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TMI Tax Updates - e-Newsletter
March 13, 2012
Case Laws in this Newsletter:
Income Tax
Central Excise
News
Notifications
Highlights / Catch Notes
Income Tax
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Shoguns received on marriage taxable as gift - Shoguns were given to assesse and not to daughter, logically cheque should be in bride name - No details provided which showed that amount has been transferred to bride's account. Decided against assesee. - AT
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Surrender of income - additional income offered is deemed income assessable u/s 69A of the Act and no deduction is allowable against such deemed income assessed u/s 69A of the Act in the hands of the assessee. - AT
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Rejection of Books of Account - non reporting of transaction can be best attributed to auditor and cannot be ground to reject books. For Job work - AT
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Capital loss on the sale of the foreign cars - when the sale of the cars itself flow from the terms of the lease agreement and the terms of the agreement thus not questioned by the Revenue, the mere fact that the cars were sold at a price so low and that the lessees could subsequently sell the car for a higher price would not defeat the claim of the assessee for capital loss. - HC
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Determination of perquisite value - Rule 3 - Where an employer takes residential premises on rent by giving security deposit for the benefit of employees, whether the notional interest on such security deposit is liable to be included in the perquisite value of the accommodation given to the assessee employee is the question raised in this appeal - held no - HC
Customs
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Seeks to amend the Notification No. 3/89-Customs, by exempting customs duty on remnant turbine fuel consumed during an aero show organised by the central government. - Ntf. No. 08/2012 - Customs Dated: March 9, 2012
DGFT
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Removal of Prohibition on export of cotton (Tariff Codes 5201 and 5203). - Ntf. No. 106 (RE-2010)/2009-14 Dated: March 12, 2012
Service Tax
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Taxation of Service (Provided from Outside India and Received in India) Rules, 2006 - Rule 3(ii) - Held that: there is no evidence on record that the service has been partly performed in India - AT
Central Excise
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Supplies to SEZ from DTA - Exception provided under Rule 6(6) of Cenvat Credit Rules, 2004 shall be applicable to supply of exempted goods both to SEZ units and SEZ developers/promoters. - AT
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Deemed credit under Notification 58/97 CE - in case the annual capacity of production of input manufacturer because of dispute cannot be determined at the time of issue of invoice, the scheme of conveyance of deemed credit cannot be put on hold and the substantive benefit of deemed credit cannot be denied to the input purchaser. - HC
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Demand - clandestine removal - based upon the calculations arrived at by the department on the basis of electricity consumption - no corroborative evidence - demand set aside. - AT
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If brand name is not affixed or embossed on the jewellery or article itself but appears on the packing, such goods will not be treated as branded jewellery and thus will not be liable to excise duty.
VAT
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Principal of classification - VAT on homoeo globules - West Bengal Value Added Tax Act, 2003 - omoeo globule imported by the writ petitioner is entitled to the benefit of item No. 35A for which no tax is payable and direct the assessing authority to act accordingly. - HC
Case Laws:
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Income Tax
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2012 (3) TMI 155
Recovery proceedings issued during pendency of appeal against the order issued, stay petition before 2nd respondent and pendency of application for rectification before 1st respondent – Held that:- 2nd respondent is directed to consider stay petition within stipulated time and in the meanwhile further proceedings pursuant to Ext.P1 will be kept in abeyance – Decided in favor of petitioner.
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2012 (3) TMI 154
Appeal to be filed in Tribunal- the limit prescribed for filing appeal before the Tribunal is Rs. 2 Lakhs now increased to 3 Lakhs vide Instruction No. 3/2011 dated 9.2.2011-Difference between the tax on the total income assessed and the tax that would have been chargeable, had such total income been reduced by the amount of income in respect of the issue against which appeal is intended to be filed- - held that:- appeals of the Revenue against Ld. CIT(A)are dismissed being not maintainable and the Cross-objections of the assessee are dismissed as not pressed Merely because the assessee fails to claim the benefit of set off cannot relieve the ITO of his duty to apply section 72 in an appropriate case.
