TMI Tax Updates - e-Newsletter
February 22, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws

Articles

1. Excise Duty on Branded Readymade Garments

   By: CA.Ankit Gulgulia

2. SHOW CAUSE NOTICE IS NOT REQUIRED TO BE ISSUED BEFORE FINALISATION OF PROVISIONAL ASSESSMENT

   By: DR.MARIAPPAN GOVINDARAJAN

News

1. Anand Sharma holds Consultation on Transport Subsidy Scheme.

2. Marine Product Exports Grows 18.72% During April – December 2011-12 .

3. FM to Present Appreciation Certificates to the Receipients of Presidential Awards.

4. Government’s Development Objective is to Reduce and Ultimately Remove the Inequalities in All Dimensions of Human Life in Society;.

5. Status of Admission to Company Secretaries (CS) Executive Programme.

6. Text of the speech of Finance Minister at the Platinum Jubilee Celebrations of the United India Insurance Company Limited.

7. Text of the Speech of the Union Finance Minister at the Inauguration of Corporate Office of Oriental Bank of Commerce in Gurgaon and Celebrations of its 70th Foundation Day.

Circulars / Instructions / Orders

FEMA

1. 81 - dated 21-2-2012

Export of Goods and Services - Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year .

2. 82 - dated 21-2-2012

Release of Foreign Exchange for Imports – Further Liberalisation.

Highlights / Catch Notes

Income Tax

• Supreme Court Clarifies Distinction Between Bad Debts and Provisions in Rural Banking Under Income Tax Act Section 36(1)(vii.

  Case-Laws - SC : Bad debts versus Provisions for bad and doubtful debts - rural banking - Scope and ambit of the proviso to Section 36(1)(vii) - provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields - SC
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• Singapore Company Taxed in India for Offshore Work Due to Permanent Establishment Under DTAA Article 5.5.

  Case-Laws - AAR : DTAA with Singapore – Singapore company entered into contract with IOCL for residual offshore construction work and Installation of SPM - contract with L&T Ltd for installation and construction services for Single Point Mooring (SPM) - the applicant has a PE in India in terms of Article 5.5 of the DTAA and falls within the ambit of Section 44BB of the Act. The consideration received by the applicant for mobilization and demobilization is taxable in India u/s 44BB of the Act. - AAR
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• High Court: Interest Due on Excess Refunds Before Section 234D, Applicable From June 1, 2003, Regardless of Assessment Year.

  Case-Laws - HC : Levy of interest for assessment years prior to the introduction of the section 234D- Regular assessment was completed on 30 March 2004 the provision on interest is not introduced with reference to any assessment year but with effect from 1 June 03 - Assessee is liable to pay interest on the excess refund amount received. - HC
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• Tax Dispute Over Deduction Limits u/s 35E for Diamond Mining and Consultancy Expenses Misinterpreted by Tax Officer.

  Case-Laws - AT : Deduction under 35E - Business of Prospecting Exploring and mining of Diamonds and also Consultancy - Assessing Officer was indeed in error in capitalizing the expenses which were not directly attributable to the prospecting of diamonds as also in restricting the deductibility of expenses to 30% of the consultancy revenues received by the assessee. - AT
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• Court Rules No Interest Liability for Assessee on Short TDS Deduction After Owner Settles Tax and Interest.

  Case-Laws - HC : TDS - lessee deducted Tax at 15% instead of 20% - Owner paid differential tax with interest - no liability on the part of the assessee to pay any interest for short deduction of TDS as the owner has paid the said tax. - HC
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• Tribunal Mistakenly Allowed Deductions u/ss 80HH and 80-I Before Section 35(2) Deduction in Income Tax Act Case.

  Case-Laws - HC : Tribunal went wrong in allowing deduction under section 80HH and Section 80-I from the gross total income before granting deduction under section 35(2) of the Act, deduction under Section 35(2) has to be first allowed in the computation of business income as a whole and thereafter deduction under Section 80HH and Section 80-I have to be granted only from the net income attributable to the eligible industrial unit - HC
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• Tax on Capital Gains: Include Previous Owner's Holding Period for Gifted or Inherited Assets When Calculating Indexed Costs.

