TMI Tax Updates - e-Newsletter
February 15, 2012

Case Laws in this Newsletter:

Income Tax Customs Service Tax Central Excise Wealth tax Indian Laws

Articles

1. CONSULTANT, ARCHITECTURAL, ACCOUNTING AND SIMILAR SERVICES PROVIDED TO SERVICE PROVIDER TO INFRA STRUCTURE PROJECTS ARE LIABLE TO SERVICE TAX

   By: Jayaprakash Gopinathan

2. TAXABILITY OF STEAMER AGENT’S SERVICES

   By: Dr. Sanjiv Agarwal

3. PERSONAL PENALTY IN SERVICE TAX

   By: Dr. Sanjiv Agarwal

News

1. FM Confident that Moderation in Inflation Would Continue in the Coming Months ; Expects that the March end 2012 Inflation will be Closer to 6 Per cent; January Food Inflation Negative for the First Time in the Present Round of Inflation

2. Dr. M. Veerappa Moily Express Grief on the Death of Dr. V.S Acharya, Minister for Higher Education in Karnataka

3. Index Numbers of Wholesale Prices in India (Base: 2004-05=100) Review for the month of January, 2012

4. Auction for Sale of Government Stocks

5. GUIDELINES FOR CONVERSION OF COST ACCOUNTANTS FIRMS (PARTNERSHIP/PROPRIETARY) INTO LIMITED LIABILITY PARTNERSHIPS

6. SPMCIL Celebrates its Foundation Day; Bank Note Paper Line unit with Annual Capacity of 6000 MT to be Commissioned by 2013 end in Hoshangabad(MP);to become a Debt Free Company by 31st March 2012

Notifications

Central Excise

1. 04/2012 - dated 9-2-2012 - CE

Amends Notification No.64/95-Central Excise - Exemption to goods supplied for defence and other specified purposes.

2. 01/2012 - dated 9-2-2012 - CE (NT)

Amendment in the CENVAT Credit Rules, 2004.

Customs

3. 12/2012 - dated 8-2-2012 - ADD

Seeks to impose anti-dumping duty on import of Coumarin, originating in, or exported from, the People’s Republic of China.

4. 06 /2012-Customs - dated 9-2-2012 - Cus

Amends Notification No. 39/96-Customs - Exemption to specified goods imported by Defence, Coast Gaurd, Deptt. of Revenue, Police Forces, HAL, specified ordnance Factories and for ATVP, IGMDP, SAMYUKTA, LCAP, SANGRAHA, DIVYA DRISHTI and DHANUSH Programmes.

5. CORRIGENDUM - dated 8-2-2012 - Cus

Corrigendum to Notification No. 113/2011 – Customs.

6. F.No. 437/07/2012-Cus. IV - dated 10-2-2012 - Cus (NT)

Appointment of Common Adjudicating Authority.

Circulars / Instructions / Orders

LLP

1. GUIDELINES - dated 22-1-2012

GUIDELINES FOR CONVERSION OF COST ACCOUNTANTS FIRMS (PARTNERSHIP/PROPRIETARY) INTO LIMITED LIABILITY PARTNERSHIPS

Customs

2. F. No.450/160/2011-Cus.IV - dated 13-2-2012

Time bound Customs clearance of Cargo from Ports/Land Customs Stations/Air CargoComplexes, CFSs/ICDs - regarding.

Highlights / Catch Notes

Income Tax

• Lease Rental Income from Complex Activities Classified as Business Income for Taxation, Not House Property Income.

  Case-Laws - AT : Income from Lease Rentals is taxable under “Income from business“ OR “Income from House Property“ - lease rental income arising from a complex commercial activity will be classified as 'income from business'..... - AT
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• Deputy Director's ECB Conditions Deemed Unlawful: Retrospective Changes Impact Exemptions u/s 10(15) and TDS 195 IT Act.

  Case-Laws - AT : Exemption u/s 10(15) - TDS u/s 195 - Utilization of ECB - by imposing a condition by Dy. Director (ECB) during the progress of the scheme was like changing the rules of the game in mid-way and the change of the rule was in respect of a game already played to alter its outcome. A retrospective or ex post facto change in such a manner is an arbitrary approach having no legal sanctity..... - AT
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• Employer-Paid Taxes Are Taxable Perquisites u/s 17(2)(iv) of Income Tax Act, Not Direct Payments to Employees.

