TMI Tax Updates - e-Newsletter
February 2, 2012
Case Laws in this Newsletter:
Income Tax
CST, VAT & Sales Tax
Highlights / Catch Notes
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Income Tax:
Capital gain - period of limitation for deposit the amount in Capital Gain Account Scheme - Sub-Section (4) of Section 139 provides extended period of limitation as an exception to Sub-Section (1) of Section 139 of the Act. Sub-Section (4) is in relation to the time allowed to an assessee under Sub-Section (1) to file return. Therefore return filed by the assessee before the expiry of the year ending with the Assessment Year is valid under Section 139(4) of the Act..... - HC
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Income Tax:
Fringe Benefit Tax – car dealer - Expenditure incurred on accessories which were supplied to customers who have purchased cars cannot be treated as sale promotion including publicity expenses under clause (D) of Section 115WB(2)..... - HC
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Income Tax:
Capital gains – In view of the provisions of sub-section (2) of section 50C, if fair market value as assessed by the DVO is lower than the value adopted by Stamp Duty Authorities for collecting stamp duty then the value so adopted by DVO has to be adopted by the Assessing Officer for the purpose of computation of LTCG..... - AT
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Income Tax:
Allowable u/s 37(1)- Whether the expenses incurred on construction of tennis court are allowable as revenue expenses or are capital in nature - the expenditure on Black Rose Tennis Court by the appellant firm is allowable u/s 37(1) of the Act .... - HC
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Income Tax:
Unexplained Investment – 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..... - HC
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Income Tax:
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 - Tribunal, not having considered the said provisions of Himachal Pradesh General Sales Tax Act has committed an error in law.... - HC
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Customs:
Implementation of The Pneumatic Tyres and Tubes for Automotive Vehicles (Quality Control) Order 2009 – reg. - Cir. No. F.No. 528/109/2011-STO (TU) Dated: January 30, 2012
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Customs:
Classification of Fused Silica under Customs Tariff Act, 1975 - regarding. - Cir. No. 03 / 2012 - Customs Dated: February 1, 2012
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Customs:
Amends Notification No. 36/2001-Customs(N.T) Palm oil, Palmolein, Soyabean Oil (Crude) and Brass Scrap (all grades) - Traiff Values. - Ntf. No. 10/2012 – Customs (N. T.) Dated: January 31, 2012
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Customs:
Notification 44/2002 - EPCG Scheme - The facts that the cars were not registered as a tourist vehicle and the Appellants did not bill for the use of car separately cannot be fatal for claiming the customs duty exemption... - AT
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FEMA:
Opening of Diamond Dollar Accounts (DDAs). - Cir. No. 73 Dated: January 31, 2012
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Service Tax:
Authorized service station - authorised dealers of General Motors - also undertook the servicing of vehicles manufactured by the other manufacturers – services provided in respect of vehicle cannot be held to be taxable services in the light of the definition of the authorized service station appearing under section 65 (9) of Finance Act 1994.... - AT
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Service Tax:
Liability to pay Service tax by government authority undertaking Insurance business – Insurance business is not a sovereign act. - service tax would be leviable and it falls within the ambit of taxable service. .... - HC
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Service Tax:
Refund of Cenavt - Requirement of Service Tax Registration - Registration not compulsory for refund - Export of software not a taxable service still refund cannot be denied.... - HC
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Central Excise:
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. - Demand of interest beyond one year set aside.... - HC
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Central Excise:
Central Excise Registration - Change in premises - new address communicated - existing registration continue and no new registration sought - a technical or venial breach - Decided in favor of assessee with direction to department.... - HC
Articles
Notifications
Circulars / Instructions / Orders
News
Case Laws:
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Income Tax
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2012 (2) TMI 8
Penalty u/s 271(1)(c) – dis-allowance of expenses on ground of non-deduction of tax at source u/s 40(a)(i) – Tribunal deleted the penalty levied by A.O. on ground that assessee has been able to justify and discharge the onus under Explanation 1 to Section 271(1)(c) - A.Y. 2000-01 – Held that:- In present case, assessee had contended that Section 40(a)(i) was not applicable as the words used were „tax has been paid or deducted‟. It is possible to submit that the amendment which came in 2004 was clarificatory in nature, but this is different from stating and holding that the assessee could not have raised the said plea or argued that the dis-allowance under the pre amended Section 40(a)(i) was not justified or mandatory. It is undisputed that TDS has been deducted and paid in the next A.Y. Assessee can in the penalty proceeding show and explain that interpretation was plausible and had merit, though was not accepted. Order of Tribunal deleting penalty is justified – Decided against the revenue.
