TMI Tax Updates - e-Newsletter
January 14, 2012
Case Laws in this Newsletter:
Income Tax
TMI SMS
Articles
By: Jayaprakash Gopinathan
Summary: The article discusses the impact of changing the Central Excise Tariff from a six-digit to an eight-digit code on coconut oil classification. Coconut oil in containers up to 200 ml is now classified as hair oil under Chapter 33, subjecting it to higher excise duties. This affects consumers in Kerala who use coconut oil for both cooking and as hair oil, especially those buying in small quantities due to financial constraints. The change results in higher costs for small buyers, as they must pay additional excise duty and cess, unlike those purchasing in bulk. The classification change aims for uniformity but raises concerns about its fairness.
By: DEVKUMAR KOTHARI
Summary: Administrative orders or notifications for extending deadlines should be reasonable to prevent repetitive extensions. The article discusses a recent notification extending the deadline for filing service tax returns from January 6 to January 20, 2012, due to electronic filing issues. However, the notification was issued after the original deadline had passed. The short extension of 14 days, including 10 working days, is criticized for being insufficient, especially with additional holidays and adverse weather conditions affecting productivity. The author argues for more foresight and longer extensions to accommodate taxpayers and infrastructure challenges effectively.
By: Dr. Sanjiv Agarwal
Summary: The Finance Act, 2006 introduced a service tax on the sale of advertising space or time, effective from May 1, 2006. This tax applies to the gross amount charged for providing space or time for advertisements across various media, excluding print media such as books and newspapers. Amendments in 2007 further clarified that business directories, yellow pages, and trade catalogues are not considered print media, making their advertising space taxable. The service tax does not apply to sales of time slots by broadcasting agencies. Legal rulings have affirmed that selling advertising space, even online, falls under taxable advertising services.
News
Summary: The Central Board of Excise and Customs (CBEC) of India's Ministry of Finance has issued a notification updating the tariff values for certain commodities as of January 13, 2012. The tariff values for edible oils, including various types of palm oil and soybean oil, remain unchanged. However, the tariff value for brass scrap (all grades) is set at $4007 per metric tonne, and for poppy seeds, it is set at $1970 per metric tonne. This notification outlines the specific tariff values for these commodities, impacting their import and export pricing.
Summary: The Reserve Bank of India (RBI) has issued guidelines under the Foreign Exchange Management Act, 1999, enabling Qualified Foreign Investors (QFIs) to invest in Indian companies. This move aims to broaden the base of non-resident investors in Indian stock markets by allowing non-resident investors, excluding SEBI-registered foreign institutional investors and foreign venture capital investors, to invest in equity shares. Additionally, the RBI has permitted up to 100% foreign direct investment (FDI) in single-brand retail trading through the Government route, following a policy review by the Indian Government.
Summary: The Union Finance Minister addressed the 46th convocation of the Indian Statistical Institute (ISI) in Kolkata, emphasizing the institution's pivotal role in advancing statistical research and education in India. Highlighting ISI's historical contributions, including the formation of the National Sample Survey Organisation and the development of India's second five-year plan, he praised the institute's impact on academia, governance, and industry. The Minister underscored the importance of statistics in modern policy-making and data analysis, urging graduates to contribute to society and uphold ISI's legacy. He congratulated the graduates and encouraged them to embody the values of Indian education in their future endeavors.
Summary: The Ministry of Corporate Affairs in India has established a committee to create a roadmap for the future implementation of XBRL (eXtensible Business Reporting Language). The committee's tasks include identifying classes of companies and reports for phased XBRL filing, developing taxonomies for corporate regulatory filings, extending taxonomies and the XBRL assurance framework, and enhancing training and awareness among stakeholders. Stakeholders are encouraged to submit their suggestions via email or mail to the designated contact at the Ministry.
