Newsletter: Where Service Meets Reader Approval.
TMI Tax Updates - e-Newsletter
March 16, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Corporate Laws
Service Tax
Central Excise
Indian Laws
Articles
News
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Limited Liability Partnership.
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Vanishing Companies.
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Cartelization by Cement Manufacturers.
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ICAI National Cost Convention-2012 begins RPN Singh calls for public friendly Accounting.
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Mid-Quarter Monetary Policy Review: March 2012
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Economic Survey
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Economic Survey Pegs Industrial Growth at 4-5% in the Current Financial Year Survey Calls for Boosting of Business Sentiments, Encouraging Investment and Identifying Bottlenecks Industrial Sector Expected to Rebound During Next Financial Year.
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Achievements in Some Infrastrucutre Sector ‘Remarkable’ Need to Attract Large Scale Investment into Infrastructure.
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Empowerment of Women:Major Advancements over the Years.
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Public Health Investment Increases Substantially.
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Mgnrega:Coverage Increases to 5.49 Crore Households During 2010-11 Government Sets up Committee for Developing Index for Fixing Mgnrega Wage Rates 13 Crore Aadhar Numbers Generated.
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Education: Reform Process Continues in 2011-12 Aakash, Low Cost Computing Device Launched.
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Labour Bureau Survey Indicates Upward Trend in Employment Since July 2009 Maintained.
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Lower Carbon Sustainable Growth to be Central Element of 12th Plan; Economic Survey Seeks More Sensitivity from Developed Countries to Carbon Emissions.
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Services Sector Proves Saviour of Indian Economy During the Global Crisis; Grows by 9.4% Despite Slowing GDP Growth.
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Public Sector Banks Show 19 Per Cent Growth in Priority Sector Lending Credit Disbursement to Agri Sector Exceed Target by 19 Per Cent; Over 127 Lakh New Farmers Benefitted 98 Per Cent Public Sector Bank Branches Fully Computerised.
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Volatality in Global Financial Markets Likely to Tighten Availability and Cost of Foreign Funding Indian Banks Maintain Robustness Amidst Euro Zone Crisis Government Measures Mitigate Liquidity Stress.
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Forex Reserve at Us $ 293 Billion; External Debt Stock at US $ 326 Billion Rupee Declines by 12.4 Per Cent Against Dollar on Month-to-Month Basis Oil, Gold And Silver Prices Contribute to Modest Rise in Current Account Deficit.
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India’s Cumulative Export Growth up 23.5 Per Cent During April 2011–Jan 2012; Total Exports US $ 242.8 Billion Exports from Sezs up 14.5 Per Cent at Rs. 2,60,973 Crore upto Dec 2011.
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Indian Economy Holds out Despite Global Uncertainty.
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Government Takes Calibrated Steps to Rein in Inflation Survey Emphasises the Need for Rapid Fiscal Consolidation Growth Rate Expected to Pick up in 2012-13 India’s Cris Rating Improves by Nearly three Percent.
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Options to Ensure Price Stability in Food Items – Economic Survey.
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Economic Survey Forecasts 2.5 Percent Growth for AGRO Sector Survey Suggests FDI in Multi Brand Retail to Address Infrastructure GAPS.
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Inflation to Moderate Further in 2012 Renewed Focus on Supply Side Measures Essential for Price Stability – Economic Survey.
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Summary of Economic Survey Survey Pegs GDP Growth At 6.9% in 2011-12 Outlook Brighter for Next Fiscals.
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Highlights of Economic Survey 2011-12 .
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Railway Minister Had Wide Ranging Consultations before Finalising Budget Cooperation with State Governments.
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List of New Trains Announced in the Railway Budget 2012-13.
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ICAI National Cost Convention-2012 to focus on Enhancing the long term enterprise value- Environment, Society and Governance – Towards New form of Business Reporting.
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Staff Amenities and Encouragement to Sports Persons.
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New Railway Electrification Projects Sanctioned in 2012-13.
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Rajdhani /Shatabdi Travel for Arjuna Awardees 50% Concession for Anaemia Patients.
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New Gauge Conversion Projects Sanctioned in 2012-13.
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Minor Increase in Fare of All Class Travel Proposed Increase not Enough to Cover Impact of Fuel Price Rise in 8 Years.
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Projects being Executed with State Cooperation.
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List of 84 Adarsh Stations to be taken up in 2012-13.
