TMI Tax Updates - e-Newsletter
May 12, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise CST, VAT & Sales Tax

Articles

1. Delhi Tribunal grants additional depreciation on assets purchased for power generation

   By: CSSwati Rawat

2. Cost Accounting Record Rules 2011 to Media Industry

   By: ajay singh

News

1. Banks in Rural Areas.

2. Import of Gold .

3. Khandelwal Committee Report.

4. Agriculture Development Bank.

5. Campaign to Recover Outstanding Amount.

6. National Policy on Microfinance.

7. Connection of Banks with EPS.

8. Remittance of Funds by Migrant Population.

9. Vidyanathan Committee.

10. Rupay System.

11. BIFR Like Institution for Agriculture Sector.

12. IT Evasion of Builders.

13. ATM System.

14. Loan From Land Development Bank.

15. Interest Rate on NRIs Deposits.

16. Auction of Government Cash Surplus.

17. Repayment of 10.25% Government Stock, 2012.

18. Anand Sharma Expresses Concern Over Decline in IIP.

19. Finance Bill 2012 as Passed By Lok Sabha. [To be called the Finance Act, 2012]

20. India Germany to Collaborate in Electric Mobility India Seeks Green Technologies from the Global Leader.

21. Germany Expresses Happiness on Indian Investment Climate Anand Sharma raises issues of Cumbersome Visa Process and IPR Infringement of Indian Intellectual Property Siemens to collaborate in Skill Development in Manufacturing Meets German Economy Minister and Mayor of Berlin.

22. New Companies Act.

23. MLM Companies.

24. Autonomy to Serious Fraud Investigation Office.

25. Export Stood at US$ 24.50 Billion in April 2012: Commerce Secretary.

Notifications

VAT - Delhi

1. F.7(400)/Policy/VAT/2011/47 to 60 - dated 30-4-2012 - DVAT

Maharashtra Bank authorized for e-payment.

Circulars / Instructions / Orders

VAT - Delhi

1. 02 OF 2012-13 - dated 7-5-2012

Online issue of central declaration forms.

2. 01 OF 2012-13 - dated 2-5-2012

Clarification regarding preserving of DVAT 43 by the contractors.

FEMA

3. 123 - dated 10-5-2012

Risk Management and Inter Bank Dealings.

4. 124 - dated 10-5-2012

Exchange Earner's Foreign Currency (EEFC) Account .

5. 125 - dated 10-5-2012

Exim Bank's Line of Credit of USD 13 million to the Government of the Republic of Mozambique .

6. 122 - dated 9-5-2012

Risk Management and Inter Bank Dealings.

DGFT

7. 02/2012 - dated 10-5-2012

Additional conditions for obtaining cotton RC’s.

8. 111(RE:2011)/2009-2014 - dated 10-5-2012

SION for new product “Tubular Bags (Gauntlet)” under Textiles Product Group.

9. 01/2012 - dated 8-5-2012

Procedure for obtaining cotton RC’s.

Highlights / Catch Notes

Income Tax

• Tax Authorities Must Allow TDS Credit Even if Income Isn't Taxable to Ensure Fair Taxation Process.

  Case-Laws - AT : TDS – Revenue can not disallow credit of TDS even if the amount is not chargeable to tax
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• Tax Department Questions Minor Partner's Capital Contribution; Attributes Funds to Minor Instead of Firm.

  Case-Laws - HC : IT - introduction of capital into the firm by the partner - if for any reason department was not satisfied with the financial capability of Minor partner the amounts could have been added to his hands and not at the hands of Firm
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• Life Membership Subscription for Magazines Considered Income Receipt Under Tax Law, Not Capital Receipt.

  Case-Laws - HC : Revenue receipt or capital receipt - there is no justification to treat the receipt of life membership subscription of the magazine differently other than the income receipt.
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• Increase in Capital Not Taxable u/s 56 as Income from Other Sources, Rules Assessing Officer.

