TMI Tax Updates - e-Newsletter
February 29, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Articles
By: DEVKUMAR KOTHARI
Summary: The article discusses the relevance of the donor's date of acquisition for calculating capital gains tax on property received as a gift. It highlights that, according to the Bombay and Delhi High Courts, the cost inflation index (CII) should be applied based on the date the previous owner acquired the property, not the date the donee received it. This interpretation ensures that the holding period of the previous owner is included, aligning with the intent to tax only the real gain after accounting for inflation. The courts emphasized that excluding the previous owner's holding period would lead to inconsistencies and contradict the purpose of the income tax provisions.
By: Dr. Sanjiv Agarwal
Summary: Underwriting involves a contractual agreement where an underwriter agrees to subscribe to securities if public subscription falls short, thereby mitigating the risk for companies issuing securities. According to the Securities and Exchange Board of India (SEBI) regulations, only certified underwriters can perform these services. Underwriters charge a commission, which is subject to service tax, for assuming this risk. The SEBI (Underwriters) Regulations, 1993, dictate the commission rates, which vary based on the type of underwriter and the risk involved. Lead managers who also perform underwriting are classified as underwriters for tax purposes.
News
Summary: India and Italy are enhancing their economic collaboration by liberalizing visa regimes and establishing joint working groups in key sectors such as infrastructure, manufacturing, and pharmaceuticals. The Indian Minister of Commerce has set a deadline for these groups to prepare recommendations for the upcoming India-Italy Joint Economic Commission meeting. Both nations plan to announce a Joint Business Forum and explore new working groups in tourism and agro-processing. Italy has committed to streamlining business visa processes, while India offers long-duration visas to Italian citizens. Trade between the countries has grown significantly, with notable increases in exports and imports across various sectors.
Summary: The Index of Eight Core Industries, which constitutes 37.90% of the Index of Industrial Production, showed a growth of 0.5% in January 2012, down from 6.4% in January 2011. From April 2011 to January 2012, the cumulative growth was 4.1%, compared to 5.7% in the previous year. Coal production grew by 7.5% in January 2012, while crude oil and natural gas saw declines of 2.0% and 8.9%, respectively. Petroleum refinery products decreased by 4.6%, and steel fell by 2.9%. Cement production increased by 10.6%, and electricity generation rose by 2.4%. Fertilizer production grew by 4.0%.
Summary: The 12th Assembly of the Asian Organisation of Supreme Audit Institutions (ASOSAI) will commence in Jaipur, inaugurated by the Governor of Rajasthan. The event will feature addresses from prominent figures including the Comptroller and Auditor General of India and the Chairman of INTOSAI. ASOSAI, part of the International Organisation of Supreme Audit Institutions, fosters cooperation among member institutions in public auditing. Since its inception in 1979 with 11 members, it has expanded to 45 Supreme Audit Institutions. The recent INTOSAI-Donor Steering Committee meeting highlighted India's role in capacity building for Supreme Audit Institutions.
Summary: The 12th Assembly of the Asian Organisation of Supreme Audit Institutions (ASOSAI) will be inaugurated in Jaipur by the Governor of Rajasthan. The event will feature key figures such as the Chief Minister of Rajasthan and representatives from INTOSAI and ASOSAI. ASOSAI, established in 1979, now includes 45 member institutions and focuses on promoting cooperation and knowledge exchange in public audit. The recent INTOSAI-Donor Steering Committee meeting highlighted the Comptroller and Auditor General of India's role in capacity building for Supreme Audit Institutions, showcasing its training infrastructure and bilateral projects.
Summary: India is committed to strengthening its relationship with Iraq, focusing on enhancing bilateral trade and economic cooperation. During a meeting between India's Commerce Minister and Iraq's Deputy Prime Minister, both nations agreed on the need to diversify trade beyond oil, exploring sectors like food, construction, IT, and pharmaceuticals. India is actively supporting Iraq's reconstruction efforts and providing educational and technical training opportunities. The countries aim to increase direct business interactions, with India issuing numerous medical visas to Iraqis, highlighting strong people-to-people ties. Bilateral trade has significantly grown, with India being a major importer of Iraqi oil and exporting various goods to Iraq.
