TMI Tax Updates - e-Newsletter
January 27, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Service Tax
Indian Laws
Articles
By: Dr. Sanjiv Agarwal
Summary: The Finance Act, 2007 introduced a service tax on the development and supply of content services, effective from June 1, 2007. This tax applies to services related to mobile value-added services, music, movie clips, ringtones, wallpapers, mobile games, data, information, news, and animation films. The tax is levied when these services are used in telecommunications, advertising, or online information and database access services. The definition of content is broad, encompassing various forms of data and information. Exemptions exist, such as for digitized cinema content delivered electronically. The service provider is responsible for paying this tax.
News
Summary: The Lok Sabha Speaker highlighted the importance of balancing economic growth with equity and inclusiveness during the Golden Jubilee Celebrations of the Indian Economic Service (IES). Despite economic advancements, India's Human Development Index ranking remains low, presenting a major challenge. The Speaker called for real-time policy coordination for sustainable growth. The event featured lectures and the release of two books on India's economic progress and development policies. The IES's role in policy formulation and economic analysis was emphasized, with a focus on continuous learning. The celebrations, marking 50 years of IES, included various events and publications to reflect on India's economic journey.
Summary: The Government of India has announced the Presidential Awards for officers of the Customs and Central Excise Department and the Directorate of Enforcement. These awards honor 35 officers for their exceptional and meritorious service, often rendered at personal risk. The awards recognize sustained excellence and dedication in fulfilling organizational goals. The recipients include officers across various roles such as additional commissioners, superintendents, intelligence officers, and others from different regions and units. The awards are traditionally announced on the eve of Republic Day to acknowledge their distinguished service records.
Summary: The Indian Customs tableau, titled "Guardians of Our Economic Frontiers," will be featured in the 2012 Republic Day Parade to commemorate the 50th anniversary of the Customs Act, 1962. The tableau highlights the crucial role of Indian Customs in revenue collection, international trade facilitation, and protection against smuggling of currency, endangered species, and narcotics. Present at airports, seaports, and land stations, the department ensures vigilant border security. Accompanied by a signature tune by composer Adesh Srivastava, the tableau symbolizes progress and coincides with the celebration of Customs Day on January 26.
Summary: The Ministry of Corporate Affairs in India has enhanced the MCA 21 system by integrating it with the Trade Mark Authority, allowing for easier verification of company names before seeking ROC approval. Additionally, the Ministry has implemented the XBRL reporting format for financial statements of certain companies starting from the fiscal year 2010-11. This initiative has led to a significant increase in filings, with over 21,500 companies submitting their financial statements in XBRL format, compared to 12,500 in the previous month. Training is being provided to regulators for examining these filings effectively.
Notifications
Customs
1.
11/2012 - dated
24-1-2012
-
ADD
Seeks to impose anti-dumping duty on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms, originating in, or exported from subject countries.
Summary: The Government of India has imposed an anti-dumping duty on imports of Geogrid, Geostrips, and Geostraps made of polyester or glass fiber from China. This decision follows findings that these imports were sold in India below normal value, causing material injury to the domestic industry. The duty, set at $0.55 per square meter, applies to goods originating in or exported from China and will be in effect for five years. The duty amount is payable in Indian currency, with the exchange rate determined by the date of the bill of entry presentation.
2.
10/2012 - dated
24-1-2012
-
ADD
Seeks to impose anti-dumping duty on import of Morpholine originating in, or exported from, China PR, European Union and the United States of America.
Summary: The Government of India has imposed definitive anti-dumping duties on the import of Morpholine from China, the European Union, and the United States. This decision follows findings that these imports were below normal value, causing material injury to the domestic industry. The duties, specified per kilogram in US dollars, vary based on the country of origin, export, producer, and exporter. These duties will be in effect for five years from September 20, 2011, and are payable in Indian currency. The applicable exchange rate will be determined by notifications issued by the Ministry of Finance.
3.
09/2012 - dated
24-1-2012
-
ADD
Rescinds Notification No. 91/2011-Customs, dated the 20th September, 2011.
Summary: The Government of India, through the Ministry of Finance, has issued Notification No. 09/2012-Customs (ADD) on January 24, 2012, which rescinds the previous Notification No. 91/2011-Customs dated September 20, 2011. This new notification imposes an anti-dumping duty on Morpholine imported from China, the European Union, and the United States for six months. The action is taken under the authority of the Customs Tariff Act, 1975, and the related anti-dumping rules, aiming to address dumping practices and potential injury to domestic industries.
4.
07/2012 - dated
24-1-2012
-
Cus (NT)
Grant of Presidential Awards of Appreciation Certificate on the occasion of Republic Day-2012
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has issued Notification No. 7/2012 on January 24, 2012, announcing Presidential Awards of Appreciation Certificates. These awards recognize officers from the Customs & Central Excise Department and the Directorate of Enforcement for their "specially distinguished record of service" on Republic Day 2012. The recipients include individuals holding positions such as Additional Commissioners, Joint Directors, Superintendents, Intelligence Officers, Inspectors, and others across various regions and departments. The awards are granted under a specific scheme outlined in the Gazette of India, with amendments over time.
