TIOL-DDT 1812 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14276"><img src="http://www.taxindiaonline.com/RC2/image/ddt/ddt_1794.jpg" alt="DDT in Limca Book of Records" width="175" height="120" hspace="5" border="0" align="right"></a></font></strong></font><font color="#663399" size="3">TIOL-DDT 1812</font><br>
12.03.2012<br>
Monday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Ban On Export of Cotton to be Lifted - Pawar Power </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>NOTIFICATION</strong> No. 102(RE-2010)/2009-14 dated 05.03.2012 had prohibited export of cotton (Tariff Codes 5201 & 5203). This notification had also stipulated that </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) transitional arrangement under para 1.5 of FTP will not be applicable and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) export against registration certificates (RCs) already issued will also not be permitted. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=14438" target="_blank">DDT 1810 - 07 03 2012</a></strong> had said, “<em>Ban on export of cotton is not simple economics; it is complicated politics. So, now the matter goes to a Group of Ministers headed by Finance Minister Pranab Mukherjee. The GoM is to meet on Friday to sort out the issue. It is almost sure that the ban will be lifted on Friday” </em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, it is going to be done today. Government has decided to lift the ban on export of cotton and the notification is expected today. India is the world's second largest producer of cotton and a ban on export of cotton from India has global repercussions. China Cotton Association called the ban an "irresponsible act" that ended "a large number of registered contracts" and "disturbed international cotton trade order seriously”. This would have caused a big ruckus in Parliament today. Any way, wiser counsel prevailed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On March 9th, the DGFT issued a Circular to the effect that <em>any consignments for which Let Export Orders (LEOs) have been issued till 2400 hours on Sunday, 04 March, 2012 will be outside the purview of Notification No.102 dated 05 March, 2012</em>. -<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2010/dgft10cir058.htm" target="_blank">DGFT Policy Circular No. 58/(RE-2010)/2009-14 Dated: March 9, 2012</a></strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, the CBEC issued a Circular quoting the DGFT Circular <em><strong>desiring</strong></em> that field formations shall allow the export of consignments of Cotton (TH 5201 and 5203) for which ‘Let Export Orders' have already been issued till 2400 hrs on 04 -03-2012. -<strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2012/cuscir12_007.htm" target="_blank">CBEC Circular No. 7/2012-Cus., Dated: March 9, 2012</a></strong> </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, these Circulars are not relevant as the ban on export itself is to be lifted today. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Companies Act - Allotment of Director's Identification Number (DIN) </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BY</strong> Circular No. 32/2011 dated 31.05.2011, the time for filing form DIN-4 by DIN holders for furnishing PAN and to update PAN details, was 30 th September 2011. By Circular No. 66/2011 dated 04.10.2011, this date was extended till 15 th December and by Circular No. 70/2011 dated 15/12/2011,it was extended till 29.02.2012. Now the Government has extended it further till 30.04.2012. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/mca_circular_04_2012.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MCA Circular No. 04/2012 Dated; March 09 2012 </font></strong></a></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ITAT to Set Up E-Courts </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> ITAT President has come up with a novel idea. He notes that there are 63 sanctioned Benches of the I.T.A.T. wherein the required strength of the Members is 126 and have 88 Members now and some of the Benches are not regularly functioning resulting in increase of pendency. Therefore, there is a need to utilize information technology for dispensation of justice in the I.T.A.T. by introducing E-Courts/E-Benches and it will make non-functioning Benches operational so that we fulfill the motto of the Tribunal SULABH NYAY AND SATVAR NYAY. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is proposed to launch E-Bench system to dispose of the cases of Nagpur Bench at Mumbai and Allahabad Bench at New Delhi for two weeks from 14th May, 2012 to 25th May, 2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Will CESTAT follow? </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Parliament's Budget Session from Today </font></strong></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/Parliament.jpg" alt="Legal Corner Icon" width="340" height="119" hspace="5" border="0" align="center"></p>
<p align="center"><img src="http://www.taxindiaonline.com/RC2/image/stories/Pratibha_Patil.jpg" alt="Legal Corner Icon" width="160" height="114" hspace="5" border="0" align="left"></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Budget session of Parliament begins today with an address by the President to both Houses of Parliament. This will be the last address by President Pratibha Patil to the joint session of Parliament. Finance Minister Pranab Mukherji is to present the Union Budget on 16th.</font></p>
<p align="center"> </p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The DTC does not have a single proviso! </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Parliamentary Standing Committee on Finance has submitted its report on the Direct Taxes Code. We had already carried the highlights of the Report on Saturday. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some more interesting bits from the Report: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Income Tax Bill, 1961, as introduced in Lok Sabha on 24th March 1961, had 298 serially listed sections and Four Schedules. The Income Tax Act, 1961 as it stands today has around 656 sections and Fourteen Schedules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On being asked as to what structural changes has the Direct Taxes Code made in the existing Direct Tax Laws in order to make it simpler and better comprehensible, the Ministry in their written replies stated as under: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) It simplifies the language of the legislation by the use of direct, active speech, expressing only a single point through one sub-section and rearranging the provisions into a rational structure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Currently, the rates of tax for a particular year are stipulated in the Finance Act for that relevant year. In the DTC, all rates of taxes are proposed to be prescribed in Schedules to the Code, thereby obviating the need for annual finance bill, if no change in the tax rate is proposed. Tax rates are mentioned in the Finance Act (and not in the Income-tax Act) through Part I, II and III of First Schedule and Part IV for a particular year. The tax rates in the DTC are provided under Schedules I to IV. These are: The First Schedule: Rates of Income Tax; The Second Schedule: Rate of other Taxes; The Third Schedule: Rates for deduction of tax at source in the case of resident deductee; The Fourth Schedule: Rates for deduction of tax at source in the case of non-resident deductee. