TIOL-DDT 2284 · the untouched capture
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<p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><img width="115" height="125" border="0" align="right" src="image/ddt/10yearsDDT.jpg" alt="" /></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><strong><font color="#006600"><strong><strong><strong><strong><strong><strong><strong><strong><strong><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=17063"><img width="175" hspace="5" height="120" border="0" align="right" src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2013.jpg" alt="DDT in Limca Book of Records" /></a></strong></strong></strong></strong></strong></strong></strong></strong></strong></font></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="3">TIOL-DDT 2284 </font><br>
</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>31.01.2014 <br>
Friday </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">IT - Decision to Change Procedure for Pan Allotment - Kept in Abeyance</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> the procedure for PAN allotment was changed <strong>[<a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19602">DDT 2280-27.01.2014</a>]</strong>. The major changes proposed were: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">From 03.02.2014 onwards, every PAN applicant has to submit self-attested copies of Proof of <font color="#FF0000"><strong>Indentify</strong></font> (POI) [perhaps what they mean is <font color="#FF0000"><strong>identity</strong></font>], Proof of Address (POA) and Date of Birth (DOB) documents and also produce original documents of such POI/POA/DOB documents for verification at the counter of PAN facilitation centres. List of documents of POI/POA/DOB is given in the Instructions part of Form 49A/49AA. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The copies of Proof of Identity (POI), Proof of Address (POA) and Date of Birth (DOB) documents attached with PAN application form, will be verified vis-a-vis their original documents at the time of submission of PAN application at PAN facilitation Centres. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Original documents shall not be retained by the PAN Facilitation Centres and will be returned <font color="#FF0000"><strong>back</strong></font> to the applicant after verification. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fee for processing a PAN application shall be Rs 105/ - (inclusive of all taxes). </font></p>
</blockquote>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the CBDT has decided to keep in abeyance the decision to change the procedure for PAN allotment till further orders. In the meantime, the old procedure of PAN application and allotment shall continue. </font></p>
<p align="right"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">->PIB Press Release </font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax - Non-filing of Returns - Jayalalithaa loses in Supreme Court - Trial starts NOW - Supreme Court frowns on those who see Court as medium for stalling all legal processes - Pendency of appeal is no bar for prosecution </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em>PURATCHI</em></strong><em> Thalaivi - Amma </em>- Selvi J Jayalalithaa, Chief Minister of Tamil Nadu is in deep trouble - just before the elections - it seems she is a strong aspirant for the post of Prime Minister of India, but things are pretty bad for the tough lady from Chennai. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It all started long ago in 1989, when she started a partnership firm with her illustrious friend Sasikala and forgot to file income tax returns for the Assessment years 1991-92 and 1992-93. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Prosecution was initiated against the two partners and the firm by the Income Tax Department and complaints were filed on 21.08.1997 before the Chief Metropolitan Magistrate. She sought discharge from the prosecution and went right up to the Supreme Court to get discharged. The Supreme Court on 3.3.2006 directed the trial court to dispose of the petition within two months. The Trial Court rejected the petitions on 14.6.2006, which was upheld by the Madras High Court on 2.12.2006. It is against this High Court order that Jayalalithaa, Sasikala and the firm are before the Supreme Court. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The case was pending in the Supreme Court for over six years for one reason or another. The Supreme Court made a passing mention of the dilatory tactics adopted in these cases and cautioned the Courts to be <font color="#FF0000"><em><strong>guarded against those persons who prefer to see it as a medium for stalling all legal processes</strong></em></font>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court found no reason to interfere with the order of the High Court and directed the Criminal Court to complete the trial within four months. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, the Hon'ble Chief Minister will have to stand as Accused No. 2 before the Magistrate and the magistrate has to decide the case within four months - if no further delay takes place, this case will have a huge impact on the political engineering of the Nation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Pendency of appeal is no bar for prosecution:</strong> The Supreme Court reiterated that pendency of appeals in different appellate forums is no bar against prosecution. The Court noted that <em>Section 276CC contemplates that an offence is committed on the non-filing of the return and it is totally unrelated to the pendency of assessment proceedings except for second part of the offence for determination of the sentence of the offence, the department may resort to best judgment assessment or otherwise to past years to determine the extent of the breach</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court observed that the language and legislative intention of Section 276CC is clear. It is trite law that “the language employed in a statute is the determinative factor of the legislative intent. It is well settled principle of law that a court cannot read anything into a statutory provision which is plain and unambiguous”. If it was the intention of the legislature to hold up the prosecution proceedings till the assessment proceedings are completed by way of appeal or otherwise the same would have been provided in Section 276CC itself. Therefore, the contention that no prosecution could be initiated till the culmination of assessment proceedings, especially in a case where the appellant had not filed the return as per Section 139(1) of the Act or following the notices issued under Section 142 or Section 148 does not arise. