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Home e-Newsletters Index Year 2012 July Day 23 - Monday

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TMI Tax Updates - e-Newsletter
July 23, 2012

Case Laws in this Newsletter:

Income Tax Customs Corporate Laws Service Tax Central Excise Wealth tax Indian Laws



Articles

1. EXEMPTION FOR CHARITABLE ACTIVITIES

   By: Dr. Sanjiv Agarwal

Summary: The article discusses the exemption from service tax for services provided by entities registered under section 12AA of the Income Tax Act, 1961, when engaging in charitable activities. Charitable activities include public health, advancement of religion, education, environmental preservation, and other public utilities. These services are exempt from service tax if they meet certain criteria, such as being for the general public and not exceeding a specified financial threshold. The exemption requires that the services be both charitable and provided by a registered entity. Additionally, services for religious purposes for the general public are also exempt.

2. Whether revenue sharing arrangements attract service tax prior and post 1st July, 2012

   By: Bimal jain

Summary: A recent judgment by the Honorable CESTAT, New Delhi, examined whether revenue sharing arrangements attract service tax, specifically focusing on a franchisee of BCCI-IPL. The appellant argued that payments received from BCCI-IPL were shares of media rights revenue, not business support services, thus not subject to service tax. The tribunal agreed, citing a Circular that revenue sharing on a principal-to-principal basis does not constitute a taxable service. However, a subsequent Board clarification stated that not all revenue sharing arrangements are exempt from service tax, emphasizing that each case should be evaluated individually based on transaction nature.

3. WHETHER A COURT IS HAVING POWER TO APPOINT AN ARBITRATOR OTHER THAN THE NAMED ARBITRATOR

   By: DR.MARIAPPAN GOVINDARAJAN

Summary: The article discusses whether a court can appoint an arbitrator other than the one named in an arbitration agreement under the Arbitration and Conciliation Act, 1996. It highlights that while parties can specify an arbitrator in their agreement, courts may intervene if there are justifiable doubts about the arbitrator's impartiality or independence. Several cases are cited, illustrating that courts generally uphold the named arbitrator unless bias is evident. In a notable Supreme Court case, the court determined it could appoint a different arbitrator due to potential bias, emphasizing the importance of impartiality in arbitration proceedings.


News

1. Exchange Rates Relating to Imported and Export Goods Notified.

Summary: The Central Board of Excise and Customs (CBEC) of India has announced new exchange rates for foreign currencies concerning imported and exported goods, effective from July 20, 2012. The rates are determined under the authority of Section 14 of the Customs Act, 1962. The notification supersedes the previous rates set on July 5, 2012. The exchange rates for various currencies, including the US Dollar, Euro, Pound Sterling, and others, are specified for both import and export transactions. For example, the US Dollar is set at 55.50 for imports and 54.60 for exports.

2. Exemption of Salaried Employees from Requirement of Filing of Returns for Assessment Year 2012-13.

Summary: The Central Board of Direct Taxes (CBDT) announced that salaried employees are exempt from filing tax returns for the assessment year 2012-13 if specific conditions are met. These include having only salary income and savings bank interest below Rs. 10,000, a total income not exceeding Rs. 5 lakh, reporting of PAN and interest income to the employer, receipt of Form 16, full tax payment via TDS by the employer, no refund claims, and no notice from the Income Tax Department. This exemption applies only to employees with a single employer.

3. MCA Notification on Investor Education and Protection Fund (Uploading of Information Regarding unpaid and Unclaimed Amounts Lying with Companies) Rules, 2012.

Summary: The Ministry of Corporate Affairs has issued a notification mandating companies to file eForm 5INV, detailing unclaimed and unpaid amounts as per the Investor Education and Protection Fund (IEPF) Rules, 2012. This form must be submitted annually within 90 days after the Annual General Meeting or its scheduled date, continuing for seven years. Additionally, companies must submit an excel sheet with detailed investor information. For the financial year ending March 31, 2011, the deadline for submission is July 31, 2012. More information is available on the IEPF website.

4. Disinvestment of 10.82% paid up equity in Steel Authority of India Limited out of Government of India shareholding of 85.82 percent.