Income Tax
5.
139/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure "Creating and Upgradation of infrastructure facilities for advanced treatment for Cancer and Cardiac patients with an element of accessibility and affordability of the underprivileged, Charutar Arogya Mandal, Gujarat
Summary: The Central Government has extended the eligibility of a project by Charutar Arogya Mandal in Gujarat under Section 35AC of the Income Tax Act, 1961. This project involves creating and upgrading infrastructure for advanced cancer and cardiac treatment, focusing on accessibility and affordability for the underprivileged. Initially approved for three years from the financial year 2008-09, it has now been extended for an additional three years, covering 2011-12 to 2013-14, with no change in the approved cost of Rs. 49.66 crore. The extension follows a recommendation by the National Committee for Promotion of Social and Economic Welfare.
6.
138/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - Notified eligible projects or schemes - Society for Education of the Crippled (Child & Adult), Bombay
Summary: The Central Government has extended the eligibility of a project under Section 35AC of the Income-tax Act, 1961, for the Society for Education of the Crippled in Bombay. This project involves furnishing and running centers for independent living and schools for the education of the disabled. Initially notified in 1994, the project has been extended multiple times, with the latest extension covering the financial years 2012-13 to 2014-15. The approved cost remains at Rs. 175.00 lakhs. The National Committee for Promotion of Social and Economic Welfare recommended this extension due to the project's satisfactory execution.
7.
137/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Sevalaya Primary School Building Project" by Sevalaya, Sevalaya Campus, Kasuva Village, Pakkam
Summary: The Central Government has extended the eligibility of the "Sevalaya Primary School Building Project" as an approved project under Section 35AC of the Income-tax Act, 1961. Initially recognized for three years starting in the financial year 2009-10, the project has been extended for an additional three years from 2012-13 to 2014-15. The project, managed by an organization at Sevalaya Campus, Kasuva Village, has an approved cost of Rs. 3.63 crore, including a corpus fund of Rs. 3.00 crore. This extension follows a recommendation by the National Committee for Promotion of Social and Economic Welfare.
8.
136/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Sevalaya old age home project" by Sevalaya, Sevalaya Campus, Kasuva Village, Pakkam Sevalaya, Thiruninravur
Summary: The Central Government has extended the eligibility of the "Sevalaya old age home project" under section 35AC of the Income-tax Act, 1961. Initially recognized in 2009 for three years, the project is now approved for an additional three years starting from the financial year 2012-13. This decision follows a recommendation by the National Committee for Promotion of Social and Economic Welfare, confirming the project's proper execution. The approved cost remains at Rs. 1.15 crore, including a corpus of Rs. 95 lakh and recurring expenditure of Rs. 19.86 lakh.
9.
135/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Tribal Development" by Seva Mandal Meghraj, AT & PO Kasana, Tal Meghraj, District Sabarkantha, Gujarat,, Gujarat
Summary: The Central Government has extended the eligibility of the "Tribal Development" project by an organization in Gujarat under Section 35AC of the Income-tax Act, 1961. Initially approved for three years starting from the financial year 2008-09, the project has been deemed to continue beyond this period. Following a recommendation from the National Committee for Promotion of Social and Economic Welfare, the project is now approved for an additional three years, covering 2011-12, 2012-13, and 2013-14, with no change in the approved cost of Rs. 2.76 crore.
10.
134/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Running of Polio Hospital, Rehabilitation and Research Centre at Hiran Magri, Sector-4, Udaipur, Rajasthan" by Narayan Seva Sanstha, Rajasthan
Summary: The Central Government has extended the eligibility of the project "Running of Polio Hospital, Rehabilitation and Research Centre" in Udaipur, Rajasthan, managed by Narayan Seva Sanstha, for tax benefits under Section 35AC of the Income-tax Act, 1961. Initially notified in 1997, the project has undergone several extensions, with the latest extension covering the financial years 2012-13 to 2014-15. The approved cost remains Rs. 64.28 crore, including a corpus fund of Rs. 2 crore. The project has been recognized for its proper execution and is expected to continue beyond fifteen years.
11.
133/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Expansion Project - purchase of equipments for increasing number of free eye surgeries and running of Hospital at Village - Ognaj, Ahmedabad, Gujarat" by Lions Club of Karnavati Foundation, Ahmedabad
Summary: The Central Government has extended the eligibility of the "Expansion Project" by an organization in Ahmedabad, Gujarat, under Section 35AC of the Income-tax Act, 1961. This project involves purchasing equipment to increase free eye surgeries and manage a hospital in Village Ognaj. Initially recognized as eligible from the assessment year 2001-02 and extended several times, it will now continue for three more years starting from the financial year 2012-13. The approved project cost remains at Rs. 437.50 lakh, including a corpus fund of Rs. 150.00 lakh, as recommended by the National Committee for Promotion of Social and Economic Welfare.
12.