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New Express Trains to be Introudced Sikh Pilgrimage Train on Amritsar-Patna-Naned Route.
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List of 11 New Line Projects Sanctioned in 2012-13.
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Two New Members to be Inducted for Finding New Resources Over One Lakh Vacancies to be Filled.
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Pradhan Mantri Rail Vikas Yojana.
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Rs. 4410 Crore Allocated for Capacity Augmentation Works.
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Coaching Terminal at Naihati and A Museum to be Named After Bankim Chandra Chattopadhyay.
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Logistics Corporation to be Set up.
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Travel Time Between New Delhi And Kolkata to Come Down from 17 to 14 Hours.
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Signalling Systems to be Modernized with Advanced Technological Features.
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19,000 Km Railway Tracks to be Modernized.
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Five Focus areas for Infrastructure Development Identified: Tracks, Bridges, Signaling & Telecommunications, Rolling Stock and Stations & Freight Terminals Highest Ever Plan Outlay of Rs. 60,100 Crore this Year.
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‘Mission Mode’ Approach to be Followed in the Modernization Programmes Quantum Jump in 12th Plan Investment at Rs. 7.35 Lakh Crore.
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Railway Safety Authority to be Set up Strong Emphasis on Strengthening Safety: Dinesh Trivedi.
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Railway Budget 2012-13 at a Glance :
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Highlights of Railway Budget 2012-13.
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Index Numbers of Wholesale Prices in India (Base: 2004-05=100) Review for the month of February, 2012 .
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Exemption u/s 10B - 100% EOU - there was a loss in the Unit eligible for deduction u/s. 10B and there was a business income in an another Unit. Therefore, while computing the total income; the business income can be computed only after set off of business loss as per section 70 and if after such set off, still there is a business loss, such loss can be set off against other sources as per section 71 of the I.T. Act - AT
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Non deduction of TDS - Period of limitation u/s 201(3) - proceedings under section 201/201(1A) of the Act, can be initiated only within three years from the end of the assessment year or within four years from the end of the relevant financial year. - AT
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Exemption u/s 10A - As deduction under section 10A has to be excluded from the total income of the assessee the question of unabsorbed business loss being set off against such profit and gains of the undertaking would not arise. - HC
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Merely because credit was claimed for TDS, it does not mean that the corresponding income is chargeable to tax. - AT
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Section 90 of the Income-tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Tanzania. - Ntf. No. 08/2012-FT&TR-II Dated: February 16, 2012
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Capital Gains - Slump sale – whether amount of liability reflected in the negative net worth can be added to determine value of sale consideration - Decided in favor of Revenue. - AT
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Where a transaction is sham and not genuine, it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. - HC
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Whether the CIT (A), in exercise of power under Section 251 (1) (a) of the Act has the power to enhance the assessment in the manner done in the instant case - held yes - HC
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Block assessment - Undisclosed income versus opening capital - block assessment - held that:- the said opening capital accrue to the assessees at a point of time anterior to the commencement of the block period, it cannot be treated as undisclosed income at all. - HC
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Applicability of 40A(7) - Given the fact that Section 40A(7)(b) of the Act contemplates deduction in respect of the provision made, not only for the purpose of contribution towards the approved gratuity fund, but equally so for the purpose of payment of gratuity payable during the year, rightly the Commissioner of Income Tax (Appeals) granted the relief. - HC
Customs
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Whether Section 129(6) of the Customs Act, 1962, which stipulates that on demitting office as Member of the CESTAT a person shall not be entitled to appear before the CESTAT, is ultra vires the Constitution of India - held no - SC
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Regarding extension of Status Holder Incentive Scrip (SHIS) scheme upto 31.03.2013 . - Ntf. No. 07 /2012 - Customs Dated: March 9, 2012
Indian Laws
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ICAI member guilty of gross professional misconduct - Chartered Accountants Act, 1949 – false certificate u/s 80HHC issued in the Form No. 10CCA - name removed for 6 months - HC
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Mid-Quarter Monetary Policy Review: March 2012
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Economic Survey
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Railway Budget 2012-13 at a Glance :
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Highlights of Railway Budget 2012-13.
