TIOL-DDT 1948 · 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 1948 </font><br>
24.09.2012 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">5% TDS on interest payable by Indian Companies to Foreign Companies - Section 194LC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Finance Act, 2012 introduced section 194LC in the Income Tax Act with effect from 1st July 2012. This section provides for lower withholding tax at the rate of 5% on interest payments by Indian companies on borrowings made in foreign currency by such companies from a source outside India. There are principally two modes of borrowing which are covered, subject to approval of the Central Government: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Monies borrowed under a loan agreement </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Long term Infrastructure Bonds </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The rate of interest on such borrowings, for the purpose of eligibility under the section 194LC, shall be as approved by the Central Government.The lower rate of withholding tax is for monies borrowed or bonds issued during the period from 1.7.2012 to 30.6.2015.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Instead of giving approval in each case, as it would entail avoidable compliance burden on the borrower/issuer of bond, the Government has decided to give a general approval in respect of the loan agreements and issue of long-term infrastructure term bond by Indian companies - subject to certain conditions. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2012/it12cir07.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Circular No. 7/2012; Dated September 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - DGFT Amends SION </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> DGFT has amended the Standard Input output Norms (SION) for certain products. </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. <strong>SION No. A -1691 of Chemical Product Group (Product Code A):</strong> The description of Import Item No. 7 of SION A - 1691 (export product: Nylon Bicycle Tyres) is amended from ‘Nylon Fabric' to read as "Relevant Nylon Tyre Cord Fabric". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. <strong>SION No. H - 207 of Plastic Product Group (Product Code H):</strong> The quantity allowed for Import in SION H-207 [export product: Polyester Chips (Textile Grade) PTA Route)] is enhanced. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. <strong>SION No. H - 278 of Plastic Product Group (Product Code H):</strong> The quantity allowed for Import of PVC Stabilizer, of SION H-278 [export product: PVC Rigid Film/Sheet (General purpose/Stationary Grade)] is reduced from ‘ 0.028 kg' to " 0.022 kg". </font></p>
</blockquote>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn017.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 17/(RE-2012)/2009-2014, Dated: September 20, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - Disposal of pending cases for clubbing of advance authorisations filed on or before 31st March, 2012</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PUBLIC</strong> Notice No. 79(RE-2010)/2009-14 dated 13.10.2011 had stated in para 4.20.05 " ---This facility will be available only till 31st March 2012, thereafter no clubbing of Authorisations issued before 31st March 2001 shall be allowed. No clubbing of erstwhile Value Based Advance licences shall be allowed". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A question has been raised about such applications that have been received by the Regional Authority before the due date i.e.31.03.12, but are yet to be disposed of. The new Handbook of Procedure and the annual supplement issued on 05.06.12 are silent on this issue. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, DGFT clarifies: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Intention of the Government is to facilitate clubbing if conditions of Public Notice No.79 are satisfied. Hence, requests for clubbing of advance authorisations filed by the exporters in the office of Regional Authorities of DGFT on or before 31st March 2012 should be disposed of as per the provision of the Handbook of Procedure prior to the revised edition/annual supplement dated 05.06.2012. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=46&filename=notification/dgft/2012/dgft12cir005.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT policy Circular No. 5/(RE-2012)/2009-2014, Dated: September 21, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Statement recorded during survey under Section 133A of IT Act-not conclusive piece of evidence by itself</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHAT</strong> is the validity of statements recorded by Income Tax Officers during a survey? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Madras High Court had in <em>CIT Salem Vs S.Khader Khan Son</em> in a 2007 Judgement held: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. An admission is extremely an important piece of evidence but it cannot be said that it is conclusive and it is open to the person who made the admission to show that it is incorrect and that the assessee should be given a proper opportunity to show that the books of accounts do not correctly disclose the correct state of facts. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In contradistinction to the power under section 133A, section 132(4) of the Income-tax Act enables the authorised officer to examine a person on oath and any statement made by such person during such examination can also be used in evidence under the Income-tax Act. On the other hand, whatever statement is recorded under section 133A of the Income-tax Act it is not given any evidentiary value obviously for the reason that the officer is not authorised to administer oath and to take any sworn statement which alone has evidentiary value as contemplated under law. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The expression "such other materials or information as are available with the Assessing Officer" contained in Section 158BB of the Income-tax Act, 1961, would include the materials gathered during the survey operation under Section 133A. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The material or information found in the course of survey proceeding could not be a basis for making any addition in the block assessment. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The word "may" used in Section 133A (3)(iii) of the Act, viz., "record the statement of any person which may be useful for, or relevant to, any proceeding under this Act, as already extracted above, makes it clear that the materials collected and the statement recorded during the survey under Section 133A are not conclusive piece of evidence by itself. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appeal against this order was dismissed by the Supreme Court last week. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Incomplete address results in CESTAT ordering applicant to pre-deposit adjudicated amounts</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is one order, which Revenue would be pleased to read. The CESTAT has passed the following order - </font></p>
