of the guidelines is the time devoted and to the extent to which it is the means of livelihood. Board invites comments from the public on this.

Deduction under 80HHC – Cascading effect of amendment in other statutes

The Income Tax Department has encountered a strange problem. As per Section 80HHC certain deductions are allowed on income earned from profits from exports. The Section mentions the Customs and Central Excise Duty Drawback Rules, 1971. But these rules have been replaced by the Customs and Central Excise Duty Drawback Rules, 1995. Now there are some smart officers who wanted to deny the benefit of 80HHC on the ground that there is no Duty Drawback Rules, 1971.

Now the CBDT has clarified that by virtue of the General Clauses Act, the benefits of Section 80HHC cannot be denied just because the Section mentions the 1971 Rules and not the 1995 rules.

This is what happens with too many enactments finding place in too many other acts and too many amendments with no clue as to what is mentioned where.

CBDT Circular No. 5/2006, dated May 15, 2006

Customs and Central Excise  amendments

Re-import of exported goods – Exemption Notification No. 94/96-Cus. grants exemption to various categories of exported goods when reimported. Now cut and polished precious and semiprecious stones exported for treatment abroad is included in the list.

Cut and polished diamonds Cut and polished diamonds when reimported after certification/grading by certain agencies are exempted. Now one more agency “Diamond Trading Company U.K.” is included in the list of grading agencies.

Exemption to EOUs – Conditions relaxed Notification No. 52/2003-Cus. dated 31-3-2003 allows exemption to goods imported by EOUs, STP and ESTP. Under the scheme certain conditions are now relaxed:

1) Goods may be transferred to other EOUs/SEZ under intimation to the proper officer - no need of permission.

2) Goods may be removed for test, repair etc under intimation to the proper officer  - no permission required.

3) Exemption is now allowed for import of promotional materials like brochures, literatures, pamphlets, hoardings, catalogues and posters.

Similar changes are made in the Central Excise exemption for procurement of goods by EOUs.

Notification No. 44/2006-Customs and 31/2006-C.E., dated May 17, 2006

FTP Amendments - The DGFT had amended the Hand Book of Procedures

1) In Para 2.12 the validity period of 24 months for DFIA is deleted.

2) Certain sea ports/air ports/ICDs/LCS added to the list of ports for imports and exports under the advance authorisation and DEPB.

3) The period of fulfilling export obligation in case of import of spices is restricted to 120 days.

Vehicles imported for R&D – Registration

As per Notification No. 2 dated 7.4.2006 vehicle manufactures and auto component manufacturers were allowed to import vehicles for R & D purposes. One of the conditions for such imports was that the vehicle will not be registered under the CMVR Rules in the country and will not ply on Indian roads. Now DGFT clarifies that the condition is applicable only for use as a passenger vehicle. For the limited purpose of carrying out endurance test, evaluation test and for other testing purposes, the vehicle may be registered as provided for in the CMVR Rules.

POLICY CIRCULAR NO. 06(RE-06)/2004-2009 Dated: May 18, 2006

non obstante - Notwithstanding. (any statute to the contrary)

In absence non obstante clause allowing prevailing of Narcotic Drugs and Psychotropic Substances Act, 1985 over Evidence Act, 1872 such statements could only be treated as previous statements under Section 145 ibid and not as substantive evidence

Retrospective amendment of excise rules empowering Revenue to recover duty - Even in such a case, demand has to be within limitation prescribed under Section 11A of Central Excise Act, 1944, in absence of non-obstante clause in amendment

Although a non obstante clause is used in Article 253 of the Constitution of India, it only explains and provides for the legislative competence of the Parliament for the whole or any part of the territory for the purpose of implementing any treaty or agreement with any other country or any decision made at any international conference etc. If the Parliament or the State Legislature are competent to lay down the guidelines and leave the implementation of the guidelines to the rule making authority, such a law cannot be held to be ultra vires because of a non obstante clause in Article 253.

Until Monday with more DDT

Have a nice Weekend.

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