Service Tax
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Service Tax - Coaching and Training classes - demand imposed on advance fees collected during the period April 2003 to June 2003 - decided in favor of assessee on the ground of limitation - AT
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Waiver of pre-deposit - Business Exhibition services received by the appellant in South Africa and other middle eastern countries - no service tax - AT
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Stay of Demand - Business Support Services - Business or profession - Sir Ganga Ram Hospital was providing infrastructural support to certain doctors who were allowed to hold private outpatient consultation in the hospital and was charging some amounts from those doctors. - Prima facie no service tax - AT
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Levy of service tax - even if the appellant has discharged the service tax liability, after taking the registration under this category, the question of confirming the demand without putting the appellant on notice is incorrect and not within the provisions of the law - AT
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Export of services - instead of foreign exchange going out of India, there is conservation of foreign exchange in India to the extent of commission earned by the service provider appellant in view of the arrangement made by the service recipient abroad in that behalf through Indian Railways - benefit of export allowed - AT
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Whether hiring of ambulance does not fall under the ambit of Service Tax as ‘Rent-a-Cab’ service - ambulances are not meant for carrying passengers on hire and hence question of levy does not arise - AT
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Allocation of work relating to Service Tax procedures to the Service Tax wing of the CBEC – regarding. - Cir. No. 153/04/2012 – Service Tax Dated: March 6, 2012
Central Excise
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Valuation under central excise - sales were taking place at the distributor’s premises and, therefore, the distributor’s commission and freight expenses upto the distributor’s premises would be includible in the assessable value - AT
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Refund - Supply of goods from DTA unit to SEZ unit - treated as physical exports for the purpose of entitling refund of unutilized Cenvat credit contempla ted under the provisions of Rule 5 of the Cenvat Credit Rule, 2004. - HC
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Valuation under 4A of MRP - warranty charges - After sales service charges for four years being optional, not includible for valuation purpose while determining MRP under Section 4A of Central Excise Act, 1944 - AT
VAT
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Sales Tax / VAT on rental of electricity meters - petitioner collects rentals on the meters installed at the place of consumers where electricity is consumed - levy of sales tax upheld - HC
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Classification of utting oil - merely because the product also has a lubricating effect, cannot be classified as "lubricant" under entry 15 of Schedule II, Part A to the Act, sale of cutting oil is classifiable under entry 34 of Schedule II, Part A of the Gujarat Sales Tax Act, 1969 - HC
Case Laws:
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Income Tax
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2012 (3) TMI 194
Interest for delay in deposit of TDS – Rule 30 of the Income Tax Rules obliges such person, if it is the Government, to deposit the deducted amount on the same date of payment - appellant being state government contested that it can not be treated as person and as such has no obligation to pay such interest – Held that:- Since it is a dispute between two Governments, it would be appropriate to sort out the same by the Governments instead of sorting it through Courts. Accordingly, appellant is directed to place the dispute highlighted above before the Secretary Finance of the Central Government. ITO is directed to not to take any step to recover the assessed interest.
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2012 (3) TMI 193
Exemption u/s 10B - Set off of loss of EOU Unit brought forward against profit of the eligible business unit - held that:- Had the Legislature intended that the provisions of sections 70 & 71 should not be applied in respect of loss incurred in eligible business, it could have specifically provided so. According to us, the assessee is therefore entitled to set off the loss incurred in an eligible Industrial Unit against the other incomes earned by him (Sovika Info Tech Ltd.). In short, section 10B(6)(ii) restricts carry forward and set off of loss u/s. 72 and u/s. 74, but does not provide or restrict anything regarding intra-head set off u/s. 70 or inter-head set off u/s. 71. Admittedly, there was a loss in the Unit eligible for deduction u/s. 10B and there was a business income in an another Unit. Therefore, while computing the total income; the business income can be computed only after set off of business loss as per section 70 and if after such set off, still there is a business loss, such loss can be set off against other sources as per section 71 of the I.T. Act, though this is not the present case. Double benefit of adjustment - held that:- for the A.Y. 2008-09 it ought not to be a double disallowance because for A.Y. 2007-08, we have already directed to allow the set off of loss. Once the loss shall be adjusted in A.Y.2007-08, consequence our above decided appeal there should be a direct effect on the computation of income for A.Y. 2008-09. We therefore revert this matter back to the stage of the AO for re-computation of the eligible profit of the said Unit.