Summary: The Cabinet Committee on Economic Affairs has approved the disinvestment of 10.82% of the Government of India's 85.82% shareholding in Steel Authority of India Limited (SAIL) through an Offer of Sale via stock exchanges, in compliance with SEBI regulations. This move will reduce the government's stake in SAIL to 75%. As of March 31, 2012, SAIL's paid-up equity capital was Rs. 4130.53 crore. SAIL, a Maharatna Central Public Sector Enterprise, is the largest steel producer in India, involved in mining, production, and marketing of iron and steel.


Notifications

Customs

1. 37/2012 - dated 19-7-2012 - ADD

Amendment Notification No. 33/2008-Customs - Anti dumping duty on Acetone imported from Chinese Taipei or Singapore or South Africa or USA or European Union from specified producers / exporters.

Summary: The Government of India, through the Ministry of Finance, has issued Notification No. 37/2012-Customs (ADD) dated 19th July 2012, extending the anti-dumping duty on Acetone imports from Chinese Taipei, Singapore, South Africa, USA, and the European Union. This duty, originally imposed by Notification No. 33/2008-Customs dated 11th March 2008, is extended until 18th June 2013, unless revoked earlier. The extension follows a review initiated by the designated authority under the Customs Tariff Act, 1975, and the relevant anti-dumping rules to assess the continuation of the duty.

2. 61/2012 - dated 19-7-2012 - Cus (NT)

Rate of exchange of conversion of each of the foreign currency with effect from 20th July, 2012.

Summary: The notification issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Excise and Customs, determines the exchange rates for foreign currencies against the Indian Rupee effective from July 20, 2012. The rates apply to imported and export goods under the Customs Act, 1962. Schedule I lists rates for various currencies such as the US Dollar, Euro, and Pound Sterling, among others, for both import and export purposes. Schedule II specifies the rate for 100 units of Japanese Yen. Corrections were made to the rates for the Kenya Shilling in a subsequent corrigendum.


Circulars / Instructions / Orders

DGFT

1. 02 (RE-2012)/2009-14 - dated 19-7-2012

Pending EODC cases where vehicles imported under EPCG Scheme were not registered as Commercial/Tourist Vehicle – Reference Policy Circular dated 07.05.2008.

Summary: The circular addresses pending Export Obligation Discharge Certificate (EODC) cases where vehicles imported under the Export Promotion Capital Goods (EPCG) Scheme were not registered as commercial or tourist vehicles. It acknowledges the challenges faced by EPCG authorization holders, such as vehicles being over two years old or specific vehicle types not eligible for registration under Central Motor Vehicles Rules (CMVR). The circular identifies three case types and extends the registration deadline, condoning delays for vehicles imported before 31.08.2006 or where registration was denied by the Regional Transport Office (RTO). This directive is approved by the Directorate General of Foreign Trade (DGFT).


Highlights / Catch Notes

    Income Tax

  • Spouse Managing Finances Doesn't Make One a Benami Holder Under Income Tax Law.

    Case-Laws - AT : Benami Assessee - Just because her affairs are being looked after by her husband, it does not mean that she is benami.- AT

  • Tea Export Units Qualify as Manufacturers u/s 10B for Tax Exemption Benefits.

    Case-Laws - AT : The assessee who are in the business of blending and processing of tea and export thereof, in 100% EOUs are manufacturer/ producer of the tea for the purpose of claiming exemption u/s. 10B. - AT

  • Court Rules Capital Gains Taxable at Sale u/s 45, Regardless of Deferred Payment Agreements.

    Case-Laws - HC : Taxability under the head “capital gain“ u/s 45 - receipt based or accrual based taxation - The fact that the appellant assessee adopted a mechanism in the agreement that the transferee would defer the payments would not in any manner detract from the chargeability when the shares were sold. - HC

  • Tax Authority's 15-Year Acceptance of Amortization as Advance Rent; Res Judicata Principle Not Applicable.

    Case-Laws - HC : Rule of consistency - for the period of about 15 years, assesse’s submissions the annual amortization of the initial lease consideration, as advance rent was accepted - there is no res judicata - HC

  • High Court Evaluates Tax Classification of Lease Premium Paid to Noida Authority: Advance Rent or Amortization?