Summary: The Government of India and the Asian Development Bank (ADB) signed a $50 million loan agreement to enhance electricity transmission and distribution in Assam. This is the final tranche of a $320.6 million investment program, with $200 million from ADB and $120.6 million from the Government of Assam. The program aims to improve the power sector by adding 430 MVA substation capacity and reducing system losses by 4%. It will modernize substations and introduce high voltage distribution systems, benefiting around 1 million households and businesses. The project is expected to be completed by June 30, 2014.
Summary: The Government of India and the Asian Development Bank (ADB) signed a $100 million loan agreement to develop a solar power transmission system in Gujarat, distributing 500 megawatts from the Charanka Solar Park. This project, under a public-private partnership model, aims to create jobs, improve social services, and reduce poverty. It supports Gujarat's power distribution companies in meeting clean energy goals. The initiative is part of India's broader effort to generate 20,000 MW of solar power by 2022 under the Jawaharlal Nehru National Solar Mission. Additional technical assistance will provide vocational training, benefiting local communities, with a focus on women.
Summary: India and the Asian Development Bank (ADB) have signed a $200 million loan agreement to enhance electricity supply in rural Madhya Pradesh. The initiative aims to provide 24-hour reliable power to over 2.6 million households, supporting the state's $1.1 billion feeder separation program. This will address issues like overloaded lines and high transmission losses by establishing separate feeders for agricultural and household use. The program also includes $1 million in technical assistance to train women entrepreneurs and $600,000 for meter reader training. The project, supported by $156 million from Madhya Pradesh and local companies, is set for completion by February 2015.
Summary: The Comptroller and Auditor General (CAG) of India and the Comptroller General of the United States, from the Government Accountability Office (GAO), met to discuss mutual cooperation and global interests. The US official praised the Indian CAG's efforts in training its officers and its global contributions, particularly in the INTOSAI Community and UN bodies. The Indian CAG offered its training facilities for international cooperation. The US Comptroller General explained the GAO's transition to a more accountable role and attended an INTOSAI Donor Steering Committee meeting in India, focusing on supporting capacity building in less developed audit institutions.
Notifications
Customs
1.
13/2012 - dated
27-2-2012
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Cus (NT)
Appointment of Common Adjudicating Authority
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has issued Notification No. 13/2012-Customs (N.T.) appointing a Joint Commissioner or Additional Commissioner of Customs from CFS, ICD, G.T. Road, Sahnewal, Ludhiana, as the common adjudicating authority. This authority will oversee adjudication for customs matters related to a Show Cause Notice issued to M/s A & N Impex, Ludhiana. The appointed official will exercise powers and duties for the Joint Commissioners of Customs at CFS Ludhiana, ICD Tughlakabad, and Nhava Sheva, as per the Customs Act, 1962.
2.
12/2012 - dated
27-2-2012
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Cus (NT)
Amends Notification No. 12/97 – Customs(N.T.) dated the 2nd April, 1997
Summary: The Government of India, through the Ministry of Finance's Department of Revenue, has issued Notification No. 12/2012 - Customs (N.T.) amending Notification No. 12/97-Customs (N.T.) dated April 2, 1997. This amendment involves the inclusion of Thimmapur Village, District Mahbubnagar, Andhra Pradesh, in the list of locations where the unloading of imported goods and the loading of export goods are permitted. This notification was published in the Gazette of India on February 27, 2012, under the authority of the Central Board of Excise and Customs.
DGFT
3.
