TIOL-DDT 2363 · 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><strong><font color="#663399" size="3" face="Verdana, Arial, Helvetica, sans-serif"><s><strong><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></strong></font></strong></s>TIOL-DDT 2363</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br> 29.05.2014<br> Thursday</font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Sharing of Asset Details from Wealth Tax Returns with PSBs - CBDT Instructions </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a meeting on the performance of Public Sector Banks (PSBs) taken by Finance Minister on 5.3.2014, the PSBs raised concern that the details of assets as available in the Wealth Tax Returns of loan defaulters are not being shared by Income Tax Department with the Banks despite repeated requests. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 42B of the Wealth Tax Act 1957 states: </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>42B Disclosure of information respecting assessees:</strong>- Where a person makes an application to the Chief Commissioner or Commissioner in the prescribed form for any information relating to any assessee in respect of any assessment made under this Act, the Chief Commissioner or Commissioner may, if he is satisfied that it is in the public interest so to do, furnish or cause to be furnished the information asked for in respect of that assessment only and his decision in this behalf shall be final and shall not be called in question in any court of law. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT observes in a letter to all the Principal Chief Commissioners that <em>in view of the fact that every Return of Wealth filed by the assessee is subject to assessment under section 16 of the Wealth Tax Act, the information contained therein qualifies for being supplied u/s 42B of the Wealth Tax Act, provided the CCWT/CWT is satisfied that supply of such information to PSBs is in public interest. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT in this context clarifies<em> that information on assets of loan defaulters to enable recovery of loans by PSBs from such defaulters is in public interest. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT further clarifies that <em>such information may be provided in respect of the borrower/mortgager/guarantor of the loan only. At the time of supply of such information a confidentiality clause may be included specifying that such information be used only for the purpose of recovery of loan and will not be shared with any other person/agency. An undertaking to this effect shall be obtained from the Bank (to be signed by an officer not below the rank of the Manager of the Branch concerned) before furnishing the information</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At the same time CBDT wants to protect its own interests. The Board directs that <em>in order to ensure that the tax dues of the Department against the defaulter (if any) are safeguarded, an undertaking be obtained from the PSB to obtain a No Objection Certificate (NOC) from the jurisdictional CIT of the loan defaulter before appropriation of the surplus amount recovered from sale of immovable/movable asset of the defaulter, information in respect of which is shared, after adjustment of its loan dues. </em></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT wants the Principal Chief Commissioners to bring these guidelines to the notice of the Chief Commissioners, DGs and Commissioners of their charges. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=67&filename=notification/cbdt/2014/inst_28_2014.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Letter in F. No. 328/10/2014-WT, Dated: May 28, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Differences between duty credit scrips and goods permitted/not-permitted against them under respective FTP paragraphs/Customs Notification - CBEC Clarifies </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DIVERSE</strong> types of duty credit scrip are issued under relevant paragraphs of Foreign Trade Policy. These duty credit scrips have varying degrees of transferability/actual user conditions that, inter alia, determine which person may use the scrip and, at times, for what purpose. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, in relation to goods, the respective reward schemes/scrips prescribe the specific nature of goods permitted to be imported against the particular duty credit scrip. There may also be specification in respective reward/ incentive scheme of certain types of goods in relation to which duty credit scrip may not at all be used, for example, the items listed in Appendix 37B of HBPv1, and the use of scrips for such items would not be correct. Such aspects are also incorporated as conditions in the implementing Customs or Central Excise notifications. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Moreover, such restrictions on which person may use or in relation to which goods scrip may be used, being intrinsic to the respective reward/ incentive scheme, continue to operate even when duty credit scrip is to be allowed for use for discharging duty on already imported goods in cases of export obligation in default. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has come across a few instances of incorrect usage of duty credit scrips on above counts. Further, in one case the duty credit scrip issued under one scheme was detected to have been allowed registration (and use) as duty credit scrip of another scheme without the field formation noticing the mismatch between scrip/ scheme name and Customs notification number endorsed by the issuing Regional Authority of DGFT. It is also noted that the Board's Circular No.8/2009 dated 16.2.2009 had earlier, in a general context, highlighted to the field formations the issue of there being differences in the scrips and the goods permitted under respective policy paragraphs. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board wants the field formations to exercise due care and diligence in this matter. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=25&filename=notification/custom/2014/instruction14_006.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC Instruction in F. No. 603/ 13 /2013-DBK, Dated: May 27, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Safeguard Investigation concerning Imports of Sodium di-chromate </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Domestic Industry has filed an application for imposition of Safeguard Duty on imports of "Sodium dichromate" into India to protect the domestic producer of Sodium dichromate against serious injury /threat of serious injury caused by the increased imports of Sodium dichromate. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The application has been examined and it has been found that prima facie increased imports of Sodium dichromate have caused and are threatening to cause serious injury to the domestic producer of Sodium dichromate and as such it has been decided to initiate an investigation in the matter through a notice issued on 26.05.2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All interested parties may make their views known within a period of 30 days from the date of this notice to the Director General (Safeguards). </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=338&filename=notification/custom/2014/ctariffsg14_D_22011_05.