Summary: The Finance Minister expressed confidence in continued moderation of inflation in the coming months, projecting headline inflation to be between 6 and 7 percent by March 2012. Despite a gradual softening in manufactured goods prices, food inflation has remained negative. The Index of Industrial Production (IIP) showed a strong recovery, with overall growth at 5.9 percent over the previous year, although capital goods growth remains negative. Consumer goods and the electricity sector have shown significant growth. The Minister emphasized the need to enhance capital goods performance and investments to regain growth momentum for the rest of the financial year.
Summary: The Wholesale Price Index (WPI) for primary articles in India increased by 0.5% to 198.6 for the week ending December 31, 2011, with an annual inflation rate of 0.51%. Food articles saw a rise due to increased prices of items like fish and mutton, while tea and spices prices declined. Non-food articles rose by 1.3%, driven by higher prices for flowers and seeds. The Fuel and Power index remained stable at 172.7, with an annual inflation rate of 14.45%. The report includes detailed inflation trends for various commodities over recent weeks.
Notifications
Customs
1.
07/2012 - dated
13-1-2012
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ADD
Seeks to impose anti-dumping duty on imports of Saccharin originating in, or exported from, People’s Republic of China
Summary: The Government of India, through the Ministry of Finance, has imposed an anti-dumping duty on imports of Saccharin originating from or exported by the People's Republic of China. This duty, set at $2.69 per kilogram, applies to all grades of Saccharin under specified tariff items and will be in effect for five years from the date of publication unless revoked or amended earlier. The duty aims to counteract dumping practices that harm domestic industries. The applicable exchange rate for duty calculation will be determined by notifications issued under the Customs Act, 1962.
2.
06/2012 - dated
13-1-2012
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ADD
Rescinds Notification No. 136/2009-Customs, dated the 9th December, 2009
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has issued Notification No. 6/2012-Customs (ADD) dated January 13, 2012, which rescinds Notification No. 136/2009-Customs dated December 9, 2009. This action pertains to the anti-dumping duty previously imposed on saccharin originating from or exported by the People's Republic of China. The rescission is enacted under the authority of the Customs Tariff Act, 1975, and the related rules, with the exception of actions taken or omitted prior to this rescission.
3.
05/2012 - dated
13-1-2012
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ADD
Regarding anti-dumping duty on imports of Cellophane Transparent Film (CTF) originating in, or exported from, People’s Republic of China
Summary: The Government of India has imposed an anti-dumping duty on imports of Cellophane Transparent Film (CTF) originating from or exported by the People's Republic of China. This duty, set at a rate of 1.95 USD per kilogram, applies to imports falling under sub-heading 392071 of the Customs Tariff Act, 1975. The anti-dumping duty will be in effect for five years from the date of publication in the Official Gazette, unless revoked or amended earlier. The duty is payable in Indian currency, with the applicable exchange rate determined by relevant government notifications.
4.
04/2012 - dated
13-1-2012
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ADD
Regarding import of Phosphoric Acid of all grades and all concentrations (excluding Agriculture / Fertilizer Grade) originating in, or exported from, Israel and Taiwan
Summary: The Government of India imposed an anti-dumping duty on imports of Phosphoric Acid, excluding Agriculture/Fertilizer Grade, from Israel and Taiwan. The duty, effective for six months, aims to address material injury to the domestic industry caused by imports priced below normal value. The duty rates vary based on the producer and exporter, with specific amounts per metric ton in US dollars. The applicable exchange rate for calculating the duty will be determined by notifications from the Ministry of Finance. This measure is enacted under the Customs Tariff Act and related rules to protect domestic interests.
5.
03/2012 - dated
13-1-2012
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ADD
Seeks to impose anti-dumping duty on imports of Nylon Filament Yarn originating in, or exported from, People’s Republic of China, Chinese Taipei, Malaysia, Thailand and Korea RP
Summary: The Government of India has imposed an anti-dumping duty on imports of Nylon Filament Yarn from China, Chinese Taipei, Malaysia, Thailand, and Korea RP. This measure, effective from January 13, 2012, aims to protect domestic industries from unfair pricing practices. The duty applies to specific types of nylon yarn, excluding high tenacity and fishnet yarns, with rates detailed in a provided table. Certain yarns are exempt if their landed price exceeds specified thresholds. The duty will be in force for five years, subject to review or earlier revocation, and is payable in Indian currency.