    Case-Laws - HC : Amortization of lease premium paid by the appellant - Whether lease premium paid Noida Authority is to be treated as advance rent? - HC

  • High Court Confirms ITSC Settlement Orders Are Final, Cannot Be Reopened by Assessing Officers Under Income Tax Law.

    Case-Laws - HC : An assessment by way of a settlement order passed by the ITSC cannot be reopened by a different authority, viz., the Assessing Officer - in favour of assessee. - HC

  • Approval Denied u/s 10(15A) Due to Non-Existent Aircrafts in Lease Agreements.

    Case-Laws - HC : Rejection of application for approval u/s 10(15A) - the aircrafts for which lease Agreements were signed were not existing on the date of the agreement - If the two conditions are not satisfied, benefit under the said Section cannot be granted. - HC

  • Assessee's Non-Filing Leads to Income Escapement Determination u/s 147; AO Halts Further Investigation.

    Case-Laws - HC : Rsassessment u/s 147 - no return was filed by assessee - once the AO was satisfied about the income escapement no further investigation as to what was the ground for the assessee to have not filed the return. - HC

  • Cooperative Bank's Interest Income from RBI or SBI Investments Exempt u/s 80P(2)(a)(i) of Income Tax Act.

    Case-Laws - HC : Claim of exemption u/s 80P (2) - interest derived by a Cooperative Bank from investment of funds with RBI or SBI is exempt u/s 80P (a) (i) irrespective of the fact that investment is made out of the reserve funds or working capital. - HC

  • High Court Rules Against Discrepancy in Reopening Assessments u/s 148 Due to Different Basis of Order.

    Case-Laws - HC : Challenging reopening of assessment - notice u/s 148 - the basis of the order is completely different from the reasons recorded for reopening the assessment which is clearly not permissible - HC

  • Interest u/s 234B can increase after set-aside assessment u/ss 143(3) and 147.

    Case-Laws - HC : Interest u/s 234B was correctly charged in the assessment order passed u/s 143(3)/147 and therefore it could be subsequently enhanced on completion of set aside assessment. - HC

  • Self-Supervision Factor Leads to Lower Valuation; Section 69B Addition for Unexplained Construction Costs in Tax Assessment.

    Case-Laws - AT : Valuation - consideration of self supervision factor which lead to less value - Addition made on account of unexplained investment in cost of construction of building u/s.69B - AT

  • HRA Reimbursement Not Applicable u/s 10(13A) When Employer Provides Free Housing to Employee.

    Case-Laws - AT : Exemption of HRA u/s 10(13A) - reimbursement is considered against the free housing accommodation provided by the employer company to the employee assessee, then this reimbursement of house rent to employer is no more available to be considered for exemption u/s 10(13A). - AT

  • Purchasing a printer, scanner, and webcam is not classified as replacing spare or defective computer parts.

    Case-Laws - AT : Revenue versus Capital expenditure - The expenditure incurred on Printer, Scanner and Web Camare cannot be said to be replacement of the spares /defective parts of the computer- AT

  • Court Clarifies Rules on Holding Period and Cost Basis for Inherited Assets, Impacting Capital Gains Tax Calculations.

    Case-Laws - HC : Determination of the cost of acquisition - computation of the period for which the asset is held by the assessee - property transferred to the assessee under a will or by inheritance - HC

  • High Court Rules Know-How Expenditure Deductible as Revenue Expenditure u/s 37, Not Section 35AB.

    Case-Laws - HC : Payment for know-how - deductible under Section 37 as a Revenue expenditure OR Section 35AB? - said expenditure qualifies for deduction u/s 37 - HC

  • Penalty u/s 271D Deleted: Reasonable Cause Found for Cash Obtained by Discounting Cheques, Overriding Section 269SS Violation.

    Case-Laws - AT : Penalty u/s 271D - reasonable cause - contravention of sec. 269SS - cash was taken by discounting cheques to meet the urgent business needs of the assessee - deletion of penalty is warranted - AT

  • Ex Parte Order Challenged Over Assessee's Alleged Irresponsibility; Adjournment Request Denied.