  Case-Laws - AT : Whether “Tax Payments“ by employer on behalf of Employee be considered as a taxable Perquisite further liable to tax - Taxes paid by the employer on behalf of the assessee is not a monetary payment but it is discharge of his obligation, and the payment fully fits in the jacket of section 17(2)(iv) of the Act, and it may be a monetary gain or monetary benefits or a monetary allowance but definitely it is not a monetary payment to the assessee. .... - AT
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• Court Upholds Lease Equalization Charges Deduction for Accurate Depreciation under Companies Act Section 211(2.

  Case-Laws - HC : Deduction of lease equalization charges from lease rental income - lease equalization charges is a method of re-calibrating the depreciation – we cannot find fault with the assessee debiting lease equalization charges in the AYs in issue, in its P&L A/c. This represents true and fair view of the accounts; a statutory requirement u/s 211(2) of the Companies Act. .... - HC
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• Section 80HHC of Income Tax Act under scrutiny; Supreme Court directs all cases to Gujarat High Court for decision.

  Case-Laws - SC : Transfer petition - validity of Section 80HHC challenged – Looking to the large number of matters pending in various High Courts and since the question relates to vires, it would be beneficial if all the matters are decided by one High Court in the Country. Therefore, all the matters which have been filed/transferred to this Court be sent to the High Court of Gujarat. .... - SC
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• Tribunal Allows Set-Off of Share Trading Loss Against Service Income; Assessee Not Engaged in Speculation Business Under Sec 73.

  Case-Laws - HC : Setting off loss of share trading against income from service charges – Tribunal was justified, in holding that the assessee fell within the purview of the exception carved out in the explanation to Section 73 and that consequently the assessee would not be deemed to be carrying on a speculation business for the purpose of Sec. 73(1) .... - HC
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• Court Rules Company Not Automatically Agent for Deemed Capital Gains; Writ Petition Challenging This is Maintainable.

  Case-Laws - HC : Legal representative - Agent of non resident - Merely because those shares relate to the respondent No. 4 company, that would not make respondent No. 4 as agent qua deemed capital gain purportedly earned by the petitioner, writ petition maintainable..... - HC
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• Court Rules Prohibitory Order on Bank Accounts Invalid u/s 132(3) Due to Lack of Evidence of Undisclosed Income.

  Case-Laws - HC : Prohibitory order under 132(3) - prohibitory order under section 132(3) of the Act issued in respect of bank accounts without forming any belief or without any material on record to conclude that the amount deposited in such bank accounts is either wholly or partly undisclosed income of the petitioner is not sustainable in law..... - HC
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• Supreme Court Rules: Deduct 90% of Net Interest/Rent, Not Gross, for Business Profits u/s 80HHC.

  Case-Laws - SC : Deduction u/s 80HHC - Ninety per cent of not the gross interest/rent but only the net interest/rent, which has been included in the profits of the business of the assessee as computed under the heads ‘PGBP’ is to be deducted under clause (1) of Explanation (baa) to Section 80HHC for determining the profits of the business..... - SC
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• Profit from DEPB transfer: Face value in Section 28(iiib), sale difference in Section 28(iiid) of Income Tax Act.

  Case-Laws - SC : DEPB - any amount realized by the assessees over and above the DEPB on transfer of the DEPB would represent profit on the transfer of DEPB and while the face value of the DEPB will fall under clause (iiib) of Section 28, difference between the sale value and the face value of the DEPB will fall under clause (iiid) of Section 28.... - SC
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• India-UK Tax Convention: SIPCL Payments Taxed in India Despite No Permanent Establishment Claim Under Article 5; Section 195 Applies.

  Case-Laws - AAR : Double Taxation Avoidance Convention between India and UK – Cost Contribution Agreement (CCA) with SIPCL - payment received by SIPCL is chargeable to tax in India and the declaration provided by SIPCL that it does not have a Permanent Establishment (PE) in India in terms of Article 5 of DTAC, we rule that the applicant is under obligation to withhold tax u/s 195 of the Act..... - AAR
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Customs

• Anti-dumping duties on Chinese and Thai tires criticized for flawed injury determination, harming consumers and lacking public interest alignment.

