TIOL-DDT 1296 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1296 </font><br> 10.02.2010 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Deduction in respect of contribution to pension scheme under Section 80 CCD – CBDT clarifies </font></strong></p> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> clarifies that:- </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">in accordance with the provisions of Section 80 CCD, deduction in respect of contribution made by an individual in the previous year to his account under a pension scheme notified, is allowed in computation of his total income – </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) in the case of an employee, ten per cent of his salary in the previous year; and</font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) in any other case, ten per cent of his gross total income in the previous year.</font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is further clarified that where the Central Government or any other employer makes any contribution to the account of employee for the pension scheme, the assessee shall also be allowed a deduction in the computation of his total income of the whole of the amount contributed by the Central Govt. or any other employer as does not exceed 10% of his salary in the previous year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Salary for the purpose of above section (80 CCD) includes dearness allowance if the terms of employment so provide, but excludes all other allowances and perquisites. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is further clarified that aggregate limit of deduction under this section (80 CCD) along with Sections 80 C, 80 CCC shall not in any case exceed Rs. One lakh. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2010/cbdt_circular.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular F.No. 275/192/2009-IT (B)., Dated: February 9, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import of frozen green peas – CBEC instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IMPORT</strong> of agriculture commodities into India is permitted only after conducting Pest Risk Analysis (PRA) for the commodity and subsequent notification under the Plant Quarantine (Regulation of Import into India) Order, 2003. PRA involves detailed study and documentation after consulting various published scientific data/literature to identify pests associated with it, their morphology, behaviour, risk posed etc., thereby identifying pests of quarantine importance to India with prescription of suitable scientific risk mitigation measures. Further, the imported agricultural commodities are subjected to inspection before clearance to ensure freedom from pests and diseases. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But Board has come to know that consignments of frozen green peas imported from China were released by customs without referring these to the Plant Quarantine authorities. This is of serious concern in view of the risk posed to bio-security of the country as the frozen green peas may be infested with the nematode pest. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, Board now wants that all import consignments of frozen green peas to be referred to Plant Quarantine authorities for proper inspection, and clearance should be permitted only after necessary no objection certificate/ phytosanitary clearance etc., has been given by the Plant Quarantine authorities. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2010/cuscir10_002.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Circular No . 02/2010-Cus., Dated: February 9, 2010 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vague charges against Customs Superintendent issued after 11 years - quashed </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> charge against a Customs Superintendent read as, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Superintendent had given <em>"let export"</em> order in respect of Shipping Bills No. 1033401, 1033402, 1033403 & 1033411 all dated 23.9,98 without exercising necessary checks and scrutiny of the documents in respect of the shipping bills, thus, causing a loss of Rs. 12,06,819/- to the Govt. exchequer by way of disbursement of duty drawback to a firm M/s Romil International having its office at H-305, New Rajinder Nagar, New Delhi as no remittances has been received against the goods exported under the above mentioned shipping bills. Had the Superintendent, worked with devotion and diligence the loss of Rs.12,06,819/- caused to the Govt. exchequer could have been prevented. ON this ground a Show Cause Notice under DRI F.No. 23/154/98-DZU, dated 17.6.1999 was issued to him by the DRI, New Delhi while adjudicating the above show cause notice vide Order-in-Original No. AKR/CC/ICD/TKD/47 dated 05.9.2003 held the Superintendent guilty of dereliction of duty. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Administrative Tribunal quashed the charge sheet as it was issued 11 years after the event and even the allegations were not particularized. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Charge sheet was issued on 26.3.2009 and the Superintendent retired on 1.4.2009 that is just five days after he got the memo. The so called dereliction of duty took place on 23.9.1998. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It took the government 11 years to issue the charge memo, and there was a delay in appealing to the High Court also. The High Court condoned the delay but dismissed the petition on 5.2.2010. Incidentally there was none to represent the Superintendent in the High Court. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2010/2010-TIOL-118-HC-DEL-ST.htm" target="_blank"><font size="1" face="Verdana, Arial, Helvetica, sans-serif">2010-TIOL-118-HC-DEL-ST</font></a>)</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">304 Crores Central Excise demand against MAHINDRA & MAHINDRA LTD stayed by Supreme Court </font></strong></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">WE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> reported the CESTAT order in <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2010/2010-TIOL-128-CESTAT-MUM.htm" target="_blank"><font size="1">2010-TIOL-128-CESTAT-MUM</font></a></strong>. We ended our story with "<strong><em><font color="#663399">Last heard, the company was on its way to the Supreme Court with an appeal. After all, a Rs.3.04 billion rupees Excise duty demand is not a small amount</font></em></strong>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court on 08/02/2010 granted stay observing "<em>we are hereby granting ad interim stay restraining the Department from taking any coercive steps till further orders particularly when considerable amount has been paid</em>." </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"> – Thursday's cases</font></strong></font></strong></font></p> <p><strong><font color="#663399" 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">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shower Gel, Roll on, Shampoo/Conditioner shampoo, Shaving Gel, Hair Cream, Body Cream and Scented Spray are 'cosmetics' covered by term 'Substances' mentioned at Entry no. 1 in Schedule ‘D' of Rule 132 of Drugs & Cosmetics Rules, 1945 and can be imported from any port – Absolute Confiscation of goods set aside – CESTAT</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant sought clearance of imported cosmetics described as "Shower Gel, Roll on, Shampoo/Conditioner shampoo, Shaving Gel, Hair Cream, Body Cream and Scented Spray" and filed Bill of Entry. The appellant sought assessment of the above said goods as cosmetics under chapter 33 of the Customs Tariff Act, 1975. A show cause notice was issued stating that in terms of Rule 133 of Drugs and Cosmetics Rules, 1945, import of cosmetics is allowed only through the points of entry specified under Rule 43A of Drugs and Cosmetics Rules and since the appellant had violated the said provisions, the goods were absolutely confiscated by the Commissioner of Customs, Marmagoa. </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">Sec 80P - Cooperative society invests surplus funds in short-term deposits and securities - claims deduction for interest income - Since such income is not operational profits eligible for deduction, it falls under head 'income from other sources' u/s 56 and is taxable: Supreme Court</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>KEEPING</strong> in mind the objectives of cooperative societies, the Government has given deduction to their income earned from the activities prescribed in the relevant Section 80P. However, there are situations when a cooperative society has surplus fund (it may even be a liability for the assessee) which is not required for the regular business immediately. And such funds are commonly invested in short-term bank deposits or securities for quick bucks. But what would be the tax treatment to the interest income earned on such surplus funds? Are they eligible for deduction under the main Section 80P? The AO says NO as such an income is not operational profits of the assessee which alone can be deducted from the gross profits. And the Supreme Court has also agreed with the AO like the Tribunal and the High court. The Apex Court has held that such an interest income would fall under the head 'income from other sources' under Sec 56 and is taxable. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Drawback on sesame seeds - the Petitioner failed to produce proof of payment of customs duty on Sesame seeds, claimed to have been imported by DTA suppliers - If agricultural inputs that are in fact not imported, do not otherwise suffer incidence of excise duty, question of fixing an AIR for such commodity cannot arise - no legal infirmity in the impugned decisions taken by Respondents to withdraw deemed export duty drawback granted to Petitioner: High Court </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no estoppel against an illegality. If the Petitioner was in fact not entitled in law to claim deemed export duty drawback they cannot prevent the Respondents from taking corrective steps to recover the amounts wrongly released to the Petitioner. The petitioner, a 100% EOU was challenging the recovery of drawback of around 3 crore rupees paid to it on Sesame seeds. Para 6.12(a) of the Exim Policy provides that " supplies from DTA to EOU shall be regarded as deemed exports. The EOU, on production of disclaimer certificate from the DTA supplier, can claim the entitlements under Chapter 8 of the policy. Accordingly the EOU had applied for fixation of drawback on sesame seeds to the Deputy Commissioner, Noida SEZ. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more<strong> DDT</strong> </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </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> </body> </html>