  Case-Laws - HC : Capital gain - If the object of the legislature is to tax the gains arising on transfer of a capital acquired under a gift or will by including the period for which the said asset was held by the previous owner in determining the period for which the said asset was held by the assessee, then that object cannot be defeated by excluding the period for which the said asset was held by the previous owner while determining the indexed cost of acquisition of that asset to the assessee - HC
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• Asset Transfers Between Societies Taxed as Capital Gains, Not Donations, Under Income Tax Law.

  Case-Laws - AT : Trust - Transfer versus Donation - Transfer of assets for consideration, from one society to another, which has been received by way of book entries and cannot be a donation - Taxable as "Capital Gain". - AT
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• Reassessment Validity u/s 147 Affirmed: Income Escape Justifies Action Without Completing Regular Assessment.

  Case-Laws - HC : Validity of Re-assessment under 147 where notice u/s 143(2) has been issued - if the Assessing Officer is of the view that materials available with him or discovered by him are such as to justify income escaping assessment under Section 147, he is free to record the reasons for the belief and proceed to make income escaping assessment under Section 147 without proceeding to make a regular assessment under Section 143(3) of the Act. - HC
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• Court Rules Funds Not a "Loan" Under Interest-tax Act Section 2(7); Section 5 Inapplicable.

  Case-Laws - HC : Interest Tax under section 5 of the Interest-tax Act - Once we find that monies given by the assessee to SWC did not fulfil the aforesaid criteria thereby bringing it within the expression "loan", the question of applicability of section 2(7) of the Interest-tax Act would not arise. - HC
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• Source of Funds Determines Property Ownership in HUF; Agreement Silence on Ownership Status Doesn't Alter Character.

  Case-Laws - HC : Ownership - Mere non-mentioning of the status in the Agreement of purchase or sale does not alter the character of the property especially when the source of funds and that the status of HUF is governed by the investments which were made out of HUF funds and the HUF can purchase property in the name of any member of family. - HC
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• CBDT Notification Grants Institutes Direct Approval, Qualifying Donors for Weighted Deduction u/s 35 of Income Tax Act.

  Case-Laws - AT : There is no requirement that once the Notification is issued by the CBDT the said Institute has to be approved by any other authority. Once Notification is issued donor is qualified for weighted deduction referred in Sec.35 of the Act. - HC
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• Assessing Officer Must Independently Calculate Loss or Unabsorbed Depreciation Each Year u/s 115JB for MAT Deduction.

  Case-Laws - AT : MAT - book profit u/s. 115JB - AO is required to determine amount of loss brought forward or unabsorbed depreciation for each of years without taking said adjustment into consideration and allow deduction in respect of lesser of two amounts. - HC
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• Transfer of 'Development Rights' Classified as Non-Taxable Capital Receipts When Improvement Costs Are Indeterminable.

  Case-Laws - AT : Taxability on compensation received on transfer of 'Development Rights' - a capital asset in respect of which the cost of improvement could not be ascertained and therefore the receipts of consideration for transfer of the said rights cannot be brought to tax as the said receipts will be capital receipts and not capital gain. - AT
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• Partner Takes Over After Dissolution, Income Includes Individual Loss Share Excluding Partnership Losses.

  Case-Laws - HC : Set- off of loss – partnership on dissolution on 18.09.04 taken over by one partner – The income earned by the appellant, as an individual, would include his share of loss as an individual but not the losses suffered by the partnership firm - HC
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• Clarification on Notice Issuance vs. Service for Income Escaping Assessment under IT Act Section 147, Validity Confirmed.

  Case-Laws - AT : Issue of notice versus service of notice - Income escaping assessment - validity of notice u/s 147 - there has been proper issue of notice within the limitation period of six years - AT
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• Doubtful Debts Not Written Off u/s 36(i)(vi) Must Be Included in Book Profit Calculations.