132/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Brahmrishi Doodhadhari Burfani International Medical and Research Centre" by Shree Raghvendra Sewashram Samiti, Doodhadhari Ashram, Haridwar
Summary: The Central Government has extended the eligibility of the "Brahmrishi Doodhadhari Burfani International Medical and Research Centre" project by Shree Raghvendra Sewashram Samiti, located in Haridwar, under section 35AC of the Income-tax Act, 1961. Initially notified in 2008 for three years, the project is now approved for an additional three years starting from the 2011-12 financial year. The National Committee for Promotion of Social and Economic Welfare recommended this extension, confirming the project's proper execution. The approved cost remains Rs. 49.17 crore.
13.
131/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Free Eye surgeries and running of hospital" by Medical Research Foundation, Chennai
Summary: The Central Government has extended the eligibility of the "Free Eye Surgeries and Running of Hospital" project by a medical foundation in Chennai under Section 35AC of the Income Tax Act, 1961, for another three years starting from the financial year 2012-13. Initially recognized in 2004 and extended in 2006 and 2009, the project is deemed to be executed properly by the National Committee for Promotion of Social and Economic Welfare. The project cost is amended from Rs. 32.70 crore to Rs. 68.07 crore, with the corpus fund increased from Rs. 28 crore to Rs. 52 crore.
14.
130/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Natural Resource Management-Model Watershed Management & Afforestation programme and allied agricultural support for rural development" by Krishi Gram Vikas Kendra, Rukka- Neori Vikas,
Summary: The Central Government, under section 35AC of the Income-tax Act, 1961, has extended the eligibility of the "Natural Resource Management-Model Watershed Management & Afforestation programme and allied agricultural support for rural development" project by Krishi Gram Vikas Kendra in Jharkhand. Initially approved for three years starting in the financial year 2008-09, the project will continue for an additional three years from 2011-12 to 2013-14, with no change in the approved cost of Rs. 7.87 crore. This extension follows a recommendation by the National Committee for Promotion of Social and Economic Welfare.
15.
129/2011 - dated
27-12-2011
-
IT
Under Section 35AC, of the Income-tax Act, 1961 - Eligible projects or schemes, expenditure on - Amar Jyoti Charitable Trust, New Delhi.
Summary: The Central Government has extended the eligibility of a project by a charitable trust under Section 35AC of the Income-tax Act, 1961. This project, managed by a charitable organization in New Delhi, involves constructing buildings, purchasing library books, and providing equipment and resources for the rehabilitation of persons with disabilities. Initially approved in 2001, the project has been extended multiple times and is now set to continue beyond nine years. The project's cost has been amended from Rs. 225.84 lakh to Rs. 1550 lakh, reflecting its expansion and continued execution.
16.
128/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Land development, construction, equipments, furnishing and running of Sri Sathya Sai Heart Hospital at Rajkot, Gujarat", by Prashanti Medical Services and Research Foundation, Rajkot
Summary: The Central Government has extended the eligibility of the project "Land development, construction, equipments, furnishing and running of Sri Sathya Sai Heart Hospital at Rajkot, Gujarat" by Prashanti Medical Services and Research Foundation as an eligible project under Section 35AC of the Income-tax Act, 1961. Initially approved for three years starting from the assessment year 1997-98, the project has received multiple extensions. The latest extension allows the project to continue for three more years, covering the financial years 2011-12, 2012-13, and 2013-14, with an approved cost of Rs. 889.16 lakh, including a corpus fund of Rs. 700.00 lakh.
17.
127/2011 - dated
27-12-2011
-
IT
Under Section 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Welfare programmes in the field of Health, education, environment etc." by SNS Foundation, 1, Sri Aurobindo Marg, New Delhi
Summary: The notification under Section 35AC of the Income Tax Act, 1961, concerns the SNS Foundation's welfare programs in health, education, and environment in New Delhi. Initially notified in 2004 for three years, the project's eligibility was extended twice, with the estimated cost rising from Rs. 810 lakh to Rs. 20 crore over time. The National Committee for Promotion of Social and Economic Welfare recommended this increase, acknowledging the project's effective execution. The Central Government has now amended the notification to reflect the updated project cost, allowing for deductions under the Income Tax Act.
18.
126/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Running of free medical services by Dardi Sahayak Trust at whole of Gujarat" by Smt. Ushaben Rasiklal Shaw Digvijay Lion Dardi Sahayak Trust. Ahmedabad
Summary: The Central Government has extended the eligibility of the "Running of free medical services by Dardi Sahayak Trust" in Gujarat as an eligible project under section 35AC of the Income-tax Act, 1961. Initially notified in 2001, the project has received multiple extensions, with the latest covering the financial years 2012-13 to 2014-15. The estimated project cost has increased from Rs. 102 lakh to Rs. 171 lakh, including a corpus fund of Rs. 15 lakh. This extension follows the National Committee's recommendation, confirming the project's proper execution and need for continued support.
19.
125/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Construction of a school building and running of SOS Children's Village at Tambaram East, Chennai, Tamilnadu" by SOS Children Villages of India-Chatnath Homew, Chennai,
Summary: The Central Government has extended the eligibility of the project "Construction of a school building and running of SOS Children's Village at Tambaram East, Chennai, Tamilnadu" by SOS Children Villages of India-Chatnath Homes for three more years, covering the financial years 2012-13 to 2014-15, under Section 35AC of the Income-tax Act, 1961. The project cost has been revised from Rs. 150.00 lakh to Rs. 175.00 lakh. The extension is based on recommendations from the National Committee for Promotion of Social and Economic Welfare, acknowledging the project's proper execution.
