TIOL-DDT 2329 · the untouched capture
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<p align="justify"><font size="2"><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 color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif">TIOL-DDT 2329</font><font face="Verdana, Arial, Helvetica, sans-serif"><br>
</font></strong><font face="Verdana, Arial, Helvetica, sans-serif"><strong>07.04.2014</strong><br>
<strong>Monday</strong></font></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Direct Taxes Code 2013 - New Definition of 'ACCOUNTANT' - CAs not happy </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Chartered Accountants are a worried lot - with the recently released "Direct Taxes Code" expanding the definition of 'accountant' to include other professionals. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 314(2) of the Direct Taxes Code 2010:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>"Accountant" means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 and includes any person who is entitled to act as an auditor of Companies under sub-section(2) of Section 226 of the Companies Act, 1956. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Some of the Functions of the <strong>Accountant </strong> under the Code are: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(1) Audit of accounts of certain persons. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(2) Furnishing a report of Audit of a non-profit organisation. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(3) Certifying book profit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(4) Special Audit of an assessee as directed by Assessing Officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(5) Appearing before Tribunal and other authorities. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, what worries the CAs is that the proposed Direct Taxes Code 2013 has a new definition for 'accountant'. As per Section 320(2) of the New Code;- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Accountant" means a chartered accountant within the meaning of the Chartered Accountants Act, 1949 and who holds a valid certificate of practice under sub-section (1) of section 6 of that Act, and shall include- </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) a company secretary within the meaning of the Company Secretaries Act, 1980; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) a cost accountant within the meaning of the Cost and Works Accountants Act, 1959; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) any person having such qualifications as the Board may prescribe, for the purposes specified in this behalf.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, not only Company Secretaries and Cost Accountants, but also any person nominated by the Board can perform the functions of the 'accountant'. So if the Bill gets through (most unlikely), even Cost Accountants and Company Secretaries can do tax audit and representation work before Income Tax Authorities and Tribunal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What irks the CAs is that when they don't enter the domain of costing or Secretarial Audit, then why should other professionals enter their domain and are the ICWAs and CSs competent enough to handle income tax matters? </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jaitley Wants SSI Exemption limit raised to 5 Crores</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BJP</strong> leader Arun Jaitley wants the Central Excise SSI Exemption threshold limit to be raised from the present Rs. 1.5 Crores to Rs. 5 Crores. He also wants the income tax exemption limit to be gradually, but significantly raised from the present Rs. 2 lakhs. He says, "It will be the major relief to small traders and mid level employees and the common man. The initial loss of revenue is not very significant. Such loss would be partly made up by placing more money in the hands of consumers and earning indirect taxes when consumers spend this money. The more the money velocity, the larger will be indirect tax benefits." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He wants the Goods and Service Tax (GST) to be immediately implemented. Comfort level will be given to State with this aspect, which anticipates a loss of revenue. This will ensure uniform rate of Tax in all states.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All the demands of Mr. Jaitley are fair, reasonable and more importantly will appeal to the middle class, but it is easy to make demands while you are in the opposition and most difficult to implement when you come to power. Nearly twenty years ago, his party colleague Venkaiah Naidu demanded an Income Tax exemption limit of Rs. 1 Lakh, but during the over seven years that his party was in power, Naidu forgot all about his demand. Let us hope Jaitley does not follow his colleague - now that <em>Modicracy </em> is almost considered a certainty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">An employee with a small family living in a city will need at least Rs. 50,000 a month to lead a very average life. Now if you want to knock off his one month's income as tax - that is a big blow for him. But the Ministers and MPs - almost all of whom are worth more than ten Crores each will not understand the pinch. And Arun Jaitley is absolutely right when he says that the initial loss is not significant and the Government can earn indirect taxes by placing more money in the hands of the consumers - and that will also boost industrial production. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Central Excise exemption limit of Rs. 1.5 Crores was fixed in 2007. Even by Government's own admission there is almost a hundred percent inflation during this period. So, the limit should reasonably be Rs. 3 Crores. But these are not issues which receive much attention during our elections. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Bar Council Chief Wants Lawyers to support Modi </strong></font></p>
<p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">BAR</font></strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Council of India Chairman Manan Kumar Mishra wants lawyers to rise to the occasion and help Narendra Modi to become the next Prime Minister of India. He says that he is speaking <em>as a <strong>representative of 1.7 million lawyers </strong> across the country, but was not expressing my support for Modi on behalf of the Bar Council of India, which is a statutory body and cannot take a political stand</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">I have nothing against Modi or Manan Kumar Mishra, but pray, who has appointed Mishra as the representative of the 1.7 million lawyers of India? Mrs. Chidambaram is a lawyer. Does Mishra represent her in his mission of making Modi the PM? Last month Mishra thought that Modi was Mahatma Gandhi reborn!