  Case-Laws - HC : MAT - Provision for Doubtful advances and Investments - the said liability is not NPA but the performing assets as they have continued to be forming part of sundry debtors. As the aforesaid doubtful debts were not actually written off under Section 36(i)(vi) from the books the said amount is to be added in arriving at the net income from the book profits. - HC
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Customs

• Electronic Automatic Regulators Classified Under Chapter Sub-heading 9032.89 by Central Government Notification.

  Case-Laws - SC : Classification of 'Electronic Automatic Regulators' - in view of the Notification issued by the Central Government, the goods, namely Electronic Automatic Regulators would fall under Chapter sub-heading 9032.89 - SC
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• High Court Rules in Favor of Assessee for Fulfilling Export Obligations Under Notification No. 30/1997 Despite Delay.

  Case-Laws - HC : Advance Licensing - Notification No. 30/1997, dated 1-4-1997 - export obligation - Public Notice dated 7-11-2002 - the assessee was entitled to seek extension of export obligation period of six months from the date of Public Notice for fulfilment of certain conditions - assessee has fulfilled the export obligation though belatedly - Decided in favor of the assessee - HC
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FEMA

• FEMA Circular: New Rules Simplify Foreign Exchange Release for Imports, Boosting Efficiency and Reducing Bureaucracy for Importers.

  Circulars : Release of Foreign Exchange for Imports – Further Liberalisation. - Cir. No. 82 Dated: February 21, 2012
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• Guidelines for Exporters on Advance Payments for Shipments Extending Beyond One Year Under FEMA Regulations.

  Circulars : Export of Goods and Services - Receipt of advance payment for export of goods Involving shipment (manufacture and ship) beyond one year . - Cir. No. 81 Dated: February 21, 2012
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Service Tax

• Pre-deposit Waived for Appellants in Manufacturing via Business Auxiliary Services Due to Processing of Excisable Goods.

  Case-Laws - AT : Business Auxiliary services - job work - considering the nature of raw materials, the processes undertaken on the said raw materials and the end-product, appellants are undertaking manufacture of excisable goods on job work basis - pre-deposit waived - AT
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• Sai Computer Pvt. Ltd.'s balance sheet figures don't impose tax liability on appellant despite March 13, 2001, agreement.

  Case-Laws - AT : Mere appearance of the figures in the consolidated balance sheet of Sai Computer Pvt. Ltd. does not bring the appellant to the tax liability when from the beginning, Revenue authorities relied upon the agreement dated 13.03.01 as RUD-I and treated the Appellant as a different taxable entry granting a separate registration to it - AT
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• Jurisdiction for Service Tax Must Align with Registered Office Location; Mumbai Office Wins Over Ratnagiri Notice.

  Case-Laws - AT : Issuance of SCN - assessee contested that they have taken service tax registration at Mumbai as their registered office is situated in Mumbai and service has been rendered in Mumbai and, therefore, the Assistant Commissioner at Ratnagiri does not have jurisdiction to issue notice and recover service tax - Decided in favor of the assessee - AT
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• Service distributors can allocate Service Tax across units if services are used where credit is claimed.

  Case-Laws - AT : Head Office distributed credit - The input service distributor can distribute the Service Tax paid on input services amongst its various units only if such services are used among the units where the credit is taken. Firstly service has to qualify as input before it can be distributed - AT
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Central Excise

• Daily Production Report Entries Not Reliable for Demands Due to High Temperature Estimates.

  Case-Laws - AT : RG 1 vis a vis Daily production record - Product comes out of reactor in very hot conditions and daily production report maintained on rough estimate basis - Demand on the basis entries made in daily production report which are on estimate basis is not sustainable. - AT
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• Court Rules Administrative and Export Fees Excluded from Assessable Value for Central Excise Purposes.

  Case-Laws - AT : Valuation under central excise - Whether administrative fee/export fee etc are liable to be included in the assessable value - held no - AT
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• Bearing Housings & Brackets Classified Under Chapter 84.83, Not Heading 84.82, Per Central Excise Case Laws.

  Case-Laws - AT : Classification - Bearing Housings and bearing brackets falling under are excluded from the classification under Heading 84.82 and specifically mentioned in Chapter 84.83. - AT
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• Duty Drawback Classification Must Follow Rule 3(a) for Accurate Customs Tariff Interpretation, Avoiding Unnecessary Deviations.