    Case-Laws - AT : Challenging the order passing ex parte - considering the lethargic and irresponsible attitude of the assessee we hereby reject the adjournment letter filed by the assessee - AT

  • ITAT Appeals Must Arise from CIT(A) Orders; Grounds Not Stemming from CIT(A) Deemed Non-Maintainable.

    Case-Laws - AT : Appeal before ITAT - authorization - The grounds which are not arising out of the order of the CIT(A) are not maintainable - AT

  • Interest Demand for Late TDS Deposit Unaffected by Cheque Delays or Holidays, per Section 201(1A) of Income Tax Act.

    Case-Laws - AT : Demand of interest u/s. 201(1A) of the IT Act - late deposit of TDS - The time taken for clearing of cheques and government holidays and reasonable cause etc. are not the reasons, which could be considered while levying the interest against the assessee - AT

  • Rental Income Accrual Error: TDS Certificate Mistake Leads to Incorrect Income Addition in Tax Assessment.

    Case-Laws - AT : Rent receivable - Accrual of rental income - Addition of Income based on TDS certificate whereas deductor admitted the mistake is not correct. - AT

  • Customs

  • Anti-Dumping Duty Imposed on Acetone Imports from Chinese Taipei, Singapore, South Africa, USA, and EU to Protect Local Industries.

    Notifications : Amendment Notification No. 33/2008-Customs - Anti dumping duty on Acetone imported from Chinese Taipei or Singapore or South Africa or USA or European Union from specified producers / exporters. - Notification

  • Updated Foreign Currency Exchange Rates for Customs and Tax Transactions Effective July 20, 2012.

    Notifications : Rate of exchange of conversion of each of the foreign currency with effect from 20th July, 2012. - Notification

  • DGFT

  • DGFT Reviews Compliance of Vehicles Imported Under EPCG Scheme for Proper Registration as Commercial or Tourist Vehicles.

    Circulars : Pending EODC cases where vehicles imported under EPCG Scheme were not registered as Commercial/Tourist Vehicle – Reference Policy Circular dated 07.05.2008. - Circular

  • Indian Laws

  • New Criteria for Tax Exemptions for Charitable Entities in India: Recent Legal Updates and Compliance Requirements

    Articles : EXEMPTION FOR CHARITABLE ACTIVITIES - Article

  • Exploring Service Tax Changes on Revenue Sharing: Legal Interpretations and Implications Post-July 1, 2012 in India.

    Articles : Whether revenue sharing arrangements attract service tax prior and post 1st July, 2012 - Article

  • Service Tax

  • Court Reviews Service Tax on Infrastructure, Port, and Space Charges for Basic Telephone Service Providers under Business Support Services.

    Case-Laws - AT : Business Support Service - Interconnection, infrastructure and space facility to Basic Telephone Service Providers - demand of service tax on infrastructure charges, port charges, rent for space etc - AT

  • Service Tax Demand on Profit-Sharing Agreement for Sports Business Support Services Deemed Unmaintainable.

    Case-Laws - AT : Service Tax on Profit sharing agreement - Demand of Service tax on account of business support services provided to BCCI-IPL – prima facie demand is not maintainable - AT

  • Court Confirms Refund of Cenvat Credit Was Correctly Processed, Payment Made Under Protest Considered Valid.

    Case-Laws - AT : Cenvat credit – amount paid by the appellant has to be treated as paid under protest - original adjudicating authority's decision to allow the refund by way of credit in the cenvat account is correct - AT

  • Entity Challenged on Service Tax Demand for Advances Collected Before Liability Was Introduced for Specific Services.

    Case-Laws - AT : Demand of service tax - they are liable to pay the Service Tax on the amount collected by them as an advance prior to introduction of Service Tax liability on said services - AT

  • Sale of Space in Monthly News Publication Not Classified as Business Auxiliary Service.

    Case-Laws - AT : Sale of space or BAS - the service cannot be classified under business auxiliary service as the service is more specifically covered under the heading sale of space as the activity undertaken is only sale of space in monthly news - AT

  • Applicants' Good Faith Defense Rejected in Service Tax Case for Manpower Recruitment and Supply Agency Services.

