TIOL-DDT 1789 · 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 1789 </font><br> 06.02.2012 <br> Monday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax Raids - Recording of Statement till 3 AM on second day violates Human Rights: HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PERHAPS</strong> you will remember that the Bihar Human Rights Commission had issued notices to the Income Tax department proposing to award monetary compensation (recoverable from the salary of the officers) to an assessee whose human rights were violated in the course of search and seizure. Please see <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=12621" target="_blank">DDT 1627 - 10.06.2011</a>.</strong> </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Department was of course not amused and took the matter to the High Court in writ petition. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The High Court observed, </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“One fact remains undisputed that the interrogation continued till 3.30 A.M. on the second night of search and seizure as per the own record of department. The search and seizure manual of the Income Tax does not prescribe any time limit for search and survey operation and the same may continue for days if required, but it has to be in keeping with the basic human rights and dignity of an individual. The purpose of the Act is to give effect to the process of execution of actions of executive and bureaucratic machinery in line of accepted standard of basic human rights, which are internationally recognized. The laws, and approach to law for its execution must conform to the charter of human values and dignity. Even a person accused of a serious offence has to be produced before the nearest Magistrate within 24 hours. <strong>There is no possible justification to continue interrogation and keep the respondent No.3 awake till 3 A.M</strong>. on the second night of search and interrogations. No reason has been assigned as to why the interrogations could not have been deferred till the morning of the next day. The officials could have continued with the interrogation on the next day in the morning after allowing respondent No.3 to retire at an appropriate time in the night. </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department would consider issuing appropriate instruction in future raids to record the duration of interrogation and breaks. </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the instant case, no reason has been assigned as to why it was absolutely imperative to continue with the interrogations at 3 A.M. on 10.9.2010, when search and seizure has commenced on 8.9.2010 at 9.30 A.M. Even if there were breaks and there were no continuous interrogation for 36 hours as held by Commission, still the department has no plausible excuse for making interrogations till odd hours of second night till 3 A.M. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As for compensation, the High Court quashed the notice as in the instant case, no opportunity was given to the officials to countenance the charge of violation of human rights. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In any case, overzealous raiding parties must realise that the raided party also has human dignity and that there are courts in this country. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We bring you the High Court judgement today. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-101-HC-PATNA-IT.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Click here for the High Court Judgement. </strong></font></a></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=339&filename=Bihar_Humam_Rights_Commission_Case.htm#" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Click here for the Bihar HRC Order. </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - SION - Instant Fruit Juice Powder - Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT </strong>has added two new entries, E-129 and E-129A in the Handbook of Procedures V.2 (2009-14). These notify the Standard Input Output Norms (SION) for export product Instant Fruit Juice Powder/ Crystals <strong>(with Sugar)</strong> and Instant Fruit Juice Powder/ Crystals <strong>(Sugar free).</strong> </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn092.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 92/(RE-2010)/2009-2014, Dated: February 01, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP – SION – Biscuits - Amended </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has revised the SION entry E-5 in the Handbook of Procedures V.2 (2009-14), to change the export product name from ‘biscuits (with or without dry fruits)' to ‘biscuits'. Description of import items are now mentioned in more specific details and quantities rationalised. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn093.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 93/(RE-2010)/2009-2014, Dated: February 01, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - SION - Assorted Confectionery - Amended </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has revised the SION entry E-1 and notified a new SION E-1A in the Handbook of Procedures V.2 (2009-14). The new entry is for Assorted Confectionery (Sugar free). For the existing entry, Assorted Confectionery(with Sugar), description of input items are now mentioned in more specific details and quantities rationalized for export. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn094.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 94/(RE-2010)/2009-2014, Dated: February 01, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP – SION – Articles made of Thermo Plastic Elastomer (TPE) - Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has added a new entry, SION H-572 in the Handbook of Procedures V.2 (2009-14). This notifies the Standard Input Output Norms (SION) for export product <strong>Articles made of Thermo Plastic Elastomer (TPE). </strong></font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2010/dgft10pn095.