TMI Tax Updates - e-Newsletter
January 27, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Indian Laws
Highlights / Catch Notes
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Income Tax:
There is no prohibition to the twin benefits in respect of the amount received under the Voluntary Retirement Scheme. The relief contemplated under Section 89 of the Act is aimed to mitigate the hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates and thus held that the benefits under Section 10 (10C) and 89 could be granted to the assessee.... - HC
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Income Tax:
Penalty u/s 271D share application money can not be called deposit within the meaning of section 269 SS or 269 T of the Act .... - HC
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Income Tax:
Deductions under 80IB - Built up area - Projects approved in Oct 98 - The Section requires the assessee to build the project within this specified limit already approved when the amendment was not on the statute books, consequently, if the Section is interpreted to be applicable even to the existing projects, the same will lead to the absurdity and that is not the intention of the legislature because ultimately it will lead to a national loss..... - AT
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Income Tax:
Exemption u/s 12A & 80G - A.O. has not been able to record any finding that the persons in control of the management of the three societies had, at any point of time, not less than 20% shares in the profits of such concern. This being the position, invocation of Section 13(1) (c) (ii) has to fail and is accordingly rejected. .... - HC
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Income Tax:
Determination of transaction - statutory change to section 92CA - AO is now bound by the order of the TPO on the computation of the arms length price of an international transaction, the Assessing Officer is not and cannot be stated to be bound by the opinion of the TPO with respect to the question whether there had, in fact, been an international transaction between the assessee and the associated person during the period under consideration. .... - HC
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Income Tax:
DTAA - Penalty - The fact that section 115AD is a code by itself applicable to FIIs cannot also be the basis to hold that the assessee furnished inaccurate particulars of income .... - AT
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Income Tax:
Meaning of Export for the purpose of ection 10B -There will be no export out of India if two conditions are cumulatively fulfilled, (a) it is a transaction by way of sale or otherwise in a shop, emporium or establishment situate in India, and (b) that it does not involve clearance in any customs station as defined in the Customs Act..... - HC
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Income Tax:
LTCG or STCG - cost of land to the previous owner - Benefit of indexation - Assessing Officer has rightly taken 2-11-2004 as the date of acquisition of absolute ownership of the property ... - AT
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Income Tax:
Tax Deductible at Source - cable transmission - Where only two parties are involved than payment made by one to another cannot be refereed to be made to sub contractors and Individuals were included in purview of 194C from A/Y 06-07 only therefore no TDS is to be deducted on such payments.... - AT
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Income Tax:
Deemed Dividend u/s 2(22)(e) - deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder..... - AT
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Customs:
Revision Application - Claim for drawback - time-limits - customs authorities who are creature of Customs Act, cannot be directed to ignore or act contrary to the boundations of time-limits as provided in the statute.... - CGOVT
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Customs:
Seeks to impose anti-dumping duty on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms, originating in, or exported from subject countries. - Ntf. No. 11 /2012-Customs (ADD) Dated: January 24, 2012
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Customs:
Seeks to impose anti-dumping duty on import of Morpholine originating in, or exported from, China PR, European Union and the United States of America. - Ntf. No. 10 /2012-Customs (ADD) Dated: January 24, 2012
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Customs:
Rescinds Notification No. 91/2011-Customs, dated the 20th September, 2011. - Ntf. No. 09 / 2012-Customs (ADD) Dated: January 24, 2012
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Customs:
Grant of Presidential Awards of Appreciation Certificate on the occasion of Republic Day-2012 - Ntf. No. 07/2012(N.T) Dated: January 24, 2012
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FEMA:
External Commercial Borrowings Simplification of procedure. - Cir. No. 69 Dated: January 25, 2012
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FEMA:
External Commercial Borrowings (ECB) Policy Infrastructure Finance Companies (IFCs). - Cir. No. 70 Dated: January 25, 2012
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Service Tax:
Guest house & garden given on rent for marriage functions - temporary occupation of guest house & garden was being allowed to the customers along with other facilities for organising marriage functions. Since marriage function is a social function thus, the appellant's activity was classifiable as service provided by Mandap keeper. .... - AT
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Service Tax:
Filing of declaration and claiming rebate after the completion of export of service for which rebate had been claimed - the rebate would not be admissible.... - AT
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Service Tax:
Where appellant provided Business Auxiliary Services only to their clients abroad and their output services were being exclusively exported, they were not required to pay any duty Thus not required to obtain any registration Further rule 5 of export Rules or Notification No. 12/2005 do not mandate any registration..... - AT