  Case-Laws - HC : Addition made by the AO due to increase in the capital cannot be taxed under Section 56 as income from other sources.
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• Development Officer's Conveyance Allowance Deductible u/s 10(14) as Part of Salary for TDS Purposes.

  Case-Laws - HC : TDS u/s 192 - salary - conveyance allowance and additional conveyance allowance received by the DO of LIC was permissible deduction under Section 10(14)
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Customs

• Tata Teleservices and Tata Consultancy's Group Status Under Foreign Trade Policy Analyzed for Tax Implications.

  Case-Laws - HC : Whether Tata Teleservices (Maharashtra) Ltd. and Tata Consultancy Services Ltd. are group companies under FTP.
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• Acquiring Company Not Liable for Offenses of Acquired Firm, Clarifies Legal Ruling.

  Case-Laws - AT : A company taking over another company cannot be held liable for the offence committed by the company taken over.
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• Corrigenda Notification Effective Date: Key Difference Between Correction and Amendment in Customs and Tax Law.

  Case-Laws - HC : Effective date of corrigenda notification - It ceases to be a correction if it is effective from the date of its issuance. It then becomes an amendment.
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DGFT

• DGFT Issues New Conditions for Cotton Registration Certificates to Streamline Export and Trade Process.

  Circulars : Additional conditions for obtaining cotton RC’s. - Cir. No. 02/2012 Dated: May 10, 2012
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• DGFT issues new SION for "Tubular Bags (Gauntlet)" under Textiles Product Group, impacting production and export regulations.

  Circulars : SION for new product “Tubular Bags (Gauntlet)” under Textiles Product Group. - Cir. No. 111(RE:2011)/2009-2014 Dated: May 10, 2012
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• DGFT Releases Circular No. 01/2012 Detailing Procedure for Cotton Registration Certificates; Compliance Guidelines Included.

  Circulars : Procedure for obtaining cotton RC’s. - Cir. No. 01/2012 Dated: May 8, 2012
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FEMA

• FEMA Circular Updates Risk Management Guidelines for Interbank Transactions, Emphasizing Regulatory Compliance and Stability in Banking Sector.

  Circulars : Risk Management and Inter Bank Dealings. - Cir. No. 123 Dated: May 10, 2012
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• New Guidelines for Managing Exchange Earner's Foreign Currency Accounts Under FEMA Regulations Announced.

  Circulars : Exchange Earner's Foreign Currency (EEFC) Account . - Cir. No. 124 Dated: May 10, 2012
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• 2012 Circular Guides Banks on Risk Management and Inter-bank Dealings Under FEMA for Stability and Compliance.

  Circulars : Risk Management and Inter Bank Dealings. - Cir. No. 122 Dated: May 9, 2012
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Indian Laws

• Delhi Tribunal Approves Extra Depreciation for Power Generation Assets, Boosting Tax Incentives for Sector Investments.

  Articles : Delhi Tribunal grants additional depreciation on assets purchased for power generation - Article
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• Finance Bill 2012: Key Tax Amendments for Revenue Boost, Compliance Streamlining, and Enhanced Transparency in Financial Transactions.

  News : Finance Bill 2012 as Passed By Lok Sabha as on 08-05-2012.
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Service Tax

• Revenue Neutrality Bars Extended Limitation for Tax Demands in Service Tax Cases: Key Principle Highlighted.

  Case-Laws - AT : ST - Revenue neutral exercise - demand can not be raising invoking extended period of limitation.
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• Backup Power Supply Charges Exempt from Service Tax Under Management, Maintenance, or Repair Services Category.

  Case-Laws - AT : Management, Maintenance or Repair Services - amounts collected under the head 'backup power supply' - No service tax.
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• Rent-a-Cab Service Tax: Control by Assessee or Driver Key, Not Rental Duration.

  Case-Laws - AT : ST - rent-a-cab service – Whether the hiring out of vehicle is for a day or a month does not mean anything, as the said vehicle is still in the possession of the appellant assessee or his driver during the entire period.
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Central Excise

• Valuation of Physician Samples by Contract Manufacturer Set as Transaction Value or CAS 4 Value.