6.
02/2012 - dated
13-1-2012
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ADD
Seeks to impose anti-dumping duty on imports of Silk fabrics originating in, or exported from, People’s Republic of China
Summary: The Government of India has imposed an anti-dumping duty on imports of silk fabrics from the People's Republic of China to protect domestic industry from unfair pricing. This duty applies to silk fabrics, including crepe, georgette/chiffon, habutai, and others, with specific weight ranges. The duty varies based on the weight of the fabric and is calculated as the difference between the specified amount in US dollars and the landed value of the goods. This measure, effective for five years, aims to counteract dumping practices and is payable in Indian currency. The notification specifies the calculation of landed value and applicable exchange rates.
7.
02/2012 - dated
13-1-2012
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Cus (NT)
Amends Notification No. 36/2001-Customs(N.T) dated the 3rd August 2001
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has issued Notification No. 2/2012 - Customs (N.T.), amending Notification No. 36/2001-Customs (N.T.) dated August 3, 2001. This amendment involves the substitution of the existing table with a new one specifying tariff values for various goods, including crude palm oil, RBD palm oil, palmolein, crude soybean oil, brass scrap, and poppy seeds. Notably, the tariff values for palm oil and palmolein remain unchanged, while new values are set for brass scrap and poppy seeds. This amendment is enacted under the powers conferred by the Customs Act, 1962.
8.
F.No. 437/09/2011-Cus. IV - dated
10-1-2012
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Cus (NT)
Appointment of Common Adjudicating Authority
Summary: The Central Board of Excise & Customs, under the Ministry of Finance, has designated the Commissioner of Customs at Inland Container Depot, Tughlakabad, New Delhi, as the Common Adjudicating Authority for the adjudication of a Show Cause Notice issued by the Directorate of Revenue Intelligence. This notice, dated May 18, 2007, pertains to M/s Kripal Exports and others. The assignment is made under the authority of Notification No. 15/2002-Customs (N.T.) as amended, in accordance with the Customs Act, 1962. Copies of the order have been distributed to relevant customs and excise officials.
DGFT
9.
94 (RE – 2010)/2009-2014 - dated
11-1-2012
-
FTP
Minimum Export Price of Onions.
Summary: The Government of India, through the Ministry of Commerce & Industry, has amended the Minimum Export Price (MEP) for onions. The MEP for all varieties of onions, except Bangalore Rose and Krishnapuram onions, is set at US$ 150 per Metric Ton F.O.B., reduced from US$ 250. For Bangalore Rose and Krishnapuram onions, the MEP is reduced to US$ 250 per Metric Ton F.O.B. from US$ 300. These changes amend previous notifications and are effective immediately, as per the Foreign Trade (Development & Regulation) Act, 1992 and the Foreign Trade Policy 2009-2014.
Income Tax
10.
04/2012 - dated
6-1-2012
-
IT
Section 90 of the Income-tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Georgia.
Summary: The Government of India and the Government of Georgia signed an agreement on August 24, 2011, to avoid double taxation and prevent fiscal evasion regarding taxes on income and capital. The agreement came into force on December 8, 2011, and its provisions apply in India from April 1, 2012. It covers taxes on income and capital for both countries and includes provisions for eliminating double taxation, non-discrimination, mutual agreement procedures, and exchange of information. The agreement aims to promote economic cooperation between the two countries by providing clarity and certainty in tax matters.
SEZ
11.
S.O. 14(E) - dated
4-1-2012
-
SEZ
Rescinds the sector specific Special Economic Zone for information technology and information technology enabled services at Mount Poonamalee High Road, Aiyappanthangal, Porur, Chennai .
Summary: The Central Government has rescinded the designation of a sector-specific Special Economic Zone (SEZ) for information technology and IT-enabled services located at Mount Poonamalee High Road, Aiyappanthangal, Porur, Chennai, Tamil Nadu. Initially notified on March 10, 2008, for an area of 10.194 hectares, this SEZ was proposed by a private company under the Special Economic Zones Act, 2005. Following a request from the company to denotify the area, approval was granted on April 19, 2010. The rescission is effective immediately, except for actions completed or omitted prior to this notification.