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2012 (3) TMI 192
Income escaping assessment - notice u/s 148 issued after expiry of four years - assessee submitted that the assessee he had fully and truly disclosed the facts at the time of original assessment relating to claim of investment allowance and on that basis, assessment order under section 143(1) of the Act was passed - Held that:- The assessee does not discharge his duty by merely producing the books of account or other evidence - it cannot be held that there was true and full disclosure made by the assessee - perusal of the assessment order, no where suggests that the Assessing Officer had dealt with the issues on which reassessment is sought to be made while determining the taxable income of the assessee - it is to be held that the action taken by the Assessing Officer beyond 4 years shall be within limitation.
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2012 (3) TMI 191
Relief u/s 89 - Voluntary retirement scheme for employees - payments to the employees, but without any tax deduction at source, based on Section 89(1) of the Income Tax Act - writ petition filed for the financial year 2000-2001 - the petitioner contented that a Division Bench of this Court has in State Bank of Travancore & Ors. v. Central Board of Director Taxes & Anr. [2005 -TMI - 9572 - KERALA High Court] allowed the claim of another Bank in a similar situation - Held that:- Writ petition is allowed as to follow the binding judgments of a jurisdictional High Court in the above mentioned case and not ignoring merely on the ground that a Special Leave Petition has been filed before the Supreme Court for stay .
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2012 (3) TMI 190
LTCG - exemption u/s 54 - the property was inherited, the assessee took the cost of acquisition as fair market value of the asset as on 1.4.1981 and claimed benefit of indexation from Year 1981 - AO reworked the cost of acquisition by applying cost indexation from the year 1994 when the property was actually passed to him - assessee invested the sale consideration in his new residential house - AO stated that the sale consideration had not been deposited in capital gain account scheme before the due date specified for filing of return of income, which was 31st July, 2008 - the assessee contented when a capital asset is acquired by an assessee by gift, inheritance, partition of an HUF, or other specified mode, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner acquired. Held that:- the assessee became owner of the property on the death of his wife who acquired property from her mother - Under sec. 49(1) where the capital asset becomes the property of the assessee under the modes specified therein, the cost of acquisition of the asset shall be deemed to be the cost for which the previous owner of the property acquired it - cost of indexation has to be with effect from 1.4.1981, the date on which the cost of acquisition was taken in the hands of the previous owner - the assessee could have furnished the return of income under sec. 139(4) for any previous year at any time before the expiry of one year from the end of the relevant assessment year. The requirement of sec. 54 for exemption of capital gains could be fulfilled within the time limit of sec. 139(4) and not under sec. 139(1) - assessee was entitled to exemption under sec. 54 for investment of capital gains in new residential house.
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2012 (3) TMI 189
Deemed dividend - transfer of amount through journal entries - Revenue pointed out that the amounts were accounted under the head "Advances" both in the books of the assessees as well as in the books of the company, which proved that the amounts are covered by the definition of section 2(22)(e) of the Act - The Commissioner of Income-tax(Appeals) said that the credit entries would not amount to deemed dividends under section 2(22)(e) just for the reason that the credits were passed by means of journal entries. - Held that:- It is not proper on the part of the Commissioner of Income-tax(Appeals) to hold that credit entries made in the accounts of the assessees by the company would not fall under section 2(22)(e) only for the reason that the credits were provided through journal entries - The assessing authority should have examined every journal entry conferring credit to the assessees and verify whether any fund/benefit has been transferred by the company to the assessees directly or indirectly - issue is remitted back to the Assessing Officer to re-examine the nature and character of the journal entries directing the assessee to provide evidence to prove his case.
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2012 (3) TMI 188
Non deduction of TDS - Period of limitation u/s 201(3) - assessee did not deduct tax at source from the salary paid to the aforesaid employees within the prescribed time, the AO treated the assessee company in default in terms of provisions of section 201(1) of the Act and accordingly, raised demand u/s 201(1) and 201(1A) of the Act- Assessee contented that as he paid the tax and tax thereon voluntarily but the acceptance of the liability would not extend the period of limitation nor would it extend the reasonable time that is postulated by the scheme of the Income-tax Act - Held that :- answer to the question of limitation is in the affirmative in favour of the assessee and against the revenue - initiation of proceedings under section 201 of the Act against the assessee in respect of the assessment year 1990-91 was barred by limitation having been initiated beyond a reasonable period of time of four years - proceedings under section 201/201(1A) of the Act, can be initiated only within three years from the end of the assessment year or within four years from the end of the relevant financial year.