  Case-Laws - AT : CE - contract manufacturer jobworker - clearance of physician samples -transaction value/CAS 4 value are the correct value
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• Refund Claim Filed Before Appeal Resolution: Limitation Period Not Applicable Under Central Excise Rules.

  Case-Laws - HC : CE - refund claim was filed by the assessee even before the appeal filed by the Revenue was disposed of by the First Appellate Authority - period of limitation not applicable.
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• Central Excise shortage doesn't prove clandestine removal; improper account maintenance confirmed, demand upheld.

  Case-Laws - AT : CE - shortage cannot be presumed to be a case of clandestine removal - however charge of improper maintenance of accounts is established - demand confirmed.
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• Appellant Wins Cenvat Credit for Paint Used on Pipes and Machinery, Boosting Tax Relief Benefits.

  Case-Laws - AT : Cenvat credit allowed on Paint used by the appellant for painting of pipes and machinery.
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VAT

• Online Process for Issuing VAT and Sales Tax Forms to Streamline Compliance and Modernize Tax Administration.

  Circulars : Online issue of central declaration forms. - Cir. No. 02 OF 2012-13 Dated: May 7, 2012
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• Contractors Must Preserve DVAT 43 Forms for Compliance, Per Circular No. 01 of 2012-13; Ensures Tax Transparency.

  Circulars : Clarification regarding preserving of DVAT 43 by the contractors. - Cir. No. 01 OF 2012-13 Dated: May 2, 2012
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• Maharashtra Bank Authorized for E-Payments in VAT and Sales Tax per Notification F.7(400)/Policy/VAT/2011/47-60.

  Notifications : Maharashtra Bank authorized for e-payment. - Ntf. No. F.7(400)/Policy/VAT/2011/47 to 60 Dated: April 30, 2012
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Case Laws:

• Income Tax

• 2012 (5) TMI 139
  Penalty imposed u/s. 271D as the assessee receiving loans in cash in contravention of the provisions of section 269SS – Held that:- CBDT Circular No.572 dated 03.08.1990 has clearly brought out the provision of section 269SS explaining that "for taking or accepting any loan or deposit in excess of Rs. 20,000" - As cash loan is not exceeding Rs. 20,000 rather it is exactly Rs. 20,000 no contravention of Sec 269SS arises – Secs 271D inserted in the IT Act w.e.f. 1st April, 1989, by the Direct Tax Laws (Amendment) Act, as penalty under s. 271D may be levied for failure to comply with the provisions of s. 269SS i.e. for taking or accepting any loan or deposit in excess of Rs. 20,000 otherwise than by an account payee cheque or bank draft – in favour of assessee.

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• 2012 (5) TMI 138
  Disallowance of credit of TDS – no chargeable income in the hands of assessee - The franchisee pays rent to the assessee after deducting applicable TDS." The assessee explained the transaction with the help of accounting entries passed in its books of account. It was, therefore, urged that the assessee and M/s Arvind Brands Limited were only the link between Landlords of the property and the franchisee. That was stated to be the reason for which the assessee had not shown any rental income. The Assessing Officer, on going through the assessee's explanation, agreed that the assessee did not receive any rental income. He, therefore, did not make any addition on this account. However he held that the amount of TDS could not be refunded to the assessee as the assessee had not shown any income from rent. – Held that:- As per section 199 any deduction made in accordance with the foregoing provisions of Chapter and paid to the Central Government shall be treated as a payment of tax on behalf of the person from whose income the deduction was made and credit shall be given to him for the amount so deducted for the assessment year for which such income is assessable - The Revenue will never allow credit as the amount is not chargeable to tax and it cannot retain such amount in contravention of Article 265 of the Constitution so to circumvent the situation credit for the tax deducted at source to the payee of the amount in the year for which such tax was deducted and the amount was paid after deduction of tax at source is allowed – in favour of assessee.

