TIOL-DDT 2008 · 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 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 2008</font><br> 21.12.2012<br> Friday</strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Resurrection of 'Death Tax' - FM </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> we all joke about the certainty of death and taxes, do you know there used to be a death tax, called ‘Estate Duty'. Imagine tax collectors hovering around corpses to find out how much wealth the survivors had inherited and to tax them on the inheritance. If your rich relative died, the Government did not want you to enjoy all the inherited wealth, without sharing a part (sometimes as high as 40%) of the wealth with the Government. This was introduced in 1953 and abolished in 1985 by VP Singh. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The lofty principle behind Estate Duty is, why should Mukesh and Anil enjoy all the wealth left behind by Dhirubhai Ambani? Let us take part of it and make them a little poorer. You cannot make all Indians rich, but you can certainly try to make the Ambani brothers poorer! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There is a rumour that the Government is planning to bring back the Estate Duty. The FM has assured Parliament that there was no proposal<strong> at present </strong>to re-impose Estate Duty. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The FM told the Rajya Sabha yesterday that Estate Duty was abolished for the following reasons: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. The contribution of estate duty to the Government revenues over the years had been insignificant. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Percentage of estate duty to gross tax revenue was steadily falling. It was 0.22 percent in 1972-73, 0.5 percent in 1975-76 and 0.13 percent in 1981-82. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The proceeds of estate duty were low despite an extremely progressive rate schedule. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The cost of administration of the Estate Duty Act, 1953 and the cost of compliance to the tax payer was high. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Both wealth-tax and estate duty laws were applicable to the property of a person, the former applying to his property before death and the latter after his death. The existence of two separate laws with reference to the same property was considered a burden on the taxpayers and the heirs of the deceased. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In his Budget speech of 1985, the then Finance Minister, VP Singh said, </font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As both wealth-tax and estate duty laws apply to the property of a person, the former applying to his property before death and the latter after his death, the existence of two separate laws with reference to the same property amounts to procedural harassment to the taxpayers and the heirs of the deceased who have to comply with the provisions of two different laws. Having considered the relative merits of the two taxes, I am of <font color="#FF0000"><strong>die </strong></font>view that estate duty has not achieved the twin objectives with which it was introduced, namely, to reduce unequal distribution of wealth and assist the States in financing their development schemes. While the yield from estate duty is only about Rs.20crores, its cost of administration is relatively high. I, therefore, propose to abolish the levy of estate duty in respect of estates passing on deaths occurring on or after 16th March,1985 . </font></em></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">[Yes, the official text shows it as <font color="#FF0000"><strong>die</strong></font> view] </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Leslie Claudius Passes the Stick</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>THE</strong> Calcutta Customs "tent" will miss its most famous personality - hockey legend Leslie Claudius, who was a gold medallist in the very first Olympics that India participated as an independent Nation in 1948. He went on to win Gold in Helsinki in 1952 and in Melbourne in 1956 and silver in Rome in 1960. And in Rome,he was one of the few Olympians who had the privilege of an audience with the Pope. </font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/Leslie_Claudius.jpg" alt="Legal Corner Icon" width="491" height="316" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Claudius joined the Indian Customs in 1949 and retired as Assistant Collector in 1984. He was meant to bring glory to the nation, but faced several personal problems - his Olympic medals were stolen; his son, also a Hockey player died in an accident - he lived the last years of his life in a rented house with bad health as his companion. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=15530" target="_blank">DDT 1910-27.07.2012</a></strong>, we asked, <font color="#FF0000">Shouldn't the Customs Department take care of him and honour him in the December of his life. There is lot of money in the Welfare Fund; can't they buy a house for him from the fund?Can't they give him a good allowance for the rest of his life</font>? </font></p> <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=15547" target="_blank">DDT 1911-30.07.2012</a></strong>, said, <font color="#FF0000">Our story on Friday regarding Customs Olympian Leslie Claudius evoked huge response from concerned Netizens. But will the CBEC react? Can't they provide a decent house for Claudius. Four Olympic Medals, a Padmasri, a retired Assistant Collector of Customs - what more credentials you require to sanction about fifty lakhs of rupees to this hero of the Customs Department? In fact, his picture could have been there on the Postage Stamp they released last week. </font></font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Chairman Mr.Goel is to retire tomorrow. It will be a great achievement for him if he can honour Claudius with a handsome gift from the Customs Welfare Fund or will the incoming Chairperson get that honour</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">? She did! </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16196" target="_blank">DDT 1972-30.10.2012</a></strong>, we carried a letter from former CBEC Member, SK Choudhury, addressed to the CBEC Chairman to release sufficient funds for Leslie's treatment. We also said, "<font color="#FF0000">The CBEC should act immediately,<strong> while Leslie is still alive</strong>. Madam Chairman - this is a great opportunity for you to prove that Customs is <strong>concerned</strong>". </font></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16330" target="_blank">DDT 1987-21.11.2012</a></strong>, while reporting about the CBEC pavilion in India International Trade Fair, we asked, "<font color="#FF0000">But how about providing some financial assistance to Leslie Claudius?</font>" </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And finally, in <strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=16388" target="_blank">DDT 1992 - 29.11.2012</a></strong>, we had the pleasure of reporting that CBEC had given Rs. Six Lakhs to Leslie Claudius. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the CBEC should think of setting up a permanent memorial for Leslie and should at least persuade the Department of Posts to issue a stamp in honour of Claudius. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Good Bye Leslie! </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Dahanu Port in Maharashtra - For import of Coal by Reliance Infrastructure</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> 1929, a company by name<em> Bombay Suburban Electric Supply Limited</em> (BSES) was established in Bombay to generate and distribute electricity. What has that got to do with DDT? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Well, in 1998, the Government added Sl. No.8 to the list of Customs Ports in Maharashtra in Notification No. 62/94-Cus-NT dated 21.11.1994, by which Dahanu was appointed as a port for "<em>unloading of duty paid coal imported by M/s BSES Ltd</em>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2003, <em>Bombay Suburban Electric Supply Limited became Reliance Energy Ltd</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2005, the CBEC amended Notification No. No. 62/94-Cus-NT dated 21.11.1994, to change the port for "<em>unloading of imported coal by M/s Reliance Energy Ltd</em>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In 2008, the name of the Company was changed from <em>Reliance Energy Ltd to Reliance Infrastructure Ltd</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the Board had to change the name of the Company in the notification also, which they have now done. Now Sl. No. 8 of the Notification No. 62/94-Cus-NT dated 21.11.1994, mentions Dahanu port for "<em>unloading of imported coal by M/s Reliance Infrastructure Ltd</em>". </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, what was happening all these days from 2008 - was there no unloading of imported coal as the name was not changed to <em>M/s Reliance Infrastructure Ltd.</em> or does this notification have a retrospective effect? </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_110.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No. 110/2012-Cus., (N.T.), Dated: December 14, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exchange Rates Notified </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> has notified the Exchange Rates for imported goods and export goods with effect from 21.12.2012. The last exchange rates notified were with effect from 07.12.2012 </font></p> <p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2012/cnt12_111.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Notification No. 111/2012-Cus.,(N.T.), Dated: December 20, 2012 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Kangaroo Customs? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Australian Customs is rocked by revelations that corrupt Customs officers have been indulging in systematic smuggling of drugs and arms into Australia. Two Customs Officers have been arrested. It seems the Customs officers organised the couriers to go overseas, collect the narcotics and then meet them in the aeroplane and lead them out through Customs. Australia is shocked and loud declarations about Corruption being rooted out are being made. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </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_2008.jpg" alt="Legal Corner Icon" width="400" height="451" hspace="5" border="0" align="center"></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"> – Monday'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">When entire order which got issued was not relatable to matter under dispute, notwithstanding reference numbers in preamble of same, it has to be held as if entire order was a mistake - ROM application allowed, earlier order withdrawn and fresh order passed: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AN</strong> order was passed by the CESTAT but the dictation, which was given in another case,got copied as order in this particular appeal, which got signed by both the Members and was issued. Anyway, the fact of the matter is that the appeal was allowed with consequential relief to the appellants. So, the appellant doesn't mind even if anything else appears in the order - he, obviously, is and should be concerned about the last paragraph of the order. But the Revenue is not at all happy. The Commissioner, Central Excise, Jaipur filed a ROM application. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue representative who was supposed to argue for the Revenue seemed not inclined to do so; He submitted that it is not a mistake apparent on record and the facts as carried out in the order and the decisions relied upon do not relate to appeal in question and, therefore, now if the ROM application has to be considered, the entire matter has to be reconsidered and such reconsideration of matter cannot be allowed in a ROM application and therefore, the Revenue's prayer should be rejected . </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 assessee makes investments in mutual fund from which income is tax exempt, whether assessee earns any dividend or not, expenses incurred for investments are to be disallowed u/s 14A - YES: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee had made investment of Rs.1,19,000/- in units of mutual fund from which income was exempt. The AO disallowed expenses relating to said income which was computed by him under provisions of Rule 8D at Rs.17,032/-. The CIT(A)held that expenses had to be disallowed as per Rule 8D. The assessee was engaged in the business of syndication activities and was also enjoying income from insurance business. The assessee claimed deduction of interest expenditure of Rs.59,51,911/-. The AO held that syndication activities were of the nature of liaison activity resulting into commission income. The AO disallowed the entire interest. The CIT(A) confirmed the disallowance. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On Appeal before the Tribunal the AR submitted that the assessee had not received any dividend income which was exempt from tax and, therefore, no expenses could be disallowed u/s 14A. The AR also argued that even if disallowance had to be made, Rule 8D could not be applied as the same was applicable from A.Y 2008-09. </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">J&K exemption - Delayed availment of CENVAT Credit would amount to violation of Notification No 56/2002 CE - CESTAT by majority orders pre-deposit</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHILE</strong> it is quite normal for the assessees to receive show cause notices for not paying Central Excise duty, it is not uncommon to receive notices also for "paying duty". Likewise, normally notices are issued for availing CENVAT Credit, but in this case, the assessee had to face the notice for "failing to avail CENVAT Credit". Confusing? Please wait till Monday. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Monday for the judgements </font></strong></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT</strong></font></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a Nice Weekend </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> </body> </html>