20.
124/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on "Comprehensive rehabilitation, medical & human resource development services for the blind and disabled" by Blind People's Association, Jagdish Chowk, Surdas Marg, Vastrapur, Ahmedabad
Summary: The Central Government has extended the eligibility of the project "Comprehensive rehabilitation, medical & human resource development services for the blind and disabled" by a specified association in Ahmedabad under Section 35AC of the Income Tax Act, 1961. Initially approved for three years starting in 2005, and extended in 2008, the project is further extended for three years beginning in the financial year 2011-12. The project cost, previously increased from Rs. 2.5 crore to Rs. 6 crore, is now amended to Rs. 11 crore. The extension is based on the National Committee's recommendation, confirming the project's proper execution.
21.
123/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Supporting the Leprosy Mission Hospitals" by The Leprosy Mission Trust India New Delhi
Summary: The Central Government has issued a notification under Section 35AC of the Income Tax Act, 1961, regarding the project "Supporting the Leprosy Mission Hospitals" by The Leprosy Mission Trust India, based in New Delhi. Initially notified in 1996, the project's eligibility for tax deductions has been extended multiple times, with the latest extension adjusting the maximum allowable deduction from Rs. 62 lakh to Rs. 5 crore. The National Committee for the Promotion of Social and Economic Welfare has confirmed the project's proper execution and recommended this amendment.
22.
122/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - "Rural Drinking Water hand pump project" - Hindvi Swarajya Pratistan, Kile Rajgad, At/p. - Chirmodi, Tal Velhe, District Pune, State Maharashtra,
Summary: The Central Government has extended the "Rural Drinking Water hand pump project" by Hindvi Swarajya Pratistan in Maharashtra as an eligible project under Section 35AC of the Income-tax Act, 1961. Initially notified for three years starting from the financial year 2007-08, the project is now extended for another three years covering 2010-11, 2011-12, and 2012-13. The approved project cost remains at Rs. 1.40 crore. However, no tax exemption certificates will be issued for the financial year 2010-11 as it has already passed.
23.
121/2011 - dated
27-12-2011
-
IT
U/s. 35AC, IT Act, 1961 - Eligible projects or schemes, expenditure on - Deepak Charitable Trust, Baroda
Summary: The Central Government has extended the "Safe Motherhood and Child Survival Project" by a charitable trust in Baroda as an eligible project under section 35AC of the Income-tax Act, 1961. Initially notified in 2004 and subsequently extended in 2007 and 2009, the project is now approved for an additional year starting with the financial year 2012-13. The project continues with an approved cost of Rs. 24.96 crore, following a recommendation from the National Committee for Promotion of Social and Economic Welfare, confirming its proper execution.
24.
120/2011 - dated
27-12-2011
-
IT
U/s 35AC, - Eligible projects or schemes, expenditure on - Notified eligible projects or schemes - Sankara Eye Hospital, Chennai
Summary: The Central Government has extended the eligibility of the project "Kannoli - Vision Saver" by Sankara Eye Hospital in Chennai under section 35AC of the Income-tax Act, 1961. Initially notified in October 2008 for three years, the project is now approved for an additional three years from the financial year 2011-12 to 2013-14. The project will continue with an approved cost of Rs. 12.25 crore, including a corpus fund of Rs. 10 crore, as recommended by the National Committee for Promotion of Social and Economic Welfare.
Circulars / Instructions / Orders
Service Tax
1.
F. No.I/ST-1/HQ/ACES/CFC/2011 - dated
18-1-2012
Calling of Tender for Digitization of Manually filed Service Tax Returns pertaining to Service Tax-I, Mumbai Commissionerate
Summary: The Service Tax-I, Mumbai Commissionerate is seeking tenders from experienced service providers for digitizing manually filed service tax returns. The task involves capturing specific data fields from ST-3/ST-3A returns into Excel format, with the data to be submitted on CD. Approximately 30,000 returns need processing, and tenders may be awarded to multiple providers based on location and workload. Bidders must submit separate technical and financial bids, and the lowest financial bid among technically competent providers will typically be accepted. The deadline for tender submission is February 8, 2012, with results announced the same day.
2.
8/ 2011 - dated
3-11-2011
Renting of immovable property service - Civil Appeal on "Renting/leasing of immovable property"
Summary: The Supreme Court addressed a civil appeal concerning the service tax on renting or leasing immovable property, following a Bombay High Court decision upholding the tax provisions under the Finance Act. The Court ordered members of a retail association to pay 50% of the tax arrears in installments and provide a solvent surety for the remaining amount. Members must submit affidavits agreeing to pay any remaining taxes as directed by the Court. Petitioners are required to provide detailed payment information and a solvency certificate or bank guarantee to comply with the order.
3.
08 /2011 - dated
1-11-2011
Issuance of ST-2 Registration Certificate-reg.