  Case-Laws - CGOVT : Classification for the purpose of duty draw back - There is neither any requirement nor it would be proper to 'jump' to next provision when the classification stands concluded by Rule 3(a) of general rules for interpretation of the Customs Tariff - CGOVT
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• Cutting and grooving aluminum sheets to make composite panels is manufacturing, creating a distinct, commercially recognized product.

  Case-Laws - HC : Cutting, grooving of the Aluminium sheet to make Aluminium composite panels amounts to manufacture of a distinct product commercially known as different. - HC
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VAT

• Commissioner Cannot Revise Delhi Sales Tax Act Assessments Suo Motu Under DVAT Act Section 74A, High Court Rules.

  Case-Laws - HC : Whether the Commissioner under the DVAT Act can exercise suo motu power of revision under Section 74A of the DVAT Act in respect of assessments that have been completed under the Delhi Sales Tax Act, 1975 - held no - HC
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Case Laws:

• Income Tax

• 2012 (2) TMI 262
  Bad debts versus Provisions for bad and doubtful debts - rural banking - Scope and ambit of the proviso to Section 36(1)(vii) - whether deduction of the bad and doubtful debts actually written off in view of Section 36(1)(vii) limits the deduction allowable under the proviso to the excess over the credit balance made under clause (viia) of Section 36(1) – rural advances - Held that:- U/s 36(1)(vii), the assessee would be entitled to general deduction upon an account having become bad debt and being written off as irrecoverable in the accounts of the assessee for the previous year, while the proviso will operate in cases under clause (viia) to limit deduction to the extent of difference between the debt or part thereof written off in the previous year and credit balance in the provision for bad and doubtful debts account made under clause (viia). The proviso to Section 36(1)(vii) will relate to cases covered under Section 36(1)(viia) and has to be read with Section 36(2)(v) of the Act. Thus, the proviso would not permit benefit of double deduction, operating with reference to rural loans. Therefore, we hold that provisions of Sections 36(1)(vii) and 36(1)(viia) are distinct and independent items of deduction and operate in their respective fields – Decided in favor of assessee.

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• 2012 (2) TMI 261
  Waiver of penalty u/s 271AAA – search & seizure conducted – disclosure of income in a statement u/s 132(4) – underpayment of self assessment taxes – shortfall paid within permissible time, upon receiving the notice of demand u/s 156 – Held that:- On the facts of the present case wherein entire tax and interest has been duly paid well within the time limit for payment of notice of demand u/s 156 and well before the penalty proceedings were concluded, the assessee could not be denied the immunity u/s 271AAA(2) only because entire tax, along with interest, was not paid before filing of income tax return or, for that purpose, before concluding the assessment proceedings – Decided against the Revenue.

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• 2012 (2) TMI 260
  DTAA with Singapore – Singapore company entered into contract with IOCL for residual offshore construction work and Installation of SPM - contract with L&T Ltd for installation and construction services for Single Point Mooring (SPM) - applicant contending non-existence of PE in India and presence in India for less than 180 days – taxability of revenue - 'FTS' or 'Royalty' – applicability of Section 44BB in respect of the contract with L&T - Held that:- In case of Ishikawajima-Harima Heavy Industries Ltd.(2007 - TMI - 3467 - Supreme Court) it is specified that where consideration of each portion of the contract is separately specified, it can be separated from the whole. Since payment in respect of contract with IOCL specifies separately consideration for mobilization and demobilization falling under the definition of royalty under Article 12.3(b) of the DTAA , consideration for actual installation falling under the definition of FTS as per Article 12.4(a) of the DTAA, and the rest relating to pre and post execution work and drawing/design documentation. Therefore, part of consideration is in nature of FTS and part of consideration is in nature of royalty u/s 9(1)(vii) & (vi) of the Act and under Article 12 of DTAA In respect of contract with L&T – it is noted that services and facilities being rendered by the applicant go beyond installation and include pre-installation services, post-installation services, procurement and transportation and sub-contract is effective as of 23.04.2008 and obligations under the contract continued to exist even after the vessels left the shores of India. The applicant's plea of counting the duration of services from 3.12.2008 when the applicant's vessels were mobilized to India till 19.05.2009 when the vessels left the shores of India is untenable and unacceptable. Hence the applicant has a PE in India in terms of Article 5.5 of the DTAA and falls within the ambit of Section 44BB of the Act. The consideration received by the applicant for mobilization and demobilization is taxable in India u/s 44BB of the Act.