Circulars / Instructions / Orders
FEMA
1.
67 - dated
13-1-2012
Foreign investment in Single – Brand Retail Trading Amendment to the Foreign Direct Investment (FDI) Scheme
Summary: The circular addresses an amendment to the Foreign Direct Investment (FDI) Scheme regarding Single Brand Retail Trading in India. It informs Category-I Authorized Dealer Banks of the revised policy allowing 100% FDI in Single Brand product trading under the Government route, subject to conditions outlined in Press Note No. 1 (2012 Series). The amendment updates the previous cap of 51% FDI. Banks are instructed to inform their clients about this change, and necessary regulatory amendments will be notified separately. The circular is issued under the Foreign Exchange Management Act, 1999.
2.
66 - dated
13-1-2012
(I) Scheme for Investment by Qualified Foreign Investors in equity shares (II) Scheme for Investment by Qualified Foreign Investors in Rupee Denominated Units of Domestic Mutual Funds – Revision
Summary: The circular outlines revised schemes for investment by Qualified Foreign Investors (QFIs) in Indian equity shares and rupee-denominated units of domestic mutual funds. QFIs can invest through SEBI-registered Depository Participants in equity shares of listed Indian companies, subject to specified conditions, including investment limits of 5% for individuals and 10% in aggregate. A dedicated demat account is required, but bank accounts in India are not permitted. The circular also revises the time frame for maintaining funds in a single rupee pool bank account to five working days for both equity and mutual fund investments. Amendments to relevant Foreign Exchange Management Regulations will be notified separately.
3.
65 - dated
12-1-2012
Foreign Exchange Management Act, 1999 – Export of Goods and Services - Forwarder’s Cargo Receipt .
Summary: Authorized dealers in foreign exchange are informed that they may accept Forwarder's Cargo Receipts (FCR) issued by IATA-approved agents instead of a bill of lading for export transactions backed by letters of credit, even if the sale contract does not specify this. Additionally, dealers can accept FCRs from reputable shipping companies or IATA-approved agents for transactions not backed by letters of credit, provided the sale contract allows it. Acceptance of FCRs is at the dealer's discretion, requiring due diligence on the transaction's legitimacy and the parties involved. These guidelines are issued under the Foreign Exchange Management Act, 1999.
DGFT
4.
52 (RE-2010)/2009-14 - dated
12-1-2012
Filing of applications for DEPB in cases of exports made under “EPCG Shipping Bills” for items “Cotton yarn including Melange yarn” from 01.04.2011 to 04.08.2011 and ‘Cotton’ from 01.10.2010 to 04.08.2011.
Summary: The circular from the Directorate General of Foreign Trade addresses the procedure for filing Duty Entitlement Passbook (DEPB) applications concerning exports made under "EPCG Shipping Bills" for "Cotton yarn including Melange yarn" between April 1, 2011, and August 4, 2011, and "Cotton" between October 1, 2010, and August 4, 2011. Exporters must submit a hard copy of the application with the EPCG Shipping Bill and a declaration of not availing any duty exemptions. Regional Authorities will provide shipping bill details on the DEPB Scrip, issued in manual mode. Any implementation issues should be reported to the Directorate.
5.
91 (RE-2010)/2009-2014 - dated
12-1-2012
Amendment in Public Notice No. 90 (RE-2010)/2009-2014 dated 6.1.2012 regarding export of 8,300 MTs of sugar to USA under Tariff Rate Quota.
Summary: The Government of India issued an amendment to Public Notice No. 90 (RE-2010)/2009-2014 concerning the export of 8,300 metric tons of sugar to the USA under the Tariff Rate Quota. The amendment, effective from January 12, 2012, changes the classification of the sugar from "white sugar" to "raw cane sugar." This adjustment allows M/s. Indian Sugar Exim Corporation Ltd. to export raw cane sugar instead of white sugar, as previously indicated in the original notice dated January 6, 2012.