Summary: The circular from the Commissioner of Service Tax-I, Mumbai, addresses the procedure for issuing the ST-2 Registration Certificate. Officers are instructed to print, sign, and stamp the certificates at their office and send them by post. Assessees may opt to collect the certificate personally by indicating their preference in the ST-1 application. A new centralized registration system is being implemented, where one group of officers will handle registrations for all assessees in a division. The notice requests Service Tax Assessees and their Associations to publicize these changes among their members.
FEMA
4.
69 - dated
25-1-2012
External Commercial Borrowings – Simplification of procedure.
Summary: The circular addresses the simplification of procedures for External Commercial Borrowings (ECB) for Authorized Dealer Category-I banks. It delegates authority to these banks to approve requests for the cancellation of Loan Registration Numbers (LRN) and changes in the end-use of ECB proceeds under certain conditions. For cancellation of LRN, no drawdown should have occurred, and ECB-2 returns must be submitted. Changes in end-use are permissible if they comply with existing guidelines and no other terms change. These modifications are effective immediately, while other ECB policies remain unchanged. Banks are instructed to inform their clients of these changes.
5.
70 - dated
25-1-2012
External Commercial Borrowings (ECB) Policy – Infrastructure Finance Companies (IFCs).
Summary: The circular addresses the External Commercial Borrowings (ECB) policy for Infrastructure Finance Companies (IFCs). It highlights that Non-Banking Finance Companies (NBFCs) classified as IFCs may avail ECBs up to 50% of their owned funds via the automatic route, while amounts exceeding this require approval. The funds must be used for infrastructure lending, and currency risk must be fully hedged. Authorized Dealer Category-I banks must certify the leverage ratio for IFCs seeking approval for ECBs. Other ECB policy aspects remain unchanged, and banks should inform their clients of these directives under the Foreign Exchange Management Act, 1999.
Highlights / Catch Notes
Income Tax
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Court Rules Dual Benefits Allowed Under Voluntary Retirement Scheme and Income Tax Act Sections 10(10C) & 89.
Case-Laws - HC : There is no prohibition to the twin benefits in respect of the amount received under the Voluntary Retirement Scheme. The relief contemplated under Section 89 of the Act is aimed to mitigate the hardship that may be caused on account of the high incidence of tax due to progressive increase in tax rates and thus held that the benefits under Section 10 (10C) and 89 could be granted to the assessee.... - HC
-
Share Application Money Not a Deposit: Court Excludes Penalties u/s 271D of Income Tax Act.
Case-Laws - HC : Penalty u/s 271D – share application money can not be called deposit within the meaning of section 269 SS or 269 T of the Act .... - HC
-
Section 80IB: Deductions Apply to Projects Approved Before October 1998; Retroactive Application Leads to Absurd Outcomes.
Case-Laws - AT : Deductions under 80IB - Built up area - Projects approved in Oct 98 - The Section requires the assessee to build the project within this specified limit already approved when the amendment was not on the statute books, consequently, if the Section is interpreted to be applicable even to the existing projects, the same will lead to the absurdity and that is not the intention of the legislature because ultimately it will lead to a national loss..... - AT
-
A.O.'s attempt to apply Section 13(1)(c)(ii) fails; Exemptions u/ss 12A and 80G remain intact.
Case-Laws - HC : Exemption u/s 12A & 80G - A.O. has not been able to record any finding that the persons in control of the management of the three societies had, at any point of time, not less than 20% shares in the profits of such concern. This being the position, invocation of Section 13(1) (c) (ii) has to fail and is accordingly rejected. .... - HC
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Section 92CA Update: Assessing Officer Must Follow Transfer Pricing Officer's Order on Arm's Length Price, Not Transaction Occurrence.
Case-Laws - HC : Determination of transaction - statutory change to section 92CA - AO is now bound by the order of the TPO on the computation of the arm’s length price of an international transaction, the Assessing Officer is not and cannot be stated to be bound by the opinion of the TPO with respect to the question whether there had, in fact, been an international transaction between the assessee and the associated person during the period under consideration. .... - HC
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Section 115AD: Not Grounds for Penalties on Income Reporting Errors under DTAA for FIIs. Self-contained Code.
Case-Laws - AT : DTAA - Penalty - The fact that section 115AD is a code by itself applicable to FIIs cannot also be the basis to hold that the assessee furnished inaccurate particulars of income .... - AT
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Section 10B: Export Not Recognized if Sold Domestically Without Customs Clearance in India.
Case-Laws - HC : Meaning of Export for the purpose of ection 10B -There will be no export out of India if two conditions are cumulatively fulfilled, (a) it is a transaction by way of sale or otherwise in a shop, emporium or establishment situate in India, and (b) that it does not involve clearance in any customs station as defined in the Customs Act..... - HC
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Capital Gains Classification: Date of Acquisition Determines Long-Term or Short-Term Status for Tax Indexation Benefits.
Case-Laws - AT : LTCG or STCG - cost of land to the previous owner - Benefit of indexation - Assessing Officer has rightly taken 2-11-2004 as the date of acquisition of absolute ownership of the property ... - AT
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No TDS Required on Cable Transmission Payments Between Two Parties; Section 194C Applies From AY 2006-07 Onward.
