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TMI Tax Updates - e-Newsletter
March 22, 2012
Case Laws in this Newsletter:
Income Tax
Customs
Articles
News
Notifications
Circulars / Instructions / Orders
Highlights / Catch Notes
Customs
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2nd Corrigendum of notification no. 12/2012 Customs. - Ntf. No. CORRIGENDUM Dated: March 20, 2012
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1st Corrigendum of Notification no. 12/2012- Custom. - Ntf. No. Corrigendum Dated: March 19, 2012
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Corrigendum of notification no. 21/2012 Customs. - Ntf. No. Corrigendum Dated: March 19, 2012
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Seeks to amend Notification 12/2012 Customs, dated 17-03-2012. - Ntf. No. 23 /2012-Customs Dated: March 20, 2012
DGFT
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Scrutiny and revalidation of Registration Certificates(RCs) for export of cotton. - Cir. No. 24 Dated: March 20, 2012
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Procedure for scrutiny and revalidation of Registration Certificate for export of cotton [ITC(HS) code 5201 & 5203]. - Cir. No. 102 (RE-2010) /2009-2014 Dated: March 16, 2012
FEMA
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Foreign Exchange Management (Deposit) Regulations, 2000 - Credit to Non Resident (External) Rupee Accounts . - Cir. No. 95 Dated: March 21, 2012
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Investment in Indian Venture Capital Undertakings and /or domestic Venture Capital Funds by SEBI registered Foreign Venture Capital Investors . - Cir. No. 93 Dated: March 19, 2012
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Clarification - Prior intimation to the Reserve Bank of India for raising the aggregate Foreign Institutional Investors / Non-Resident Indian limits for investments under the Portfolio Investment Scheme. - Cir. No. 94 Dated: March 19, 2012
Corporate Law
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Constitution of a Committee to formulate a Policv Document on Corporate Governance. - Cir. No. 05 Dated: March 19, 2012
Indian Laws
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BUDGET PROPOSAL IN RELATION TO AMENDMENT OF SECTION 56 OF THE INCOME TAX ACT 1961 VIDE FINANCE BILL 2012. - Article
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Budget 2012: Amendment to overcome judgment of the Supreme Court in case of Vodaphon Explanations for the removal of doubts very unfortunate trend on legislation in law. - Article
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Budget 2012-2013 - Amendments in Cenvat Credit - Article
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BUDGET PROPOSAL IN RELATION TO WEALTH TAX VIDE FINANCE BILL 2012 - Article
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BUDGET PROPOSAL IN RELATION TO INCOME TAX VIDE FINANCE BILL 2012 - Article
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The Finance Bill 2012 :Amendments in relation to exemptions under Income-tax Act 1961 - Article
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Budget 2012-2013 - Amendments in Service Tax - Article
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Budget 2012-2013 - Amendments in Service Tax Rules, 1994 - Article
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Budget 2012-2013 - Amendments in Point of Taxation Rules 2011 - Article
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I must be cruel only to be kind - Article
Central Excise
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Seeks to amend notification No. 2/2011-Central Excise, dated the 01.03 2011. - Ntf. No. 20/2012-Central Excise Dated: March 19, 2012
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Seeks to amend the Chewing Tobacco and Un-manufactured Tobacco Packing Machines (Capacity Determination and Collection of Duty ) Rules, 2010. - Ntf. No. 20/2012 - Central Excise (N.T.) Dated: March 19, 2012
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Seeks to amend Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Rules, 2008. - Ntf. No. 19/2012 - Central Excise (N.T.) Dated: March 19, 2012
Case Laws:
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Income Tax
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2012 (3) TMI 246
Supreme Court rejects Government's petition seeking review of Vodafone order - Supreme court has declined petition filed by Union of India on 17th February, 2012 seeking review of its order in Vodafone case wherein it was held that tax authorities had no jurisdiction to tax vodafone's offshore transactions. Apex court on review petition held that no merit is found in the petition.
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2012 (3) TMI 244
Validity of notice issued u/s 148 for re-opening of assessment when jurisdiction was founded merely on the possibility of escapement asseseee being Singapore Company had business of investment in Indian securities electronically 'annexure less' return of NIL income filed in accordance with provisions of DTAA between India and Singapore several notes annexed to the return of Income making relevant disclosures A.O. sought to reopen assessment on ground that petitioner is FII and section 115AD would be attracted and short term capital gains may have arose A.Y. 2006-07 - Held that:- It is settled principle of law that when the A.O. issues a notice u/s 148, at that stage the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief and validity of the notice u/s 148 has to be determined on the basis of the reasons which are disclosed to the assessee. Those reasons constitute the foundation of the action initiated by the A.O. of reopening the assessment. Those reasons cannot be supplemented or improved upon subsequently. In present case, attention of A.O. was drawn to the fact that assessee is not FII and it would be evident that the A.O. has not acted within his jurisdiction in purporting to reopen the assessment. Also A.O. was not entitled, when he disposed of the objections to travel beyond the ambit of the reasons which were disclosed to the assessee. See CIT v. Kelvinator of India Ltd (2010 - TMI - 35201 - Supreme Court Of India) Decided in favor of assessee.
