TIOL-DDT 1256 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1256 </font><br>
11.12.2009 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CENVAT Credit on Service Tax on outward transport – Larger
Bench decision in ABB Ltd</font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> stayed
by Karnataka HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Karnataka High Court has stayed the ABB decision in CEA 121/2009. The matter is to be finally heard on 29.12. 2009. There was visible jubilation among Service Tax officers in Bangalore, who are closely monitoring the case. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CESTAT larger Bench in ABB had held, <em>“we answer the reference by holding that the services availed by a manufacturer for outward transportation of final products from the place of removal should be treated as an input service in terms of Rule 2(1)(ii) of the CENVAT Credit Rules, 2004 and thereby enabling the manufacturer to take credit of the service tax paid on the value of such services.” </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Netizens may recall that recently the Chennai Bench of the Tribunal almost disagreed with the Larger Bench decision while dealing with a batch matter of 44 appellants adjourned the case awaiting the decision of the Karnataka High Court in the Department's Stay Petition. <em><strong>[<font size="1"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2009/2009-TIOL-1964-CESTAT-MAD.htm" target="_blank">2009-TIOL-1964-CESTAT-MAD</a></font>] </strong></em></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income of Commonwealth Games Exempted </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per section 10(39) of the Income Tax Act, the following income is not to be included in computing the total income of the previous year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">any specified income, arising from any international sporting event held in India, to the person or persons notified by the Central Government in the Official Gazette, if such international sporting event-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) is approved by the international body regulating the international sport relating to such event; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) has participation by more than two countries; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) is notified 73 by the Central Government in the Official Gazette for the purposes of this clause. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>Explanation.-</em></strong> For the purposes of this clause, “the specified income” means the income, of the nature and to the extent, arising from the international sporting event, which the Central Government may notify in this behalf; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has notified the following income arising to Organising Committee, Commonwealth Games, 2010 Delhi, India from the organising Commonwealth Games, 2010 Delhi, India under section 10(39). </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) income arising from the receipt from International Broadcasting – rupees one hundred eighty two crore (seventy per cent. of rupees two hundred sixty crore); </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) income arising from the receipt from domestic broadcasting - rupees sixty six crore (sixty per cent. of rupees one hundred ten crore); </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) income arising from the receipt of sponsorship – rupees nine hundred sixty crore; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) income arising from the receipt of ticketing – rupees hundred crore; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) income arising from receipt of licensed merchandise – rupees fifty crore; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) income from Donations of rupees hundred crore, </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2009/it09not091.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 91 /2009/F.No.200/09/2009-ITA.I: Dated December 08 2009 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Double Taxation avoidance - India-Taipei Association Notified </font></strong></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 90A of the Income Tax Act, reads as:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Adoption by Central Government of agreement between specified associations for double taxation relief. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">90A. (1) Any specified association in India may enter into an agreement with any specified association in the specified territory outside India and the Central Government may, by notification in the Official Gazette, make such provisions as may be necessary for adopting and implementing such agreement- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (a) for the granting of relief in respect of- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) income on which have been paid both income-tax under this Act and income-tax in any specified territory outside India; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) income-tax chargeable under this Act and under the corresponding law in force in that specified territory outside India to promote mutual economic relations, trade and investment, or </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (b) for the avoidance of double taxation of income under this Act and under the corresponding law in force in that specified territory outside India, or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) for exchange of information for the prevention of evasion or avoidance of income-tax chargeable under this Act or under the corresponding law in force in that specified territory outside India, or investigation of cases of such evasion or avoidance, or</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) for recovery of income-tax under this Act and under the corresponding law in force in that specified territory outside India. </font></p>
<blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) xxxxx </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) xxxxx </font></p>