Case-Laws - AT : Tax Deductible at Source - cable transmission - Where only two parties are involved than payment made by one to another cannot be refereed to be made to sub contractors and Individuals were included in purview of 194C from A/Y 06-07 only therefore no TDS is to be deducted on such payments.... - AT
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Deemed Dividends u/s 2(22)(e) Only Taxable for Shareholders, Not Non-Shareholders of Lending Company.
Case-Laws - AT : Deemed Dividend u/s 2(22)(e) - deemed dividend can be assessed only in the hands of a person who is a shareholder of the lender company and not in the hands of a person other than a shareholder..... - AT
Customs
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Court Upholds Customs Act Time-Limits for Drawback Claims; Authorities Must Adhere to Statutory Deadlines.
Case-Laws - CGOVT : Revision Application - Claim for drawback - time-limits - customs authorities who are creature of Customs Act, cannot be directed to ignore or act contrary to the boundations of time-limits as provided in the statute.... - CGOVT
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Anti-Dumping Duty Proposed on Polyester or Glass Fiber Geogrid Imports to Protect Domestic Industries from Unfair Competition.
Notifications : Seeks to impose anti-dumping duty on import of Geogrid/Geostrips/ Geostraps made of polyester or Glass fiber in all its forms, originating in, or exported from subject countries. - Ntf. No. 11 /2012-Customs (ADD) Dated: January 24, 2012
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Anti-Dumping Duty Imposed on Morpholine Imports from China, EU, and US to Protect Domestic Industries.
Notifications : Seeks to impose anti-dumping duty on import of Morpholine originating in, or exported from, China PR, European Union and the United States of America. - Ntf. No. 10 /2012-Customs (ADD) Dated: January 24, 2012
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Notification No. 09/2012-Customs cancels Notification No. 91/2011-Customs, updating customs regulations and tax-related notifications.
Notifications : Rescinds Notification No. 91/2011-Customs, dated the 20th September, 2011. - Ntf. No. 09 / 2012-Customs (ADD) Dated: January 24, 2012
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Presidential Awards of Appreciation Certificates Announced on Republic Day 2012 in Notification No. 07/2012(N.T.
Notifications : Grant of Presidential Awards of Appreciation Certificate on the occasion of Republic Day-2012 - Ntf. No. 07/2012(N.T) Dated: January 24, 2012
FEMA
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ECBs Procedure Simplified Under Circular No. 69 to Boost Access to International Finance for Businesses Under FEMA.
Circulars : External Commercial Borrowings – Simplification of procedure. - Cir. No. 69 Dated: January 25, 2012
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ECB Guidelines for IFCs: Access Foreign Capital for Infrastructure Under Circular No. 70, Comply with FEMA Rules.
Circulars : External Commercial Borrowings (ECB) Policy – Infrastructure Finance Companies (IFCs). - Cir. No. 70 Dated: January 25, 2012
Service Tax
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Rental of Guest House and Garden for Weddings Classified as Mandap Keeper Service Due to Social Function Designation.
Case-Laws - AT : Guest house & garden given on rent for marriage functions - temporary occupation of guest house & garden was being allowed to the customers along with other facilities for organising marriage functions. Since marriage function is a social function thus, the appellant's activity was classifiable as service provided by Mandap keeper. .... - AT
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Rebates in Service Tax Require Declaration Before Export Completion; Late Claims Not Admissible Under Procedure.
Case-Laws - AT : Filing of declaration and claiming rebate after the completion of export of service for which rebate had been claimed - the rebate would not be admissible.... - AT
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Business Auxiliary Services Exported Abroad: No Duty or Registration Required u/r 5 and Notification No. 12/2005.
Case-Laws - AT : Where appellant provided Business Auxiliary Services only to their clients abroad and their output services were being exclusively exported, they were not required to pay any duty Thus not required to obtain any registration Further rule 5 of export Rules or Notification No. 12/2005 do not mandate any registration..... - AT
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Company Denied 80% Rebate Within 15 Days Due to Pending Offense Under Board's Circular No. 828/5/2006-CX.
Case-Laws - HC : Simplified procedure for sanction of refund/rebate of unutilised credit/rebate claims in cases of export - denial of benefit of sanction of 80% of the rebate amount within 15 days as per Board's Circular No. 828/5/2006-CX dated 20.4.2006 on the ground that an offence has been booked against the company.... - HC
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Cheque and Cash Deposits Excluded from 'Business Auxiliary Service' for Service Tax Purposes.
Case-Laws - AT : Scope of Business Auxiliary Service - mere deposit of cheque or cash in the client's account is not covered under the 'Business Auxiliary Service'..... - AT
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Understanding Rule 4: Steps and Documents Needed for Centralized Service Tax Registration per Circular No. 3/2011-12-ST.
Circulars : Read with rule 4 of the Service Tax Rules, 1994 - Registration - Procedure and documents required in respect of Centralised registrations - Cir. No. 3/2011-12-ST, Dated: October 21, 2005
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Court Reviews Service Tax Duties on Property Rentals; Circular No. 8/2011 Shapes Legal Interpretation and Updates.