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Service Tax:
Simplified procedure for sanction of refund/rebate of unutilised credit/rebate claims in cases of export - denial of benefit of sanction of 80% of the rebate amount within 15 days as per Board's Circular No. 828/5/2006-CX dated 20.4.2006 on the ground that an offence has been booked against the company.... - HC
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Service Tax:
Scope of Business Auxiliary Service - mere deposit of cheque or cash in the client's account is not covered under the 'Business Auxiliary Service'..... - AT
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Service Tax:
Read with rule 4 of the Service Tax Rules, 1994 - Registration - Procedure and documents required in respect of Centralised registrations - Cir. No. 3/2011-12-ST, Dated: October 21, 2005
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Service Tax:
Renting of immovable property service - Civil Appeal on Renting/leasing of immovable property - Cir. No. 8/ 2011 Dated: November 3, 2011
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Central Excise:
Suo motu credit or refund without sanction - all types of refund have to be filed under Section 11B of the Central Excise Act and no suo motu refund can be taken unless and until the department is satisfied that the incidence of duty has not been passed on. .... - AT
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Central Excise:
Collection of Excise duty from the customers, on account of fluctuation in rates of the petroleum products on the stocks lying at various depots - assessee being only a dealer and not a manufacturer - Demand u/s 11D can not be made.... - SC
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Central Excise:
Goods removed from DTA to SEZ - Export - Cenvat credit - Rule 6(3) of CCR 2004 not applicable... - AT
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Central Excise:
Common Input - Cenvat Credit - Appellants manufacturing the refined oil and hydrogenised vanaspati - By products soap stock arises - acid oil manufactured out of such waste would definitely be not covered by the provisions of Rule 6(2). .... - AT
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Central Excise:
CENVAT credit on own final product returned by buyers returned goods were remelted by using same machinery and fresh products emerged credit of duty allowed u/s 16.... - AT
Articles
Notifications
Customs-
11/2012 - dated
24-1-2012
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ADD
Seeks to impose anti-dumping duty on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms, originating in, or exported from subject countries.
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10/2012 - dated
24-1-2012
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ADD
Seeks to impose anti-dumping duty on import of Morpholine originating in, or exported from, China PR, European Union and the United States of America.
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09/2012 - dated
24-1-2012
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ADD
Rescinds Notification No. 91/2011-Customs, dated the 20th September, 2011.
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07/2012 - dated
24-1-2012
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Cus (NT)
Grant of Presidential Awards of Appreciation Certificate on the occasion of Republic Day-2012
Income Tax-
139/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure "Creating and Upgradation of infrastructure facilities for advanced treatment for Cancer and Cardiac patients with an element of accessibility and affordability of the underprivileged, Charutar Arogya Mandal, Gujarat
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138/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - Notified eligible projects or schemes - Society for Education of the Crippled (Child & Adult), Bombay
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137/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Sevalaya Primary School Building Project" by Sevalaya, Sevalaya Campus, Kasuva Village, Pakkam
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136/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Sevalaya old age home project" by Sevalaya, Sevalaya Campus, Kasuva Village, Pakkam Sevalaya, Thiruninravur
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135/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Tribal Development" by Seva Mandal Meghraj, AT & PO Kasana, Tal Meghraj, District Sabarkantha, Gujarat,, Gujarat
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134/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Running of Polio Hospital, Rehabilitation and Research Centre at Hiran Magri, Sector-4, Udaipur, Rajasthan" by Narayan Seva Sanstha, Rajasthan
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133/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Expansion Project - purchase of equipments for increasing number of free eye surgeries and running of Hospital at Village - Ognaj, Ahmedabad, Gujarat" by Lions Club of Karnavati Foundation, Ahmedabad
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132/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Brahmrishi Doodhadhari Burfani International Medical and Research Centre" by Shree Raghvendra Sewashram Samiti, Doodhadhari Ashram, Haridwar
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131/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Free Eye surgeries and running of hospital" by Medical Research Foundation, Chennai
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130/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Natural Resource Management-Model Watershed Management & Afforestation programme and allied agricultural support for rural development" by Krishi Gram Vikas Kendra, Rukka- Neori Vikas,
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129/2011 - dated
27-12-2011
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IT
Under Section 35AC, of the Income-tax Act, 1961 - Eligible projects or schemes, expenditure on - Amar Jyoti Charitable Trust, New Delhi.