Central Excise
6.
958/1/2012-CX - dated
13-1-2012
Revised Treaty of Trade between India and Nepal.
Summary: The Revised Treaty of Trade between India and Nepal aligns exports to Nepal with those to other countries, excluding Bhutan. Six notifications issued on December 5, 2011, amend previous notifications to eliminate the existing Duty Refund Procedure (DRP) for exports to Nepal. These changes are effective from March 1, 2012. The circular requests that any difficulties encountered in implementing the revised procedure be reported to the Board and advises that field formations and trade be informed accordingly. A Hindi version of the circular will be provided.
Highlights / Catch Notes
Income Tax
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Court Rules No Need for New Demand Notices with Income Changes u/s 220(2) of Income Tax Act.
Case-Laws - HC : Levy of interest u/s 220(2) - fresh notices of demand need not be issued every time the total income undergoes a change due to appellate or revisional orders.... - HC
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Indo-French DTAA Case: No Permanent Establishment Found, No Profit Attribution Issues Addressed.
Case-Laws - AT : Indo French DTAA - Having held that the PE did not exist on the facts of this case, it is not really necessary to deal with profit attribution in the case of PEs..... - AT
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India and Georgia Agreement to Avoid Double Taxation and Prevent Fiscal Evasion u/s 90 of Income-tax Act.
Notifications : Section 90 of the Income-tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Georgia. - Ntf. No. 04/2012 Dated: January 6, 2012
Customs
-
Proposed Anti-Dumping Duty on Saccharin Imports from China to Protect Domestic Industries from Unfair Pricing Practices.
Notifications : Seeks to impose anti-dumping duty on imports of Saccharin originating in, or exported from, People’s Republic of China - Ntf. No. 7 /2012-Customs (ADD) Dated: January 13, 2012
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Customs Notification 6/2012 Rescinds 136/2009, Altering Tax Regulations Effective January 13, 2012.
Notifications : Rescinds Notification No. 136/2009-Customs, dated the 9th December, 2009 - Ntf. No. 6/2012-Customs (ADD) Dated: January 13, 2012
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India Imposes Anti-Dumping Duty on Cellophane Transparent Film from China as per Notification No. 5/2012-Customs (ADD.
Notifications : Regarding anti-dumping duty on imports of Cellophane Transparent Film (CTF) originating in, or exported from, People’s Republic of China - Ntf. No. 5/2012-Customs (ADD) Dated: January 13, 2012
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Customs Duties on Phosphoric Acid Imports from Israel and Taiwan, Excluding Fertilizer Grade, Outlined in Notification 4/2012-Customs.
Notifications : Regarding import of Phosphoric Acid of all grades and all concentrations (excluding Agriculture / Fertilizer Grade) originating in, or exported from, Israel and Taiwan - Ntf. No. 4 /2012-Customs (ADD) Dated: January 13, 2012
-
Anti-dumping duty proposed on Nylon Filament Yarn imports from China, Taiwan, Malaysia, Thailand, and Korea to protect domestic industries.
Notifications : Seeks to impose anti-dumping duty on imports of Nylon Filament Yarn originating in, or exported from, People’s Republic of China, Chinese Taipei, Malaysia, Thailand and Korea RP - Ntf. No. 3 /2012-Customs (ADD) Dated: January 13, 2012
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Proposed Anti-Dumping Duty on Chinese Silk Fabrics to Protect Domestic Industry from Unfair Pricing Practices. Ntf. No. 2/2012-Customs (ADD).
Notifications : Seeks to impose anti-dumping duty on imports of Silk fabrics originating in, or exported from, People’s Republic of China - Ntf. No. 2 /2012-Customs (ADD) Dated: January 13, 2012
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Common Adjudicating Authority Appointed to Streamline Customs Matters Under Notification No. F.No. 437/09/2011-Cus. IV.