100 (RE-2010) /2009-2014 - dated
28-2-2012
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FTP
Duty exemption on re-import of Cut & Polished Diamonds sent abroad for Certification/ Grading
Summary: The Government of India, through the Ministry of Commerce & Industry, has issued a notification allowing duty exemption on the re-import of cut and polished diamonds sent abroad for certification or grading. Authorized laboratories for this process include institutions in India, the USA, Japan, the UK, Belgium, and Dubai. Exporters with an annual turnover of at least Rs 5 crores over the past three years can export diamonds of 0.25 carat or more to these laboratories and re-import them duty-free within three months. This exemption follows the imposition of a 2% basic customs duty on diamond imports effective from January 16, 2012.
Income Tax
4.
F. 71-Ad(AT)/2012, - dated
7-2-2012
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IT
Income-tax (Appellate Tribunal) Rules, 1963 - Amendment in rules 2, 4A, 9, 26 & 34A; deletion of proviso to rule 35A and substitution of words 'Income Tax Officer' and "Appellate Assistant Commissioner"
Summary: The Income Tax Appellate Tribunal has amended the Income Tax (Appellate Tribunal) Rules, 1963, effective from their publication date in the official Gazette. Key changes include updates to definitions, such as replacing "Income Tax Officer" with "Assessing Officer," and "Appellate Assistant Commissioner" with "CIT(Appeals)." Rule 2 now specifies the appointment of authorized representatives by the Central Board of Direct Taxes and the Chief Commissioner of Income-tax. Amendments to Rules 4A, 9, 26, and 34A revise procedural aspects, including handling changes in party addresses, continuation of proceedings after a party's death or insolvency, and filing applications under section 254(2). The proviso to Rule 35A is deleted.
VAT - Delhi
5.
No. F.7(239)/P-I/05/VAT/2009/1275-1287 - dated
21-2-2012
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DVAT
Dena Bank Authorized for e-payment
Summary: The notification authorizes branches of Dena Bank in the National Capital Territory of Delhi to serve as government treasuries for depositing Value Added Tax (VAT) dues under the Delhi Value Added Tax Act, 2004. The bank must remit funds to the Reserve Bank of India within three days, with interest on delays. Tax collection must occur through online computerized counters, and the bank must comply with the Information Technology Act, 2000. All registered dealers and contractees must make VAT payments electronically via the bank's portal. The terms for e-payments from a previous notification also apply. The notification is effective immediately.
Circulars / Instructions / Orders
FEMA
1.
83 - dated
27-2-2012
Import of Gold on Loan Basis- Tenor of Loan and Opening of Stand - By Letter of Credit .
Summary: The circular addresses Category-I Authorized Dealer Banks regarding the import of gold on a loan basis. It updates the maximum tenor for gold loans to 270 days, aligning with the Foreign Trade Policy 2009-14, which includes 90 days for manufacturing and export and 180 days for price fixing and repayment. The Standby Letter of Credit (SBLC) tenor must match the gold loan tenor. Banks are instructed to comply with these terms and inform their clients. These directions are issued under the Foreign Exchange Management Act, 1999, and do not override any other necessary legal permissions.
DGFT
2.
54 (RE-2010)/2009-14 - dated
23-2-2012
Import of spares for the existing machinery procured indigenously under EPCG Scheme.
Summary: The circular from the Directorate General of Foreign Trade addresses the import of spares for machinery procured indigenously under the EPCG Scheme. It clarifies that spares can be imported under the EPCG Scheme for Capital Goods that were initially imported, regardless of whether the EPCG Scheme was used for the original import. However, for Capital Goods procured domestically by invalidating an EPCG Authorization, the import of spares under the EPCG Scheme is not permitted. This decision follows a review and has been approved by the Director General of Foreign Trade.
3.
53 (RE-2010)/2009-14 - dated
23-2-2012
Operationalisation of provisions of Para 5.11.2 of Hand Book of Procedure Vol.-1 (2009-14) [RE: 2010].