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2012 (3) TMI 243
India Canada convention applicant being wholly owned subsidiary of UK company - outsourcing of back office support functions by overseas entities assignment of employees of overseas entity to perform the duties at the location of the applicant for the period stipulated and to report to the applicant salary paid by overseas entity reimbursement of salary by applicant to overseas entity whether reimbursement of salary to overseas entity is income accrued to overseas entity withholding of taxes Revenue also questioned regarding it to be FTS Held that:- In present case, secondee employees are all rendering managerial services and there is no indication that any technical functions or consultancy functions is performed, therefore, it cannot be held to be fees for technical services. Further, employees continue to be the employees of the overseas entities and are rendering services for their employer in India by working for a specified period for a subsidiary or associate enterprise of their employer. This gives rise to a service PE within the meaning of Art.5 of the India-UK Treaty, falling under Article 5.2(k) corresponding to provision in paragraph 2(l) of Article 5 of India-Canada Convention. Hence, reimbursement of salary by the applicant under the agreement would be income accruing to overseas entities in view of the existence of a service PE in India and tax is liable to be deducted at source u/s 195
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2012 (3) TMI 242
FTS - IVTC services - Whether payment received by the applicant in connection with transactions undertaken in relation to the Inspection, Verification, Testing and Certification (IVTC) services are chargeable to tax in India as FTS u/s 9(1)(vii)(b) - applicant being tax resident of Hong Kong belonging to X group of companies engaged in the business of IVTC services services to Indian customers provided through X India - Held that:- It is observed that reports are highly technical in nature and are cargo activity specific. These are admittedly customized services and not routine commercial services. Thus, the technical services provided to the customers/X India is covered under the term fee for technical services u/s 9(1)(vii). The exception provided u/s 9(1)(vii)(b) of the Act is not available to the applicant. Whether payments received in connection with costs incurred for and on behalf of X India / recovery of administrative cost are chargeable to tax in India Held that:- Such payments are also chargeable to tax as FTS u/s 9(1)(vii). Withholding of tax Held that:- As the applicant has tax presence in India, X India / Indian customers are required to withhold taxes u/s 195 at the rate in force mentioned in the Finance Act for the relevant year. Requirement of filing of return u/s 139 Held that:- As the applicant has taxable income in India, it is required to file tax return under the provision of section 139.
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2012 (3) TMI 240
Deduction u/s 80IB - manufacturing - Revenue filled an appeal against the judgment of the Tribunal on the ground that the activity carried on by the assessee does not amount to manufacturing or production of "an article" or "thing" within the meaning of Section 80IB(3) of the Act - The assessee is engaged in the business of manufacturing home-care products including perfume sprays, air fresheners, room fresheners as also polish spray; rust removers, etc and claimed deduction under Section 80IB on the income derived from its activity, the assessee for the A.Y 2004-05 - Held that :- Tribunal noted the process undertaken by the assessee in producing the air fresheners -that for bringing into existence the air fresheners as a commodity saleable in the market, the assessee had to undertake several steps like Container Forming, Pre-mix Preparation,Cleaning of Tins Cans, Filling, Crimping, Charging , sealing, packing ,etc. - Tribunal, by the impugned order, rejected the Revenue's appeal confirming the view of the CIT(A) that the activity carried out by the assessee would amount to manufacturing activity.
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2012 (3) TMI 239
TDS credit - claim of TDS credit without surrender of income - held that:- the provisions contained in sub-sections (1) and (3) of Section 199 read with Rule 37BA of the Income Tax Rules serve a purpose because if income is not assessable in the assessment year and at the same time assessees are entitled to credit of tax recovered and remitted in respect of such income, the Department will be compelled to refund the entire tax amount every year and along with it if refund is not made within three months from filing of return, mandatory interest will also payable, as provided under Section 243(1) of the Income Tax Act which will defeat the purpose of TDS provisions in the Act. Therefore, we do not find any justification for the Tribunal to allow credit of tax based on TDS certificates without corresponding assessment of income in the assessment years concerned which is against the statutory provision. whether the assessing officer was justified in refusing to give credit for tax payments based on TDS certificates issued by the Bank for the reason that income is not returned for assessment by the assessees in the assessment year following the year in which tax is recovered and paid by the Banks - Section 199 of the Income Tax Act makes it clear that the assessee is entitled to credit based on TDS certificate only in the assessment year in which income from which tax is deducted is assessed - Decided against the assessee. If Section 145(1) is amended for assessment of income on which TDS is made in the assessment year following the year in which deduction is made irrespective of the system of accounting followed by the assessee, the same will avoid problems for the assessees and the Department. - Decided in favor of the revenue
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Customs
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2012 (3) TMI 245
Petition filed to seek assessment of Bill of Entry by allowing exemption from CVD under Notification No.30/2004-CE Held that:- Prayer for assessing the BE by allowing the exemption from CVD under Notification No.30/2004-CE, dated 09.07.2004, cannot be granted. Also, respondent is directed to release the goods concerned subject to furnishing of bank guarantee for the entire value of CVD by petitioner.
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