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128/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Land development, construction, equipments, furnishing and running of Sri Sathya Sai Heart Hospital at Rajkot, Gujarat", by Prashanti Medical Services and Research Foundation, Rajkot
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127/2011 - dated
27-12-2011
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IT
Under Section 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Welfare programmes in the field of Health, education, environment etc." by SNS Foundation, 1, Sri Aurobindo Marg, New Delhi
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126/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Running of free medical services by Dardi Sahayak Trust at whole of Gujarat" by Smt. Ushaben Rasiklal Shaw Digvijay Lion Dardi Sahayak Trust. Ahmedabad
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125/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Construction of a school building and running of SOS Children's Village at Tambaram East, Chennai, Tamilnadu" by SOS Children Villages of India-Chatnath Homew, Chennai,
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124/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Comprehensive rehabilitation, medical & human resource development services for the blind and disabled" by Blind People's Association, Jagdish Chowk, Surdas Marg, Vastrapur, Ahmedabad
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123/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Supporting the Leprosy Mission Hospitals" by The Leprosy Mission Trust India New Delhi
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122/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Rural Drinking Water hand pump project" - Hindvi Swarajya Pratistan, Kile Rajgad, At/p. - Chirmodi, Tal Velhe, District Pune, State Maharashtra,
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121/2011 - dated
27-12-2011
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IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - Deepak Charitable Trust, Baroda
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120/2011 - dated
27-12-2011
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IT
U/s 35AC, - Eligible projects or schemes, expenditure on - Notified eligible projects or schemes - Sankara Eye Hospital, Chennai
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (1) TMI 82
Business expenditure - dis-allowance of travelling expenses, lease hold expenses, investment allowance, part of foreign travelling expenses Held that:- Since assessee has not pressed before Tribunal the matter of dis-allowance of travelling expenses, lease hold expenses and investment allowance hence, this question does not arise for adjudication in the present appeal. Further, Tribunal has not found any good ground to interfere in such part dis-allowance of foreign travelling expenses and appellant could not persuade us to take a contrary view. Therefore, appeal is dismissed.
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2012 (1) TMI 81
Best judgement assessment Lower G.P. Rate in comparison to last A.Y. - assessee contesting estimation of G.P. Rate based on previous records and G.P. of last year Held that:- In the instant case, the addition is made on the estimate basis, which is a question of fact as laid down in the case of Utkal Road Lines vs. Registrar, Income Tax Appellate Tribunal (2009 - TMI - 206552 - Orissa High Court). The Tribunal is a final fact finding authority and has already given the partial relief. No substantial question of law is emerging from the impugned order Decided against the assessee.
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2012 (1) TMI 80
Penalty u/s 271D Proceedings u/s 269 SS initiated on finding during search that assessee had received money exceeding Rs. 20,000/- in cash from 46 persons assessee contending it to be share application money Held that:- It is on record that the CIT (Appeals) had held the entire amount in dispute related to the share application money and was treated as having been fully explained. This Court has already held that share application money can not be called deposit within the meaning of section 269 SS or 269 T of the Act and, therefore, in our considered opinion, the Tribunal had rightly upheld the order of the CIT (Appeals) deleting the penalty Decided in favor of assessee.
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2012 (1) TMI 77
Society registered u/s 12A & 80G - pledged FDRs with a bank to enable some other societies to obtain loan from a bank few members of the management committee of the respondent society and other two societies are common Revenue contending violation of Section 13(1)(c)(ii) read with Section 13(3) and Explanation 3 (ii) non-utilization of grant received fully Held that:- A.O. has not been able to record any finding that the persons in control of the management of the three societies had, at any point of time, not less than 20% shares in the profits of such concern. This being the position, invocation of Section 13(1) (c) (ii) has to fail and is accordingly rejected. Grants were received for specific purposes/projects from the government, non-government, foreign institutions etc. In case of specific tied up grants, money is received for specific purposes and is to be utilized for the same. Unutilized amount has to be refunded back to the funding agencies. On the basis of the evidences placed on record, it is seen that the appellant is not free to use the funds voluntarily as per its will and, thus, these are not voluntary contribution as per Section 12 of the Act - Decided against the Revenue
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2012 (1) TMI 76
Revisionary powers of Commissioner u/s 263 - DTAAs with Canada and Thailand - Tribunal set aside the revisional orders of the Commissioner remanding matter to the A.O. to rework the credit in respect of Canadian and Thailand Tax claimed under Double Taxation Avoidance Agreement - Held that:- It is the duty of the assessing authority to support every conclusion and finding by it with reasons and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the revenue and therefore while the commissioner was justified in exercising the jurisdiction u/s 263, the tribunal was definitely not justified in interfering with this order of the commissioner in its appellate jurisdiction - Decided against the assessee. Reduction in tax relief on recomputation by A.O. - subject matter of appeal before Tribunal Held that:- Tribunal had not examined the appeals of the assessee on its merits, but had simply allowed the appeals based on the premise that the revisional orders of the commissioner had been set aside by it and the revisional orders having now been restored by us in terms of the judgment in the above two appeals, the matter again has to necessarily go back to the tribunal - Decided in favor of Revenue.