Summary: The circular issued by the Directorate General of Foreign Trade (DGFT) addresses the operationalization of Para 5.11.2 of the Hand Book of Procedure Vol.-1 (2009-14), which allows for the re-fixation of Annual Average Export Obligation when exports in any sector or product group decline by more than 5%. The circular provides a list of product groups that experienced such declines during 2010-11 compared to 2009-10. Regional Offices are instructed to adjust the export obligations for EPCG Authorizations accordingly. This is the fourth circular on this issue, following similar adjustments for previous years.
Highlights / Catch Notes
Income Tax
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Hotel Building Depreciation Permitted on Lease; License Fee Taxable as Business Income.
Case-Laws - HC : Depreciation on hotel building given on lease – Licence fee receivable taxable as business income - depreciation allowed - HC
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High Court Rules: Prior Year Losses Cannot Offset Undisclosed Income in Block Period u/s 32(2.
Case-Laws - HC : Block Assessment - Set off or carry forward of loss for p/y years from the undisclosed income determined during Search - It is clear that in computing the total income or loss of the Block period, the income or loss of each of the previous year has to be taken into consideration and computed in accordance with the provisions of the Act except set off or brought forward of loss under Section 32(2) of Act. - HC
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Income-tax Appellate Tribunal Rules 1963 amended: Updates to rules 2, 4A, 9, 26, 34A; rule 35A proviso deleted.
Notifications : Income-tax (Appellate Tribunal) Rules, 1963 - Amendment in rules 2, 4A, 9, 26 & 34A; deletion of proviso to rule 35A and substitution of words 'Income Tax Officer' and “Appellate Assistant Commissioner“ - Ntf. No. F. 71-Ad(AT)/2012, Dated: February 7, 2012
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Non-resident agent commissions taxable in India; TDS required as commission right arises upon order execution in India.
Case-Laws - AAR : Export commission payable to non-resident agents – No doubt the agents rendered services abroad and have solicited orders, but the right to receive the commission arises in India when the order is executed by the applicant in India. - Taxable in India - TDS liable to be deducted. - AAR
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Supreme Court Rules No Penalty for Non-Deduction of TDS u/s 271C in Beverage Company Case.
Case-Laws - AT : Penalty u/s 271C - Non deduction of TDS u/s 194A - Supreme Court in the case of Hindustan Coca Cola Beverage (P.) Ltd. v. CIT [2007 -TMI - 1676 - SUPREME COURT OF INDIA] wherein the applicability of ss. 194C, 194I, 201(1A) has been explained - Decided in favor of the assessee - AT
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Creditor Liable for Tax on Interest; Debtor Must Deduct and Remit Tax, Revenue Can't Double Collect.
Case-Laws - HC : TDS on interest - liability of paying tax is that of the creditor and a statutory duty is cast on the debtor to deduct tax and make payments. The revenue cannot collect tax on interest from both the principal and the agent. - HC
Customs
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Custom Declaration Form Needed for Importing Foreign Currency Over $5000 to Comply with Customs Regulations.
Case-Laws - CGOVT : Foreign currency - illegal import - a compulsory requirement of making a Custom Declaration Form (CDF) is the legal requirement specifically when the impugned foreign currency involved is more then US $ 5000 ( or equivalent). - CGOVT
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Amendment to Notification No. 12/97 - Customs (N.T.) Updates Customs Regulations for Improved Compliance and Efficiency.
Notifications : Amends Notification No. 12/97 – Customs(N.T.) dated the 2nd April, 1997 - Ntf. No. 12/2012 - Customs (N.T.) Dated: February 27, 2012
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Common Adjudicating Authority Appointed for Customs Matters Under Notification No. 13/2012-Customs (N.T.) to Streamline Processes.
Notifications : Appointment of Common Adjudicating Authority - Ntf. No. 13/2012-Customs (N.T.) Dated: February 27, 2012
DGFT
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Duty Exemption on Re-imported Diamonds for Certification: Notification No. 100 (RE-2010) Eases Trade, Cuts Costs.
Notifications : Duty exemption on re-import of Cut & Polished Diamonds sent abroad for Certification/ Grading - Ntf. No. 100 (RE-2010) /2009-2014 Dated: February 28, 2012
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Guidelines for Importing Spare Parts Under EPCG Scheme Clarified to Ensure Compliance and Facilitate Smoother Operations.