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2012 (3) TMI 153
Application of provisions of Section 50C - effective date - Immovable property sold - Amount received as Co-owners - Property transferred on 4.10.06 registered under Property Act 8.01.07 - Held That:- This amendment was brought w.e.f. 01.10.2009 for the reason there was a leakage in the provision because certain persons who transferred the land on the basis of sale agreement and want to save themselves from the valuation to be adopted by the Stamp Valuation Authority. Accordingly, from 01.10.2009 even if the land is transferred through the agreement, provision of section 50C is still applicable. However, these provisions are not applicable on the facts of the present case because the transfer, was already made much before the date of amendment, made to section 50C. So taking into consideration this aspect that the sale agreement was much before the date of sale deed execution and the possession was already given on 4.10.2006 before the sale deed execution, which was executed on 08.01.2007. Therefore, we hold that the provision of section 50C(1) are not applicable on the facts of the present case. Determination of value for the purpose of section 50C - Stamp value authority versus Registered Valuer - Value determined by Stamp Valuation Officer at Rs.33,76,391 - by registered value 13,88,000 - Held That:- After going through these reasons, we are of the view that if the valuation of this property is taken to Rs.20 lakhs instead of Rs.33,76,391/- or shown by Registered Valuer that will meet ends of justice. Though the valuation of Registered Valuation Officer is on some authentic method but there can be some shortcomings also. The AO has not referred the matter to DVO whereas he should have referred the matter to the DVO for taking valuation from him so that both the valuation can be compared. It is a matter of small addition. Therefore, we are not inclined to send the matter to the file of the AO for referring the matter to the DVO for the purpose of ascertaining actual market value. Accordingly, we direct the AO to adopt valuation of this property at Rs.20 lacs for the purpose of capital gains. We order accordingly.
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2012 (3) TMI 152
Sales tax Incentives eligible for deduction under 80IB - Held That:- In view of assessee own case for A/Y 05-06, AO not to exclude sales tax incentives from the profit of the units while calculating the deduction u/s 80IB of the Act. Interest Incentive eligible for deduction under 80IB - Held That:- When in immediately preceding assessment year assessee didnot raised the ground related to denial of deduction under 80IB on interest received, we reject the claim of assessee on principle of consistency.
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2012 (3) TMI 151
Whether the land,subject-matter of sale is agricultural land as on the date of sale without taking into consideration the conversion of land to non-agricultural purpose - held that :-the land retained its agricultural character till the date of the order permitting non-agricultural use and thereafter it is not an agricultural land and, therefore, can be treated as capital asset. whether the land should be treated as agricultural land and the same is exempt from capital gains in view of section 2(14) - held that sale consideration of Rs. 50 lakhs, is not a transaction involving transfer of a capital asset and, therefore, no need to bring the income referable to the capital gains part of the transfer of the asset.
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2012 (3) TMI 150
Brought forward and Setoff of business expenditure and business loss against "Income from House Property" when business has already closed in earlier year - Section 71 - Held That:- Total amount of business loss is Rs. 17,45,392. Out of the same, Rs. 7,64,562 is disallowed against the assessee and the balance would be set off against the income from house property. - Tribunal has rightly appreciated the law and issue and has found that even though there was a temporary break, the assessee continued the business in dis- tributorship and also maintained the establishment, thereby incurred the expenditure which were wholly and exclusively for the purpose of the business. This finding of the Tribunal is in tune with the order of the Division Bench in CIT v. S. S. M. Ahmed Hussain (1986 -TMI - 26098 - MADRAS High Court) Purchase of aluminum - Delayed Payment - Assessee contended TDS deducted and amount remitted to goverment account - Interest Expenditure of Rs 7,64,562 - Disallowance made Held That:- There is also no material to show that there was any compromise between the assessee and Nalco as to the payment of interest and by virtue of the agreement, paid the interest during the accounting year. No material were brought on record. - Decided against assessee.
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Central Excise
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2012 (3) TMI 147
Modvat credit on the glasses of bottles included in the assessable value of aerated water during the material period - Revenue submits that as per clause (iii) of the explanation to Rule 57 A of the Central Excise Rules, the cost of packing material which is not included or had not been included in the preceding financial years in the assesseable value of the final product under Section 4 of the Central Excise Act, does not qualify as `inputs' for the purpose of the Modvat credit - Held that :- the assessee had added price of the empty glass bottles and crown corks in the assessable value of the final product as shown in the cost certificate issued by the Chartered Accountant and as such, they are entitled to avail the Modvat credit - the appeal, is dismissed as it does not raise any substantial question of law as the appeal against the order of the CESTAT cannot be entertained if it involves a question of fact
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