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• 2012 (2) TMI 259
  Long term capital gains period of holding property sold was transferred to trust on 05.01.1996 acquired by previous owner prior to 01.04.1981 Revenue contending indexed cost of acquisition from 05.01.1996 Held that:- The expression held by the assessee used in Explanation (iii) to Section 48 has to be understood in the context and harmoniously with other Sections. The cost of acquisition stipulated in Section 49 means the cost for which the previous owner had acquired the property. The term held by the assessee should be interpreted to include the period during which the property was held by the previous owner. See CIT v. Manjula J.Shah [ 2011 (10) TMI 406 - BOMBAY HIGH COURT] Decided against the Revenue.

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• 2012 (2) TMI 258
  DTAA with Australia – Australian company entered into distribution agreement with Indian Company(IMI Ltd) for the distribution and sale of its software and hardware products in India - sale and collection of software product is made through the distributor - no physical delivery of the product is made to the distributor - taxability of the payments made by distributor for the software product, and for the right to downloand/receive version updates for the software products of the applicant – applicant submitted that payment received are for sale of copyrighted article - Held that:-In the Income-tax Act, royalty is defined as consideration for the transfer of all or any rights (including the grant of license) in respect of any Copyright. Article 12 of the India-Australia DTAC defines royalties to mean payment made as consideration for the use of or the right to use any copyright, patent, design or model, plan, secret formula or process, trademark or other like property or right. The definition in article is seen to be wider than the one contained in the Income-tax Act. Therefore, payments concerned would be royalty as defined in Article 12 of the DTAA between India and Australia and u/s 9(1)(vi) of the Income-tax Act. Payment received by way of Subscription for the updates would also be royalty and not 'FTS' under DTAC & Income Tax Act. Applicant contention about non-existence of PE in India – Held that:- Since payment received is royalty, the amount is liable to be taxed in India under Article 12.2 of the DTAC. Further, distributor IMI Ltd is required to withhold taxes in India in terms of Section 195 of the Income-tax Act at the rate of 10% of the gross amount of royalty, as provided under Article 12.2 of the DTAC.

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• 2012 (2) TMI 257
  Maintainability of application before Advance Rulings – Return of Income filed for A.Y. 2009-10 - application filed on 17.05.2010 raising the identical questions – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings)

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• 2012 (2) TMI 256
  Maintainability of application before Advance Rulings - transaction based on which Rulings on various questions are sought, was entered into on 1.10.2006 - assessments for the A.Y. 2007-2008 have been completed - Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2) , and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred by clause (i) of the proviso to section 245R(2) of the Act. See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings) – Application dismissed.

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• 2012 (2) TMI 255
  Maintainability of application before Advance Rulings – Return of Income filed u/s 139(1) on 31.03.2010 - transaction based on which Rulings on various questions are sought, was entered into on 26.4.2008 and 26.11.2008 – application filed on 17.6.2010 – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings)

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• 2012 (2) TMI 253
  Maintainability of application before Advance Rulings – Return of Income filed u/s 139(1) on 31.03.2010 - transaction based on which Rulings on various questions are sought, was entered into on 31.10.2007 – application filed on 06.07.2010 – Held that:- Date of filing of the return is the relevant date to consider the applicability of the proviso to section 245R(2), and that the filing of the return of income generates questions including the ones raised before this Authority, the jurisdiction to give a ruling in the present application has to be held to be barred. We, therefore, reject the application as being barred by clause (i) of the proviso to section 245R(2). See SEPCO III Electric Power Corporation (2011 - TMI - 207237 - Authority For Advance Rulings).