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2012 (3) TMI 176
Capital Gains - Slump sale – whether amount of liability reflected in the negative net worth can be added to determine value of sale consideration - whether the “negative net worth” could be treated as Nil or had to be added to the “consideration” for determining capital gain - assessee transferred its “Power Transmission Business” to KEC Int Ltd under scheme of arrangement u/s 391 & 394 of the Companies Act for a total consideration of Rs. 143 crores – same being offered as Capital gains taking negative net worth of Rs 157 Crore to be nil – reference to Special Bench for determination of full value of consideration and capital gains - Held that:- Since capital asset is an undertaking (All assets minus All liabilities), the full value of consideration would be determined by reducing the value of liabilities of the undertaking from the agreed value of all the assets of the undertaking. If one adds the liabilities to this value, one is arriving at the consideration for the “assets” but not the consideration for the “undertaking“. Therefore, full value of consideration of the undertaking should be taken at Rs. 143 crore and not Rs. 300(143+157) crore. In case of a slump sale, Capital gain on transfer of 'Undertaking’ = Full value of consideration received or accruing (All assets minus All liabilities) - 'Net worth’ or in other words the cost of acquisition and cost of improvement (All assets minus All liabilities) of the undertaking. Hence, while sustaining the figure of sale consideration at Rs. 143 crore, the negative net worth is “deducted from” (i.e. “added to“) the full value of consideration. Consequently, the chargeable capital gain is Rs. 300 crores (Rs. 143 crores + Rs. 157 crores) – Decided in favor of Revenue.
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2012 (3) TMI 175
Transaction being sham and not genuine cannot be considered to be a part of tax planning - Assessee borrowed Rs. 48 crores from the G. K. Rathi group and bought shares in four 100% subsidiary companies – shares purchased at unreasonable premium price (at Rs 150 per share when average value is less than Rs 25 per share) - amount received by the said subsidiary companies was transferred back to another company of the G.K. Rathi group – said shares sold for Rs. 5 each in subsequent A.Y. - short-term capital loss claimed – set-off of such loss against other long-term capital gains – AO, CIT (A) & Tribunal rejected the transaction of investment into, and sale of, shares as a sham – dis-allowance of capital loss and its set off – dis-allowance of loss arising out of the business of providing guarantees – Held that:- Whenever there are reasons to believe that the apparent is not real; then the taxing authorities are entitled to look into surrounding circumstances to find out the reality and apply the test of human probabilities. Supreme Court in case of Vodafone International vs. UOI (2012 - TMI - 208574 - Supreme Court Of India) made it clear that a colourable device cannot be a part of tax planning. Where a transaction is sham and not genuine, it cannot be considered to be a part of tax planning or legitimate avoidance of tax liability. In the present case the purchase and sale of shares, so as to take long term and short term capital loss was found as a matter of fact by all the three authorities to be a sham. See (Sumati Dayal vs CIT (1995 - TMI - 5469 - Supreme court) – Decided against the assessee. In respect of guarantees – Held that:- The surrounding circumstances can be looked at, but not without considering the evidence led by the party in support of its stand. Hence, it would be proper to remand the matter to the Tribunal to reconsider the issue in respect of loss on account of business of providing guarantees and pass an appropriate orders thereon.
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2012 (3) TMI 174
Penalty u/s 271D – loans and deposits received in contavention to Section 269SS – penalty waived by Tribunal accepting contention of assessee that the same is share application money – Held that:- First and the foremost aspect, which has to be considered and examined is whether the amount received was loan or deposit. This aspect has not been considered and examined by the tribunal in spite of the specific findings recorded by the A.O. and the CIT (Appeals). Therefore, an order of remit is passed to the Tribunal to decide the appeal afresh after recording factual finding – Decided in favor of Revenue.
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2012 (3) TMI 173
Writ petition - stay petition - recovery of dues - attachment - notice issued under Section 226(3) attaching the bank accounts - demand contained in notice is for more than Rs.26 crores and according to the Standing Counsel for the respondents substantial amounts are available in the Bank accounts of the petitioners - result of the notices above mentioned, the entire bank operations have been stopped and as a consequence there of, their business operations have also been stopped – Held that:- pendency of the appeals filed by the petitioners, petitioners directed to pay Rs.5 crores in two equal monthly installments - the notice issued by the respondent under Section 226(3) of the Income Tax Act will stand stayed on the payment of the Ist installment, Writ petition is disposed of as above.
