TIOL-DDT 1474 · 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 1474 </font><br>
26.10.2010 <br>
Tuesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Prime Minister Not Sure of GST Date? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Prime Minister seems to be not very sure as to when he can bring in GST in the country. Addressing a business luncheon hosted by Nippon Keidanren in Tokyo yesterday, Prime Minister Manmohan Singh said, “We are continuing the process of reform of both direct and indirect taxes and hope to unify <strong>in due course</strong> all indirect taxes into a single <strong>Goods and Services Tax</strong>” So it is now in 'due course'; God knows when the due course would arrive.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Meanwhile BJP Leader Sushma Swaraj flayed Sonia Gandhi and Rahul Gandhi for their comments flaunting Central assistance to Bihar. She says 'such comments will make the states not subscribe to the move for goods and service tax. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax raid on Karnataka BJP MLAs - Political or Economic? </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFFLUENT</strong> BJP legislators of Karnataka, yesterday had some unwelcome visitors – Income Tax sleuths. Was it a political raid or a routine income tax raid? Yesterday was the starting day of the Anti Corruption Vigilance Week promoted by the Central Vigilance Commission. And the Income Tax Department took off with great aplomb with a raid on BJP MLAs. But why only BJP politicians? At least for a semblance of fairness, the Income Tax Department could have raided a few leaders of other political parties including Congress. Ultimately no politician ever gets punished for putting back a few thousands of Crores as an attendant side activity while being engaged in the great cause of public service. There was a great leader who did not file his Income Tax returns for eleven years and Madame Gandhi(Sr) brushed it away as a case of forgetfulness! Money used to change hands in envelopes in the good old days – now even suit cases cannot contain them and gunny bags are the latest containers. There is no party which is not a party to the bag-loads of black money and they all understand each other – because they all know, in whichever party they are, they are all in the same business – of looting the country – an occasional income tax raid notwithstanding. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Selection of cases for Scrutiny based on AIR - CBDT Clarification </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> per Section 285BA of the Income Tax Act, 1961, read with Rule 114E of the Income Tax Rules, 1962, specified entities (Filers) are required to furnish an Annual Information Return (AIR) in respect of specified financial transactions registered/recorded by them during the financial year to the income tax authority. The information in the AIR is generally used for scrutiny of the Income Tax return of the assessee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has now decided that scrutiny of such cases would be limited only to the aspects of information received through the AIR. However a case may be taken for wider scrutiny, where it is felt that apart from the AIR information there is a potential escapement of income more than Rs. 10 lakhs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board
had also decided that in all cases which are picked up for scrutiny only
on the basis of AIR information, the notice u/s 143(2) should be clearly
stamped with “AIR Case”. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT F. No. 225/26/2006-ITA.II(Pt) Dated September 08, 2010. </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Mahesh Bhupathi's ball out of Court </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>MAHESH</strong> Bhupathi has his way with his bat and ball and the tennis court, but he found that the Courts of Law are a different ball game altogether. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bhupathi
had reimbursed his tennis coach father an amount of Rs. 28.5 lakhs,as per
an agreement, on which he wanted exemption from Income Tax. The Karnataka
High Court was not impressed and observed, “It is the pious and moral obligation
of the father to maintain the son during his minority or till he independently
starts earning.If really there was an agreement between the father and son,such
agreement would have come into existence before training the son by the father.In
this case,the agreement has been entered into after the assessee (Bhupathi)
started getting remuneration from the tennis association,which only shows
that the agreement has come into existence only to defeat the tax liability” (<strong>See
www.taxindiainternational.com for HC order</strong>) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Aggrieved Bhupathi took his bat (battle) to the Supreme Court, where also he faced defeat. The Supreme Court yesterday dismissed his SLP.</font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">SION – Amendment not carried out in HBP - DGFT Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>STANDARD</strong> Input Output Norm (SION) for ‘Nylon filament knitted/knotted nets' bearing number H-158 was modified by <em><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2008/dgft08pn104.htm" target="_blank">Public Notice No. 104/(RE2008)/2004-09 dated 7.11.2008</a></strong></em>. Subsequently when Handbook of Procedures, Vol. II, popularly known as the SION Book, was published/released on 23.8.2009; this amendment failed to get incorporated. <font color="#FF6633"><strong>It was an inadvertent omission</strong></font>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Such non-inclusion of the Public Notice in the SION book, that was published subsequently, does not signify that the specific SION (in this case H-158 in Public Notice of 7.11.2008) has been rescinded / withdrawn. The SION H-158, as amended on 7.11.2008, continues to be available in the application filing software at DGFT Website. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT wants RAs to take note.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT should be commended for this admission of omission and maybe this is a good model for CBEC.</font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir003.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Policy Circular No. 03/(RE-2010)/2009-14 Dated: October 25, 2010 </font></strong></a></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>
<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">Central Excise</font></strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption for Kerosene used for lamps, not applicable for industrial use - Oil Company's appeal dismissed with costs - Supreme Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is manifest that the object of providing concessional rate of duty on kerosene used for illuminating burning oil lamps was to provide some relief to those economically backward sections of society who use kerosene for illumination and other domestic purposes, and therefore, the benefit of concessional rate of duty was available only on the kerosene cleared by the assessee to the PDS. Appeals, being devoid of any merit, are dismissed with costs, quantified at Rs. 20,000/-. </font></p>
<p><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">Whether contract entered into by software company with transporter for ferrying employees from home to office is covered under Ss 194C or 194I? - It is Sec 194C- ITAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> i ssue before the Tribunal is - Whether the contract entered into by the assessee with the transport service provider for transportation of its employees should be covered by the provision of section 194-C or 194-I of the Act. And the Tribunal's answer is Sec 194C. </font></p>
<p><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">Valuation - price paid by an importer to seller in ordinary course of commerce is to be taken as transaction value for purpose of valuation of goods. – Supreme Court</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> value, as per Section 14(1), as it stood prior to its amendment with effect from 10th October 2007, shall be deemed to be the price at which such or like goods are ordinarily sold, or offered for sale, for delivery at the time and place of importation - in the course of international trade. The word "ordinarily" is clarified in the Section itself, which describes an "ordinary" sale as one "where the seller and the buyer have no interest in the business of each other and the price is the sole consideration for the sale... </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns tomorrow for the judgements</font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><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"><strong>vijaywrite@taxindiaonline.com</strong></a></font></p>
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