TIOL-DDT 2466 · the untouched capture
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<p align="justify"><strong><font size="2" 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><font color="#663399" size="3">TIOL-DDT 2466 </font><br>
30.10.2014 <br>
Thursday </font></strong></p>
<p align="center"><em><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600">Income Tax - Over 5 lakh non-filers under scan </font></strong></font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>Directorate of Income Tax (Systems) has noticed that 5,09,898 taxpayers who have submitted e-return of AY 2011-12, or 2012-13 or 2013-14 (upto 20th October, 2014) with returned income of more than Rs. 10 lakhs or paid self assessment-tax of more than/equal to Rs. 1 Lakh (as per ITR) have not filed their ITR for the AY 2014-15. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The CBDT wants all the Chief Commissioners to personally monitor these cases. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Those who have paid more than a lakh of rupees as Income Tax in any financial year in the last three years and have not paid any tax this year are sure to be honoured with a friendly visit from the nearest Income Tax Officer. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=350&filename=notification/cbdt/dit_systems/it_non_filers.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Directorate of Income Tax (Systems), F.No.DIT/(S)-II/Non-filers/2014-15/4011,Dated: October 29, 2014 </font></strong></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Doing Business - India slips to Rank 142 in the world </font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JUST</strong> two days ago, I did a terrible mistake. I had predicted that our rank in the World Bank Group "doing Business" would improve slightly. The World Bank released its findings yesterday and we have simply slipped down in our rank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now we stand at 142 in world ranking in ease of doing business. Our bureaucracy can alone take credit for this great achievement.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Our present ranks are: </font></p>
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<td valign="top"><div align="left"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rank </font></strong></div></td>
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<td valign="top" bgcolor="#E4F3DE"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ease of Doing Business </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">142 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Starting a Business </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">158 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Dealing with Construction Permits</font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">184 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Getting Electricity </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">137 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Registering Property </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">121 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Getting Credit </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">36 </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Paying Taxes </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>156</strong> </font></div></td>
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<td valign="top"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Resolving Insolvency </font></strong></td>
<td valign="top"><div align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">137 </font></div></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is easier to do business in Nepal, Sri Lanka, Pakistan, Bhutan or China than in India. After this report, how difficult it would be for Mr.Modi to attract foreign business in India! </font></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><em><font size="3">One bureaucrat built tax haven in Luxembourg </font></em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Wall Street Journal last week reported that a business friendly bureaucrat spent years engineering this country's most valuable export: tax relief. Marius Kohl, as the Head of a Government Department approved thousands of tax arrangements for multinational corporations, sometimes helping them save billions. Luxembourg has only 550,000 residents but has more than 50,000 Companies. Foreign Companies flocked to this tiny country because of the speed and ease of the approval process that Kohl presided over. "Sometimes it's easier if you only have to ask one person", Kohl said in a recent interview. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the WSJ report, a senior officer of the OECD said, "Luxembourg's wealth comes from helping companies not pay taxes in the countries where the value was created" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On per capita basis Luxembourg is the richest Country on Earth, with taxes as less as 0.4 percent compared to over 20 percent in many countries. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">One of the advantages that businessmen find in Luxembourg is that the tax laws are very clear and if they are not clear, there is an open line with the ministers and problems are solved. It takes just a meeting to get a tax ruling and sometimes Kohl would give even oral rulings - binding and believable. Kohl earned a reputation for always honouring his preliminary rulings. "He never changed his mind." Kohl says none of his superiors in the finance ministry, including Mr.Juncker, who served as finance minister for two decades, questioned or criticized his approach. He was always careful to follow the law but if he could take the business-friendly reading, he would. </font></p>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"The work I did definitely benefited the country, though maybe not in terms of reputation," he says. </font></em></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While on Black Money and tax avoidance, it maybe worthwhile to read an interesting book, <em>The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business</em>. Though we all think that the taxmen and the taxpayers are like cat and mouse, the author of this book explains that the cats and the fattest mice are not enemies at all. He writes about how multi nationals with the help of world famous accounting firms have avoided tax in all the major countries of the world - with the support of the Cats. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><font color="#006600">Head and Tail of Headnotes - sometimes misleading </font></strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ONE</strong> of the major problems we in TIOL and any Law Journal faces is getting quality headnote writers. Cases have proliferated and headnote writers have dwindled. And the result is - quality of headnotes took a nosedive. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Unfortunately, lawyers and judges usually go by headnotes and not the whole text of the decision. Recently there was an interesting case in the ITAT. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In this appeal filed by <a href="http://www.taxindiainternational.com/case_lawDesc.php?qwer43fcxzt=NDM1OA==" target="_blank"><strong>BMW India Private Ltd</strong></a>, it was mentioned that the ITAT in the appellant's own case had held that the Special Bench Order in LG Electronics is not applicable, while the Tribunal in another case had held that it was applicable. Because of the conflict, the matter was almost referred to a Larger Bench of five members. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Then it was realised that the Special Bench Order was actually followed but the confusion arose due to the headnote. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Tribunal observed, "<em>The fact that headnotes can at times be misleading is a well known fact as they are only the reporting done for the convenience of the professionals and it is imperative therefore to read the entire order. Be it as it may, we would not be out of place to sound a caution that hasty conclusions based on arguments advanced on the basis of the headnotes in the reporting of the orders may not be advisable and it may lead to misleading conclusions.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Supreme Court had observed in a case, "<em>Headnotes by the editors of a Reports are not a conclusive guide to the text of the judgement reported. They are made only for the convenience of the readers as a short summary to the text and for easy reference and at times they are misleading.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The United States Supreme Court had observed, "<em>In the first place, the headnote is not the work of the court, nor does it state its decision. ……………… It is simply the work of the reporter, gives his understanding of the decision, and is prepared for the convenience of the profession in the examination of the reports</em>." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Also see</strong> <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=3537" target="_blank"><strong>Headnotes to a judgement are creation of the author and do not necessarily reflect the true content of decision : Cestat - </strong></a><strong>(<a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=34&filename=legal/cestat/2006/2006-TIOL-407-CESTAT-MUM.htm" target="_blank">2006-TIOL-407-CESTAT-MUM</a>) </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe the Courts themselves should write the headnotes too - but then the mountain of arrears will reach Himalayan heights! </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><em><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif">Jurispruden</font><font color="#FF6633" size="4" face="Georgia, Times New Roman, Times, serif">tiol</font><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"> - Friday's cases</font></em></strong></font></strong></font></p>
<p align="justify"><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">Customs</strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption to goods imported for Common Wealth Games - Exemption extended to suppliers/contractors/vendors or sub-vendors of Organising Committee by amending Notification No 84/2010 cannot be applied retrospectively: CESTAT</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>VIDE</strong> Notification No.13 /2010-Customs 19th February, 2010, Government had exempted specified goods imported by the Organising Committee of the Common Wealth Games, 2010, National sports federations in relation to the Games from the whole of customs duties. Initially, the exemption was limited only to the Organising Committee, but it was later extended to the suppliers or contractors, vendors of sub-vendors of the Committee vide Notification No. 84/2010-Customs New Delhi, dated 27th August, 2010. The appellant is before the Tribunal contending that the exemption to the contractors/vendors etc is applicable retrospectively from the date of issue of original notification No 13/2010 Cus dated 19.02.2010. </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 income of assessee is finally assessed u/s 115JB and not under normal provisions of Act, addition can still be made with respect to income determined under normal provisions - NO: ITAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is a wholly owned subsidiary of M/s. O.N.G.C. and engaged in the business of overseas exploration and production of hydrocarbon, oil and gas to supplement the reserves of the parent company and to augment the National Energy Security of India. The assessee filed its return of income declaring loss under the normal provisions of the Act and Book Profit under section 115JB of the Act and paid taxes on Book Profit. The assessment u/s 143(3) was completed after making disallowance on account of depreciation inadmissible and disallowance on account of expenditure relating to project pending final evaluation/ approval written off. However, as a result of the order of the CIT(A) in quantum proceedings, addition made by the AO in respect Sakhalin project, and in respect of Myanmar Project was reduced. In the light of the above, the AO held that the assessee has furnished inaccurate particulars of income and thus levied penalty u/s 271(1)(c) of the Act. However, CIT(A) deleted the said penalty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether when income of assessee is finally assessed u/s 115JB and not under normal provisions of the Act, addition can still be made with respect to income determined under normal provisions. And the verdict is NO. </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">Balance sheet figures included quantity of re-rolled products traded by appellant - demand on differential quantity dropped by CCE& Revenue appeal dismissed by Tribunal - in grounds taken by Revenue, there hardly exists any element of law and entire case is depending on facts - Reference rejected: HC</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent is a manufacturer of re-rolled products of iron and non-alloy steel. During audit of the records it was observed that 26968.312 MTs of re-rolled products have been cleared on payment of excise duty for the year 1993-94 whereas the balance sheet for the corresponding period revealed the transaction in relation to 29049.747 MTs of re-rolled steel. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">On that basis, a SCN was issued demanding CE duty on the differential quantity allegedly removed without payment of duty. The assessee submitted that the said quantum of re-rolled products was purchased from outside, and was traded, and in that view of the matter, it cannot be treated as a product manufactured by them. The explanation was found satisfactory and the Commissioner passed an order dropping the proceedings. </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our Columns Tomorrow for the judgements</font></strong></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"><strong><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></strong></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@tiol.in"><strong>vijaywrite@tiol.in </strong></a></font></p>
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