    Case-Laws - AT : Manpower Recruitment and Supply Agency Service - the claim of the applicants that they were under bonafide belief is not sustainable - AT

  • Central Excise

  • Court Grants 12% Annual Interest on Delayed Refund of Predeposit Amount to Petitioner.

    Case-Laws - HC : Entitlement to interest on the delayed refund of the amount paid by way of predeposit - petitioner is entitled to interest @ 12% per annum - HC

  • Court Explores Waiver of Pre-Deposit in Central Excise, Defines "Undue Hardship" and Financial Difficulty Criteria for Relief.

    Case-Laws - AT : Waiver of pre-deposit - Scope of term 'undue hardship' - - AT

  • Delay Excused as Order Was Misplaced in Cupboard, Revealed by Affidavit.

    Case-Laws - AT : Condonation of delay – there was an affidavit filed by a person who received the order in original and had stated that after receiving the order in original he placed it in the cupboard and forgot to handover the same to the management. - delay condoned - AT

  • Show cause notices for sugar manufacturers on Cenvat credit u/r 6 found defective due to unspecified inputs.

    Case-Laws - AT : Cenvat credit – Rule 6 - Maintenance of separate accounts - manufacturers of sugar and molasses - SCN issued in these cases are defective inasmuch as neither of the SCN indicates as to which are the input and input services used which have resulted in the generation of press-mud which was converted into bio-compost - AT

  • Reduction in Freight and Insurance Charges Impacts Wholesale Price Determination for Taxation Under Central Excise Laws.

    Case-Laws - HC : CE - Reduction of the cost freight and insurance charges incurred for carrying the goods from the depot to the customer’s end would make the wholesale price available ? - HC


Case Laws:

  • Income Tax

  • 2012 (7) TMI 532
  • 2012 (7) TMI 531
  • 2012 (7) TMI 530
  • 2012 (7) TMI 529
  • 2012 (7) TMI 528
  • 2012 (7) TMI 527
  • 2012 (7) TMI 526
  • 2012 (7) TMI 525
  • 2012 (7) TMI 524
  • 2012 (7) TMI 523
  • 2012 (7) TMI 522
  • 2012 (7) TMI 521
  • 2012 (7) TMI 520
  • 2012 (7) TMI 519
  • 2012 (7) TMI 518
  • 2012 (7) TMI 517
  • 2012 (7) TMI 516
  • 2012 (7) TMI 515
  • 2012 (7) TMI 497
  • 2012 (7) TMI 496
  • 2012 (7) TMI 495
  • 2012 (7) TMI 494
  • 2012 (7) TMI 493
  • 2012 (7) TMI 492
  • 2012 (7) TMI 491
  • 2012 (7) TMI 490
  • 2012 (7) TMI 489
  • 2012 (7) TMI 488
  • 2012 (7) TMI 487
  • 2012 (7) TMI 486
  • 2012 (7) TMI 485
  • 2012 (7) TMI 484
  • 2012 (7) TMI 483
  • 2012 (7) TMI 482
  • 2012 (7) TMI 481
  • 2012 (7) TMI 480
  • 2012 (7) TMI 479
  • 2012 (7) TMI 478
  • Customs

  • 2012 (7) TMI 514
  • 2012 (7) TMI 477
  • Corporate Laws

  • 2012 (7) TMI 534
  • 2012 (7) TMI 513
  • Service Tax

  • 2012 (7) TMI 508
  • 2012 (7) TMI 507
  • 2012 (7) TMI 506
  • 2012 (7) TMI 505
  • 2012 (7) TMI 504
  • 2012 (7) TMI 503
  • 2012 (7) TMI 502
  • 2012 (7) TMI 501
  • 2012 (7) TMI 500
  • 2012 (7) TMI 499
  • Central Excise

  • 2012 (7) TMI 512
  • 2012 (7) TMI 511
  • 2012 (7) TMI 510
  • 2012 (7) TMI 509
  • 2012 (7) TMI 476
  • 2012 (7) TMI 475
  • 2012 (7) TMI 474
  • 2012 (7) TMI 473
  • Wealth tax

  • 2012 (7) TMI 533
  • Indian Laws

  • 2012 (7) TMI 498
 

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