  Case-Laws - AT : Imposition of Anti-dumping duty on bus and truck radial tyres from China and Thailand - injury determination done by the D.A. for the domestic industry is faulty and not convincing and faulty. - The ultimate sufferer is the domestic consumer and imposition of anti-dumping duty in such a scenario cannot also be considered to be in the public interest..... - AT
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• 3D Mouse Emulation Device Classified Under Heading 84716060 Despite Size, Cost, and Additional Functions.

  Case-Laws - AT : Classification - 3D Mouse Emulation - Heading 84716060 specifically mentions 'mouse' - merely because the said mouse is bigger in size and costlier than the ordinary mouse and also performs other specific functions, the same cannot be held to be a device other than the mouse.
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• Common Adjudicating Authority Appointed for Customs Cases to Streamline Adjudication Process and Enhance Efficiency.

  Notifications : Appointment of Common Adjudicating Authority. - Ntf. No. F.No. 437/07/2012-Cus. IV Dated: February 10, 2012
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• Customs Notification 06/2012 grants import exemptions for defense and specific programs like ATVP, IGMDP, and more.

  Notifications : Amends Notification No. 39/96-Customs - Exemption to specified goods imported by Defence, Coast Gaurd, Deptt. of Revenue, Police Forces, HAL, specified ordnance Factories and for ATVP, IGMDP, SAMYUKTA, LCAP, SANGRAHA, DIVYA DRISHTI and DHANUSH Programmes. - Ntf. No. 06 /2012-Customs Dated: February 9, 2012
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• Corrigendum Amends Customs Notification No. 113/2011 to Rectify Errors, Clarifying Legal Implications for Stakeholders.

  Notifications : Corrigendum to Notification No. 113/2011 – Customs. - Ntf. No. CORRIGENDUM Dated: February 8, 2012
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• Anti-Dumping Duty Proposed on Coumarin Imports from China to Protect Domestic Industries from Unfair Pricing Practices. Notification No. 12/2012-Customs.

  Notifications : Seeks to impose anti-dumping duty on import of Coumarin, originating in, or exported from, the People’s Republic of China. - Ntf. No. 12/2012 –Customs (ADD) Dated: February 8, 2012
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• Efficient Customs Clearance: New Circular Promotes Timely Processing of Cargo at Ports and Stations to Boost Trade.

  Circulars : Time bound Customs clearance of Cargo from Ports/Land Customs Stations/Air CargoComplexes, CFSs/ICDs - regarding. - Cir. No. F. No.450/160/2011-Cus.IV Dated: February 13, 2012
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Indian Laws

• New Guidelines for Converting Cost Accountants' Firms to LLPs: Steps, Documentation, and Compliance Explained.

  News : GUIDELINES FOR CONVERSION OF COST ACCOUNTANTS FIRMS (PARTNERSHIP/PROPRIETARY) INTO LIMITED LIABILITY PARTNERSHIPS
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Wealth-tax

• Court Rules AOP Not Taxable u/s 21AA of Wealth Tax Act Due to Unmet Conditions.

  Case-Laws - HC : Wealth Tax - taxability of net wealth of AOP– S.21AA only ropes in an AOP for being assessed under the Wealth Tax Act but subject to the rider that it’s members should have the income or assets or both of the association on the date of its formation or at any time thereafter. Since in present case, second condition is not satisfied the assessee cannot be considered as falling within the ambit of S.21AA of the Act..... - HC
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Service Tax

• Court Upholds Service Tax on Lottery Commissions; Distributors' Services Deemed Essential for Ticket Sales to Customers.

  Case-Laws - HC : Constitutional Validity of Levy of Service tax on lotteries promoted and marketed by clients - Discount or commission received by the petitioners is nothing but consideration for service rendered to the promoter or organiser of the lottery. Moreover without the service rendered by the distributors namely, the lottery tickets will not reach the ultimate customers who are the participants in the draw. Thus liable to Service Tax. .... - HC
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Central Excise

• Excise Duty Refund Error? Authority Must Issue Show Cause Notice u/s 11A for Recovery, No Appeal Needed.