Circulars : Renting of immovable property service - Civil Appeal on “Renting/leasing of immovable property“ - Cir. No. 8/ 2011 Dated: November 3, 2011
Central Excise
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Refunds Must Follow Section 11B of Central Excise Act; Departmental Approval Required, No Suo Motu Claims Allowed.
Case-Laws - AT : Suo motu credit or refund without sanction - all types of refund have to be filed under Section 11B of the Central Excise Act and no suo motu refund can be taken unless and until the department is satisfied that the incidence of duty has not been passed on. .... - AT
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Dealers Not Liable for Excise Duty Collection u/s 11D, Only Manufacturers Are Responsible for Petroleum Product Rates.
Case-Laws - SC : Collection of Excise duty from the customers, on account of fluctuation in rates of the petroleum products on the stocks lying at various depots - assessee being only a “dealer” and not a “manufacturer” - Demand u/s 11D can not be made.... - SC
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Goods from DTA to SEZ are exports; Rule 6(3) Cenvat Credit Rules 2004 inapplicable. No credit reversal needed.
Case-Laws - AT : Goods removed from DTA to SEZ - Export - Cenvat credit - Rule 6(3) of CCR 2004 not applicable... - AT
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Acid oil from soap stock by-product in refined oil manufacturing not covered under Cenvat Credit Rule 6(2).
Case-Laws - AT : Common Input - Cenvat Credit - Appellants manufacturing the refined oil and hydrogenised vanaspati - By products soap stock arises - acid oil manufactured out of such waste would definitely be not covered by the provisions of Rule 6(2). .... - AT
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CENVAT Credit Allowed for Reprocessing Returned Goods: Fresh Products from Remelted Materials Qualify for Duty Credit.
Case-Laws - AT : CENVAT credit on own final product returned by buyers – returned goods were remelted by using same machinery and fresh products emerged – credit of duty allowed u/s 16.... - AT
Case Laws:
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Income Tax
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2012 (1) TMI 82
Business expenditure - dis-allowance of travelling expenses, lease hold expenses, investment allowance, part of foreign travelling expenses – Held that:- Since assessee has not pressed before Tribunal the matter of dis-allowance of travelling expenses, lease hold expenses and investment allowance hence, this question does not arise for adjudication in the present appeal. Further, Tribunal has not found any good ground to interfere in such part dis-allowance of foreign travelling expenses and appellant could not persuade us to take a contrary view. Therefore, appeal is dismissed.
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2012 (1) TMI 81
Best judgement assessment – Lower G.P. Rate in comparison to last A.Y. - assessee contesting estimation of G.P. Rate based on previous records and G.P. of last year – Held that:- In the instant case, the addition is made on the estimate basis, which is a question of fact as laid down in the case of Utkal Road Lines vs. Registrar, Income Tax Appellate Tribunal (2009 - TMI - 206552 - Orissa High Court). The Tribunal is a final fact finding authority and has already given the partial relief. No substantial question of law is emerging from the impugned order – Decided against the assessee.
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2012 (1) TMI 80
Penalty u/s 271D – Proceedings u/s 269 SS initiated on finding during search that assessee had received money exceeding Rs. 20,000/- in cash from 46 persons – assessee contending it to be share application money – Held that:- It is on record that the CIT (Appeals) had held the entire amount in dispute related to the share application money and was treated as having been fully explained. This Court has already held that share application money can not be called deposit within the meaning of section 269 SS or 269 T of the Act and, therefore, in our considered opinion, the Tribunal had rightly upheld the order of the CIT (Appeals) deleting the penalty – Decided in favor of assessee.
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2012 (1) TMI 77
Society registered u/s 12A & 80G - pledged FDRs with a bank to enable some other societies to obtain loan from a bank – few members of the management committee of the respondent society and other two societies are common – Revenue contending violation of Section 13(1)(c)(ii) read with Section 13(3) and Explanation 3 (ii) – non-utilization of grant received fully – Held that:- A.O. has not been able to record any finding that the persons in control of the management of the three societies had, at any point of time, not less than 20% shares in the profits of such concern. This being the position, invocation of Section 13(1) (c) (ii) has to fail and is accordingly rejected. Grants were received for specific purposes/projects from the government, non-government, foreign institutions etc. In case of specific tied up grants, money is received for specific purposes and is to be utilized for the same. Unutilized amount has to be refunded back to the funding agencies. On the basis of the evidences placed on record, it is seen that the appellant is not free to use the funds voluntarily as per its will and, thus, these are not voluntary contribution as per Section 12 of the Act - Decided against the Revenue
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2012 (1) TMI 76
Revisionary powers of Commissioner u/s 263 - DTAAs with Canada and Thailand - Tribunal set aside the revisional orders of the Commissioner remanding matter to the A.O. to rework the credit in respect of Canadian and Thailand Tax claimed under Double Taxation Avoidance Agreement - Held that:- It is the duty of the assessing authority to support every conclusion and finding by it with reasons and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the revenue and therefore while the commissioner was justified in exercising the jurisdiction u/s 263, the tribunal was definitely not justified in interfering with this order of the commissioner in its appellate jurisdiction - Decided against the assessee. Reduction in tax relief on recomputation by A.O. - subject matter of appeal before Tribunal – Held that:- Tribunal had not examined the appeals of the assessee on its merits, but had simply allowed the appeals based on the premise that the revisional orders of the commissioner had been set aside by it and the revisional orders having now been restored by us in terms of the judgment in the above two appeals, the matter again has to necessarily go back to the tribunal - Decided in favor of Revenue.