Circulars : Import of spares for the existing machinery procured indigenously under EPCG Scheme. - Cir. No. 54 (RE-2010)/2009-14 Dated: February 23, 2012
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DGFT Updates Implementation Guidelines for Paragraph 5.11.2 of Hand Book of Procedure Vol.-1 (2009-2014) for Trade Compliance.
Circulars : Operationalisation of provisions of Para 5.11.2 of Hand Book of Procedure Vol.-1 (2009-14) [RE: 2010]. - Cir. No. 53 (RE-2010)/2009-14 Dated: February 23, 2012
FEMA
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New Guidelines for Gold Import Loans: Tenor, Stand-by Letter of Credit Process Under FEMA Explained.
Circulars : Import of Gold on Loan Basis- Tenor of Loan and Opening of Stand - By Letter of Credit . - Cir. No. 83 Dated: February 27, 2012
Corporate Law
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High Court Rules Late Annual Returns and Balance Sheets as Continuing Offence, Daily Fines Apply for Non-Compliance.
Case-Laws - HC : Daily fine - Period of limitation - Default on submission of annual returns - default in filing the balance-sheet of the profit and loss of the Companies within the prescribed statutory period was a continuing offence. - HC
Indian Laws
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Foreign Lawyers Can't Practice in India Without Meeting Advocates Act, 1961 and Bar Council Rules.
Case-Laws - HC : Foreign law firms or foreign lawyers cannot practice the profession of law in India either on the litigation or non-litigation side, unless they fulfill the requirement of the Advocates Act, 1961 and the Bar Council of India Rules - HC
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Foreign Lawyers Can Conduct Arbitration in India for International Disputes Under Arbitration and Conciliation Act, 1996.
Case-Laws - HC : Having regard to the aim and object of the International Commercial Arbitration introduced in the Arbitration and Conciliation Act, 1996, foreign lawyers cannot be debarred to come to India and conduct arbitration proceedings in respect of disputes arising out of a contract relating to international commercial arbitration.
- HC
Service Tax
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High Court Approves Cenvat Credit for Expenses on Kannada Rajyotsava Day and Kengeri Police Station Inaugural Functions.
Case-Laws - HC : Cenvat credit - assessee availed input service tax credit among other things for the function arranged for Kannada Rajyostava Day and colour photography expenses in respect of the inaugural function of Kengeri Police Station - Credit allowed - HC
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Court Clarifies: Profit Motive Not Required to Classify as Security Agency u/s 65(94) for Service Tax.
Case-Laws - HC : Commercial concern versus non profit concern - As per definition of security agency under Section 65(94) service provider should be engaged in the business rendering specified service. There is no warrant for reading therein requirement of profit motive. - HC
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Refund Criteria for Service Tax on CHA and Technical Testing Services Must Be Consistent, Per Notification No. 41/2007-ST.
Case-Laws - AT : Notification No. 41/2007-ST dated 06.10.2007 - Refund - Regarding refund of service tax paid on CHA service and technical testing service - there cannot be two different yard sticks for charging the service tax and allowing the benefits. - AT
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No Notice Issued for Voluntary Service Tax Payment Once Informed to Central Excise Officer Under Sub-section (1).
Case-Laws - AT : If the assessee has discharged the service tax liability on his own ascertainment or on the basis of ascertainment by the Central Excise officers and inform the Central Excise officer of payment of such service tax then, no notice under sub-section (1) in respect of the amount so paid shall be served - AT
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Yamming Process Classified as Manufacturing, Exempt from Business Auxiliary Services Tax.
Case-Laws - AT : Business Auxiliary Services - Job work - ‘yamming process’ amount to manufacture - not liable to service tax - AT
Central Excise
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SFIS Debits Not Duty Exempt; Rule 6 Provisions Inapplicable for Cenvat Credit on Inputs in Central Excise.