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) TDS rates on non-salary income are spread over Part II of the First Schedule to the Finance Act. Other TDS provisions are spread over 43 sections of the Act. All these tax rates, are consolidated into the Third Schedule of the DTC and mentioned in a tabular format while TDS provisions are listed over 8 clauses. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Currently in the Income Tax Act, 1961, there are 9 sections (section 115A to 115BBB) dealing with tax rates for non-residents on specific incomes. These have now been classified as special source incomes and the tax rate has been specified in Part III of the First Schedule of the DTC. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) Exemption provisions under the Income-tax Act [section 10)] are spread over more than 60 pages and more than 50 sub-clauses. All these provisions are mentioned in two Schedules of the DTC. The Sixth Schedule lists the income which is exempt and the Seventh Schedule lists the persons whose income is exempt. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) It strengthens taxation provisions for international transactions. In the context of a globalised economy, it has become necessary to provide a stable framework for taxation of international transactions and global capital. This has been reflected in the new provisions. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ON the question whether the Government has somehow failed to deliver on the basic promise of simplifying the provisions which could be comprehensible to the assessees, facilitate easier filing procedure so that the average taxpayer finds it convenient and include specific clauses to ensure accountability of tax authorities, the Ministry in their written submission stated as follows:? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The use of direct, active speech, expressing only a single point through one sub-section and re-arranging the provisions into a rational structure will assist a layperson to understand the provisions of the DTC. Easier filing procedures are an ongoing initiative of the Income tax department under which two page return forms for salaried taxpayers (Saral and now Sahaj) and for small business taxpayers (Sugam) have been introduced besides the facility for e-filing returns of income. Similar initiatives would also continue under the new legislative regime. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DTC is simple as it uses direct, active speech, expressing only a single point through one sub-section and the provisions are structured in a rational manner. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For example, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Currently, tax rates are mentioned in the Finance Act through Part I, II and III of First Schedule and Part IV for computing net agricultural income. Tax Deduction at Source (TDS) rates and provisions are spread over these Schedules and 43 sections of the Act. All these tax rates, are consolidated into 4 Schedules (Schedule I to IV) of the DTC and mentioned in a tabular format. TDS provisions are listed in 8 clauses and 2 of these Schedules. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Currently in the Income Tax Act, 1961, there are 9 sections (section 115A to 115BBB) dealing with tax rates for non-residents on specific incomes. These have now been classified as special source incomes and the tax rate has been specified in Part III of the First Schedule. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Currently, section 10 of the Income Tax Act, 1961, details persons whose incomes are exempt as well as nature of incomes which are exempt. It contains more than 50 clauses and some clauses are further divided into several sub-clauses. The section runs into 60 pages. All these provisions are mentioned in two Schedules of the DTC. The Sixth Schedule lists the incomes which are exempt and the Seventh Schedule lists the persons whose income is exempt. These cover 6 pages. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Currently, section 10(23C) of the Income-tax Act has 16 provisos within the section which makes it difficult to read and comprehend. <strong>The DTC does not have a single proviso.</strong></font></p>
</blockquote>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/49_Final_DTC_report.pdf">The Report </a></font></strong></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">Central
Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Fraudulent
availment of Cenvat Credit of more than Rs. 2 Crores – it is admitted
that the employees of the assessee were preparing excise documents in the
Excise Consultant's office and with his help had availed credit fraudulently – Prima
facie no case for waiver of penalty – Consultant directed to make
pre-deposit: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> demand
of more than Rs.2.36 Crores was confirmed after denying the Cenvat credit
to M/s Supertech Mercantile Co. Pvt. Ltd. and M/s Fastwave Trading Co. Pvt.
Ltd. on the ground that the firms have availed CENVAT credit fraudulently
on the basis of fake and bogus invoices as well as on the basis of invoices
under which the inputs were received but subsequently the inputs were sold
in the market in cash without any bill and without reversing any credit ...</font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income
tax - Whether negative figure of Net Worth is to be ignored for working
out capital gains in a slump sale case - ITAT Special Bench answer goes
in favour of Revenue</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>issues
before the Special Bench are - Whether the negative figure of net worth has
to be ignored for working out the capital gains in case of a slump sale and
whether the liabilities being reflected in the negative net worth of the
assessee has to be added to the sale consideration for determining the capital
gains on account of slump sale. And the verdict goes in favour of the Revenue.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs</font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs - Summons - Department has the power to summon any person, but an
accused cannot be compelled to give evidence against himself: High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> petitioner
has stated that he is carrying on business in purchase of Red Sander Wood in
the auctions conducted by the various Departments of the State Governments.
The Red Sander Wood purchased by the petitioner had been sold to various persons,
who purchase the same, process it for its utilisation within the country or
for the purpose of export ...</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"> <strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p>
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