TIOL-DDT 1715 · 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 1715</font><br>
18.10.2011<br>
Tuesday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Deposits
in Banks on Court Orders - TDS - CBDT Clarifies</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the course of the proceedings before Supreme Court/ High Court/ any other court or tribunal, one or more than one litigant (‘the depositor') is directed by the court that a specified amount ('deposit') be deposited in the bank either directly or through the court in order to protect the interest of litigants. Such deposits (usually time deposits) are kept in the bank in the names of Registrar/Prothonotary and Senior Master or any other name as per the order of the court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Difficulties are faced in making TDS on the interest periodically accruing on such deposits/ time deposits and about the person(s) as deductee who is entitled to TDS certificate in Form 16A. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT clarifies: </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The bank shall in accordance with the provisions of the Act, deduct tax at source on the interest accruing on the deposit(s) as per existing procedure and at the rates in force. The certificate of deduction of tax shall be issued by the bank in the name of ‘the depositor'. If more than one person has been directed to deposit any specified amount, the amount of TDS shall be corresponding to each such depositor for the portion of interest accrued in its respective share in the total amount deposited and TDS certificates shall be accordingly issued by the bank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the time of making deposit of the amount ordered by the court, the depositor(s) shall submit a prescribed declaration with the court for record purpose and to facilitate the administration of TDS. The Registrar/ Prothonotary and Senior Master or any person authorized by the court will pass the information furnished therein to the bank concerned for TDS properly in the name of the depositor(s) in accordance with the provisions of the Act. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the instances of such deposits:</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ In the course of appellate proceedings, the court directs an insurance company (the depositor) to deposit a part of compensation awarded by Motor Accident Claims Tribunal. This amount is deposited as Time Deposit in a bank in such name as per the directions of the court, the credit of TDS on interest accruing on such deposit will be allowed to the Insurance Company, which has made the said deposit. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The Court while deciding the cases of land compensation directs the authority concerned (liable for making payment of compensation) to deposit any sum in time deposit in any bank, the TDS on time deposit shall be in the name of the authority making deposit, if such authority is an entity liable for charge to Income Tax on its income. In case the deposit in the bank is by Central or State Government, no tax will be deducted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The court adjudicating upon financial dispute during pendency of proceedings direct any party(ies) to deposit any amount as security in time deposit, the TDS on interest accruing on such deposit will be in name of the depositor irrespective of the fact that at the directions of the court such time deposit has been drawn in the name of the officer of the court or joint name or any other name. </font></p>
</blockquote>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This procedure shall not apply to:</font></strong></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Any deposit in the bank held or dealt by the court or any other person appointed by the court in the capacity of being an administrator or receiver or any authority of similar nature; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Any deposit which has not been made by any specific depositor but has arisen due to attachment made by the Court; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ The cases of “representative assessee” within the meaning of section 160 of the Act. </font></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2011/it11cir08.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 8/2011, Dated: October 14, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Import of Radioimmunoassay kits (Medical equipments containing radioactive isotopes)</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> import of 'Radioimmunoassay kits' (Medical equipments containing radioactive isotopes) now will not require an import authorization from DGFT. Exim Code 2844 4000 of the Schedule 1 (Imports) of the ITC (HS) Classifications of Export and Import Items, is amended. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Import will be subject to Atomic Energy Act, 1962 and Rules thereunder. However, import of Radioimmunoassay kits intended for the diagnosis of disease or disorders in human beings or animals is ‘Free' subject to prior permission of AERB. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2010/dgft10not080.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Notification No. 80 (RE-2010)/2009-2014, Dated: October 17, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Import of Liquid Paraffin</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended the Handbook of Procedure, Vol. II. In SION No. H-532, H-533, H-534 and H-535 of Plastic Product Group (Product Code H), the description of Import Item ‘Mineral Oil' is amended to read as '<strong>Mineral Oil/Liquid Paraffin'</strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, Liquid Paraffin can also be imported as an alternate input for manufacture of certain export products in Plastic Product Group. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn081.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 81 (RE-2010)/2009-2014, Dated: October 14, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Procedure for sale or transfer of imported firearms</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PROCEDURE</strong> for sale or transfer of imported firearms is simplified and prior permission from DGFT is dispensed with in respect of some categories. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>++ Prior Permission of RA shall not be required for transfer or disposal of imported goods after a period of two years from the date of import. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Transfer of Imported Firearms will not require permission from DGFT (a) after 10 years of import or (b) on attaining the age of 60 years by such importer. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Prior Permission of DGFT shall also not be required for transfer of imported weapons (firearms) by the Renowned Shooters after 5 years from date of import. In respect of those shooters categorised as Renowned Shooter for at least 3 consecutive years, no permission would be required from DGFT after 3 years from date of import. </font></em></p>
</blockquote>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn082.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 82 (RE-2010)/2009-2014, Dated: October 17, 2011 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Tax Accounting Standards - Discussion Paper</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SECTION</strong> 145 of the Income-tax Act, 1961 (the Act) provides that the method of accounting for computation of income under the head “Profits and gains of business or profession” and “Income from other sources” can either be the cash or mercantile system of accounting. The Finance Act 1995 empowered the Central Government to notify Accounting Standards for any class of assessees or for any class of income. Explaining the reason for introduction of this provision, it was stated that there is flexibility in the standards issued by the Institute of Chartered Accountants of India (ICAI) which makes it possible for an assessee to avoid the payment of correct taxes by following a particular system and therefore, there is an urgent need to standardize one or more of the alternatives in various standards so that income for tax purpose can be computed precisely and objectively. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has published the draft of the Tax Accounting Standards on Construction Contracts and Government Grants. Draft of other TAS will be issued for comments/suggestions by all stakeholders in due course. </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>
<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">Proposal made in SCN for imposition of penalty u/s 114A of Customs Act, 1962 - hence imposition of penalty u/s 112 is unwarranted as same not invoked: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> penalty imposed on the current appellant under Sec. 112 is unwarranted, as this section was not invoked in the show-cause notice issued to the appellant. In the absence of any such invocation or liability for confiscation of the goods on the appellant, as he is not the importer, the penalty imposed on the appellant is unsustainable and is liable to be set aside. The impugned order to the extent of penalty imposed on the appellant is set aside and the appeal is allowed. </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">Whether when individual assessee, who is a Director in company, lets out own premises to company, expenses incurred on renovation of premises are to be treated as deemed dividend in hands of assessee who also holds majority share in company - NO, rules ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is - Whether when individual assessee, who is a Director in the company, lets out his own premises to the company, expenses incurred on renovation of the premises are to be treated as deemed dividend in the hands of the individual assessee who also holds majority share in the company. And the Tribunal rules against the Revenue. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Even where demand of duty is for normal period of limitation, assessee is liable to be penalized under section 11AC if he is found to have evaded duty by adopting any of means specified in section: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>HAD</strong> it been the intention of the legislature that section 11AC was applicable only to cases where the proviso to section 11A(1) was invoked for recovery of duty, it would not have been necessary for the legislature to frame the text of section 11AC in the manner it did. It would, therefore, appear that section 11AC is not a provision exclusively applicable to cases in which the proviso to section 11A(1) is invoked. It could also be applied to a case in which duty is demanded for the normal period of limitation if any of the grounds laid down in the body of section 11AC is established against the assessee. </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><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"><strong> <a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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