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DG Safeguards Notice in F. No. D-22011/05/2014, Dated: May 26 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Imports of Saturated Fatty Alcohols - Safeguard duty recommended </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Domestic Industry has filed an application for imposition of Safeguard Duty on imports of Saturated Fatty Alcohols with carbon chain length of C8,C10,C12,C14,C16, and C18 including single, blends and unblended ( Not including branched isomers) which includes blends a combination of carbon chain lengths, C12-C14, C12-C16, C12-C18,C16-18 and C14-C16 (commonly categorized as C12-C14). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DG, Safeguards found that in the present case that critical circumstances are in existence and therefore interim measures are imperative in view of the steep deterioration in performance of the domestic industry as a result of sudden and steep increase imports of the product under consideration. Therefore, if there is any delay in imposition of provisional safeguard duty, it would cause irreparable damage to the domestic Industry. Accordingly, immediate imposition of provisional safeguard duty, pending final determination of serious injury and threat of serious injury is warranted in this case. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He has recommended a 20% safeguard duty. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=338&filename=notification/custom/2014/ctariffsg14_D_22011_26.htm"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DG Safeguards Notification in F. No. D-22011/26/2013, Dated: May 26 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Safeguard Investigation concerning Imports of Flexible SlabstockPolyol </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Domestic Industry has filed an application for imposition of Safeguard Duty on imports of Flexible SlabstockPolyol of molecular weight 3000 to 4000 into India to protect the domestic producer of Sodium dichromate against serious injury /threat of serious injury caused by the increased imports of the product. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The application has been examined and it has been found that prima facie increased imports of the product have caused and are threatening to cause serious injury to the domestic producer and as such it has been decided to initiate an investigation in the matter through a notice issued on 22.05.2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">All interested parties may make their views known within a period of 30 days from the date of this notice to the Director General (Safeguards). </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">India has on 26 05 2014 notified the WTO's Committee on Safeguards that it initiated on 22 May 2014 a safeguard investigation on “flexible slabstockpolyol”. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=338&filename=notification/custom/2014/ctariffsg14_D_22011_04.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DG Safeguards Notice in F. No. D-22011/04/2014, Dated: May 22 2014 </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"> - Friday's cases</font></strong></font></strong></font></p> <p><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Legislation is not rejected or amended by private agreement - order passed in arbitration proceedings cannot shift liability or inherence of service tax under provisions of FA, 1994 on service recipient - appeal rejected: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is Delhi Transport Corporation. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Anti-Evasion Branch discovered that the appellant had provided taxable service by providing space for advertisements on its buses, bus queue shelters, time keeping booths and other properties. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In response to the SCNs the appellant contended that agreements entered with the advertisers contained a specific clause that the liability to tax, including service tax would be borne by the recipient of the service/the other party to the agreement; there arose disputes between the appellant and recipients of the service, some of which are subject matter of arbitration proceedings; that advertisers had not reimbursed the appellant for the service tax component; that the appellant is pursuing with the Central Government for grant of exemption from tax. </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 surplus arising on sale of agri land gives rise to agricultural income within meaning of sec 2(1A) read with Explanation (1) of Sec 2(14)(iii) and consequentially exempt u/s 10(1) - YES: ITAT Third Member </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>assessee purchased certain agricultural land and sold in the previous year relevant to assessment year under consideration. The case of the assessee was that the income arises from the transaction of agricultural land and hence it was exempt under section 10(1) r.w.s. 2(lA)(a) of the Act. Even otherwise the income arising therefrom is not assessable to capital gains tax in view of the provisions of section 2(14)(iii)(a)(b). On the other hand, the case of the Revenue was that it was an adventure in the nature of trade and the income from the impugned land was business income. The AO as well as the CIT(A) were of the opinion that the amount received by the assessee on sale of the impugned land deserved to be treated as profit from adventure in the nature of trade and assessable as business income. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the Bench are - Whether the transactions of purchase and sale of five pieces of agricultural land with standing crop, by way of separate conveyance deeds, beyond the prescribed distance from any municipal council, amounts to transactions on capital account or adventure in the nature of trade and Whether the surplus arising on sale of agricultural land gives rise to agricultural income within the meaning of section 2(1A) read with Explanation (1)/Section 2(14)(iii)(a) and (b) and consequentially exempt under section 10(1) of the Act. And the answers go against the Revenue. </font></p> <p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Service Tax </font></strong></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Penalty - proviso inserted in s.78 of FA, 1994 has prospective effect - Penalties under sections 76 and 78 are imposable simultaneously for failure to pay service tax for period prior to 10.05.2008 although SCNs were issued in year 2010/2011: CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> short facts of the Revenue appeals are that the respondents were held liable to pay Service Tax for the financial year 2005-06 to 2009-10 by the adjudicating authority but he imposed penalty only under section 78 of the FA, 1994. The penalty imposition under s.76 was avoided by citing the following case laws viz. <em>First Flight Couriers Ltd.</em> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2011/2011-TIOL-67-HC-P-H-ST.htm"><strong><font size="1">2011-TIOL-67-HC-P&H-ST</font></strong></a>,<em> Motor World, Bangalore </em><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=43&filename=legal/hc/2012/2012-TIOL-418-HC-KAR-ST.htm"><strong><font size="1">2012-TIOL-418-HC-KAR-ST</font></strong></a>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Revenue filed unsuccessful appeals with the Commissioner (Appeals) praying for imposition of penalty on the respondents under Section 76 of the Act for the period up to 09.05.2008 in addition to penalty imposed under Section 78. </font></p> <p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements </font></strong></p> <p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p> <p><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"><strong><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></strong></font></p> </body> </html>