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Home e-Newsletters Index Year 2012 April Day 11 - Wednesday

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TMI Tax Updates - e-Newsletter
April 11, 2012

Case Laws in this Newsletter:

Income Tax Service Tax Central Excise CST, VAT & Sales Tax Indian Laws



Articles


News


Notifications


Circulars / Instructions / Orders


Highlights / Catch Notes

    Income Tax

  • Section 203 of the income-tax Act, 1961 - deduction of tax at source - Certificate for tax deducted - Issuance of TDS Certificates In Form No. 16A downloaded from TIN website. - Cir. No. 01/2012 Dated: April 9, 2012

  • Deduction u/s 54EC – LTCG - Proviso to Section 54EC restricts investment of more than Rs 50 lacs in a F.Y.. However, if assessee transfers his capital asset after 30th September of the F.Y. he gets an opportunity to make an investment of Rs. 50 lakhs each in two different F.Ys. - AT

  • Hiring of vehicles to be used for loading & unloading and transportation of products – Merely because the words "loading & unloading" are used in the contract, no one can presume that the contractee has to do any work on behalf of the assessee. The assessee has to make use of the equipment/vehicle made available on payment of hire for his use. Therefore, it is hire of equipment/vehicle simplicitor and Section 194I would be applicable - AT

  • Nature of 'Usance Interest' – The nexus of interest was only with the period from which the purchase price of the raw material became due viz., the date of bill of lading. Therefore, usance interest, is interest within the meaning of sec. 2(28A) and same would be deemed to have accrued and arisen in India in view of the provisions of sec. 9(1)(v)(b) of the Act. - AT

  • Method of accounting or royalty and assessment of reimbursement of expenses by the AO - Singapore based company - royalty and FTS are taxable on payment basis and not on accrual basis. - AT

  • Capitalization of regularization fee paid - Construction of hospital building - The assessee has rightly booked the payment under the cost of construction of the hospital building - AT

  • Payments made by the assessee-company for subcontracting its works contract - payment of hire charges/charter fees to EMPL - the contract given to EMPL was in the nature of sub-contract to undertake on behalf of the assessee's dredging work with the equipment and manpower of EMPL - It is only hiring of the equipment and the assessee did not use the dredger or any part thereof on its own neither it was given any right to use - AT

  • Succession of the proprietorship business in to a corporate entity - conditions prescribed in section 47 (xiv) - in the present case, it cannot be held that he has received consideration or benefit indirectly other than by way of allotment of shares, only because higher number of shares have been allotted due to revaluation - AT

  • Taxability of project - relevant assessment year - held that:- Once the income from the project is taxed, the Assessee will have no occasion to claim expenses relating to that project in a later assessment year. - AT

  • Power u/s 131 - Extension of period of retaining Books of account - Assessing Officer can retain the books of account only for 15 days. - learned single judge was justified in entertaining the writ petition, issuing a direction to return the books of account,- HC

  • Mentioning of a footnote below the return - a footnote cannot guide or control a return which is filed by an assessee. A footnote if at all can be for the purpose of amplification or for further reference or any such thing, but not to indicate a stand contrary to the main thing - HC

  • Exemption u/s 54F - land purchased for construction of house but stayed by the court - the entire amount spent by the assessee in purchasing the land should be construed as amount invested in purchase/construction of residential house - AT

  • Assessee had transferred as per the agreement goodwill to client which AO contested that it cannot be treated as a capital receipt and be treated as a revenue receipt and brought to tax under the head "Profit and Gains of Business' - consideration paid is not for the goodwill but it is for the assets, properties and rights of the transferor hence treated as capital receipt - HC

  • Allow ability of discount charges in respect of debentures issued by the assessee while computing income from house property - the difference between the issue price and maturity value has to be spread over the debenture holding period and only proportionate amount can be allowed as deduction in a particular year. - AT

  • Exemption u/s 10A(2) - Deduction u/s 80HHE - Tribunal in the present case has come to the conclusion that where a running business is transferred lock, stock and barrel by one assessee to another assessee the principle of reconstruction, splitting up and transfer of plant and machinery cannot be applied - Reconstruction is of a business already in existence and there must be a continuation of the activities and business of the same industrial undertaking - HC

  • Depreciation on intangible assets being “business and commercial rights” - pecified intangible assets acquired under slump sale agreement were in the nature of “business or commercial rights of similar nature” specified in Section 32(1)(ii) and were accordingly eligible for depreciation. - HC

