TIOL-DDT 1843 · 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 1843 </font><br>
25.04.2012 <br>
Wednesday</strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone
Amendment - Worth Rs 40,000 Cr</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Government is likely to get around 40,000 Crores of rupees from the retrospective amendments proposed in the 2012 Budget, as stated by the MoS in the Finance Ministry Palanimanicakam in a written reply in the Rajya Sabha. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The retrospective amendments, especially the Vodafone amendment is a point for intense debate all over the world with thinkers vertically divided on the fairness of retrospective tax legislation. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Vodafone Tax - Murkier Times </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> the parliament is about to pass the Finance Bill, the debate is getting shriller. It is said that Prime Minister Manmohan Singh had written to his British counterpart Gordon Brown in 2010 that there is no r<strong>etrospective application</strong> of taxation in India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But the Finance Secretary says <em>"There was no retrospective application of taxation; It was not a clarification, just an implementation of what the tax authorities had always believed."</em> The Finance Secretary also sated that Vodafone was informed by the Income Tax Department, even before it had made final payments to Hutchison, that it would have to deduct tax on the transaction. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But now Vodafone says, <em>"This is completely untrue. At no point before the transaction concluded and the payment was made did any entity of the Vodafone Group receive any communication at any of its business addresses from the Indian Tax Authorities requesting a payment of withholding tax."</em> </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Retrospective legislation is here to stay and in the Vodafone case, the Government cannot now go back – Long battle ahead and good times for the Legal hawks. </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">External Commercial Borrowings (ECB) for Civil Aviation Sector </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present, availing of ECB for working capital is not a permissible end-use. On a review of the policy related to ECB and keeping in view the announcement made in the Union Budget for the Year 2012-13, it has been decided to allow ECB for working capital as a permissible end-use for the civil aviation sector, <strong>under the approval route,</strong> subject to the following conditions:</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Airline companies registered under the Companies Act, 1956 and possessing scheduled operator permit license from DGCA for passenger transportation are eligible to avail of ECB for working capital; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) ECB will be allowed to the airline companies based on the cash flow, foreign exchange earnings and its capability to service the debt; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The ECB for working capital should be raised within 12 months from the date of issue of the circular; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The ECB can be raised with a minimum average maturity period of three years; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) The overall ECB ceiling for the entire civil aviation sector would be <strong>USD one billion </strong>and the maximum permissible ECB that can be availed by an individual airline company will be <strong>USD 300 million</strong>. This limit can be utilized for working capital as well as refinancing of the outstanding working capital Rupee loan(s) availed of from the domestic banking system. Airline companies desirous of availing of such ECBs for refinancing their working capital Rupee loans may submit the necessary certification from the domestic lender/s regarding the outstanding Rupee loan/s. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ECB availed for working capital/refinancing of working capital as above will not be allowed to be rolled over.</font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=280&filename=notification/rbi/2011/rbi11cir113.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">RBI A. P. (DIR Series) Circular No. 113., Dated: April 24, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wardha Notified as ICD </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified Wardha in Maharashtra as an Inland Container Depot for <em>Unloading of imported goods and the loading of export goods</em>. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_035.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 35/2012 - Cus.,(NT.), Dated: April 23, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Common Adjudicating Authority for DRI cases </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified a common adjudicating authority for certain DRI cases in Show Cause Notices issued by Joint Director, DRI Ludhiana. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_036.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 36/2012 - Cus.,(NT.), Dated: April 23, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Can