</blockquote>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Explanation 1.</em>- xxxxx </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Explanation 2. -</em> For the purposes of this section, the expressions- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) <em>“specified association”</em> means any institution, association or body, whether incorporated or not, functioning under any law for the time being in force in India or the laws of the specified territory outside India and which may be notified as such by the Central Government for the purposes of this section; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b)<em> “specified territory”</em> means any area outside India which may be notified as such by the Central Government for the purposes of this section. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has notified the territory in which the taxation law administered by the Ministry of Finance in Taipei is applied ; as the specified territory and the ‘India-Taipei Association in Taipei' and the ‘Taipei Economic and Cultural Centre in New Delhi' as the “<em>specified association</em>”. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2009/it09not093.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 93 /2009/F.No.200/09/2009-ITA.I: Dated December 09 2009 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Definitive Anti dumping Duty on Cathode Ray Colour Television Picture Tubes – yet another resurrection! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROVISIONAL</strong> anti dumping duty was imposed on Cathode Ray Colour Television Picture Tubes falling under sub-heading 8540 11, originating in or exported from, Indonesia, by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_031.htm" target="_blank">Notification No. 31/2009-Cus., dated 27-3-2009</a></strong></em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This Notification actually died on 26.09.2009. Now they have resurrected it with retrospective effect from the original date of provisional imposition that is 27.3.2009. What happened during the period 27.9.2009 to 8.12.2009? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally the Designated Authority had recommended imposition of definitive anti dumping duty in its notification dated 10.09.2009 and the CBEC had sixteen days to issue the notification before its death. But the fact that nothing happens to them if a notification is not revalidated on time and they can always resurrect dead notifications, makes them lazy. Can't they just keep a list of sunset notifications and have an alarm bell? Is it impossibly difficult? </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2009/ctariff09_135.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO. 135/2009-Cus., Dated: December 9, 2009 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI raid on Obulapuram Mines </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBI</strong> has begun investigation of a case related to boundary disputes and illegal mining activities of two private firms and activities of unknown public servants & others. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the uninitiated, the Obulapuram mines are with the famous Reddy brothers – BJP ministers in Karnataka. They are said to be close to Jagan Mohan Reddy, former AP CM, YSR's son. If the equations don't balance, Gali Janardhan Reddy, one of the Reddy brothers and Tourism Minister of Karnataka invoked the blessings of Lord Balajee of Tirupati by presenting the God with a Rs. 42 Crore worth diamond studded crown. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">That of course did not stop the CBI from raiding the mining barons. CBI has constituted a Multi-disciplinary team consisting of officers of Survey of India, Bureau of Mines, Ministry of Environment & Forest, Central Forensic Science Laboratory, Customs & Revenue Intelligence (all of Govt. of India). This team also consist of Forest & other departments of Govt. of Andhra Pradesh. This joint task force is led by DIG, CBI. A Superintendent of Police, CBI is the Chief Investigating Officer. On the request of Govt. of Andhra Pradesh, Govt. of India issued a Notification for conducting investigation by the CBI. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The forest area in Distt. Ananthapur, Andhra Pradesh and Distt. Bellary, Karnataka have been notified as Bellary Reserve Forest vide Notification dated 12.05.1890 u/s.16 of the Madras Forest Act, 1882 and the mining blocks fall under the Reserve Forest area in Andhra Pradesh. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A lot of mining is going on in Andhra Pradesh, which would cause fiscal and political ripples all over the country. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Monday's cases</font></strong></font></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"><strong><font color="#663399">CESTAT</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pre-deposit ordered by CESTAT upheld by Apex Court but time for deposit was extended – Appellant failed to comply with this deadline and makes payment subsequently - CESTAT does not have power to condone such a delay and restore appeal rejected earlier for non-compliance. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> first two deposits were made within the time stipulated by the Hon'ble Supreme Court. The last payment was far beyond the prescribed period. The question is whether we can condone the delay involved in the payment of Rs.1.00 Crore made on 14.09.2009. Obviously, we can't. Where the Hon'ble Supreme Court stipulated a period for deposit of an amount by the appellant, they ought to have complied with the direction of the Hon'ble Supreme Court. Where the appellant made the deposit belatedly, it was open to them to move the Hon'ble Supreme Court for condonation of the day. Neither this Tribunal nor, in our view, even the Hon'ble High Court can condone such delay. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Gift
- immediate source of gift is admittedly established to be from a third
party, donor had appeared in person before AO and confirmed making
of gift and the reasons which persuaded him to make the gift, to be treated
as genuine – ITAT by majority. </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> adverse facts i) that the assessee or his family had never made any gift of any amount to anybody; ii) that the gift was not on any occasion or function; iii) that the donor visited his house one or two times though, never beyond the drawing room; iv) that the donor is the person of low financial status having monthly income of less than Rs.5,000/- and has shown withdrawals from his capital account less than Rs.3000/- per month; v) that the donor has no house no telephone number, no fixed deposit and not any other immoveable assets; or that the original deposit by the donor of Rs.1,25,000 with Balaji Trading Corp. was not proved are not so material to hold the gift not a genuine one or sources thereof unsatisfactory so long as the immediate source of the gift is admittedly established to be from a third party, the donor had appeared in person before the AO and confirmed the making of the gift and the reasons which persuaded him to make the gift, he being the friend of the assessee's father who helped him in past. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs House Agents - CHALR – Examination passed under old CHALR, 1984 does not entitle for a licence under CHALR, 2004 – High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants/writ petitioners at best were having liberty to apply for licence. The same cannot be treated as a vested right. The appellants have not even applied for licence under Regulation of the year 1984 and the eligibility condition having been changed drastically in the year 2004 due to the intricacies of the procedures to be followed by the Customs House Agents, the respondents cannot be found fault with. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Weekend. </font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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