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Customs
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2012 (3) TMI 200
Whether Section 129(6) of the Customs Act, 1962, which stipulates that on demitting office as Member of the CESTAT a person shall not be entitled to appear before the CESTAT, is ultra vires the Constitution of India - held that:- the provisions of Section 129(6) of the Customs Act and its operation cannot be faulted with. Another half-hearted attempt was made to raise a contention that the appellants can continue to appear before the Tribunal as they are permitted to do so in terms of Section 146A of the Customs Act, despite the provisions of Section 129(6) of the Customs Act. We are unable to find any merit in this contention as well. The provisions of Section 129(6) of the Customs Act are specific and both these provisions have to be construed harmoniously. We find nothing contradictory in these three provisions. Section 146(2)(c) of the Customs Act refers to the appearance by a legal practitioner who is entitled to practice as such in accordance with law. Section 129(6) places a restriction, which is reasonable and valid restriction, as held by us above. Thus, the provisions of Section 146A of the Act would have to be read in conjunction with and harmoniously to Section 129(6) of the Customs Act and the person who earns a disqualification under this provision cannot derive any extra benefit -contrary to Section 129(6) of the Customs Act from the reading of Section 146A of the Customs Act.
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2012 (3) TMI 184
Plea for reduction in penalty imposed - mis-declaration of the goods imported by assessee – release of 80 % of confiscated goods – Held that:- On undertaking given by assessee that they are not interested in clearing the consignment which is lying with the departmental authorities, we reduce the penalty imposed from Rs.1 lakh to Rs.20,000/- Decided in favor of assessee
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2012 (3) TMI 172
Writ Appeal- appellant imported some electrical goods - officers of the 1st respondent seized the goods due to undervaluation and issued Ext.P3 show cause notice under Section 124 - appellant sought for interim release of the goods pending completion of the proceedings initiated - The provisional release also came to be ordered subject to conditions as per Ext.P7 - appellant contends that conditions imposed. Held that:- if the matter is kept pending, heavy demurage charges to be incurred by the appellant - 2nd respondent shall complete the proceedings initiated against the appellant by issuing show case notice within three weeks from the date of receipt of the copy of the judgment - the Writ Appeal is dismissed.
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2012 (3) TMI 171
Purchase of the vehicle from a "used car" dealer in Dubai - on inspection damaged chassis number and corrected was noticed and over the engine number in the engine block, a metal plate was fixed covering the original number and with a new number - adjudicating officer confiscated the car and levied penalty - importer filed appeal before the Commissioner (Appeals)- to set aside the order of confiscation reducing the fine and personal penalty - department as well as importer filed appeals before the Tribunal - Held that :- The information given by the authorized dealer that car is '2004' in India of Toyota Motors, Japan that it is of 2004 make has to be accepted as conclusive - uphold the order of the Commissioner confirmed by the Tribunal to release the vehicle on payment of redemption fine and personal penalty, besides import duty payable at the applicable rate - no reduction in personal penalty and modification of redemption fine 2,00,000/- and 1,50,000/- respectively.
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Corporate Laws
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2012 (3) TMI 170
Approval of the scheme of amalgamation - held that:- it is not prejudicial to their interest, since they would be continuing in the Transferee-Company and the shareholders would be allotted shares of the Transferee-Company, the rates for which has been worked out by the experts. Thus, taking notice of the basic requirement of the scheme and also considering the fact that neither the Regional Director nor the official liquidator have raised any objections with regard to the scheme, the scheme as proposed requires to be approved. - scheme of amalgamation allowed
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Service Tax
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2012 (3) TMI 198
Period of Limitation - Coaching and Training classes - demand imposed on advance fees collected during the period April 2003 to June 2003 - Service Tax liability on Commercial & Training Classes introduced from 01.07.2003 – SCN issued on 28.06.2005 – Held that:- During the relevant period, there was confusion as regards the leviability of amount collected in advance as Board s circular dt.1.7.2003 had clarified that no Service Tax liability arises on advance payment received, while the Board s circular dt.05.11.2003 reiterates that Service Tax paid on such advance amounts. In such a confused situation, we find that there cannot be any allegation of suppression of the facts on the appellant. Therefore, Demand imposed by issuing the SCN in 2005 seems to be hit by limitation. See CAIIT JEE (CAT JEE) Vs CCE Allahabad (2009 - TMI - 32715 - CESTAT, New Delhi), Noble Institute (Education) Pvt.Ltd. Vs CST Ahmedabad 2008 (2008 - TMI - 4275 - CESTAT, Ahmedabad) – Decided in favor of assessee.