Notifications : Appointment of Common Adjudicating Authority - Ntf. No. F.No. 437/09/2011-Cus. IV Dated: January 10, 2012
DGFT
-
DEPB Benefits Applicable for Cotton Yarn and Cotton Exports Per DGFT Circular No. 52, Covering Specific 2010-2011 Dates.
Circulars : Filing of applications for DEPB in cases of exports made under “EPCG Shipping Bills” for items “Cotton yarn including Melange yarn” from 01.04.2011 to 04.08.2011 and ‘Cotton’ from 01.10.2010 to 04.08.2011. - Cir. No. 52 (RE-2010)/2009-14 Dated: January 12, 2012
-
Amendment to Export 8,300 Metric Tons of Sugar to USA Under Tariff Rate Quota, Circular No. 91, 2009-2014.
Circulars : Amendment in Public Notice No. 90 (RE-2010)/2009-2014 dated 6.1.2012 regarding export of 8,300 MTs of sugar to USA under Tariff Rate Quota. - Cir. No. 91 (RE-2010)/2009-2014 Dated: January 12, 2012
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DGFT Sets Minimum Export Price for Onions to Stabilize Domestic Market under 2009-2014 Export Policy Framework.
Notifications : Minimum Export Price of Onions. - Ntf. No. 94 (RE – 2010)/2009-2014 Dated: January 11, 2012
SEZ
-
New IT Special Economic Zone Established in Chennai under Notification No. S.O. 14(E.
Notifications : Set up a sector specific Special Economic Zone for information technology and information technology enabled services at Mount Poonamalee High Road, Aiyappanthangal, Porur, Chennai . - Ntf. No. S.O. 14(E) Dated: January 4, 2012
FEMA
-
Foreign Direct Investment Scheme Amended: Increased Foreign Investment in Single-Brand Retail Trading per Circular No. 67, FEMA.
Circulars : Foreign investment in Single – Brand Retail Trading Amendment to the Foreign Direct Investment (FDI) Scheme - Cir. No. 67 Dated: January 13, 2012
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Revised Guidelines for QFIs: Streamlined Investment in Equity Shares and Rupee Denominated Mutual Funds Under FEMA.
Circulars : (I) Scheme for Investment by Qualified Foreign Investors in equity shares (II) Scheme for Investment by Qualified Foreign Investors in Rupee Denominated Units of Domestic Mutual Funds – Revision - Cir. No. 66 Dated: January 13, 2012
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FEMA 1999: Key Updates on Export Regulations and Forwarder's Cargo Receipt from Circular No. 65 for Compliance.
Circulars : Foreign Exchange Management Act, 1999 – Export of Goods and Services - Forwarder’s Cargo Receipt . - Cir. No. 65 Dated: January 12, 2012
Indian Laws
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Secondary Packaging for Transport Not a 'Wholesale Package' u/r 2(x) Regulations.
Case-Laws - SC : Secondary outer packing for transportation or for safety of the goods being transported or delivered cannot be described as a wholesale package within the definition of the expression 'wholesale package' under Rule 2(x) of the Rules.. .... - SC
Service Tax
-
Service Tax Not Applicable on PAN Card Issuance Services; Not Classified as 'Business Auxiliary Service'.
Case-Laws - AT : Demand of service tax in respect of services rendered for issue of PAN Cards on behalf of the Income Tax department under the category 'Business auxiliary service' - Activities are not taxable... - AT
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Income Discrepancy: Balance Sheet vs. ST-3 Returns; Case Remanded for Fresh Review by Adjudicating Authority.
Case-Laws - AT : The balance sheet figures are the income figures on accrual basis while the figures shown in ST-3 return were of actual receipt of payment. - Matter remanded back to adjudicating authority to reconsider the issue afresh..... - AT
Central Excise
-
India-Nepal Trade Treaty Revised: Enhances Bilateral Trade, Updates Excise and Tax Rules per Circular No. 958/1/2012-CX.
Circulars : Revised Treaty of Trade between India and Nepal. - Cir. No. 958/1/2012-CX Dated: January 13, 2012
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SSI Exemption Limit Not Extendable Separately to Each Partner or Multiple Firms by Same Individual.