  Case-Laws - SC : In case of erroneous refund of excise duty the competent authority shall issue show cause notice under Section 11 A, in which the assessee has to show cause as to why the aforesaid amount of refund, which is erroneously refunded, should not be recovered from him. In such a case, there is no question of filing any appeal, as appropriate remedy as provided under Section 11A is available..... - SC
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• Intravenous Fluids with Medicaments Classified as Schedule H, Denied Tax Exemption Under Central Excise Regulations.

  Case-Laws - HC : Intravenous fluids - Exemption under central excise -Additions of dicaments will make it a schedule H Drug. The medicaments of intravenous fluid will certainly make the use thereof for a particular disease and it cannot be used for the common purpose of sugar, electrolyte or fluid replenishment and thus defeating the intention of legislature. Exemption denied.... - HC
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• Court Rules Sub-Rule (1) of Rule 11 Inapplicable to Exemption Notification; Cenvat Credit Transfer Allowed Post-Amalgamation.

  Case-Laws - HC : Transfer of Cenvat Credit - Amalgamation - Sub-Rule (1) of Rule 11 has no application to the Exemption Notification, in the instant case, and therefore the appellate Commissioner as well as the assessing authority were totally in error in denying the benefit of transfer of unutilized Cenvat credit to the assessee..... - HC
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• Printed Products on Paper, Coated Paper, and PVC Films Classified Under Chapter 49 for Central Excise Purposes.

  Case-Laws - AT : Manufacture - products which emerge after printing on paper, polyethylene coated paper and on PVC films - the products should be treated as products of printing industry and classifiable under Chapter 49 instead of 39..... - AT
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• Appellant's Sugar Export Diverted to Domestic Market; No Intent to Evade Duty Found in CT-1 Case.

  Case-Laws - AT : Export - Appellant cleared sugar on CT-1 basis - Exporter diverted the goods to DTA - Appellants cannot be held having mala fide intention to evade duty..... - AT
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• Amendment to CENVAT Credit Rules 2004 via Notification 01/2012 aims to streamline credit utilization for manufacturers and service providers.

  Notifications : Amendment in the CENVAT Credit Rules, 2004. - Ntf. No. 01/2012-Central Excise (N.T.) Dated: February 9, 2012
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• Amendment to Excise Notification: Exemptions for Defense Goods Updated to Streamline Supply Chain Under Notification No. 04/2012.

  Notifications : Amends Notification No.64/95-Central Excise - Exemption to goods supplied for defence and other specified purposes. - Ntf. No. 04/2012 - Central Excise Dated: February 9, 2012
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Case Laws:

• Income Tax

• 2012 (2) TMI 137
  TDS - Payments made to agents of foreign shipping Co. - No application filed with AO under 195(2) - Held That:- Payments made to the agents of foreign shipping companies are claimed to be not taxable in India and there is no material produced before us to controvert the said claim. As per Circular no. 723 dated 19.9.95 in case of ships belonging to non-resident, provisions of section 194C and 195 are not applicable. Apex court in view of G.E.India Technology Centre was of the same view that provisions of 195 and 195(2) cannot be applied.

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• 2012 (2) TMI 136
  Disallowance of Sundry balance written off and Traveling Expense as no details were submitted - Held That:- Details only gave the name of the party, amount, date and no further details as to whether these were taken into account in computation of income of earlier years etc. is not available. Similarly, in respect of traveling expenses, the details given are only the date wise payments made to Deep Tours & Travels.CAse remanded back to AO for fresh perusal giving an opportunity to assessee. Disallowance of expense in relation to exempt Income - A/Y 06-07 thus Rule 8D not applicable - Held That:- In view of Godrej and Boyce Manufacturing Co. Ltd case remanded back. Manufacture - conversion of rough marble blocks into polished and finished marble slabs, tiles, table tops - Held That:- The end product was recognized as commercial product distinct from the input.Reliance placed on Lucky Minmat Pvt. Ltd. Vs CIT (2000 - TMI - 5818 - SUPREME Court), decided in favour of assessee.