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• 2012 (5) TMI 137
  Deleting the addition made by the A.O. on account of excessive payment to the persons specified in section 13(3)– Revenue appeal - Held that:- If an assessee made payments for availing benefit, services or any facility from the persons mentioned in section 40A(2(b) and similar type of benefit or service can be availed from the open market at a cheaper rate then the excess amount considered by the AO is to be disallowed to the assessee out of his business expenditure - Since the income of the assessee is being not computed as a business income and computed under sec. 11, 12 and 13 - Clause "b" of section 40A(2) provides no reference to an assessee who is a society or trust and whose income is to be assessed as per sections 11, 12 and 13 - Because a similar mechanism has been provided therein section 13(1)(ii) and 13(3) of the Act it appears that the Assessing Officer has made reference to this section unnecessarily - section 13(3) is an analogous to sub-clause (b) of section 40A(2)– against revenue. Violation of sec. 13(1)(c)(ii) r.w.s.13(3) and thus lose status of a charitable institution and exemption under sec. 11 – Held that:- Restriction is applicable to those amounts which have been applied directly or indirectly for the benefit of any person referred to in sub-section (3) of the Act and will not lead to any conclusion that assessee would loose its charity status - if a small amount is to be disallowed that would not disqualify to enjoy the status of charity- against revenue. Whether assessee has extended any undue benefit directly or indirectly to the persons referred to in sub-section (3) – Held that:- As far as the salary paid to two persons is concerned in assessment years 2005-06 and 2006-07, AO made the disallowance and the ITAT has upheld the deletion of disallowance – looking to 6th Pay Commission which resulted into a handsome enhancement by 30% to 40%. in the salary of government teaching staff the increase in the salary of Shri Joseph John allowed to him by the ITAT in 2004-05, is being looked into with this angle also then sum of Rs. 55,000 would not be on a higher side – against revenue.

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• 2012 (5) TMI 136
  Whether income realized from the sale of land is chargeable to income tax as capital gains or as income from business – Held that:- The sale of the land was not motivated by a desire to make a profit, but to protect the corpus and the resulting expenditure due to litigation – as there were no improvements on the land by way of laying out drainage, levelling or construction of roads it cannot be said that the land was for the purpose or trade - an area of about hundred acres was repurchased cannot be treated as purchase in the commercial sense since it was a repurchase of lands which were declared as surplus under the Urban Land Ceiling Act - the surplus realised on the sale of the land during the assessment years in question was in the nature of capital gains.

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• 2012 (5) TMI 135
  Amount introduced by the minor partner in the assessee firm at the time of starting of business treated as income of the firm – Held that:- Failure to take into account that the period in question was the first year of the business of the assessee firm - the partnership firm was formed on 5.7.1990 and on 7.7.1990 Minor partner deposited capital money with the Firm through bank drafts - the accounting period being financial year i.e. ending on 31st of March, 1991, the Firm could not have any income at the time of its formation - if for any reason department was not satisfied with the financial capability of Minor partner the amounts could have been added to his hands and not at the hands of Firm - no material before the Tribunal in holding that amount introduced by minor partner at the time of starting of the business, as income of the assessee Firm – against revenue. Tribunal dismissing the appeal without recording any finding on the said grounds – Held that:- Tribunal was not justified in not considering the ground nos. 2 to 6 of grounds of appeal independently and it committed illegality in dismissing the appeal without recording any finding thereon – in favour of assessee.

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• 2012 (5) TMI 134
  Disallowance of payments made to professionals on non-deduction of tax at source – Held that:- As there is no mention of any other medical consultancy receipts, i.e., apart from surgery income (being at Rs. 28.50 lacs out of total receipt of Rs. 34.74 lacs for the financial year 2005-06) the matter without any clear finding on facts cannot be concluded as there has been no examination on this vital aspect of the matter which as it transpire would be decisive - no doubt physicians/doctors have been hired but the nature of the services rendered by them are whether facilitative or on independent stand alone basis need to looked - restore the matter back to the file of the assessing authority for an examination and issue of the consequential finding/s – in favour of assessee.