Case-Laws - AT : SSI exemption - There is no question of extending separate SSI exemption limit to each partner of a firm or to different firms being run by the same person especially in a situation where goods are manufactured by one firm and sold in the name of different firms..... - AT
Case Laws:
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Income Tax
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2012 (1) TMI 12
Deduction u/s 80IC – Quantum of deduction u/s 80IC – new industrial undertaking set up by the assessee in the A.Y. 2005-06 at Dehradun – various documents placed by assessee to prove the existence of Dehradun unit/undertaking - Held that:- In view of the factual findings recorded by the CIT (A), affirmed by the Tribunal, and non-placement of any contrary material or documents by Revenue, there is no reason to interfere with the order of allowing deduction u/s 80IC to assessee. - Decided against the Revenue. The assessee may be eligible u/s 80 IC but the quantum of deduction is an incidental but an important aspect which must be considered and examined even though no question has been raised by the appellant on this aspect. The Tribunal did not examine the question of quantum of deduction inspite of the factual matrix referred to and stated in the assessment order. Therefore, the matter is remitted to the Tribunal to decide afresh the quantum of deduction u/s 80IC. - Decided in favor of revenue.
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2012 (1) TMI 10
Levy of interest u/s 220(2) - requirement of notice – Held that:- (a) fresh notices of demand need not be issued every time the total income undergoes a change due to appellate or revisional orders - (b) a case where the assessee has paid the full amount of tax demanded by the AO pursuant to the assessment order stands on a different footing from a case where such demand was not satisfied in full and different considerations shall apply to such a case; (c) the original demand made by the AO on the basis of the assessment order is merely kept in abeyance or suspension during the entire proceedings by way of appeal or revision taken against the assessment and gets revived from inception once the assessment gets finally confirmed in those proceedings; (d) when the assessment order is finally affirmed, the doctrine of merger also applies and interest being compensatory in nature, the revenue is entitled to charge the same from the date of the original order which merged with the final appellate order; (e) as a corollary to the above, it follows that where an assessment is restored and the original demand gets revived from inception, the assessee is liable to pay interest u/s.220(2) of the Act from that date on the unpaid amount and any variation in the amount of the demand favourable to the assessee which was directed by any of the appellate authorities in the interregnum has no effect on the liability of the assessee to pay the interest.
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2012 (1) TMI 9
Indo French DTAA - foreign company s business of operations of ships in international traffic carried out through agents s fixed place in India question of existence of a Permanent Establishment Dependent Agent Permanent Establishment(DAPE) or independent agent - Article 5, 7 9 of Indo French DTAA - determination of profits attributable to PE Relief under article 9 levy of interest u/s 234B - Held that:- Permanent establishment in the present case will be governed by Article 5(5) read with Article 5(6) of Indo French DTAA. Since there are no findings by the A.O., or the DRP, to the effect that the transactions between the agent and the assessee are not at an arm s length price, the agent is treated to be an independent agent in view of the provisions of Article 5(6). Such a finding by the revenue is a sine qua non for existence of DAPE. Thus, it is held that the assessee did not have any PE in India. Having held that the PE did not exist on the facts of this case, it is not really necessary to deal with profit attribution in the case of PEs. With respect to relief under Article 9 in respect of freight earnings it is held that the issue is covered against the assessee by a coordinate bench s decision in assessee s own case for the assessment year 2001-02 therefore, the assessee may take up the issue before Hon ble Courts. Levy of interest under section 234 B A.O. is directed to grant necessary relief. - Decided partly in favor of assessee.
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2011 (12) TMI 154
Interest u/s 234B – advance tax not paid - entire income subject to TDS - Held that:- Assessee had no liability to pay advance tax in view of the fact that his entire income was subject to tax at source. Thus, no interest is chargeable u/s 234B. This issue also stands concluded in Director of Income-Tax Vs. Jacab Civil Incorporated (2010 - TMI - 78020 - Delhi High Court). Hence, no substantial question of law arises in these appeals which are accordingly dismissed.
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