News Update

Vinod Kumar, IRS, 2002 Batch, is no moreCabinet okays privatisation of 20 PSUs: PanagariyaIndian Industry required to move to global norms: KantDDA, DUSIB sign MoU to implement PMAY in DelhiFM inaurgurates CII Centre for Arbitration and MediationPM praises Cyprus for being 8th largest investor in India and invites Cypriots to invest in IndiaPay Commission recommendations on allowances - Lavasa panel propses modificationsCBDT signs 2 APAs relating to IT & Banking (See 'TII Brief' in TII)CBDT gives addl charge of Gujarat + Ahmedabad zones to P C Modi & Surat to Rajani K GuptaGovt to develop 100 more airports, says Jayant SinhaCentral Excise - Refunds - Passing on the incidence to the ultimate buyer - Supreme Court dismisses review petitionTariff Values of Gold, Silver and all Edible oils (except Crude Soya bean oil) reducedSimplification of tax regime to increase compliance: FMFM says no surprises likely in GST rate fixationKenyan Ambassador Karau appointed as New Chair of Agri PanelAbolition of FIPB to pave way for more FDI reforms: FMNo medical certificate required for PF withdrawal for illnessCX - Classification - Polyester Covered Yarn and Nylon Covered Yarn fall under CSH No. 5402.62/61: SCI-T - Seized material must have some nexus to additions sought to be made by AO and must be relevant for forming belief regarding escaped income: HCST - Reason that officials were involved in matters pertaining to challenge in some other matters, and, therefore, there has been delay in filing appeals is vague and cryptic: HCST – For another field formation of same tax collection mechanism to take an alternative stand and, that too, for limited period of time is best described as 'tax opportunism': CESTATTrichy Customs seizes FC worth Rs 29 lakh from pax heading for MalaysiaFinance Secretary Panel submits report on allowances recommended by 7th Pay Panel; Now, Panel of Secretaries to examine itAamby Valley Reserve Price - Apex Court fixes at Rs 37392 CroreJharkhand is Third State to pass SGST law
 
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.

Mail your comments to vijaywrite@taxindiaonline.com


POST YOUR COMMENTS