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 95/(RE-2010)/2009-2014, Dated: February 02, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Housing Loans by Banks - Stamp Duty not to be included in Loan Amount </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS </strong>per RBI guidelines the Loan to Value (LTV) ratio in respect of housing loans should not exceed 80 per cent. However, for small value housing loans i.e. for loans below Rs. 20 lakh (which are classified as priority sector advances) the LTV ratio should not exceed 90 per cent. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has come to know that banks adopt different practices for deciding the value of the house property while sanctioning housing loans. Some banks include stamp duty, registration and other documentation charges in the cost of the house property. This overstates the realisable value of the property as stamp duty, registration and other documentation charges are not realisable and consequently the margin stipulated gets diluted. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So RBI has directed that banks should not include these charges in the cost of the housing property they finance so that the effectiveness of LTV norms is not diluted. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI /2011-12/383 , Dated: February 03, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Loans and Contracts to Bank Directors and their Relatives </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RBI</strong> has come to know of an instance, where loans and advances have been sanctioned to the relative of a Director of a bank, at a concessional rate of interest, thereby circumventing the spirit of the restrictions contained under Section 20 of the Banking Regulation Act, 1949. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI has decided that the restrictions as contained in Section 20 of the Act would apply to grant of loans and advances to spouse and minor/dependent children of the Directors of banks. However, banks may grant loan or advance to or on behalf of spouses of their Directors in cases where the spouse has his/her own independent source of income arising out of his/her employment or profession and the facility so granted is based on standard procedures and norms for assessing the creditworthiness of the borrower. Such facility should be extended on commercial terms. All credit proposals for Rs. 25 lakhs and above should be sanctioned by the bank's Board of Directors/Management Committee of the Board. The proposals for less than Rs. 25 lakhs may be sanctioned by the appropriate authority in banks in terms of the powers delegated to them. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These norms relating to grant of loans and advances will be equally applicable to award of contracts. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI /2011-12/385 , Dated: February 03, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Annual Medical Check Up for Gr-A Officers </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is already an existing scheme of Annual Medical Check Up for All India Service (IAS, IPS, IFS) officers. Now, the scheme is extended to Group A officers of the Central Civil services (IRS, ITS etc,.) of and above the age of 40 years. The charges for men officers are Rs. 2000/- and for women Rs. 2200/-. The Medical Report is to be enclosed to the Annual Performance Report of the officer. </font></p> <p><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/medical_exam.pdf"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DOPT OM No. 21011/1/2009-Estt(A)-Part , Dated: February 01, 2012 </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"> – Tuesday'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">As per Joint Venture Agreement, Royalty and Licence Fee payments are liable to be made in respect of goods manufactured and sold in India and not in respect of goods under importation - Provisions of Rule 10(1)(c) of Customs Valuation Rules, 2007 are not attracted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> payments made should be related to the imported goods and such payments are condition of the sale of the goods. In the present case, from a reading of the agreement, it is evident that the payments made by way of royalty or licence fee has nothing to do with the imported goods nor is it a condition of sale for the imported goods. These payments are required to be made in respect of the rubber products manufactured and sold by the licensee in India. In view of the above position, the provisions of Rule 10(1)(c) of the Customs Valuation (Determination of Value of Imported Goods) Rules, 2007 are not attracted. </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 benefit of Sec 80IA can be availed only after an industrial park scheme is framed and gazetted - YES, rules Delhi HC </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> requirement of Section 80IA(4)(iii) is that a scheme should be framed and gazetted and then only benefit can be claimed by an industrial undertaking which gets notified under the scheme. If there was no scheme in operation as the scheme had not been framed or gazetted, no benefit can be availed of by an undertaking on the basis of a prior scheme, the term and validity of which had come to an end by efflux of time. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise/Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mobile phones in name of Director of Company - CENVAT Credit of Service Tax cannot be denied - Prima facie case - Stay granted: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> input service is not restricted to services used in or in relation to manufacture of final products, but extends to all services used in relation to the business of manufacturing the final product. The Board has issued a Circular allowing the CENVAT credit on mobile phones. Since the stay is only being decided at this stage, and the case is prima facie in favour of the applicant, the pre-deposit of service tax, interest and penalty is waived and recovery thereof stayed during the pendency of the appeal. </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> <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> </body> </html>