Case-Laws - AT : Cenvat Credit on Inputs - Served from India Scheme (SFIS) - debits made in SFIS would not amount to exemption from payment of duty. - Provisions of Rule 6 are not attracted - AT
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High Court Rules Cenvat Credit Cannot Be Recovered from Innocent Purchaser in Supplier Fraud Case.
Case-Laws - HC : Cenvat credit wrongly claimed - supplier committed fraud - cenvat credit can not be recovered from the purchaser since he was not part of fraud - HC
VAT
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Dena Bank Authorized for E-Payments in VAT and Sales Tax Transactions per Notification No. F.7(239)/P-I/05/VAT/2009/1275-1287.
Notifications : Dena Bank Authorized for e-payment - Ntf. No. No. F.7(239)/P-I/05/VAT/2009/1275-1287 Dated: February 21, 2012
Case Laws:
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Income Tax
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2012 (2) TMI 389
Writ petition filed aginst order of Administrative Tribunal allowing stepping up of pay of employee to that of an admitted junior at each post and cannot be treated as once in a service time – employee have exercised this option twice at different posts - Held that:- No jurisdictional error or legal infirmity in is found in the order. Obviously, such stepping up can be done only in terms of the other conditions being satisfied in accordance with the rules.
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2012 (2) TMI 388
Validity of reassessment order – original order framed u/s 143(3) - assessee filed objections and contended change of opinion of A.O. – objections disposed by way of non-speaking order on 02.11.2010 – writ petition against the said order filed on 24.11.10 - reassessment order passed in meantime dated 19.11.2010 - Held that:-Once we have quashed the order dated 2.11.2010 on the ground of it being non-reasoned and does not meeting the basic requirements of the principles of natural justice, the petitioner should not be denied relief on the ground that the Revenue had proceeded in great haste and hurry to pass the reassessment order. In the present case, therefore, quashing of order dated 2nd November, 2010 would necessarily entail and as a sequitor mandate quashing of the reassessment order dated 19th November, 2010. A.O. is directed to pass a fresh order on the objections raised by the petitioner in terms of direction issued in case of GKN Driveshafts (India) Ltd (2002 - TMI - 6100 - Supreme Court) – Decided in favor of assessee.
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2012 (2) TMI 387
Recovery apprehended during the pendency of the appeals – writ petition filed - Held that:- In such case petitioner is directed to file stay petitions and recovery proceedings for realising the tax due from the petitioner will be kept in abeyance until orders are passed.
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2012 (2) TMI 386
Depreciation on hotel building given on lease – non-disclosure of licence fees as income after A.Y. 1995-96 by assessee on ground of dispute between assessee and ITC Ltd – settlement agreement executed - A.O. made addition on accrual basis and allowed depreciation – search conducted in 2007 – A.O. disallowed depreciation on ground that hotel building was not being used for business – Held that:- CIT(A) deleted dis-allowance of depreciation on ground that for claiming the depreciation it is not necessary to use the asset by the assessee directly. The appellant's ownership over the asset on which depreciation is claimed is not under dispute and user of these assets in business is also not under dispute. Tribunal has also recorded that licence fee receivable should be included as "business income" and accordingly, depreciation on hotel building is to be allowed. Aforesaid is upheld – Decided against the Revenue.
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2012 (2) TMI 385
Order issued by the CIT u/s 220(2A) waiving 50% of the interest due u/s 220(2) – appeal declined against such order – Held that:- CIT(A) order of granting partial relief is not interferred with however, having regard to the fact that the appellant is a widow and the financial constraints stated by her, we grant 12 equal monthly installments to clear the arrears.
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2012 (2) TMI 384
Expenditure in respect of exempt Income - Investment in shares - Tax free Income - Held That:- In view of Godrej & Boyce Manufacturing (2010 -TMI - 78448 - BOMBAY HIGH COURT) and Maxopp Investments Ltd (2011 - TMI - 208569 - Delhi High Court), we remand the matter back to AO to consider varios aspects.