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2012 (1) TMI 73
Relief u/s 89(1) - ex-gratia payment received under VRS scheme – Revenue allowed exemption u/s 10(10C) but denied relief u/s 89(1) – Held that:- Similiar controversy is settled by the two Division Bench decisions of this Court in case of CIT vs Harendra Natah Tripathi and CIT vs Subhash Chand Goyal [2010 (7) TMI 754 - ALLAHABAD HIGH COURT] and their being no decision to the contrary. Relief u/s 89(1) is also admissible in such a case. Present appeal does not raise any question of law which requires to be decided by this Court – Decided in favor of assessee.
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2012 (1) TMI 72
Validity of reopening of assessments - unexplained credits – amount received from company(entry provider) – assessee contending the amount to be share application money and discrediting the reasons recorded for reopening the assessment - information received by the A.O. from DIT (Inv.), who was in charge of the investigation into groups that operate as entry providers or entry operators - Held that:-Material present before the A.O. at the time of recording reasons for reopening the assessment did show a link between entry provider, with the petitioner herein together with date on which the entry was taken, the cheque or DD number, the name of the bank and branch and the account number. With such precise material before the A.O., the existence of which is beyond challenge, it can hardly be said that the A.O. could not have had even a prima facie belief that income chargeable to tax had escaped assessment in the hands of the assessee. - Decided against the assessee.
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Customs
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2012 (1) TMI 78
Writ petition filed to seek an order in the nature of mandamus commanding the respondents to release the containers to the petitioner - shipping company - 40 containers having 20,000 bags of MOP of Fertilizer Grade of customer seized by the Customs Authorities - petitioner is pressing for release of containers after unloading the goods contained therein - Additional Commissioner (Customs) vide order dated 11.10.2010 had asked the Container Corporation of India Ltd, Noida to keep seized goods in the warehous in safe custody and release the containers to the concerned shipping line – Held that:- Additional Commissioner (Customs) should take appropriate steps for keeping the seized goods in the safe custody and for releasing the 40 containers to the petitioner for which the Court thinks that period of one month would be reasonable as more than a year have passed since letter dated 11.10.2010. Further, release of containers should not be taken to mean that the petitioner has been absolved of its liability if any under the provisions of the Customs Act, 1962 or any other enactment, in case the authorities decide to take any action.
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2012 (1) TMI 70
Unlawful import of the gold - offences punishable u/s 135(1)(a) and 132 of the Customs Act – matter relates to year 1989 - petitioner has already undergone sentence for more than one month – Held that:- The instant case is of economic offence in the prospective. Therefore, while maintaining the conviction, the order dated 21.3.2003 is modified to the extent already undergone, accordingly he is released on the sentence already undergone. The criminal Revision Petition 1037/2003 is partially allowed, as prayed.
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Service Tax
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2012 (1) TMI 71
Plea for waiver of Pre-deposit – registered charitable society – Held that:- Having considered the matter in the light of the material on record, we are of the opinion that the ends of justice would be subserved if the appellant is directed to deposit 1/3rd of the demand raised against them towards the service tax. If the said deposit is made on or before 15th March, 2012, their appeal shall be heard by the Tribunal on merits.
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2012 (1) TMI 68
Simplified procedure for sanction of refund/rebate of unutilised credit/rebate claims in cases of export - denial of benefit of sanction of 80% of the rebate amount within 15 days as per Board's Circular No. 828/5/2006-CX dated 20.4.2006 on the ground that an offence has been booked against the company - show cause notice dated 21.10.2011 issued for payment of the Service Tax on 'Intellectual Property Services' received from foreign companies – Held that:- At this stage, we are not required to go into merits of the validity of the show cause notice, as proceedings of adjudication are still pending. Company has not been denied the rebate, it has only been disentitled to the benefit of the Board's Circular dated 20.4.2006. Rebate claims of the company will be processed or sanctioned as per provision of Section 11-B of the Central Excise Act, 1944. - Decided against the assessee.
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Indian Laws
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2012 (1) TMI 79
Benefit of Central Government Health Scheme(CGHS) - pensioner neither got his name registered with any of the dispensary in CGHS covered dispensaries nor paid the requisite contribution – writ petition decided in favor of pensioner for directing the appellant-employer to reimburse the medical expenses incurred by him - Held that:-Various judicial prouncements have held that -even if employee contributes after availing medical facilities, and becoming member after treatment, there is entitlement to reimbursement - even if membership under scheme not processed the retiree is entitled to benefits of Scheme - Full amounts incurred have to be paid by the employer - pensioner is entitled to full reimbursement so long the hospital remains in approved list - If medical treatment is availed, whether the employee is a cardholder or not is irrelevant and full reimbursement to be given. Thus, appeal is dismissed.
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