TIOL-DDT 1324 · 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 1324 </font><br>
23.03.2010 <br>
Tuesday</strong> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income
tax exemption - Interest on bonds/debentures - Notified bonds or debentures
of public sector companies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> <em>Notification No. 07/2010 [F.No.178/126/2009-ITA.I], dated 3-2-2010,</em> the government had authorised the Indian Railway Finance Corporation(IRFC) to issue, during Financial Year 2009-10, tax free secured, redeemable, non-convertible Railway Bonds of Rs. 1,000 each in case of public issue and Rs. 1,00,000 each in other cases, aggregating to an amount of five thousand crore rupees only, carrying an interest rate in the range of 6.50% to 7.25% per annum, depending upon the size and tenor of a tranche, under item (h) of sub-clause (iv) of clause (15) of section 10 of the Income-tax Act, 1961. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the lower interest rate of 6.50% is changed to 6%. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not016.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CORRIGENDUM Notification No. 16/2010 -INCOME TAX Dated: March 22, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - University of Pennsylvania Institute for Advance Study of India approved as other institution </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per clause (iii) of sub-section (1) of section 35 of the Income-tax Act, 1961, In respect of expenditure on scientific research, the following deductions shall be allowed; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">an amount equal to one and one-fourth times of any sum paid] to a university, college or other institution to be used for research in social science or statistical research : </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provided that such university, college or <strong>other institution</strong> for the purposes of this clause— </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(A) is for the time being approved, in accordance with the guidelines, in the manner and subject to such conditions as may be prescribed; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(B) such university, college or <strong>other institution</strong> is specified as such, by notification in the Official Gazette, by the Central Government </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the <strong>University of Pennsylvania Institute for the Advance Study of India, New Delhi</strong> has been approved by the Central Government for the purpose of clause (iii) of sub-section (1) of section 35 of the Income-tax Act . </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 17/2010 -INCOME TAX Dated: March 22, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mumbai Central Excise IV Commissionerate merged with I Commissionerate?</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ALL</strong> references to Mumbai - IV Central Excise Commissionerate in the Central Excise Notification No. 14/2002-Central Excise (N.T.), dated the 8 th March, 2002, are removed. Even the jurisdiction of the Mumbai –I Commissionerate is enlarged to include the erstwhile Mumbai-IV Commissionerate. It seems a lot of restructuring is going on in forming and reforming Commissionerate – which will only mean more confusion for the assessees. There are rumours that more tinkering is in the pipeline. Let us hope that they update all this information on changes in jurisdiction in ACES as well. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=30&filename=notification/excise/2010/exnt10_13.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">NOTIFICATION NO. 13/2010 -CX.(N.T.), Dated: March 19, 2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why is Financial Literacy Important? RBI Governor explains </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is virtually no country whose economy has developed and matured without a corresponding deepening of the financial sector. And such deepening is possible only when individuals and households are financially literate and are able to make informed choices about how they save, borrow and invest. Indeed, it is possible to argue that the sub prime problem would not have grown to the explosive proportions that it did if people had been financially more ‘literate'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Beyond the individual level - and this is equally important - greater financial literacy can aid a better allocation of resources and thereby raise the longer-term growth potential of the economy. India clocked average growth of around nine percent in the period 2004-08 before the global financial crisis interrupted the growth trajectory. One of the key drivers of this growth has been the </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">increased savings rate in the economy, which reached a high of 36 percent of GDP in 2007/08, the year before the crisis. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The increase in savings itself has been a consequence of the changing demographics and the welcome trend of rise in household savings. However, nearly half our population still lacks access to banking and other financial services. If we can redress that and provide this ‘left behind' population access to the entire gamut of banking services, we could raise household and overall domestic savings even further, and that will fulfil one of the necessary conditions to achieve the double-digit growth that we aspire to. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">To make that happen, we need to deepen the penetration and expand the coverage of financial services to all sections of society and to all regions of the country in a meaningful way, particularly to those at the bottom of the economic pyramid. Lack of financial awareness and literacy is one of the main reasons behind lack of access to financial products or failure to use them even when they are available. An NCAER and Max New York Life study shows that in India, around 60 percent of labourers surveyed indicated that they store cash at home, while borrowing from moneylenders at high interest rates - a pattern which increases their financial vulnerability. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Financial literacy and awareness are thus integral to ensuring financial inclusion. This is not just about imparting financial knowledge and information; it is also about changing behaviour. For the ultimate goal is to empower people to take actions that are in their own self-interest. When consumers know of the financial products available, when they are able to evaluate the merits and demerits of each product, are able to negotiate what they want, they will feel empowered in a very meaningful way. They will know enough to demand accountability and seek redressal of grievances. This, in turn, will enhance the integrity and quality of financial markets. One big lesson we have learnt in our outreach programmes is that financial literacy is not just a public good; it is a merit good. What this means is that by deepening financial literacy, not just individuals and households, even the society at large stands to benefit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These are excerpts from RBI Governor, Dr. D. Subba Rao's speech at the RBI-OECD Workshop at Bangalore yesterday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dr. Subba Rao also said, “I am happy to claim, with a deep sense of fulfilment of course, that between all of us in the top management of the Reserve Bank, we have visited at least one village in every state and most union territories. Given that India has over 600,000 villages, our coverage was, by all accounts, miniscule. Even so, it has been an enormously rewarding experience for us as individuals and for the RBI as an institution. We learnt more this way than what we could have by reading hundreds of reports and attending scores of meetings and conferences. And what is more, it was a lot more fun than sitting in air-conditioned offices in skyscrapers. If I were to single out one important lesson from these visits, it is about the growing aspirations and the rising awareness of rural people. We were all struck by how much rural women knew about saving and investment and struck even more by how eager they were to learn more about saving and investment. </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"> – Wednesday's cases</font></strong></font></strong></font></p>
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax</strong> </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Merely because assessee had claimed expenditure, which claim was not accepted or was not acceptable to Revenue, that by itself would not, attract penalty under Section 271(1) (c): Supreme Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing inaccurate particulars. It is obvious that it must be shown that the conditions under Section 271(1)(c) must exist before the penalty is imposed. There can be no dispute that everything would depend upon the Return filed because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not. Merely because the assessee had claimed the expenditure, which claim was not accepted or was not acceptable to the Revenue, that by itself would not, attract the penalty under Section 271(1) (c). </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">Description of goods in invoice and shipping bill for export of Poly Acrylic/Wool/Lycra Blended knitted garments merits classification under S. No. 60.07 of Drawback Schedule and not 61.01 as claimed by petitioner - When interest under Section 75A(2) is mandatory and automatically applies for recovery of excess drawback, no separate notice required for recovery of interest: High Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee was engaged in manufacture and export of knitted garments. They exported Poly Acrylic/Wool/Lycra Blended knitted garments under claim for drawback. Subsequently, lower authority issued a notice to recover excess drawback on the ground that the goods exported were blended knitwear which merited classification under Serial No.60.07 of drawback schedule and not under S. No. 61.01 as claimed by the assessee and the demand was confirmed. An appeal to the Commissioner (Appeals) failed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However, the Commissioner (Appeals) set aside the demand of interest since there was no mention of this in the notice. Cross appeals were filed by the assessee challenging the recovery of excess drawback and Revenue for recovery of interest which was earlier set aside by the Commissioner (Appeals). Joint Secretary (Drawback) while dismissing the appeal filed by the assessee allowed the appeal filed by the Revenue resulting in a Writ Petition before the High Court. </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"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tomorrow
is <em>Ram Navami</em> Holiday.</font></strong></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until
Day After 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><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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