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This applies to indirect taxes like Customs too. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Don't forget to file your Income Tax Returns, for the punishment may be six months to seven years in jail. And even mighty chief ministers sometimes cannot escape from the long arm of the LAW. </font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">See <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=19639" target="_blank">Breaking News</a></font></strong></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - Import of machinery from Bhutan - CBEC amends a 30 year old exemption notification</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>GOD</strong> knows where this notification is but the Government has amended Notification No. 152/84-Customs, dated the 15th May, 1984. This notification prohibits import from Bhutan goods which have been exported to Bhutan from countries other than India. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Notification is amended to add a proviso, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“Provided that the prohibition shall not apply to import of machinery and equipment, which were exported to Bhutan from countries other than India through an Indian place of entry, for use in execution of projects in Bhutan, subject to the conditions that- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">i. The importer produces before the Assistant Commissioner of Customs or Deputy Commissioner of Customs the ‘Letter of Guarantee' or the ‘Bill of Import' and the other documents based on which the said goods were originally allowed transit clearance from the Indian place of entry to Bhutan, and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">ii. The Assistant Commissioner of Customs or Deputy Commissioner of Customs is satisfied regarding the identity of the goods.</font></p>
</blockquote>
<p align="justify"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wherefrom will an importer get the parent notification 152/84-Cus? The CBEC site does not have it. So, as a measure of Trade facilitation, the Board should have annexed this notification to the amending notification. </font></p>
<p><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_007.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.7/2014-Cus., (N.T), Dated: January 28, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs - New Land Route Notified </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Section 7 of the Customs Act,</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board may, by notification in the Official Gazette, appoint - </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) the ports and airports which alone shall be customs ports or customs airports for the unloading of imported goods and the loading of export goods or any class of such goods; </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(aa) the places which alone shall be inland container depots for the unloading of imported goods and the loading of export goods or any class of such goods; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) the places which alone shall be land customs stations for the clearance of goods imported or to be exported by land or inland water or any class of such goods; </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) <strong>the routes by which alone goods or any class of goods specified in the notification may pass by land or inland water into or out of India, or to or from any land customs station from or to any land frontier; </strong></font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) the ports which alone shall be coastal ports for the carrying on of trade in coastal goods or any class of such goods with all or any specified ports in India. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, the Board has notified <em>Dimakuri-Bishkhowa</em> road from Kanuri Part-II to the border pillar number 1009 as a route on the Bangladesh border. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2014/cnt14_006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification No.6/2014-Cus., (N.T), Dated: January 23, 2014 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">No Audit by CAG - AP High Court also grants Stay </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WITH</strong> reference to our story on audit by Department and CAG, yesterday, Advocate Sreenivasa Reddy informs us that even the AP High Court has granted an interim stay. In WP MP No. 26799 of 2013, the petitioner prayed that the <em>High Court may be pleased to direct the respondents (CAG) to order the officers under their control not to visit the premises of the petitioner or demand production of records, pending disposal of WP No. 21872 of 2013 on the file of the High Court</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Court has granted interim direction as prayed for, while directing issue of notice to the Respondents. </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Smugglers in Army Uniform - DRI busts arms and drug smuggling </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT</strong> is reported that DRI made a sensational seizure of drugs and arms including an AK-47 in Siliguri from smugglers dressed up as army jawans. A truck and a Gypsy were also seized. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who knows where and for what purpose these drugs and arms would have been used. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A seizure like this makes the existence of DRI eminently justifiable. This kind of seizure is extremely dangerous and the DRI officers deserve our salute. </font></p>