a Person be tried twice for same offence? - Doctrine of double jeopardy </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a judgement delivered on 23 April 2012, the Supreme Court observed, </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) Adjudication proceedings and criminal prosecution can be launched simultaneously; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Decision in adjudication proceedings is not necessary before initiating criminal prosecution; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Adjudication proceedings and criminal proceedings are independent in nature to each other; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) The finding against the person facing prosecution in the adjudication proceedings is not binding on the proceeding for criminal prosecution; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) Adjudication proceedings by the Enforcement Directorate is not prosecution by a competent court of law to attract the provisions of Article 20(2) of the Constitution or Section 300 of the Code of Criminal Procedure; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vi) The finding in the adjudication proceedings in favour of the person facing trial for identical violation will depend upon the nature of finding. If the exoneration in adjudication proceedings is on technical ground and not on merit, prosecution may continue; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(vii) In case of exoneration, however, on merits where the allegation is found to be not sustainable at all and the person held innocent, criminal prosecution on the same set of facts and circumstances cannot be allowed to continue, the underlying principle being the higher standard of proof in criminal cases. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Here was a case where a person already tried under the Negotiable Instruments Act was also prosecuted under the IPC. The Supreme Court observed, "<em>Admittedly, the appellant had been tried earlier for the offences punishable under the provisions of Section 138 N.I. Act and the case is sub judice before the High Court. In the instant case, he is involved under Sections 406/420 read with Section 114 IPC. In the prosecution under Section 138 N.I. Act, the mens rea i.e. fraudulent or dishonest intention at the time of issuance of cheque is not required to be proved. However, in the case under IPC involved herein, the issue of mens rea may be relevant. The offence punishable under Section 420 IPC is a serious one as the sentence of 7 years can be imposed. In the case under N.I. Act, there is a legal presumption that the cheque had been issued for discharging the antecedent liability and that presumption can be rebutted only by the person who draws the cheque. Such a requirement is not there in the offences under IPC. In the case under N.I. Act, if a fine is imposed, it is to be adjusted to meet the legally enforceable liability. There cannot be such a requirement in the offences under IPC. The case under N.I. Act can only be initiated by filing a complaint. However, in a case under the IPC such a condition is not necessary. There may be some overlapping of facts in both the cases but ingredients of offences are entirely different. Thus, the subsequent case is not barred by any of the aforesaid statutory provisions."</em> </font></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=50&filename=legal/sc/2012/2012-TIOL-34-SC-MISC.htm" target="_blank">Click here for the Supreme Court Order</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"> – Thursday'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">Export duty on Non alloy steel - Instead of alleging that appellants had taken advantage of low percentage of boron to convert non-alloy steel to alloy steel, arrangements should have been made for proper determination of boron content with far greater accuracy as is being done in other countries - Confiscation of goods set aside: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants wanted to export the impugned goods by declaring them as “alloy steel billets of prime quality”. There is no duty on export of goods out of India except in a few cases. In respect of “non-alloy steel, ingots or prime form”, export duty of 15% advalorem has been imposed vide Notification No.66/08-Cus. dt. 10.5.08. Appellant-exporter used to earlier export non-alloy steel only but since, after imposition of duty on such steel, they had filed the impugned shipping bills declaring the goods as alloy steel, a question has been raised as to whether there has been any misdeclaration to avoid export duty imposed on 10.5.2008. </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="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether when Revenue, during a search, finds documents or assets belonging to another person, is it necessary for AO, as per Sec 153C, to conclusively show details of undisclosed income before AO proceeds with assessment - NO, rules Delhi HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> search u/s 132 was conducted on ‘P' group. During the search proceedings, certain documents belonging to the assessee were found in the form of agreements. AO recorded a satisfaction note u/s 153(1) of the Act. Three agreements were found. The first agreement was between ‘P' and it associate concern and the assessee in the form of collaboration agreement. The next agreement was between the assessee and ‘E' in the form of assignment agreement. The third agreement was between ‘P' and ‘E' in the form of escrow agreement. As per these agreements, AO recorded the satisfaction that the assessee acquired development rights from ‘P' in respect of a land and subsequently transferred such rights in favour of ‘E' against which a consideration was received partly which was not considered as revenue.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Excise/Customs/ST </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Postal authorities returning SCN/OIO as being ‘unclaimed' - Since delivery of the SCN as well as O-in-O was deliberately & intentionally avoided by appellant, contention that same has not been served is unsustainable - Appeal dismissed - Appellant making allegations of favouritism - SCN issued for initiation of contempt proceedings: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AFTER </strong>passing of the order, the appellant made allegations against the Bench that the Bench is favouring the Revenue in the absence of any evidence. The Court feels that the act of the appellant is a contempt of Court. Accordingly, it issued show-cause notice as to why contempt of the Court proceedings shall not be initiated against the appellants. </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>
<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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