  • Charitable Institution - when no approval was granted u/s 10(23C), CIT was not justified in holding that assessee is a charitable institution and eligible for exemption u/s 10(23C)(iiiad) - AT

  • ITAT deleted the addition of Rs. 1.50 crore made by AO invoking the provisons of Section 40(a)(ia) read with section 194C - Tribunal while deleting the addition made under Section 40(a)(ia) of the Act has made out altogether a new case and accepted the stand of the assessee that they had not paid Rs. 1.50 crores and the said work was not sub-contracted by them to Rishikesh Properties Pvt. Ltd - Decided in favor of revenue. - HC

  • Set off of business loss ignoring the provisions of section 90(2) - From the prescription of section 71, it is palpable that there is no bar in allowing set off of loss under the head "Profits and gains of business or profession" against income under the head "Income from other sources".

  • FEMA

  • CONSOLIDATED FDI POLICY EFFECTIVE FROM 10-04-2012. - Cir. No. FDI GUIDELINES - 01/2012 Dated: April 10, 2012

  • Corporate Law

  • Annual general meeting - the 7th to 12th annual general meetings of the company could not be held. On 28th May, 2008 the company issued notices for holding these annual general meetings on 27th and 28th June, 2008 at diverse timings specified in the notices - The Company Law Board (CLB) fell into great error in altogether preventing holding meetings as mentioned in the above notices. It ought to have permitted them to be held - HC

  • Indian Laws

  • Theft from cash chest by an employee - Once the employer has lost the confidence in the employee and the bona fide loss of confidence is affirmed, the order of punishment must be considered to be immune from challenge, for the reason that discharging the office of trust and confidence requires absolute integrity, and in a case of loss of confidence, reinstatement cannot be directed. - SC

  • Wealth-tax

  • Wealth tax - the commercial asset used by the assessee substantially and partly given on lease are not business assets and thus includible into the 'net wealth' u/s 2(ea) - Since the assessee in the instant case has let out a part of its business premises and since the assessee is not in the business of letting out properties, therefore, the said property, in our opinion, is not exempt either u/s. 2(ea)(i)(3) or 2(ea)(i)(5) of the Wealth Tax Act - - AT

  • Service Tax

  • Service tax paid on taxable services used for export of goods at the post-manufacture stage - electronic refund through the Indian Customs EDI System -- Notification 52/2011-ST – review -- regarding. - Cir. No. 156/7 /2012-ST Dated: April 9, 2012

  • Harmonisation of Service Tax and Central Excise Registration. - Cir. No. Draft circular [F. No. 137/22/2012 - Service Tax] Dated: April 4, 2012

  • Clarification on Point of Taxation Rules - regarding. - Cir. No. 155/6/ 2012 – ST Dated: April 9, 2012

  • Refund of service tax on taxable services used for export of goods – assessee claimed refund of service tax on taxable services used for export of MT of Chrome Concentrate as per Notification 17/2009-ST dated 7.7.2009 – export made through MMTC - claim denied on ground that the appellant are not the exporter of the goods but the exporter of the said goods was M/s MMTC Ltd., BBSR - Matter remanded back - AT

  • Intellectual Property Services - Trade marks and brand name - The appearance of the trade mark "Hero Honda" and "Hero Honda 4T plus" on the oil company's products definitely indicates a connection between the said companies and the appellants product. - AT

  • Cenvat credit while availing benefit of abatement - Commercial and Industrial Construction - notification no. 1/2006 - there is no stipulation in the notification that the option to avail/non-avail CENVAT credit has to be exercised uniformly in respect of all the contracts executed by the assessee. It is for the assessee to choose which formulation he wants to follow in a given contract. - AT

  • Maintainability of application filed u/s 96(C) of the Finance Act, 1994 – subsidiary of a subsidiary of a Government company - If ruling is given in this case, it will bind only the applicants, this would mean CESTAT is free to render a ruling ignoring what is being ruled by this Authority. Such a situation should be avoided. - AAR

  • Business auxiliary service - the entries for “Business Auxiliary Service” and “Business Support Service” have different objects. After the introduction of the new entry, there can be argument as to which entry covers the activity more appropriately - in such situations the extended period of time cannot be invoked for raising demand - AT

  • Claim for exemption under Notification 12/2003-ST which was not claimed in adjudication proceedings - When the contract is read as a whole it is indeed a contract for transfer of the right to use the Trademark for limited purposes but on a permanent basis - the impugned contract, in its pith and substance is not a "transfer of right to use" and is more in the nature of permission to use the trademark which continues to be the property of the licensor - Demand of service tax confirmed. - AT