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• 2012 (5) TMI 133
  Notice issued u/s 148 - unutilized CENVAT credit to be included in the value of closing stock - Held that:- The condition precedent for exercising power of reopening the assessment as provided in Section 147 and issue of notice u/s 148 is absent and the AO acted illegally in issuing notice of reassessment by forming a second opinion without having any "tangible material" to exercise jurisdiction - only the difference of opinion of the successor-in-office which has been the basis for reopening of the assessment cannot be accepted – the meaning of the expression "reason to believe" needs to be given a schematic interpretation, otherwise Section 147 giving arbitrary powers to the AO to reopen assessments on the basis of "mere change of opinion" which cannot be per se reason to reopen - in favour of assessee.

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• 2012 (5) TMI 132
  Validity of notice under Section 148 issued after filing of revised return under Section 139(5) – Held that:- The revised return was filed on 28.5.2002 and was processed under Section 143(1) on 24.3.2004 - Rs.1,00,000 as the gift amount was surrendered to be taxed and tax amount was also deposited - the revised return filed on 28.5.2002 was the only return which substituted the original return thus it was not a case of escapement of income – wrong conclusion that revised return can be filed only when there is bonafide mistake as Section 139(5) enables an assessee to file revised return on the discovery of any omission or wrong statement – initiation of reassessment taking recourse of Section 148 was not warranted - in favour of assessee.

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• 2012 (5) TMI 131
  Cancelling the penalty u/s 271-D/27/E by tribunal - contravention of provisions of section 269SS / 269T – Held that:- Tribunal rightly invoked Section 273-B as no penalty shall be imposable on the assessee for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure - from the materials brought on record it is clear that four persons were agriculturists from whom various deposits in cash were accepted amounting to Rs. 10,000/- or lesser amount and came to the conclusion that those agriculturists had no bank account and the amounts were paid in cash – in favour of assessee.

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• 2012 (5) TMI 130
  Power of Commissioner took cognizance under sec. 263 – Held that:- AO has issued a questionnaire for information in respect of installation of wind turbine plant and the assessee has given the reply producing all relevant documents indicating the installation of the wind turbine plant meant for generation of electricity - The assessment order passed subsequent to passing of 263 order by the Learned Commissioner certain facts noticed in this subsequent orders held that Assessing Officer has not applied his mind analytically in the original assessment proceedings - according to the Learned Commissioner, the replies do not contain complete details and AO has time to frame the assessment order but without conducting any proper inquiry, passed the assessment order - information supplied by the assessee on the power purchase agreement though were on the record but they were not looked into by the AO - it cannot be inferred that Assessing Officer has applied his mind and thereafter accepted the claim of the assessee for grant of depreciation - Commissioner set aside the order of the AO directing to conduct a fresh inquiry – no error in the order of Learned Commissioner – against assessee.

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• 2012 (5) TMI 127
  Withdrawing the additional depreciation on the ground that electricity is not an article or thing – Held that:- CIT while treating the electricity as not an article or thing has not made reference to any provisions of the Income-tax Act, 1961 and simply construed the meaning of electricity as not article or thing on the basis of his own inference – as per the definition of “goods” as given in Article 366(12) of the Constitution it means all kinds of moveable property and the term “moveable property” when considered with reference to “goods” as defined for the purpose of sales-tax cannot be taken in a narrow sense and merely because electricity energy is not tangible or cannot be moved or touched like it cannot be cease to be moveable property when it has all the attributes of such property. It is capable of abstraction, consumption and use - If there can be sale and purchase of electrical energy like any other moveable object, this Court held that there was no difficulty in holding that electric energy was intended to be covered by the definition of “goods” - electric energy has all trapping of an article or goods – in favour of assessee. Provisionally revising the sales downward on estimate basis as per the earlier norms of CERC, final order yet to be passed in succeeding year – Held that:- An error has crept in the assessment order if an verification of the record, Learned Commissioner formed an opinion that an issue available in the computation of income required verification and investigation at the end of AO before its acceptance or rejection and such inquiry was not conducted - such an error caused a prejudice to the revenue than assessment order on such issue could be set aside - on reduction of sales Learned CIT has rightly taken cognizance u/s. 263 and has rightly remitted this issue to the Assessing Officer for fresh adjudication.