</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Former Customs Officer joins BJP thru AAP </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JAGAT</strong> Singh Tonka former Joint Commissioner of Customs who is also a recipient of the Presidential Award recently quit his job and joined the <em>Aam Admi Party</em>. He was tipped to contest from Delhi in the ensuing elections. But politics is not what you think it is. Now, Tonk has joined the BJP <em>to do something meaningful for the country </em>. He said that after joining the AAP he realised that they are not keen on eradicating corruption. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise Commissioner in Rs. 1 Crore Bribe Case </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> is stale news but the magnitude is baffling. A Central Excise Commissioner has the audacity to demand and accept a bribe of one Crore rupees. And the story has all the thrills - hawala, a ten rupee note for identification, money changing hands across the nation - and the all important female character. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">HAD the bribe not been given, perhaps the assessee would have been stuck with a huge demand and a liberal pre-deposit and the Commissioner would claim to be a saint and hero. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who is the real evader? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What will a Government employee do with a Crore of rupees in black money? He must have earned many such Crores in his long illustrious career which started as an appraiser. This man is about 57 years old and will almost certainly spend a few of his old age years in jail and a good ten years going round Courts. The other day a retired Chief Commissioner appeared in a CBI court and informed the Court that he had no money to hire an advocate! Even the black money stashed somewhere cannot be retrieved during trial. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>India Votes </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> first part of the Indian Elections 2014 - the biggest democratic exercise in the world, begins today. Corruption is not an issue; money is not an issue. Many candidates will be spending about a hundred Crores rupees each. The minimum expenditure for a candidate in a constituency is said to be Rs. 10 Crores. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ten years ago Actor journalist Cho Ramaswamy had said, <em>"What is my choice- between a thief and a pickpocket?"</em>. He was recently asked whether there was any change in the situation. <em>"Now, it is between a thief and a thief,"</em> he said. </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"> - Wednesday's cases</font></strong></font></strong></font></p>
<p align="justify"><strong><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="left"></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise </font></strong></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Refund - Unjust enrichment - Reduction in price after clearing goods due to discounts - Addison & Co case is still relevant - Refund Allowed: HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is engaged in manufacture of paper and dispatches the paper from time to time by raising composite invoices setting out the price amount payable, which is inclusive of excise duty. The appellant had sold goods to various dealers and collected the invoice amount, which is inclusive of excise duty as applicable at the relevant point of time. Later on, on account of market conditions, the dealers were offered quantitative discounts and other discounts and the invoices were revised accordingly. At the time of clearing the goods from the factory premises, the appellant had paid the excise duty on the invoices amount. Later, when the invoices were revised, the excise duty component, which was collected from the dealers initially, was revised in terms of the revised invoice price, which was lower than the invoice amount, which was initially issued. The difference of amount in excise duty, which was collected, was given credit to the dealers, thereby the actual amount of excise duty collected from the dealers was corresponding to the revised invoices subsequently issued. </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, for purpose of Sec 80IA, expression 'manufacture or production' also includes 'processing' in its ambit - NO: HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>AO rejected the claim of deduction u/s 80IA(2)(iv)(c). The CIT (A) allowed the appeal of the assessee observing that the definition of the word Industrial Undertaking to which Section 80IA applies, includes 'processing of goods' also. Even processing of goods can be considered alongwith manufacture or production of goods while allowing deduction in respect of profits of the industrial undertaking u/s 80IA. Therefore deduction was allowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ITAT partly allowed the appeal of Revenue observing that deduction u/s 80IA had been claimed on the transformer oil, scrap as well as the labour charges for the sale of scrap. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether, for the purpose of Sec 80IA, the expression 'manufacture or production' also includes 'processing' in its ambit and Whether when the transformer oil has been purchased by the assessee from market and centrifuging had been done by centrifugal machine in order to make it usable in Transformer, it cannot be construed that due to this transformation or activity there was change in the substance and new substance or article had come out. And the verdict goes against the assessee. </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">CX
- Unmanufactured Chewing Tobacco - Packing Machine Capacity Determination
Rules -machines found in rented godown plugged into electric socket but
with essential parts like motor missing - whether conclusion by Commissioner
that missing parts of machines can always be attached to machines
to make same operational as it does not require substantial engineering
skills and thus goods can be deemed to have been manufactured and cleared
by deeming fiction of Rules needs to be <em>prima facie</em> upheld & pre-deposit
is to be ordered - Difference of Opinion - Matter referred to Third Member:
CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant
is engaged in the packing of pouches of unmanufactured chewing tobacco (Ch.
24) bearing brand name 'Laxmi Chhap'. The manufacturing activities are being
conducted from the premises located at B-21, Krishnapuri, Old Ramgarh Mod,
Jaipur. The premises of the appellants' company were visited by the central
excise officers on 18.1.2011 who conducted various checks and verifications.
They also visited the rented godown of M/s. Rajesh Tobacco Co. situated at
269, Govind Nagar East, Old Ramgarh Mod, Jaipur and found certain goods of
'Laxmi Chhap' brand were lying. In addition, the officers also found three
packing machines in the said premises.</font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tomorrow is a Holiday - Sri Ram Navami </strong></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Wednesday for the judgements</strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Wednesday 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 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>
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