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TMI Tax Updates - e-Newsletter
January 30, 2012
Case Laws in this Newsletter:
Income Tax
Central Excise
Highlights / Catch Notes
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Customs:
Corrigendum of Notification no. 2/2012- Custom. - Ntf. No. CORRIGENDUM Dated: January 23, 2012
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Corporate Law:
Section 233B of the Companies Act, 1956 - Audit of Cost accounts in certain cases - order under section 233B(1). - Cir. No. [F.No. 52/26/CAB-2010] Dated: January 24, 2012
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (1) TMI 92
Unexplained Investment – Search conducted – assessee declared undisclosed investment of Rs.42,65,924/- - A.O. made addition of Rs 61,64,407/ on ground of undisclosed stock - CIT(A) deleted addition of Rs 23,08,033/- as assessee established that belonged to third parties – balance addition was deleted by Tribunal – Held that:- Assessee in their explanation had pointed out that the valuation reports had taken the value of 24 carat gold at Rs.790 per gram but did not correspondingly reduce the value of 18 carat and 22 carat gold. Further, even the stock, recorded in the books of account, was valued as per the market rates, which is not correct, and under the mercantile system of accounting an assessee is entitled to value the stock in hand (declared stock) at “cost price or market price, whichever is lower”. The assessee had valued the stock at cost price. The cost price as recorded in the books was not rejected or adversely commented upon in the assessment order. Thus an obvious mistake has been corrected by the Tribunal – Decided in favor of assessee.
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2012 (1) TMI 91
Deduction u/s 43B in respect of interest paid on additional sales-tax - Tribunal rejected the claim on the ground that interest did not fall within the expression “any sum payable” used in Section 43B – Held that:- It is clear in Section 17-A (2) of the Himachal Pradesh General Sales Tax Act, 1968 that once there is a notice of demand for the tax and the same is not paid then interest becomes automatically payable. In this regard, Tribunal, not having considered the said provisions of Himachal Pradesh General Sales Tax Act has committed an error in law – Decided in favor of assessee.
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2012 (1) TMI 86
Contract Construction activity - Commissioner exercised revisionary powers u/s 263 on the ground that A.O. had not examined whether the assessee was following completion method or percentage completion method and whether the said expenditure could be claimed as an expense in the A.Y. in question - non-inquiry by the Assessing Officer with regard to squared up loans – Tribunal quashed the order of Commissioner on ground that expenditure would be allowed as assessee has commenced business activities – Held that:- There was error on the part of the A.O. in not making verification and inquiries, regarding both the aspects discussed aforesaid, which were required and the assessment order was prejudicial to the interest of the Revenue. The tribunal has completely ignored the said aspect and has proceeded on an entirely different basis which was not edifice and foundation of the order passed by the CIT u/s 263 of the Act. Order of Tribunal quashing CIT order is set aside – Decided in favor of Revenue.
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Central Excise
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2012 (1) TMI 89
Plea for waiver of pre-deposit of Rs 70 lakhs - clandestine removal and production has been established against the assessee and clubbing of turnover of assessee firm with turnover of sister concern was made – Held that:- Appellant has made out the prima facie case by insisiting that due to its financial position, constraints & adverse market conditions, it is not in a position to pay the pre-deposit and thus would be deprived of his right to be heard and press their appeal. Further appellant have accepted to furnish surety or create a charge on its immovable property so that recovery can be made in case the demand is accepted. Thus, directions of the tribunal are modified. Appellant is required to pay Rs 40 lacs as per schedule specified and is required to deposit papers/title documents of its property. The appellant will also file an undertaking that they shall not dispose of, sell, or encumber or rent out property – Decided in favor of assessee to the extent indicated above.
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2012 (1) TMI 88
Whether period of limitation would be applicable on demand for payment of interest – duty imposed vide order dated 12.09.2001 paid by assessee - no direction for payment of interest in order-in-original or in the appellate order - letter dated 10.11.2004 demanding differential duty issued - another letter dated 19.10.2005 demanding interest on differntial duty issued - Held that:- Period of limitation, unless otherwise stipulated by the statute, which applies to a claim for the principal amount should also apply to the claim for interest thereon. Period of limitation prescribed for demand of duty u/s 11A is normally one year and, in exceptional circumstance of a case falling under the proviso to Section 11A(1), the period of limitation is five years. But that would be applicable only in case of misstatement, fraud, concealment etc., which is not the case here. As such, in the present case, the period of limitation for the demand for duty would be one year. Thus, the period of limitation for demand of interest thereon would be one year - Decided in favor of assessee.
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