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2012 (2) TMI 7
Composite sale - Capital Gains - Allocation of sale value towards land and the factory building – composite sale of Rs 17. 50 lacs – reference made to Departmental Valuation Officer on direction of Tribunal – DVO bifurcated sales and estimated sale consideration to be 21.42 lacs – A.O. computed capital gain taking sale consideration to be Rs 21.42 lacs and not Rs 17.50 lacs – Held that:- D.V.O. and A.O. was not required and permitted by the said order to examine the total sale consideration as the appellant in the present case had applied under Chapter XXC and the appropriate authority had accepted the sale consideration mentioned by the appellant. The sale consideration and the quantum thereof was never in question and need not be re-examined. Thus, the enhancement made by the A.O. was not justified and as per law – Decided in favor of assessee.
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2012 (1) TMI 100
Validity of reassessment proceedings – failure to issue notice u/s 143(2) within the period stipulated in the proviso to clause (ii) - effect of Section 292BB - petitioner had filed returns of income vide letter dated 19th November, 2009 in response of notice issued u/s 147/148, adopting their earlier returns u/s 139(1) – objections to the reopening were filed by petitioner on 13th July, 2010 and 19th July, 2010 and supplementary objections on 8th August, 2010 - A.O. issued notice u/s 143(2) on 23rd November, 2010 which is beyond the period of six months prescribed in the proviso to Section 143(2)(ii) - petitioner being foreign company, filed an application with the RBI for closure of their liaison office – NOC required from the Income Tax Department – Held that:- In the present case, the final assessment order has not been passed and only a draft assessment order u/s 144C has been passed. The proviso to section 292BB is applicable. The principle of estoppel u/s 292BB will, therefore, not apply. In respect of returns filed pursuant to notice u/s 148 after 1st October, 2005, it is mandatory to serve notice u/s 143(2), within the stipulated time limit. Thus, in present case, notice u/s 143(2) is deemed not to be served within the stipulated time. See ACIT vs. Hotel Blue Moon (2010 - TMI - 35251 - Supreme Court Of India. In view of the aforesaid position, reassessment proceedings should not continue as no notice u/s 143(2) was served on the assessee within the stipulated time. Accordingly, the writ petition is allowed and a Writ of Certiorari is issued quashing the assessment proceedings pursuant to the notices u/s 148. A Writ of Mandamus is issued to the Department to issue NOC to the petitioner as per the needs and requirements of the RBI within the stipulated time – Decided in favor of petitioner.
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CST, VAT & Sales Tax
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2012 (2) TMI 5
Bombay Sales Tax Act 1959 - whether sales made to vendee situated in the Mumbai High Region are sales in the course of export out of India – alternative contention of Revenue to tax it as local sale – assessee is a licensed manufacturer of Helium gas - sales of Helium gas to ONGC situated at Mumbai High – Held that:-Once the customs frontier stands extended to a territory, there can obviously be no export of goods to a territory which falls within the customs frontier. Thus, for period both before and after 15 January 1987, sale was not a sale in the course of export. See Aban Loyd Chiles Offshore Ltd & Anr. Vs Union of India & ors (2008 - TMI - 3611 - Supreme Court) Further, movement of goods from the State of Maharashtra to Mumbai High does not constitute a movement from one State to another State. Mumbai High does not form part of any State in the Union of India. Therefore it cannot be regarded as inter-state sale. In respect of treating it as local sale , we are firmly of the view that this issue did not arise out of the order of the Tribunal. The State has not sought to levy sales tax in the present case on the basis that there was a local sale. Having held that the State was not justified in bringing the sale to tax as a sale in the course of interstate trade and commerce, we are not called upon to decide any other hypothetical issue.
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