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2012 (2) TMI 383
Deduction on payment basis - Employees Contribution towards P.F. and E.S.I - Held That:- In view of Vinay Cement (2007 -TMI - 102762 - Supreme Court of India), case remanded back to AO to find out whether the payments have been made before the due date of filing of return or not.
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2012 (2) TMI 366
Transfer pricing – adjustment to ALP – Revenue contended that distinct operating profit margin to cost in the preceding year qua the AEs and non-AEs should not be applied to the ratio of operating profit to cost in the current year on a combined basis – Held that:- Nature of international transactions in the year under consideration with its AE s are similar to the preceding year and Operating profit margin for the current year compares favorably with that finally determined for the preceding year therefore, CIT(A) order of deleting addition is upheld. Addition on account of non-charging of interest on trade debtors from the AEs – Held that:- Section 92B transpires that the transactions of 'sale' and 'lending ... money' have been distinctly set out. It is evident that interest income is associated only with the lending or borrowing of money and not with sale. When the international transaction is that of 'sale', the interest aspect is embedded in it. Early or late realization of sale proceeds is only incidental to the transaction of sale, but not a separate transaction in itself. No adjustment is warranted. Further, relevant consideration is the taxation of the enterprises of the group that are chargeable to tax in India. If the concept of over all higher or lower rate/amount of tax in the other countries in which AEs are situated is taken into consideration, then Chapter-X of the Income-tax Act would become meaningless.
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2012 (2) TMI 365
Fees for technical services – Revenue treated transportation fees receivable as FTS u/s 9(1)(vii) – Hongkong company – engaged in the business of provision of supply chain management, including the provision of freight and forwarding and logistics services – Held that:- In instant case, role of the assessee in the entire transaction was to perform only the destination services outside India by unloading and loading of consignment, custom clearance and transportation to the ultimate customer. In our opinion, it is too much to categorize such restricted services as managerial services. Further, use of computer in tracing the movement of the goods, though indirect, remote and not necessary, can not bring the payment for freight and logistics services within the purview of "technical services". Also, section 9(1)(i) cannot be invoked since assessee rendered "International services" outside India - Decided in favor of assessee.
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2012 (2) TMI 364
Income deemed to accrue or arise in India - export commission payable to non-resident agents – withholding of tax - Held that:- No doubt the agents rendered services abroad and have solicited orders, but the right to receive the commission arises in India when the order is executed by the applicant in India. We therefore hold such export commission payable to be deemed to accrue and arise in India, and is taxable in view of the specific provision of Section 5(2)(b) r.w.s. 9(1)(i). Applicant has not contended that it is availing benefits under the provision of DTAA with Pakistan nor has it a claim of tax exemption under any provision of the Act. The provision of section 195 would apply.
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2012 (2) TMI 363
Revisionary order passed u/s 263 - Long-term capital gains - 'Deemed transfer' of property u/s 2(47)(v) - dis-allowance of exemption u/s 54EC reckoning period of six months for the deposit in bonds from the date of agreement and receipt of part payment at the first instance – Held that:- Admittedly, assessee received part payments after execution of agreement to sale and handing over of possession thereby completing the transaction in terms of section 53A of Transfer of Property Act and invested in specified bonds i.e. NABARD bonds within one month of the receipt of sale consideration being part payment. In our view, in such case, the period of six months for making deposit u/s. 54EC should be reckoned from the dates of actual receipt of the consideration. Therefore, assessee is eligible for exemption u/s 54EC on part payment received – Decided in favor of assessee.
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2012 (2) TMI 362
Plea for stay of the collection of tax and the interest – partial relief - Held that:- Petitioner is directed to deposit sum of Rs.1.75 lacs in respect of the tax demand of Rs. 6.95 lacs as per the impugned order dated 29.12.2011 within fifteen days from the date of receipt of a copy of this order for admissibility of appeal.