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• 2012 (2) TMI 135
  Sale/Purchase of Shares assessable under "Capital Gain" or "Business Income" - Held That:- Assessee hold shares for more than One year and upto ten year - Investments have been mostly from Owned Funds - main objects was to make investments. Therefore such income shall be treated as Capital Gain and not business Income.

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• 2012 (2) TMI 134
  Assessee dealer in diamonds - sale not accounted in books - No confirmation by M/s Alpha Exports sale was on approval basis - Held That:- The contention of assessee cannot be accepted as if the transaction was on approval the question on encashing the cheque do not arise. Bad Debt - Held That:- When the sales were not recorded in books, party cannot be treated as Bad Debt thus there was no occasion or question to write off the said debt as irrecoverable in the books of account. Normal Profit in diamond business around 2% to 8% additions assessed income on higher side - Held That:- When a confirmed sale has been made to M/s export there has to be a confirmed purchase of corresponding diamonds. As regards the purchase price of diamonds made by the assessee from M/s White Diamonds Industries Ltd., it is observed that the same has been shown by the assessee himself at Rs.3,36,619/- and there is nothing brought on record by the assessee to show that it was actually more. Decided against assesee.

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• 2012 (2) TMI 133
  Search - Unaccounted Cash to be settled against Advance Tax liability - Held That:- Search conducted on 19.1.09 and advance tax liability was due on 15.03.09, before conduct of search assessee wrote a letter to the Additional Director to adjust the cash towards his liability and the liabilities of the associates. Assessee had no intention to shrink his liability thus CIT(A) has rightly allowed adjustment of cash against Advance tax.

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• 2012 (2) TMI 132
  Period Of Limitation - AO passed order on 27.2.97 - afresh order passed on 31.03.97 - No variance in order facts were on record ever since original order - Held That:- Order passed by the Commissioner in exercise of the revisional jurisdiction on 20.2.2001 is clearly out of time insofar as it relates to order dated 27.2.1997 relating to the assessment year 1994-95. Tribunal correct in rejecting order of CIT.

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• 2012 (2) TMI 124
  Dis-allowance of bad debts – share broker - Revenue did not doubted share transaction and that amount has been written off in the books of account of the assessee - objection regarding whether the transaction resulting in bad debt were undertaken in the individual capacity of B. Ahuja(client) or on behalf of the company employing him - dis-allowance of interest paid on delayed payment to NSE, DSE – revenue contending it to be penalty – Tribunal deleted aforesaid dis-allowances - Held that:- Deduction is allowed u/s 36(1)(vii) in view of decision in case of T.R.F. Ltd. Vs. CIT (2010 - TMI - 76626 - Supreme Court ) holding that after 1st April, 1989, it is enough if the bad debt is written off in the books of accounts of the assessee and it is not necessary for the assessee to establish that the debt, in fact, has become irrecoverable. Revenue has not been able to controvert findings of Tribunal and show that the payment was, in fact, in nature of penalty and not normal interest on delayed payment. Deletion of dis-allowance is upheld – Decided in favor of assessee.

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• 2012 (2) TMI 123
  Pre-emptive purchase u/s 269UD – allocation of residential plot on 24.02.94 – Assignee of letter of allocation entering into agreement with builders for development of plot on 12.06.96 – Revenue contending evaluation of FMV of property on the date when form 37-I was filed i.e. 25.08.2000 – petitioner contending for evaluation on date of agreement – Held that:- Division Bench in the order dated 18.10.2010 while remitting matter back observed that the private agreement can be looked into by the Appropriate Authority. From the past history of transaction it is obvious that the parties had contracted on the basis of the then prevailing market rate of land. Moreover, this sale consideration is comparable with other instances in which the Appropriate Authority had granted the permission/No Objection Certificate during the relevant period. Therefore, condition stipulated in Section 269UD of difference being more than 15% between the fair market value and the apparent sale consideration is not satisfied. Hence, impugned order is set aside and direction is issued to Appropriate authority to grant permission/No Objection Certificate within stipulated time. See DLF Universal Ltd (2000 - TMI - 5795 - SUPREME Court) – Decided in favor of petitioner.