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• 2012 (5) TMI 125
  Full exemption of salary under DTAA u/s 90 to the assessee for the salary received from foreign company – AO contested that the claim of the salary received from Polish Company as per Article 17(2) of the Agreement between India and Poland DTAA the person is required to be Top Level Managerial position - Held that:- As per the Cooperation agreement entered into between the assessee and the Polish Company, the function of the assessee was "to support establishing and preparing organization of the company's representative office” in India at best be termed as a management function but cannot be equated with "Top Level Managerial Position" - further findings of the A.O. that the Assessee has made only two short visits to Poland – in favour of revenue. Allowing deduction u/s. 80G by CIT (A) – Held that:- Revenue has not brought any material on record which could prove that the donations made were not genuine and made in cash - whereas assessee has submits that the donations were made by cheque and also furnished the copies of the receipts of the donations - no infirmity in the order of CIT(A) allowing the benefit of deduction u/s 80G - against revenue.

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• 2012 (5) TMI 124
  Payment to Overseas Commission agent - whether it is simply commission, or it is in the nature of "fees for technical services"? - liability on the assessee to deduct withholding tax – Held that:- The agreement between the assessee and the Non Resident is only for rendering services which cannot be considered as technical services - as there is no PE to the said non - resident in India, the amount does not accrue or arise in India - as there is no need for deducting the amount under section 195, there is no violation of provisions of section 195 and accordingly the same cannot be disallowed under section 40(a)(ia)- if the fee payable is on source of income outside India, the same is not taxable in India - Since there is no evidence that the non-resident has rendered any managerial services to assessee and the agreement indicates only services were provided for agency on commission basis, the findings of AO and CIT(A) are to be rejected - reliance on the CBDT circular 786 dated 7 February 2000 that where the non-resident agent operates outside the country, no part of his income arises in India and no tax is therefore deductible under section 195 - in favour of assessee.

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• 2012 (5) TMI 123
  Treatment of receipt by way of subscription of magazine from life members – Tribunal held it as revenue receipt – Held that:- The assessee has failed to prove that the subscription amount which was received from the life members was in the nature of deposit and is refundable to the subscriber as and when any subscriber so desires - being no evidence that ten years subscription and annual subscription are considered as revenue receipt, there is no justification to treat the receipt of life membership subscription of the magazine differently other than the income receipt - the manner in which the sums are treated by the assessee in its accounts is neither conclusive nor a sure indication of the nature and character of the receipt – against assessee.

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• 2012 (5) TMI 122
  Penalty under Section 271 (1)(c) - revised return surrendering the amount due to mistake committed by the Accountant, was a case of concealment of particular of income and to be added to its income as extra profit – Held that:- No illegality in the order of the Tribunal - concealment of income and furnishing inaccurate particulars of income was surfaced by the AO only then Rs.1,00,000/- was surrendered, after availing multiple opportunities of filing revised returns - Suffice it to say that the Tribunal has found that the concealment has been detected by the Assessing Officer and the same forced the assessee to file the revised return – against assessee.

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• 2012 (5) TMI 121
  Invoking section 56(1)- Addition made by the AO on a/c of excess generation of income by assessee – Held that:- As section 44AE providing for a method of estimating income from the business of plying, hiring or leasing trucks owned by a taxpayer has been held to be applicable, the CIT(A) and the Tribunal were justified in deleting the additions made holding that it cannot be treated as income from other sources - only ground for making the addition that the assessee was not able to explain the discrepancies in the account-books cannot be ground for making addition as income from other sources - Income, if it is changeable to tax under any heads specified in Section 14, item A to E, it cannot be changed as income from other sources - thus the addition made by the AO due to increase in the capital cannot be taxed under Section 56 as income from other sources as the accretion in the capital is relatable to profit from transport business of the assessee

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• 2012 (5) TMI 120
  Validity of notice u/s 148 – status of assessee as per notice - Held that:- Department issued a notice under Section 148 in the name of assessee, in response to which the statement was filed referring to earlier return filed may be treated in compliance to the above notice – the Department being well aware of the identification of the assessee issued notice u/s 148 he having participated in the proceedings, cannot be allowed to turn round and challenge the notice issued as without jurisdiction - it is not a case where notice has been issued in favour of one assessee and the assessment has been framed against another assessee – against assessee.

