TIOL-DDT 1971 · 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 1971</font><font color="#663399"> <br>
</font>29.10.2012 <br>
Monday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Accounting Standards Committee Submits Final Report</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Finance Act, 1995 empowered the Central Government to notify the Accounting Standards to be followed for computing the income under the head "Profits and gains of business or profession" or "Income from other sources". The intention in framing the Standards under the Income-tax Act is to compute the income precisely and objectively. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 1996, two Accounting Standards relating to disclosure of accounting policies and disclosure of prior period and extraordinary items and changes in accounting policies were notified. The Government constituted a committee in July 2002 for formulation of Accounting Standards for the purposes of notification under the Income-tax Act. This Committee recommended for notification of the Accounting Standards issued by the ICAI without any modification along with consequential legislative amendments to the Act for preventing any revenue leakage. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Subsequently, the CBDT has constituted the present Committee to harmonise the Accounting Standards issued by the ICAI with the provisions of the Act for the purposes of notification under the Act and also to suggest amendments to the Act necessitated by transition to Ind-AS/IFRS. The Committee comprised of brilliant professionals and knowledgeable officers from the Department. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Committee examined all the thirty one Accounting Standards issued by the ICAI and noted that some of the Accounting Standards issued by the ICAI relate to ‘disclosure' requirement, whilst some other contain matter that are adequately dealt within the Act. The Committee recommends that Tax Accounting Standards need not to be notified in respect of seventeen Accounting Standards issued by the ICAI. The Committee formulated the drafts of Tax Accounting Standards on the issues covered by the rest of the fourteen Accounting Standards issued by the ICAI. The Committee while framing the Tax Accounting Standards, broadly, adhered to the principles of ‘reduction of litigation', ‘minimization of alternatives' and giving ‘certainty to issues'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Committee also recommends that the Accounting Standards to be notified under the Act may be termed as "Tax Accounting Standards" (TAS), to distinguish the same from the Accounting Standards issued by the ICAI. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Committee has submitted Draft Tax Accounting Standards for the following: </font></p>
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<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sl. No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS No. </font></strong></p></td>
<td valign="top"><p align="center"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Title of the Accounting Standard </font></strong></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-1 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Disclosure of Accounting Policies </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-2 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Valuation of Inventories </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-4 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Contingencies and Events Occurring After the Balance Sheet Date </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-5 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Net Profit or Loss for the Period, Prior Period Items and changes in Accounting Policies </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-7 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Construction Contracts </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-9 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue Recognition </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-10 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accounting for Fixed Assets </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-11 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Effects of Changes in Foreign Exchange Rates </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-12 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accounting for Government Grants </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-13 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Accounting for Investments </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-16 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Borrowing Costs </font></p></td>
</tr>
<tr>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-19 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Leases </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-26 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Intangible Assets </font></p></td>
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<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14. </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">AS-29 </font></p></td>
<td valign="top"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Provisions, Contingent Liabilities and Contingent Assets </font></p></td>
</tr>
</table>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(<a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/asc_final_report.pdf">Click here for full text of the Report</a>) </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">The Fiat Fallout - Car manufacturers Under Excise Scanner </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> famous Fiat judgement <font size="1"><strong><em>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=32&filename=legal/sc/2012/2012-TIOL-58-SC-CX.htm">2012-TIOL-58-SC- CX</a>)</em></strong></font> has started its ripples effect. The Supreme Court had held that when the cars were sold at prices below their manufacturing cost, the sale price was not the assessable value for excise duty and value had to be ascertained. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board was elated and wanted to know from the field if there were any such instances. While many in the field replied that they had no car manufacturers in their jurisdiction, those who had car manufacturers have asked them to furnish cost of production of each brand of car for the last five years. Now with each car manufacturer making many models of cars, it is possible that some cars may be sold at below cost price and those manufacturers are in for trouble with excise. Further, the cost of manufacture is a highly sensitive information and the car manufacturers may not like such information being available in the sieves of the Central Excise Department. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">FTP - SION - Two More Export Products Notified </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DGFT</strong> has amended SION A1578 to add two more export products, Ruled Cards and Plain Cards </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2012/dgft12pn028.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT Public Notice No. 28/(RE: 2012)/2009-2014, Dated: October 26, 2012 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">In Future, No Laxity in assistance rendered to Court - CBDT Member assures HC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is an Income Tax Appeal filed in 2003 by the Commissioner of income Tax. On 11.11.2011, the Standing Counsels told the Court that their payments have not been made. The High Court directed the authorities to file a chart giving the details of the total bills raised month-wise by each of the 10 standing counsels, the amounts for which these have been settled and the payments released against the bills. The reason for the difference between the bills raised and as paid was also to be communicated to the counsels and incorporated in the chart. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 20.12.2011, the Court noted, "<em>An affidavit has been filed by the CIT (Judicial) to the effect that the new draft instructions on engagement of standing counsel is under consideration by CBDT, New Delhi and have not yet been issued. We would like to await the said new instructions. List for directions on 3rd February, 2012</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 3rd February 2012, the Standing Counsel requested for some more time and the case was listed for 27.03.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 27.03.2012, the Court noted, "<em>We are informed that effectively there has been no progress in the mater. It is stated that some proposal has gone through the Ministry of Revenue, Department of Expenditure. We consider it appropriate that the concerned Member, CBDT (A and J) should remain present in court along with the proposal sent to the Ministry. The matter will be taken in Chambers at 4.15 pm. List on 18.04.2012</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On 18.04.2012, the learned Counsel for Revenue circulated an adjournment slip. The High Court directed the case to be listed on 26.4.2012 and the Member, CBDT was required to be present. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Apparently, nothing happened till 18.10.2012, when the case was listed. The High Court observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Mr. K P Chowdary, Member, A & J and Mr. Amitabh Misra, Chief Commissioner-III, are present in the court. It is stated by them that insofar as the revamping the system and giving better assistance to the court is concerned, all necessary action as they would take has been taken. We would thus naturally expect that now there would be no lack of proper assistance to the court. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Insofar as the fresh panel is concerned, it is stated that the matter is pending consideration of the Law Ministry and as and when the approved list is received, it will come into force. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Learned Member has explained that insofar as the issue of payment of fee to the counsel is concerned, the admitted fee is being paid and the arrears towards the admitted fee are expected to be cleared in the next two months. However, there appears to be some dispute of parameters, which the Member says will be sorted out with the counsels themselves. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Learned Member also states that the frequent changes in the Board occur qua the subject matter being dealt with by the Member on account of the tenure of the Members themselves being quite short running not more than about a year within which time there is also shifting of the designation of the work. This is an aspect to be dealt with by the Department itself. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Member states that a quietus may be given to the issue as he has assured this court that there would be no laxity in the assistance rendered to the court in future." </font></em></p>
<p><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See the <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=38&filename=legal/hc/2012/2012-TIOL-871-HC-DEL-IT.htm" target="_blank">order dated 18.10.2012 </a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Member Launches VidhiVarta </font></strong></p>
<p align="center"><font 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="center"></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Member (L&J) Sandhya Baliga on Friday launched the Monthly News letter of Directorate of Legal Affairs "VidhiVarta' and a quarterly journal ECS Reporter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ECS reporter contains the exact text of the judgements delivered by the Tribunal during the quarter. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vidhivarta will contain gist of the judgements, which decide some important legal issues. The judgements are from Supreme Court, High Court and CESTAT. It contains other topics also such as news, topical issues and pot pourri. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC had been launching such journals periodically and all of them have gone into oblivion with the transfer/retirement of the officers connected with them. Let us hope this time, this lasts. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/Vidhi-Varta.pdf" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">VidhiVartha </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">Service Tax </font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Issue management related service provided by merchant bankers are classifiable under ‘Banking and other financial service' of FA, 1994 & not as ‘Underwriting services' - applicant has not made a prima facie case in their favour - Axis Bank directed to make a pre-deposit of Rs.50 lakhs: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>applicant had availed the services of Non-Resident service providers, who did not have offices in India and they had paid certain fees/charges to such non-resident service providers for facilitating issue of Global Depository Shares (GDS). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue took a view that the service rendered by such non-resident Joint Bank runners and Joint Lead Managers to the applicant appeared to be a taxable service classifiable under the category of Banking and Other Financial Services as Merchant Banking Services and is liable to service tax w.e.f. 16th July 2001. </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">UP Chief Minister takes Rs 44.67 lakh loan from Samajwadi Party in cash; CIT(A) & ITAT rule penalty u/s 271D not imposable for violation of Sec 269SS </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is Akhilesh Kumar Yadav, the present Chief Minister of UP. He acquired a property worth Rs. 44,67,208/- along with his wife, Smt. Dimpal Yadav. This amount was deposited in cash by the Samajwadi Party as a cash loan. It was noted by the AO that the assessee had taken cash loan from Samajwadi Party in contravention of the provisions of section 269SS of the IT Act and as such, liable for penalty u/s. 271D of the IT Act. Accordingly, it was held that the assessee had no reasonable cause to accept the deposits/loans in cash. It was, therefore, held that the assessee had violated the provisions of section 269SS and accordingly, penalty was levied u/s. 271D of the IT Act. The CIT(A) held that the assessee had "reasonable cause" for his failure to comply with the provisions of section 269SS of the IT Act and accordingly, deleted the penalty and allowed the appeal of the assessee. On appeal by the Department, the ITAT held that the assessee has been able to prove that there was a "reasonable cause" for failure to comply with the provisions of law and confirmed the order of the CIT(A). </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">Refund of deemed credit available under notfn. 54/2001-CE(N.T) - There is no requirement of fixing RSP on readymade garments exported - RMG are also not notified u/s 4A of the CEA, 1944 - in such a situation, there is no question of applying contents of notfn. 20/2001-CE(NT) to reject a part of refund claim - Appeals allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> is no requirement of fixing the RSP on the goods for export. Further, as the readymade garment has not been notified under Section 4A of the Central Excise Act, there is no requirement for fixing the RSP on the readymade garments which were exported therefore, provisions of Notification No.20/2001-CE are not applicable. The impugned order, rejecting a part of the refund claim by taking into consideration the provisions of Notification No. 20/2001-CE, is not sustainable. Hence, the same is set aside and the appeals are allowed. </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"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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