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• 2012 (2) TMI 252
  Proprietor firm converted into partnership - Cost of acquisition - Asset acquired by succession - "Book Value OR Fair Market Value" - Held That:- AO had not examined as to whether the cost value given by the assessee firm is correct or otherwise, We remand the matter back to AO with a specific direction to examine as to whether the value [FMV] shown by the assessee firm is correct as on 1.4.1981 and to take appropriate action in accordance with the provisions of the Act at that relevant period. - Reliance placed on Sunil Siddharthbhai vs CIT (1985 -TMI - 5909 - SUPREME Court)

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• 2012 (2) TMI 238
  Valuation of Closing Stock - AO made additions as "Excise Duty" not included in stock - Held That:- In view of Asst.CIT vs. Narmada Chematur Petrochemicals Ltd. (2010 - TMI - 202159 - Gujarat High Court), duty to be included only at the time of sale since goods not cleared additions not justified. TDS - Delivery of gas to be made from buyer to seller at the outlet station - Held That:- Its a contract of sale/ purchase and not of work thus no liability to deduct TDS under 194C.

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• 2012 (2) TMI 237
  Best Judgment - Yield of paddy reflected at 63% AO adopted at 65% - Held That:- Additional evidences in support of yield and trading results were filed as revenue could not confront the same. - Decided in favour of assessee. Cash Credits - Unsecured Loan - Balance confirmed by Ram Prasad Rawat - Held That:- No infirmity in CIT(A) order. Appeal of revenue rejected.

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• 2012 (2) TMI 236
  Registration under Trust - Object encouraging "Religious Discourses" - Held That:- encouraging religious discourses without mentioning any religion cannot per se be considered as benefiting any particular religious community even if considered as religious in nature it is only a part of many number of object clauses, all of which are charitable and hence cannot be considered as of a nature which is wholly or substantially wholly religious. Whether Fees from Apprentices convert trust into commercial venture - Held That:- Fee received from apprentices who were studying in the institution or establishment by the Trust could not be ‘per se’ be a commercial activity. possibility of a future contingency with a remote probability will not make the Trust itself a commercial venture

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• 2012 (2) TMI 235
  Penalty - Search - Block assessment - Jewelery worth RS 12,77,635 added as Undisclosed Income - CIT(A) deleted entire additions - Tribunal: duplicate bills were neither found at the time of search nor were produced before the Investigating Authority - AO on tribunal findings levied penalty - Held That:- It is not the case of Department that the duplicate bills produced by the assessee were false or the parties who issued those bills were not existent parties. Minor variation in the description cannot be conclusive proof for coming to the conclusion that the bills were not genuine. Therefore, it cannot be said that the assessee’s explanation was, in any case, malafide. Penalty un-justified.

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• 2012 (2) TMI 234
  Trust - Transfer versus Donation - Held That:- Transfer of assets for consideration, from one society to another, which has been received by way of book entries and cannot be a donation - Taxable as "Capital Gain". RE-assessment under 147 - reasons to believe - Capital Gain not charged to tax - Held That:- The re-opening of the assessment for bringing the capital gains to tax which was omitted earlier does not amount to change of opinion. The omission to apply the provisions of the Act and later on applying them is a valid ground for invoking notice under 148.

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• 2012 (2) TMI 233
  Estimation of profit on cash portion - 15% on cheque and 10% on cash margin - Held That:- Assessee only pressed for one issue of application of profit rate on the cash portion during the course of arguments which have been considered and decided on merit, therefore, both the Misc. Applications of the assessee are not maintainable.

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• 2012 (2) TMI 232
  Stock - Difference in Valuation of Rs 2,35,983 - Held That:- When the difference in stock has been accepted by assessee and the same is not appealed, levy of penalty is justified.

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• 2012 (2) TMI 231
  Expenses incurred on Car driving and security of director on foreign tour personal in nature - Held That:- No material to establish foreign visit to Bangladesh of the employees of the assessee was directly or distinctly related to the business of the company. We upheld the order of CIT(A). Decided against assessee. TDS - Payment for "Technical Retainer-ship" Fee - Amount deposited on 7.10.05 - Held That:- Finance Act 2008, as retrospectively amended the law enabling payments made before the due date of filing will be allowed as deduction. Decided in favour of assessee.