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• 2012 (5) TMI 119
  Additions made on account of under valuation of Closing Stock by the AO after recalculating cost of production – Held that:- The assessee is following Accounting Standard and is valuing the closing stock of finished goods and stock in process at costs, there was no justification to include the amount of interest and depreciation in recalculating cost of production - the assessee should adopt any accounting practice but it should disclose the true and proper income - no finding that by not including the depreciation and interest in the closing stock the true income of the assessee is not disclosed – against revenue.

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• 2012 (5) TMI 118
  Addition u/s 68 made with respect to the share capital of the assessee in the hands of the assessee company – Held that:- As decided in Commissioner of Income Tax Vs. Lovely Exports (P) Ltd (2008 (1) TMI 575 - SUPREME COURT OF INDIA), if the assessee has furnished complete details of investors and all the investors have confirmed having invested money in the assessee company filling the income tax details and bank account statement etc. no addition on account of share capital can be made in the hands of the assessee company - Merely because creditworthiness of all the shareholders has not been established to the satisfaction of the AO or because some of the shareholders having not appeared before the AO for examination, no addition u/s 68 could be made – against revenue.

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• 2012 (5) TMI 117
  Salary - TDS in respect of conveyance allowance and additional conveyance allowance - conveyance allowance and additional conveyance allowance received by the Development Officers of the Corporation was permissible deduction under Section 10(14) as they were paid to Development Officer against the expenses actually incurred on duty as per the rules and circulars of the Life Insurance Corporation - both the AO and Appellate Authority as well as the Tribunal have proceeded on the premise that the officers of the Corporation cannot suo motu allow any deduction towards conveyance allowance or additional conveyance allowance and was in the domain of the Assessing Officer, the very premise on which the authorities have proceeded is unfounded as it is the employer who makes the payment to its employee as per the rules or the procedure regulated by it - in favour of the assessee

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• 2012 (5) TMI 116
  Penalty imposed u/s 271(1)(c) on claim for deduction of excess depreciation and interest on amount borrowed for building which was incomplete – Held that:- Mere erroneous claim in the absence of any concealment or furnishing of inaccurate particulars, is no ground for levying penalty - there is nothing on record to show that the explanation offered by the assessee was not bona fide or any material particulars were concealed or furnished inaccurate - no fault has been found with the particulars submitted by the assessee in its Return – as decided in CIT vs. Reliance Petroproducts Pvt. Ltd.[2010 (3) TMI 80 - SUPREME COURT] – in favour of assessee.

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• Customs

• 2012 (5) TMI 129
  Whether Tata Teleservices (Maharashtra) Ltd. and Tata Consultancy Services Ltd. cannot be considered as group companies under para 9.28 of the Foreign Trade Policy 2004-2009. – Held that:- The Policy Interpretation Committee has not assigned any reasons as to why the petitioner company and TCS cannot be considered as group companies - petitioner indirectly fulfills the first condition set out in para 9.28 of the Foreign Trade Policy as Tata Sons Ltd held 74% equity shares of TCS and 21% equity shares of the petitioner company giving the petitioner to exercise 26 per cent or more of voting rights in TCS – in favour of assessee.

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• Corporate Laws

• 2012 (5) TMI 128
  Application filed by the Official Liquidator to take cognizance of the offence committed by the respondent in not filing the statement of affairs - Held that:- A perusal of the proceedings indicates that all the respondents other than respondent No. 3 have been discharged from the proceedings on different dates - considering the fact that the 3rd respondent has sought discharge from the instant proceedings on the ground that he had resigned, the same is a legal aspect - resignation letter filled to the office of Registrar is proof that he had resigned as a director of the company-in- liquidation thus no liability.