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Customs
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2012 (2) TMI 377
Petition sought for directing the respondent to furnish backup copies of the data contained in a Laptop/hard discs seized during search conducted, enabling petitioner to file replies – Held that:- Since prayer of the petitioner is now agreed upon by the respondents. Therefore, this Writ Petition stands disposed of with a direction to the respondents to furnish the documents within stipulated time.
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2012 (2) TMI 360
Goods Imported - Provisional release - Held That:- Respondent shall complete the proceedings pursuant to the show cause notice issued to the petitioner, expeditiously. The same shall be done within 3 weeks from the date of receipt of a copy of this judgment. The writ petition is disposed of as above.
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2012 (2) TMI 359
Re-export of goods – petition filed by foreign exporter to seek permission for re-shipment of goods exported by it to India - importer abandons the goods – Held that:- Since, Petitioner has the right to request such permission and importer does not have any objection for the re-export of the goods in question, the respondents are directed to consider the request of re-export of the goods in question unless there are other legal impediments, for granting such permission.
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Corporate Laws
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2012 (2) TMI 361
Companies Act 1956 - petition filed u/s 433(e) & (f), 434 & 439 of Companies Act, 1956 seeking to wind up the Respondent-Company – non-payment of debt – Held that:- From the facts of the case it is concluded that there is no bona fide dispute as regards the dues of the petitioning creditor and mere filing of a suit is not enough to say that there is bona fide dispute as regards the claim of the petitioner or this application is an abuse of process of this Court. There is no doubt that the Company failed and neglected to pay the dues of the Petitioner Company. Therefore, this winding up application is admitted. The winding up application is to be advertised. However, Company is granted an opportunity to pay the dues as aforesaid by five monthly equal installments as stipulated. In case of regular payment of installments, order of advertisement would remain stayed permanently. In case any one of the installments is not paid the petitioner is permitted to publish the notice as directed hereinabove - Decided in favor of petitioner.
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Service Tax
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2012 (2) TMI 392
Refund of service tax claimed on expenses incurred on road and rail and port handling and terminal charges for export of goods – denial of claim on ground of lack of evidences – stay petition - Held that:- Neither impugned order speak about non receipt of the goods at the port for export nor there is any evidence of not incurring handling and terminal charges when export remained undisputed. In the absence of contrary finding exporter should not be denied the benefit through rigidity of procedure – Decided in favor of assessee.
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2012 (2) TMI 368
Whether power u/s 84 of the Finance Act, 1994 can be exercised by Revisional Authority during pendency of the appeal before Commissioner – Held that:- Issue which is pending before the first Appellate authority, shall not be subject to revision jurisdiction u/s 84 of the Finance Act, 1994.
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2012 (2) TMI 367
Determination of nature of activity - whether repair and maintenance or industrial and commercial construction – Held that:- Matter remitted back to adjudicating authority.
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Central Excise
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2012 (2) TMI 358
Whether penalty and interest u/s 11AC of Central Excise Act, 1944 can be levied and collected when the duty has been paid before the issue of Show Cause Notice Held that:- In view of decision in case of Union of India Vs. Dharmendra Textile Processors Ors., (2008 - TMI - 31520 - Supreme Court) , Order of Tribunal is set aside and matter is remitted back to Tribunal for its fresh consideration and decision.
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2012 (2) TMI 357
Pre-deposit for admissibility of appeal – petitioner pleaded financial hardship – seeked part relief - Held that:- Petitioner is directed to make a pre-deposit of 50% of the sales tax said to be payable by the petitioner, within a period of four weeks from today for admissibility of appeal.
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2012 (2) TMI 356
Differential duty - assessee being manufacturer of Washing Machines – demand raised by Revenue on ground of undercharging of sale price – decided in favor of assessee by first appellate authority & Tribunal – Held that:- In our considered view, the Tribunal and the First Appellate Authority have not committed any error whatsoever and findings and the conclusions reached by those Authorities cannot be characterized as perverse. Therefore, appeal dismissed.
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