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• 2012 (2) TMI 122
  Education society registered u/s 12A – denial of registration u/s 10(23C)(vi) – discrepancies in accounts pointed out on the basis of the records produced during the course of proceedings u/s 10(23C)(vi) - Held that:-Prescribed authority is required to examine various aspects and thereafter issue directions/stipulations and impose conditions. On violation of the said conditions and stipulations, it is open to the prescribed authority to cancel the registration. The distinction between assessment proceedings and proceeding under Section 10(23C)(vi) has been explained and elucidated by the Supreme Court in case of American Hotel and Lodging Association Education Institute (2008 (5) TMI 17 - SUPREME COURT OF INDIA). Order of remit is being passed to decide the application for registration u/s 10(23C) (vi) of the Act afresh. Further, interim order passed on 28.11.2011 staying the reassessment proceedings u/s 148 for the A.Y. 2009-10, is vacated and comes to an end. It will be open to the A.O. to proceed in accordance with law.

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• 2012 (2) TMI 121
  Validity of notice issued u/s 147/148 – Tribunal affirmed the order of CIT(A) declaring that the notices u/s 147/148 were void as the words "Pvt. Ltd." were missing – asseseee filed declarations under VDIS 1997 – in view of same notices were issued u/s 147/ 148 for A.Y. 1992-93 to 1995-96 – Held that:- It has not been held by the Tribunal or the CIT (A) that there was misnomer or misdescription because the words 'Private Limited' were missing in 4 out of 5 notices though the name "Jagat Novel Exhibitors" were clear. Therefore, it has not resulted in misnomer or misdescription of parties which is fatal and makes the entire proceedings null and void – Decided in favor of Revenue.

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• 2012 (2) TMI 120
  Deduction of lease equalization charges from lease rental income - lease equalization charges is a method of re-calibrating the depreciation – debits and credits of same to P a statutory requirement u/s 211(2) of the Companies Act. As explained by us, the rationale is that over the entirety of the lease period the said debit would work itself out – Decided in favor of the assessee.

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• 2012 (2) TMI 119
  Deduction u/s 80HHC – whether to be allowed on basis of adjusted book profits u/s 115JA or profit arrived at on the regular basis - Held that - Deduction u/s 80HHC in a case of MAT assessment is to be worked out on the basis of the adjusted book profit and not on the basis of the profit computed under the regular provisions of law. See DCIT vs. Syncome Formulations (I) Ltd (2007 - TMI - 59552 - ITAT BOMBAY-H ) - Decided in favor of assessee.

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• 2012 (2) TMI 118
  Transfer petition - validity of Section 80HHC challenged – Held that:- Looking to the large number of matters pending in various High Courts and since the question relates to vires, it would be beneficial if all the matters are decided by one High Court in the Country. Therefore, all the matters which have been filed/transferred to this Court be sent to the High Court of Gujarat.

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• 2012 (2) TMI 117
  Setting off loss of share trading against income from service charges – both falling under same head “PGBP” - Revenue contending loss in share trading to be speculative loss – Held that:- The explanation to sub section (1) of section 73 provides a deeming definition of when a company is deemed to be carrying on a speculation business, however, applying the provisions of Section 73(1) to determine whether a company is carrying on speculation business would reverse the order of application. In present case, Tribunal was justified, in holding that the assessee fell within the purview of the exception carved out in the explanation to Section 73 and that consequently the assessee would not be deemed to be carrying on a speculation business for the purpose of Sec. 73(1) – Decided in favor of assessee.

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• 2012 (2) TMI 116
  Search it's challenge against findings of violation of Human Rights is dismissed.

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• 2012 (2) TMI 115
  Block assessment - cash found during the search conducted on 27.10.98 added u/s 68 – assessee had earlier filed declarations under VDIS 1997, on 23.12.97 – Tribunal deleted the addition in block assessment on ground that A.O. had made a similar addition in the regular assessment proceedings on protective basis – Held that:- Cash had been found at the time of search and was undisclosed income that can be brought to tax in the block assessment proceedings - Decided in favor of the Revenue.

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• Customs

• 2012 (2) TMI 138
  Appeal for release of consignment – Non-presence of CESTAT, Chennai during proceedings – plea for transfer of appeal to co-ordinate Bench of CESTAT, Karnatka - Held that:- Petitioner may be permitted to make an application, before the third respondent, requesting him to pass an administrative order transferring the matter from the CESTAT, South Zonal Bench, Chennai, to its co-ordinate bench sitting at Bangalore, within a specified time, as per law.