<p align="center"><font color="#006600"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DDT Cartoon </font></strong></font></p>
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<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">Appellant is engaged in providing transport service and initial service of temporary storage of vehicles at or near railway sidings, which is eventually for a few days subject to availability of rail rakes, will not render appellant to fall under category of ‘Clearing & Forwarding Agent' - Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the business of transportation of vehicle of <em>M/s. Tata Motors</em>. The appellant entered into an agreement with M/s. Tata Motors for transporting their vehicles by railway rakes. Under the aforesaid agreement, the appellant are required to carry out following functions: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) To transport cars/vehicles from the premises of Tata Motors to Railway sidings for the purpose of loading into railway rakes. The appellant gives trust receipt to Tata Motors for having received cars/vehicles under bailment for the said cars and vehicles given for transportation. </em></font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) To load vehicles on to railway rakes </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) To pay freight to railways </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) To unload the vehicles from the railway rakes at the destination stations and to transport the same to the dealers premises. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(e) To ensure that no damage is caused to the vehicles during transportation </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(f) To establish and maintain the stockyards at various places to stock the vehicles pending availability of rakes at Pune and pending transfer of cars/vehicles to the dealers yard at the destination. </font></em></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(g) To obtain a receipt from the concerned dealer for delivery of vehicles and submit the same to Tata Motors. </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">SCNs were issued demanding Service Tax under the category ‘Clearing and Forwarding Agent Service' for the period April, 2001 to March, 2005 and the same were confirmed along with penalties and interest and were also upheld by the lower appellate authority. </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 is an astrologer and receives certain payments from political
leaders for making precise predictions on outcome of elections, such receipt
is to be taxed as business income - YES: HC </font></strong></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> assessee, an individual, is an Astrologer by profession. He had filed return of income disclosing a turnover of 2,67,430/-. After claiming various expenses, he returned an amount of 1,89,751/- as income from his profession. In the statement of affairs as on 31.3.2002, it had shown 10,00,000/- being contribution from certain persons and claimed that the said sum had been exempted. During assessment, the AO rejected the said contention. An appeal was filed before the Tribunal and the Tribunal concurred with the view expressed by the lower authorities. Before the HC, the assessee's counsel contended that the amount of 10,00,000/- was received from some persons who had given confirmation letters. In the confirmation letters they indicated that the contributions were paid by them since they were happy on account of the assembly election results of Tamil Nadu in the year 2001. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
issue before the Bench is - Whether when the assessee is an astrologer and
receives certain payments from political leaders for making precise predictions
on the outcome of elections, such receipt is to be taxed as business income.
And the answer is YES. </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">Valuation - although drilling rigs have necessarily to be used in conjunction with bought out items, these do not constitute parts of such machines as they are complete items in themselves - as they are not integral parts of drilling machines but are in nature of tools and other equipment, their value is not required to be added in AV - Appeal allowed: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in the manufacture of Drilling Rig. They also purchased and sold certain goods which were used in conjunction with the rigs. These are drill pipes, drill bits, substitutes, slips, spiders/spider bushings, drill collars, casing elevators, fishing tools, traveling blocks, generator/welding sets etc. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The same were separately invoiced by the appellant to the buyer as drilling accessories and were not included in the invoice for the rig. The said drilling rigs were commercially complete, marketable and were bought and sold in the market without the said bought-out items. Most of the said bought-out items form part of what is known as the drill string assembly. Customers purchasing rigs from the appellant were not under any obligation to purchase the said bought out items from the appellant and were free to procure the same from other suppliers. The appellant has also occasionally supplied such items on their own to buyers and not along with the supply of such rigs. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant did not include the value of these items in the assessable value of the said rigs while paying excise duty on the ground that the said bought-out items did not amount to parts of the said rigs. </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>
<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>
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