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• 2012 (2) TMI 230
  Validity of Block Assessments - Period of limitation - Search on 27.07.99 - Delay more than 3 years while issuing Notice under 158BD - Search completed after Seven from the date of Search - Held That:- Issue of notice u/s 158BD after three years from the date of completion of the assessment in respect of the person against whom search was carried out is barred by limitation. Reliance placed on (Khandubhai Vasanji Desai & Ors vs DCIT (1998 - TMI - 16365 - GUJARAT High Court)) and Shri P Venkata Ramana (Hyderabad Bench Tribunal).

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• 2012 (2) TMI 229
  Search - Document seized indicated investments in Partnership firm - AO made additions on the basis of loose sheets found - Held That:- When document talks at full length the "Total Cost Involved". The cost also mentions about the bar licence fee stock and purchase cost. The seized document itself thus mentions about the initial contribution to be made by the partner at Rs. 1,50,000 and additional contribution of Rs 4,20,000. Reliance also placed on CIT vs Durga Das (1971 -TMI - 6269 - SUPREME Court), Decided against assessee.

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• Customs

• 2012 (2) TMI 242
  Classification of 'Electronic Automatic Regulators' - Revenue classified it under Chapter sub-heading 8543.89 – Central Government vide Notification dated 01.03.2002 classified it under Chapter sub-heading 9032.89 - Held that:- For the period after 01.03.2002, in view of the Notification issued by the Central Government, the goods, namely Electronic Automatic Regulators would fall under Chapter sub-heading 9032.89 – Decided in favor of assessee.

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• 2012 (2) TMI 222
  Revision petition filed u/s 397 r/w 401 of the CrPC against order of discharge u/s 245CrPC - smuggling of ball bearing - respondents challenging maintainability of the present revision petition – validity of the sanction and also non-examination of the sanctioning authority - Held that:- The petitioner had the concurrent option of filing revision before the Sessions Court or this Court hence, present revision petition is certainly maintainable. Validity of sanction - The sanction order fully sets out the material facts and the offences disclosed by those facts. Moreover, Officer signing the sanction order is not required to state that he had personally scrutinized the file and had arrived at the required satisfaction. The non-availability or non-association of independent witness cannot be a ground for discharge or acquittal in all cases. Therefore, petition is allowed and the impugned order is set aside. The matter is remanded back to the court of learned ACMM, New Delhi.

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• 2012 (2) TMI 220
  Ocean going vessels – seizure for not filing B/E for home consumption - provisional release of vessels ordered subject to conditions including condition of payment of duty – vessels imported prior to 2001 – exemption from custom duty on the date of initial import – assessee contesting payment of duty – Held that:- Revenue is not justified in demanding the duty for provisional release of the vessels when, prima facie, it is not in dispute that on the date of initial import of these ocean going vessels, there was total exemption from payment of duty and customs authorities were also under the belief that it is not necessary to file B/E, where there is total exemption. Since the issue is yet to be adjudicated hence petitioner is directed to file B/E for home clearance of each of the vessels in question without payment of any duty and other conditions as stipulated in order for provisional release. No opinion is expressed on merits of the case.

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• Corporate Laws

• 2012 (2) TMI 240
  Period of Limitation – Petition filed u/s 433(e) & 433(f) of Companies Act, 1956 seeking to wind up the Respondent-Company – non-payment of salary of the petitioner (part-time employee) for period March 2002 to June 2002 – Held that:- Period of limitation for claiming salary is 3 years and u/s 18 of Limitation Act, acknowledgment of liability should be before the expiry of period of limitation. In present case, limitation starts from 1.7.2002 and ends on 30.06.2005. However, the first letter had been addressed on 22.9.2007 which itself is beyond the period of said three years. Therefore, documents of alleged acknowledgment of liability dated 25.09.07 onwards produced do not constitute an acknowledgment of liability. Hence, no debt is enforceable against the Respondent and consequently no ground u/s 433 of the Companies Act, 1956 – Decided against the petitioner.

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