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<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"When the case was called out, none appeared on behalf of the applicants. The notice issued to the applicants was received back with postal remark ‘incomplete address'. We find that the notice has been sent at the address which is mentioned in Col. 6 of Form ST-5. In view of this, as none appeared nor any request for adjournment made and the applicants refused to accept the notice, therefore, the stay application is dismissed. The applicants are directed to deposit the amount adjudicated in the impugned order within eight weeks." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, for the interest of Netizens, the applicant is Air India Limited. Probably, the personnel were all busy in welcoming the <strong>Boeing 787 Dreamliner</strong> that the address was left incomplete and the <strong>postman</strong> too had trained his eyes in the sky. But then who is to blame if the company website indicating the particulars of the Public Information Officer for RTI purposes also shows the same address, well almost! </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(See </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><u><font size="1" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=44&filename=legal/cestat/2012/2012-TIOL-1283-CESTAT-MUM.htm">2012-TIOL-1283-CESTAT-MUM</a></font></u>)</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">TIOL Moot Court with National Law School </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL </strong>is associating with National Law School of India University, Bangalore to organise the First <strong>NLS-TIOL Taxation Law Moot Court</strong> from 4th January to 7th January 2013 at Bangalore. The Moot will witness some of the youngest and brightest legal minds from across the country, battling it out for the top honours. The Moot will be organized in the NLSIU, Bangalore campus. Other details regarding the Moot will be released shortly. For any further details, please contact Mr.Dheer Bhatnagar Convenor, Moot Court Society, NLSIU (Mb: +91-9986538654) </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Or mail at<strong> <a href="mailto:nlstaxmoot@gmail.com">nlstaxmoot@gmail.com </a></strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Please see <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=11146"><strong>In an island of Excellence with a Brihaspati as Chieftain! </strong></a></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Money Will Grow on Trees - If you allow trees to Grow</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ADDRESSING</strong> the Nation on 21 September 2012, Prime Minister Manmohan Singh said, "Money does not grow on trees". Our official speech writers perhaps think that such phrases would impress the people. Last time, they made the Finance Minister talk about eating lizards. This is not politics - this is not economics - this is simply third rate bureaucratic literature. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even if money grew on trees, would we allow the trees to grow? Perhaps there is lot of money under the trees in coal, gas and simply underground stashed money. There is money far above the trees in our 2G and 3G. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Money will grow on trees if you allow the trees to grow.The Government should take initiatives in reducing the use of paper and maybe we can save a few forests and really see money growing on trees. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A great poet said, <em>Poems are made by fools like me, but only god can make a tree</em> - Please don't insult the tree for your stupid money. </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"> - 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">Notification
No. 67/95-CE provides exemption only for inputs used in or in relation
to manufacture of final product whereas definition of "input" under
CCRs is wide - benefit of exemption is not available in respect of Naphtha
captively consumed for purpose of generating electricity used for lighting
refinery road, canteen and administrative office - Demand upheld: CESTAT
by Majority</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellants have set up a cogeneration power plant where steam/electricity are generated by firing the gas turbine generators and stage Naphtha is used as fuel for the Gas Turbine Generators in the cogeneration power plant. The appellants are claiming the benefit of Notification No. 67/95-CE in respect of the Naphtha. The demand is raised on the ground that the electricity so generated is being used in the manufacture of dutiable as well as exempted final product and also for refinery road lighting, canteen and administrative office in the refinery. </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 an allowance claimed by assessee involves a question of law, it cannot be disallowed by treating it as a mistake u/s 154: SC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issues before the Apex Court are - Whether when an allowance claimed by the assessee involves a question of law, the same cannot be disallowed by treating it as a mistake u/s 154 and Whether when the assessee claims Sec 80IA benefits before adjusting carry-forward losses based on a HC decision, although the issue was later settled against the assessee, it can be said that allowing the assessee's claim was a mistake and the same can be corrected u/s 154. And the verdict goes in favour of the assessee. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Maharashtra Industrial Development Corporation is a public authority and activities performed by them are not taxable under Finance Act, 1994 - Prima facie strong case in favour - Pre-deposit waived and Stay granted: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Board's circular dated 18.12.2006 relied upon by the applicant and reproduced in the impugned order provides that the activities performed by the public authority are not taxable. In view of the above Board's Circular, the applicant has prima facie strong case in their favour. Therefore, pre-deposit of service tax, interest and penalties is waived and recovery of the same is 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><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@taxindiaon line.com </strong></a></font></p>
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