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Central Excise
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2012 (3) TMI 183
Limitation - first appellate authority, while remanding the matter back, has not recorded any finding on the point of limitation claimed by the appellant before him – Held that:- First appellate authority has not considered the appeal in its entirety and in a proper perspective and also not recorded any finding on the point of limitation claimed by the appellant. Hence, matter is remitted back to first appellate authority to decide the issue afresh, after following the principles of natural justice – Appeal allowed by way of remand.
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2012 (3) TMI 182
Reversal of CENVAT Credit attributable to the inputs used in the exempted goods and/or payment of 8% or 10% of the value of the exempted goods - period involved 01.03.2004 to 31.01.2009 – Held that:- Retrospective amendment brought in by the Budget 2008 renders that reversal of CENVAT Credit attributable to the inputs utilized in exempted product is enough and assessee need not to reverse 8% or 10% of the value of the exempted goods. Further, amendment also brought to the provisions of Rule 6 of CENVAT Credit Rules, 2004. In present case, assessee had reversed an amount of Rs.20,14,456/- and interest of Rs.16,10,915/-. Whereas CENVAT attributable to the inputs used in exempted goods comes to Rs.11,81,141/-. We find that adjudicating authority has not considered all these aspects in proper perspective thus, issue needs to be re-considered by the adjudicating authority – Appeal allowed by way of remand.
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2012 (3) TMI 169
Deemed Modvat credit on the inputs in terms of Notification No.58/97-CE, dtd. 30.08.97 - credit was availed by the appellants on the strength of invoices issued by supplier of inputs discharging their duty liability in terms of Section 3A of the Central Excise Act, 1944 read with Rule 96ZP(3) Central Excise Rule, 1944 (scheme commonly known as Compounded Levy Scheme) - credit was denied on the grounds that invoices did not declare that the appropriate duty of excise has been paid on the inputs under the provisions of Section 3A of the Act - Held that :- inputs suppliers are working under the Compounded Levy Scheme who discharge their duty liability at the end of the month in which the goods stand cleared by the input supplier and duty liability in respect of each and every clearance was not being determined and reflected in the invoices - appeal allowed with consequential relief to the appellants to take input credit
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Indian Laws
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2012 (3) TMI 195
ICAI – member guilty of gross professional misconduct falling within the meaning of Clause (7) of Part- I of the Second Schedule u/s 22 r.w.s. 21 of the Chartered Accountants Act, 1949 – false certificate u/s 80HHC issued in the Form No. 10CCAC – Held that:- It is established that no payment was received against the export, therefore, certificate issued by the respondent was false. It is a bogey raised by the respondent that he has verified all the documents and only then issued the certificate. The misconduct is of serious nature. The attempt was thus to dupe the tax authorities and help the assessee to avoid the tax to that extent such a conduct has to be taken seriously. Some penalty needs to be imposed so that it acts as deterrent and such professional misconduct are not committed. Weighing the circumstances, the ends of justice would be subserved by removing his name from the Register of Members for a period of six months.
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2012 (3) TMI 177
Invocation of proviso (b) to Article 311(2) of the Constitution of India to dispense with the inquiry against the appellant to remove him from service - appellant working as sub-ordinate Judge in Garhwa, Jharkhand alleged of not preparing judgments on his own, rather getting it prepared through some body else before delivering the judgments - appellant challenging legality of order and jurisdiction of High Court – Doctrine of pleasure under article 310 - Held that:- Under Articles 310 and 311, public servants are given protection from being dismissed, removed or reduced in rank without holding a proper inquiry or giving a hearing. However, proviso (b) to Article 311(2) provides for dispensing of such condition on reasonable and legal grounds. In present case, High Court on basis of facts was of the opinion that holding of such enquiry should be dispensed with in view of the fact that if an enquiry is held the same may lead to the question of validity of several judgments rendered by the appellant. Because of legal and valid grounds there was no necessity of giving him any opportunity of hearing. Subsequent to that, the Governor decided to invoke the provisions of Article 311(2) (b) of the Constitution of India and dispensed with condition of holding enquiry. Thus, procedure and the pre-conditions laid down for invoking the extra-ordinary power under Article 311(2) (b) having been complied with and properly exercised within the parameters of the provisions – Decided against the appellant.
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