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• 2012 (5) TMI 115
  Company in liquidation - The statement of affairs has not been filed by the respondents within the period of 21 days. Condonation of delay - Held that: an application under Section 454 has been pending from the year 2005, the records were perused by this Court in depth to find out as to whether any purpose would be served in retaining the main application in C.A. No. 672/2005 on file without proceeding further in the matter when the statement of affairs has been filed subsequently. The said application though not listed in the cause-list today, on the perusal of the subsequent order sheet, it is found that the same has not been disposed of. a perusal of the reasons assigned in the application supported by an affidavit seeking condonation of delay would indicate that apart from the amount which was due and payable to the creditors who had initiated the winding up petition in Co.P.No. 91/2002, the Company-in-liquidation was also due certain amounts to KSIIDC. The manner in which the statement of affairs has been filed on 30.05.2007 and the revised statement on 23.10.2007 would indicate that immediately on C.A. No. 869/2005 being disposed of, necessary steps have been taken by the respondents for filing statement of affairs. As already noticed, the deficiencies in the statement of affairs in any event would entail its consequence in accordance with law and this proceedings cannot be held on, as it would have to conclude with its consequences. Delay is condoned

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• Service Tax

• 2012 (5) TMI 126
  Demand of duty, interest and penalty - tour operator service or rent-a-cab service – Period of limitation - held that:- the charges that has to be paid to the assessee appellant has to be based basic distance and any express travelled will upon pro-rata kilometres traversed. - the appellant is responsible for maintenance of the vehicles and he is suppose to fill the fuel and make the vehicle available along with the driver and substitute the vehicle in the case of any break down of vehicle. - the appellant herein is in possession of vehicles and is only hiring out the vehicles to ONGC for a stipulated period or as per the agreement. - Whether the hiring out of vehicle is for a day or a month does not mean anything, as the said vehicle is still in the possession of the appellant assessee or his driver during the entire period. - Tribunal in the case of Shree Sai Krishna Travels (2009 (9) TMI 515 - CESTAT, BANGALORE) was considering an identical issue and has held that in this kind of situation, the services rendered by the assessee cannot fall under the category of Rent-a-Cab services, as per the definition enshrined at Section 65 (91) of the Finance Act, 1994. - Decided in favour of the assessee. As regards the question of limitation, Held that the issue involved was really in dispute and various Benches have been holding that the activities being conducted by the appellant herein would not fall under the category of Rent-a-Cab Services and hence the bonafide impression carried by the appellant could not be faulted with.

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• Central Excise

• 2012 (5) TMI 114
  Application for waiver of pre-deposit of duty - Cenvat credit on wagons as capital gain - Classification - rule 2(a) of Cenvat Credit Rules, 2004 - Held that: the wagons are classifiable under chapter 86 of the Central Excise Tariff and the same is not covered under the definition of capital goods. Further, we find that the wagons cannot be considered as components, spares and accessories of the specified goods. In view of this, we find that the applicant has not made out a case for waiver of duty no financial hardship is pleaded during the arguments - Decided against the assessee

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• 2012 (5) TMI 113
  Whether the Tribunal was justified in holding that limitation was not applicable in respect of refund of deposit made by the respondents - Held that: in the present case, refund claim was filed by the assessee even before the appeal filed by the Revenue was disposed of by the First Appellate Authority. In these circumstances, the decision of the Tribunal in holding that the assessee was entitled to the refund of pre-deposit and rejecting the contention of the revenue that the claim of the assessee was time barred cannot be faulted - Decided in favor of the assessee

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• CST, VAT & Sales Tax

• 2012 (5) TMI 140
  Whether or not multi functional printers are input or output units under Entry No.41A of the notification issued under the DVAT Act. - held that:- the issue in question first requires determination of factual aspects viz., whether or not the multi functional machine in question, is in fact, input or output unit of an automatic data processing machine. For deciding this fact - Since petitioners have alternative remedy, writ petition dismissed.

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