  • Cenvat credit - Input service distributor (ISD) - The term 'commencing of business' in Rule 3 therefore, cannot be understood in the manner whereby it will apply only to the cases where the actual manufacturing process would start. It would commence from the time the preparation commences for the establishment of manufacturing unit as the party is entitled to avail credit even prior to actual commencement of production. - Benefit of cenvat credit denied - decided against the assessee. - AT

  • Storage and warehousing - the various old records such as discharged cheques, vouchers, books of accounts in respect of which the service was rendered by the appellant to his clients such as banks and corporate houses for management of the records, cannot be considered as storage and warehousing of "goods" as defined in the Finance Act, 1994 read with section 2(7) of the Sale of Goods Act, 1930 - not liable to pay service tax - AT

  • Central Excise

  • Refund of the excess excise duty paid - Tribunal has travelled beyond the show cause notice and has given a reasoning in paragraph 5 of the order passed by the Tribunal that the appellant has not established whether incidence of excess paid duty was not passed to the customer in the form of availment of MODVAT/CENVAT credit. - HC

  • Remission of duty - remission of duty is being claimed on the ground that the goods in respect of which the remission of duty has been claimed were a lost/destroyed due to an unavoidable accident - appellant have not been able to explain as to how the bottom of the tank got burst. - AT

  • Cenvat credit - separate account and inventory of the inputs - requirement of Rule 6(2) - this requirement cannot fulfilled in respect of inevitable waste or by product - AT

  • Valuation u/s 4A based on MRP or u/s 4 based on truncation value - Classification of bath fittings etc. - AT

  • Exemption under Notification No.8/97-CE, dated 1.3.1997 - finished goods manufactured by the 100% EOU out of the raw material supplied by another 100% EOU - Clearance to DTA - The notification requires to be interpreted in the light of the words employed by it and not on any other basis. There cannot be any addition or subtraction from the notification for the reason the exemption notification requires to be strictly construed by the Courts. - SC

  • Cenvat credit - though the document is titled as "Debit Note" the said document contains all relevant details as specified in Rule 9(2) of the Cenvat Credit Rules, 2004 and therefore there is no reason to deny the credit - AT

  • Cenvat Credit denied on the ground that invoices did not contain necessary details as required under Rule 11 of Central Excise Rules, 2002 - The fact that Rule 9(2) is an exception to the provisions of Rule 11 of Central Excise Rules, has not been taken note of by both the lower authoritiest - AT

  • VAT

  • Supply of goods from SEZ to DTA - Levy of CST - territory outside the territory of India u/s 53 (1) of SEZ Act, - The deeming provision also cannot be inferred from the analogy drawn from different Acts - Decided against the assessee. - HC

  • Classification - voltage stabilizers were electronic goods falling within entry No. 74(f) of Notification No. 1223 dated March 31, 1992, passed under the U. P. Trade Act, 1948, and were liable to sales tax under the U.P. Trade Tax Act, 1948, at the rate of four per cent. - SC

  • AO issued annexure A notice under section 22(3) of the KVAT Act, on the basis that the aforesaid products of the assessee were laundry brighteners and proposing to classify the products under entry 27 of S. R O. No. 82/2006 tax and levy tax at 12.5 per cent - Decided in favor of revenue. - HC

  • Benefit of the sales tax deferral scheme - it is not the case of the Revenue that circular dated May 1, 2000 is in conflict with either any statutory provision or the deferral schemes announced under the aforementioned Government orders. We, therefore, hold that the said circular is binding in law on the adjudicating authority under the TNGST Act. - SC

  • Clarifications/circulars issued by the Central Government and of the State Government are concerned they represent merely their understanding of the statutory provisions. They are not binding upon the court. - SC


Case Laws:

  • Income Tax

  • 2012 (4) TMI 218
  • 2012 (4) TMI 217
  • 2012 (4) TMI 216
  • 2012 (4) TMI 215
  • 2012 (4) TMI 214
  • 2012 (4) TMI 213
  • 2012 (4) TMI 212
  • 2012 (4) TMI 211
  • 2012 (4) TMI 210
  • 2012 (4) TMI 209
  • 2012 (4) TMI 207
  • 2012 (4) TMI 206
  • 2012 (4) TMI 205
  • 2012 (4) TMI 204
  • Service Tax

  • 2012 (4) TMI 219
  • Central Excise

  • 2012 (4) TMI 202
  • 2012 (4) TMI 201
  • CST, VAT & Sales Tax

  • 2012 (4) TMI 220
  • Indian Laws

  • 2012 (4) TMI 208
 

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