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• Service Tax

• 2012 (2) TMI 107
  Classification of taxable services - revenue classified under "Consulting Engineer" - Assessee classified as "Erection, Commissioning and Installation" - Held That:- As per board circular from 01.07.03 to 09.09.04, services are classifiable under "Erection, Commissioning and Installation" Services, application for waiver of pre-deposit and stay was allowed.

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• Central Excise

• 2012 (2) TMI 104
  Cenvat - Common Modvatable inputs used in the manufacture of exempted as well as dutiable products – manufacture of biscuit - demand confirmed @ 10% of the value of the exempted products – appellant contested for reversal of Modvat credit relatable to inputs used in the manufacture of exempted final products – Held that:- In view of decision in case of CCE vs Maize Products(2008 - TMI - 48307 - High Court Of Gujarat At Ahmedabad), assessee can be directed even at the appeal stage to quantify the quantum of Modvat credit required to be reversed by them. Accordingly we set aside the order and remand the matter to the original adjudicating authority to quantify the credit along with the interest required to be reversed by them – Decided in favor of assessee.

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• 2012 (2) TMI 103
  Benefit of section 11AC denied – duty confirmed together with penalty & interest – Rs 8 lacs deposited against duty liability of 17.88 lacs - Held that:- In the present case, it is clear from the conduct of the assessee that he never wanted or showed any inclination to pay the duty amount or the interest and was throughout contesting the order in original on merits. In case the assessee had any grievance with regard to non-compliance of Section 11AC, the said grievance should have been raised at the earliest opportunity. The appellant should have deposited the duty amount. Therefore, we hold that no substantial question of law arises – Decided against the assessee.

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• Wealth tax

• 2012 (2) TMI 106
  Wealth Tax - taxability of net wealth of “AOP” – charge u/s 21AA of Wealth Tax Act, 1957 inserted w.e.f. 01.04.89 - A.Y. 1988-89, 1989-1990 – Held that:- S.21AA only ropes in an AOP for being assessed under the Wealth Tax Act but subject to the rider that it’s members should have the income or assets or both of the association on the date of its formation or at any time thereafter. Since in present case, second condition is not satisfied the assessee cannot be considered as falling within the ambit of S.21AA of the Act. Further, Circular No. 508 dated 29.06.1981 effects that company or a cooperative society or a society registered under the Societies Registration Act are outside the preview and ambit of Section 21AA. Cancellation of assessment by Tribunal is upheld for both the A.Y.s – Decided against the Revenue.

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• Indian Laws

• 2012 (2) TMI 140
  2G Spectrum Scam – whether a complaint can be filed by a citizen for prosecuting a public servant for an offense under the Prevention of Corruption Act, 1988 – High Court dismissed the petition on ground that investigation is in progress hence decision on the application of the appellant either to grant or refuse the sanction cannot be taken - Held that:- There is no provision either in the 1988 Act or the Code of Criminal Procedure, 1973 (CrPC) which bars a citizen from filing a complaint for prosecution of a public servant who is alleged to have committed an offense. Further, while considering the issue regarding grant or refusal of sanction, the only thing which the Competent Authority is required to see is whether the material placed by the complainant or the investigating agency prima facie discloses commission of an offense. If satisfied, then it is required to grant sanction. The Competent Authority cannot undertake a detailed inquiry to decide whether or not the allegations made against the public servant are true. In Vineet Narain's case, time-limit of three months for grant of sanction for prosecution was granted with additional one month, however in present case, due to failure of officers in the PMO and the Ministry of Law and Justice, to apprise respondent No.1 about seriousness of allegations made by the appellant matter lingered for a period of more than one year. In result, order of High Court is set aside, and right granted to appellant to file a complaint for prosecuting respondent No.2. At the same time, it is directed that in future every Competent Authority shall take appropriate action on the representation made by a citizen for sanction of the prosecution of a public servant strictly in accordance with the direction contained in Vineet Narain v. Union of India (1998) SC and the guidelines framed by the CVC - Decided in favor of petitioner

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