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2012 (1) TMI 73
Relief u/s 89(1) - ex-gratia payment received under VRS scheme Revenue allowed exemption u/s 10(10C) but denied relief u/s 89(1) Held that:- Similiar controversy is settled by the two Division Bench decisions of this Court in case of CIT vs Harendra Natah Tripathi and CIT vs Subhash Chand Goyal [2010 (7) TMI 754 - ALLAHABAD HIGH COURT] and their being no decision to the contrary. Relief u/s 89(1) is also admissible in such a case. Present appeal does not raise any question of law which requires to be decided by this Court Decided in favor of assessee.
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2012 (1) TMI 72
Validity of reopening of assessments - unexplained credits amount received from company(entry provider) assessee contending the amount to be share application money and discrediting the reasons recorded for reopening the assessment - information received by the A.O. from DIT (Inv.), who was in charge of the investigation into groups that operate as entry providers or entry operators - Held that:-Material present before the A.O. at the time of recording reasons for reopening the assessment did show a link between entry provider, with the petitioner herein together with date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the A.O., the existence of which is beyond challenge, it can hardly be said that the A.O. could not have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee. - Decided against the assessee.
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Customs
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2012 (1) TMI 78
Writ petition filed to seek an order in the nature of mandamus commanding the respondents to release the containers to the petitioner - shipping company - 40 containers having 20,000 bags of MOP of Fertilizer Grade of customer seized by the Customs Authorities - petitioner is pressing for release of containers after unloading the goods contained therein - Additional Commissioner (Customs) vide order dated 11.10.2010 had asked the Container Corporation of India Ltd, Noida to keep seized goods in the warehous in safe custody and release the containers to the concerned shipping line Held that:- Additional Commissioner (Customs) should take appropriate steps for keeping the seized goods in the safe custody and for releasing the 40 containers to the petitioner for which the Court thinks that period of one month would be reasonable as more than a year have passed since letter dated 11.10.2010. Further, release of containers should not be taken to mean that the petitioner has been absolved of its liability if any under the provisions of the Customs Act, 1962 or any other enactment, in case the authorities decide to take any action.
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2012 (1) TMI 70
Unlawful import of the gold - offences punishable u/s 135(1)(a) and 132 of the Customs Act matter relates to year 1989 - petitioner has already undergone sentence for more than one month Held that:- The instant case is of economic offence in the prospective. Therefore, while maintaining the conviction, the order dated 21.3.2003 is modified to the extent already undergone, accordingly he is released on the sentence already undergone. The criminal Revision Petition 1037/2003 is partially allowed, as prayed.
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Service Tax
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2012 (1) TMI 71
Plea for waiver of Pre-deposit registered charitable society Held that:- Having considered the matter in the light of the material on record, we are of the opinion that the ends of justice would be subserved if the appellant is directed to deposit 1/3rd of the demand raised against them towards the service tax. If the said deposit is made on or before 15th March, 2012, their appeal shall be heard by the Tribunal on merits.
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2012 (1) TMI 68
Simplified procedure for sanction of refund/rebate of unutilised credit/rebate claims in cases of export - denial of benefit of sanction of 80% of the rebate amount within 15 days as per Board's Circular No. 828/5/2006-CX dated 20.4.2006 on the ground that an offence has been booked against the company - show cause notice dated 21.10.2011 issued for payment of the Service Tax on 'Intellectual Property Services' received from foreign companies Held that:- At this stage, we are not required to go into merits of the validity of the show cause notice, as proceedings of adjudication are still pending. Company has not been denied the rebate, it has only been disentitled to the benefit of the Board's Circular dated 20.4.2006. Rebate claims of the company will be processed or sanctioned as per provision of Section 11-B of the Central Excise Act, 1944. - Decided against the assessee.
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Indian Laws
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2012 (1) TMI 79
Benefit of Central Government Health Scheme(CGHS) - pensioner neither got his name registered with any of the dispensary in CGHS covered dispensaries nor paid the requisite contribution writ petition decided in favor of pensioner for directing the appellant-employer to reimburse the medical expenses incurred by him - Held that:-Various judicial prouncements have held that -even if employee contributes after availing medical facilities, and becoming member after treatment, there is entitlement to reimbursement - even if membership under scheme not processed the retiree is entitled to benefits of Scheme - Full amounts incurred have to be paid by the employer - pensioner is entitled to full reimbursement so long the hospital remains in approved list - If medical treatment is availed, whether the employee is a cardholder or not is irrelevant and full reimbursement to be given. Thus, appeal is dismissed.
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