TIOL-DDT 2320 · 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 align="justify"><font 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><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></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 face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 2320 </font><font size="3"></font><font size="2"><br> </font></strong><font size="2"><strong>25.03.2014 <br> Tuesday </strong></font></font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - AST - Functionality to pass Best Judgement order u/s 144 where no return of income was filed </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AT</strong> present, the functionality to pass ex-parte order U/S 144A is available only in the cases in which return of income has been filed. A new functionality has been made available in AST wherein assessing officer can pass ex-parte order of assessment U/S 144 even though no return of income is filed in response to statutory notices issued U/S 142(1), 148, 153A or 153C. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The salient features of this functionality: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) The notice (148, 142(1), 153A, 153C) against which assessment proceeding is initiated should be present in the system. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Once assessment U/S 144 is initiated then earlier proceedings initiated for the year will be automatically 'Locked' and AD cannot proceed with the same. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) Date of issue of notice U/S 142(1), 148, 153A or 153C through which proceedings have been initiated should be earlier than the date of issue of notice for assessment u/s 144. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) Before passing the order U/S 144 if return for the year in which the assessment is in progress, is entered in the system then proceedings U/S 144 as per the present functionality will be automatically cancelled. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Through this functionality, the AD can pass ex-parte order U/S 144 through the System. If any manual notice has been issued, the same can be uploaded into the system before completing the assessment. The functionality also enables the AD to upload the already passed order into the System. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Directorate of Income Tax (Systems) wants this information to be circulated among all the officers by the Commissioners and Chief Commissioners. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>(AST):</strong> <em>"Assessment Information System" </em>- AST module is the core process of ITD applications conceptualized as an on-line, menu driven software capable of carrying out all assessment and related functions. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=350&filename=notification/cbdt/dit_systems/it_ast_124.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIT (Systems) AST Instruction No. 124, Dated: March 24, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Processing of returns filed in F.Y. 2012-13 getting time barred on 31.03.2014 on Online TMS in ITD Application </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FIELD </strong>formations have represented that owing to certain technical problems, certain cases could not be processed in AST. The major reasons are: </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Category 1 : </strong>In this category of cases, the PAN is a genuine one and the returns are not processed in the CPC/AST due to technical hindrances as mentioned below. </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (i) PAN under migration </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (ii) PAN is deleted in de-duplication process </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (iii) PAN is under de-duplication or restoration. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Category 2: </strong>In this category, either the PANs are invalid or the returns cannot be processed in the given PAN. The reasons are as under: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (i) Invalid PAN mentioned in the return </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (ii) PAN is not available </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (iii) Name in PAN database does not match with Return name </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (iv) Return with one PAN issued to two different entities OR someone filing a return quoting the PAN of original holder and this wrong return is processed first in AST/CPC/TMS , therefore the System will not allow processing of original PAN holder. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (v) Any other contingency in AST not allowing the processing of such return even with valid PAN. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department has developed two separate functionalities namely <em>"Online TMS"</em> (category 1) and <em>"Online TMS"</em> (category 2). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Online TMS (category 1) </strong> : The key features of the software are as under: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (i) The returns can be entered by AO having return of income, although the PAN is lying in some other jurisdiction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (ii) The returns with PAN out of Jurisdiction, deleted PAN, PAN under de-duplication, PAN under restoration etc. can be processed on this System. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The AO having return of Income can process returns till the command for integration of this data to AST is given by the jurisdictional A.O. Once data has been integrated with AST, all future actions can be performed by the A.O. having PAN jurisdiction. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) As the cases are having a genuine PAN, therefore, credits of taxes will be given online through system. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) The cases can be processed through this functionality only after the return is not available in AST. Therefore, the AO has to delete the return in AST before initiate processing under this category. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Online TMS (category 2) </strong>: Under this category, credits of TDS (26AS) and challans under OLTAS are not allowed through System. Moreover, the PAN mentioned in the return either do not belong to assessee or have other infirmities, therefore, the data will not be integrated to AST at a later date. Though the data could not be integrated in AST, still the processing data of this category of cases will be available online in ITD in standalone form. It will be compulsory for the Assessing Officer to mention the reason, which compelled using this facility. It is presumed that the AO has already made all efforts for obtaining correct PAN or getting the PAN data corrected through NSDL/UTIISL. All the refunds determined under Online TMS (category 2) will compulsorily go through the approval process of Range Head. However, no refund will be allowed to be issued as the cases do not have valid PANs. </font></p> <p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Let us hope all this will not make the taxpayer's life miserable. </em></font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=350&filename=notification/cbdt/dit_systems/it_ast_125.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIT (Systems) AST Instruction No. 125, Dated: March 24, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>50th anniversary of ATA Carnet celebrated at WCO </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> International Chamber of Commerce (ICC) World ATA Carnet Council and many national chambers of commerce, along with Customs participants, celebrated the 50th anniversary of the ATA Carnet during meetings of the ATA/Istanbul Convention Administrative Committee on 24 March 2014 at the World Customs Organization (WCO). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ATA Carnet is a prime example of successful Customs-business partnerships for promoting trade and investment. In addition, this partnership is instrumental for implementation of the World Trade Organization's (WTO) Agreement on Trade Facilitation (ATF) Article on Temporary Admission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There are substantial economic benefits to be gained from temporary admissions of goods. The ATA Carnet System, which is based on the Istanbul Convention as well as the ATA Convention, is one of the most important internationally accepted systems for the movement of goods under temporary admission through multiple Customs territories. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ATA Carnet is a simple customs document, which is readily made out by the holder and checked by the customs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For business people the ATA Carnet provides a simple and speedy way to travel abroad with business materials. It saves both time and money and this is a very important factor in international competition. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Trade circles, guaranteeing associations and customs administrations all acknowledge the excellent operation of the ATA Carnet System. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For the customs, the use of the ATA Carnet entails less administrative work and increased customs safety since the payment of import duties and taxes is guaranteed by the guaranteeing association affiliated to the WCF/ATA guarantee chain in the territory of the temporary admission. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The guarantee is automatic and the customs need not check its validity for each Carnet. In addition, the system does not affect the revenue of the nation since the goods covered by the ATA Carnets are intended for re-exportation and not at all for sale in the country of temporary admission. The system is "self-policing" in that should the Carnet holder fail to re-export the goods within the period of validity of the Carnet, duties become payable. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The main categories of goods temporarily imported under cover of ATA Carnets are the following: </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Antiques, machinery, machine-tools, catering equipment, canned food, footwear, toys, computers, office equipment, transformers, electric generators, electrical/electronic and scientific equipment, surgical and dental equipment, jewellery and articles of precious metal/stones, "hi-fi", audio-visual, photographic and filming equipment, lasers, musical instruments and records, display material, aircraft, films, motor vehicles and accessories, racing engine machinery, heating and lighting equipment, agricultural machinery, furniture, crockery, paintings and other works of art, umbrellas, race-horses, suitcases, perfume, theatrical effects and sets, concert and musical instruments, leather and sports goods, clothing, yachts and boats, display stands. </font></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ATA Carnet service is available to business and sales executives, exhibitors at trade fairs and traveling professionals, such as film crews, architects, artists, engineers, entertainers, photographers, sports teams and many more. </font></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Wants to promote Additional Commissioner/DC - Delay due to ACRs </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC</strong> Member Mala Srivastava has written a letter to all the Chief Commissioners that the Board is in the process of finalising a proposal to hold DPC for ad-hoc promotion to the grade of Commissioner for the vacancy year 2013-14 and Joint Commissioner for the vacancy year 2014-15. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">She informs the Chief Commissioners that the whole process of DPC is getting delayed due to deficiency of ACR folders of officers. She finds it obvious that instructions for maintenance of ACRs are not being complied strictly. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The IRS hardly has a strength of 2000 officers and they are not able to maintain the ACRs of these officers - for their own promotions and they proclaim to collect 5 lakh crores of revenue! </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/promotn-dpc-commer_3201214.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Member's D.O. No.A-32012/14/2013-Ad.II, Dated: March 24, 2014 </strong></font></a></p> <p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC promotion to Assistant Commissioners for years 2002-2004 </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VACANCIES</strong> to the post of Assistant Commissioners in CBEC have been filled up on a regular basis only up to 1996-97. Now they want to take up the promotions for the years 2002-03 to 2003-04. The ad hoc promotions are to be regularised. When will they reach 2013-14? </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Board Member wants Chief Commissioners to furnish particulars of officers including ACRs latest by 7th April 2014. God knows who will have the records of officers who must have retired by this time. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Around 150 Superintendents who are cleared for promotion and waiting eagerly for promotion are scared of any new missile from the Board. Let us hope their promotion will not be linked to this exercise of regularising old promotions. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/promotn-ac-ltr_3201216.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Member's D.O. No.A-32012/16/2013-Ad.II, Dated: March 21, 2014 </strong></font></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"> - Wednesday's cases</font></strong></font></strong></font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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"></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Appeal - Waiver of Pre-deposit - Tribunal wrong on the preposition of law that the financial difficulty is a subordinate criterion. Prima facie case is not the only criterion, but financial hardship has also to be considered side by side. : High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TRIBUNAL</strong> has gone wrong on the preposition of law holding that the financial difficulty is a subordinate criteria; financially undue hardship is also another criteria. It seems that the learned Tribunal was under the view that prima facie case is only the criteria to adjudge the waiver of pre-deposit issue. The relevant provision of law no way envisages making out prima facie case for waiver of pre-deposit. However, the judicial pronouncement enables the Tribunal and Court of law to decide the prima facie case for granting stay and waiver of pre-deposit in a fit case. The Supreme Court construed such undue hardship to be of financial hardship, but at the same time the interest of the Revenue has also to be safeguarded. Therefore, a fair balancing exercise has to be worked out while passing the order of waiver of pre-deposit. This has been explained by the Supreme Court in clear terms in the case of <em>Benara Valves Limited </em>. The impugned judgment and order is completely contrary to the provisions of law as well as the principle laid down by the Supreme Court in the aforesaid case. Tribunal directed to reconsider the issue of financial hardship taking note of the audited balance sheets of the appellant of the relevant time and also by following the Supreme Court guidelines. </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"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether booking rights or right to purchase apartment is also a transferable capital asset - YES: Delhi High Court </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong>assessee is an individual. He alongwith his wife had booked an apartment, by payment of a booking amount of Rs. 2,00,000/-on 3.08.2004 and consequently, it was claimed, acquired rights or interests in the same. The builder DLF Universal Limited ("DLF") issued a letter dated 6.08.2004 provisionally allotting the apartment and two parking spaces, stating specifically the receipt of Rs. 2,00,000/-. Consequent to this, regular payments were made per the payment plan of the builder. A buyer's agreement was executed on 4.11.2004 between DLF and the allottees. As per the payment schedule, a total payment of Rs. 87,12,500/- was made towards the purchase of apartment. Following this, the appellant and his wife entered into an agreement to sell dated 2.11.2007 to sell their booking rights/rights or interest in the apartment for a sum of Rs. 1,44,87,500/-. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether booking rights or rights to purchase the apartment or rights to obtain title to the apartment are also capital assets that is transferable; Whether the booking rights to a property sold can accrue to the assessee on the date of application for allotment/confirmation of allotment; Whether in case there is no intention of the builder of the property to convey any rights to the assessee, it can be assumed that "booking rights" emanated from the confirmation letter given by the said builder and Whether in such case the date of execution of the agreement to sell by the assessee to a subsequent buyer would be considered as the date of transfer of "Booking Rights". And the verdict goes against the assessee. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p> <p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Manufacture - s. 2(f) of CEA, 1944 - Imported plywood subjected to a process of dipping into a boiling hot chemical solution consisting of sodium bicarbonate, boric acid and copper sulphate mixed in water and thereafter kept for drying - it cannot be said that the process amounts to manufacture - Demands set aside & appeals allowed: CESTAT </strong></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellants are importing plywood. At the time of import these are being classified under heading 4412 3110 and being cleared on payment of Customs duty including CVD. After import of the said goods, these are subjected to a process of manually dipping them individually in a tank containing a solution of chemicals namely Sodium Bicarbonate, Boric Powder and Copper Sulphate mixed in water. The solution is heated to boiling point and thereafter imported plywood is removed and kept for drying. The original plywood gets coated with the chemicals. Thereafter appellant puts labels, stickers on the plywood indicating it as "Marine Plywood" and sell in the market. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue's contention is that the imported goods are Decorative Plywood while the final product is marine plywood and which is classifiable under 4412 3140 if meeting ISI specification. However, since the plywood in this case is not meeting the Indian Standards Specification, these are classifiable under 4412 3190. According to Revenue the final product is "marine plywood" and since a new commodity with different name, character and use has emerged, activity of the appellant amounts to manufacture and final product is chargeable to excise duty. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Tomorrow for the judgements </strong></font></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"><strong>Have a nice day. </strong></font></p> <p align="justify"><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> </body> </html>