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TMI Tax Updates - e-Newsletter
January 17, 2012
Case Laws in this Newsletter:
Income Tax
Central Excise
Highlights / Catch Notes
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Customs:
Refund of 4% CVD (SAD)-Extension of time upto 31st March 2012, for using re-credited 4% CVD (SAD) amount in DEPB-Regarding. - Cir. No. 02/2012-Customs Dated: January 16, 2012
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Central Excise:
Cenvat / Modvat Credit - the flexible plastic films used for testing the FandS machines are inputs used in relation to the manufacture of the final product and would be eligible for Modvat credit.... - SC
Articles
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2011 (12) TMI 162
Whether the brought forward loss from the earlier years can be set off against the income from "capital gains" u/s 72 – land, building and bore well used for business purposes being sold – assessee claiming it to be business assets - Held that:- Only the business loss can be carried forward u/s 72 of the Act and it can also be set off only against the business income of the assessee. In present case, assets sold were capital assets and capital gains on sale of capital assets is not to be set off against the brought forward loss of earlier years. Case is posted before the Division Bench to give effect to the order of the special Bench - Decided against the assessee.
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2011 (12) TMI 161
100% EOU – software development – sale of software to its subsidiary company - computation of Arm Length Price in respect of interest free loans given to its wholly owned subsidiary in USA - Revenue charging notional interest on the loan – TNMM method vs CUP method - deduction u/s 10(B) – assessee claiming positive income of profitable units as deduction & carrying forward the loss of other units – Held that:- The international transaction of interest free loan to the AE is an independent transaction, requiring determination of ALP. Since neither the assessee nor TPO/AO and CIT(A) have examined the applicability of CUP method as the most appropriate method in order to determine ALP of the international transaction of interest free foreign currency loan to its subsidiary by the assessee, the matter is restored to the file of the AO for fresh adjudication and to recompute the ALP of the aforesaid international transaction following CUP method. In respect of deduction u/s 10B, order of CIT(A) providing total income arrived at by setting off loss of units against profits of other units allowed as deduction is set aside and matter is restored back to the file of the AO for deciding the issue afresh. - Decided in favor of assessee for statistical purposes.
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Central Excise
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2012 (1) TMI 17
Cenvat / Modvat Credit - plastic films/poly paper used for testing machines - for forming commercial/technical opinion as to their marketability/ excisability - whether plastic films/poly paper would be eligible for credit - whether use of plastic films/poly paper used for testing machines would be held as used in the manufacture of or use in relation to the manufacture of the final products - held that:- the process of testing the customised FandS machines is inextricably connected with the manufacturing process, in as much as, until this process is carried out in terms of the afore-extracted covenant in the purchase order, the manufacturing process is not complete; the machines are not fit for sale and hence not marketable at the factory gate. - the manufacturing process in the present case gets completed on testing of the said machines and hence, the afore-stated goods viz. the flexible plastic films used for testing the FandS machines are inputs used in relation to the manufacture of the final product and would be eligible for Modvat credit under Rule 57A of the Rules. - Decided in favor of assessee.
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