TIOL-DDT 2503 · the untouched capture
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font><font color="#663399" size="3">TIOL-DDT 2503 </font><br>
24 .12.2014 <br>
Wednesday </strong></font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><strong><em>Central Excise Valuation - What is mutuality of Interest? - AG Audit recommends Changes in Law </em></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>SOME </strong>facts as noted by the CAG: </font></p>
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<td><p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 4(3)(b) of the Central Excise Act provides that persons shall be deemed to be<em> "related"</em> if </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>i. they are inter-connected undertakings; </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>ii. they are relatives; </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>iii. amongst them the buyer is a relative and a distributor of the assessee, or a sub-distributor of such distributor; or </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>iv. they are so associated that they have interest, directly or indirectly, in the business of each other. </em></font></p>
</blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Explanation below Section 4(3)(b) details the circumstances in which two undertakings would be treated as ‘inter-connected undertakings'. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sub-clause (F) of Explanation provides that if the undertakings are owned or controlled by the same person or by the same group, they would be inter-connected undertakings for the purposes of the Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, vide Explanation V to Section 4,"group" includes, <em>inter alia</em>, two bodies corporate which exercise control, directly or indirectly over any body corporate. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rule 10 of the <em>Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000 </em> envisages that when an assessee so arranges that the excisable goods are sold by him only to or through an inter-connected undertaking, the value of goods shall be determined as follows:- </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) If the undertakings are so connected that they are also related in terms of sub-clause (ii) or (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act or the buyer is a holding company or subsidiary company of the assessee, then the value shall be determined in the manner prescribed in rule 9. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) In any other case, the value shall be determined as if they are not related persons for the purpose of sub-section (1) of Section 4. </font></p>
</blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, rule 9 envisages that where excisable goods are sold by an assessee only to or through a person who is related in the manner specified in either of sub-clauses (ii), (iii) or (iv) of clause (b) of sub-section (3) of Section 4 of the Act, the value of the goods shall be the normal transaction value at which these are sold by the related person at the time of removal to buyers (not being related person). </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CAG opines that: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Neither the Act nor the Rules provide clarity on when undertakings would be termed as being so associated that they have interest, directly or indirectly, in the business of each other.
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. By including an additional requirement of <em>"holding and subsidiary relationship"</em> between the two parties in addition to their being inter-connected undertakings, rule 10(a) has very significantly diluted the provision of Section 4 (1) of the Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. The rule has gone beyond the scope envisaged in the substantive statutory provisions. What the statute intended was that in any case where the parties are deemed to be related including where the parties are "inter-connected undertakings", the value would be determined as prescribed. There was no exception made by Parliament that as regards inter-connected undertakings not fulfilling an additional criterion, such as holding-subsidiary relationship, assessable value would be the transaction value/normal transaction value. In fact, the impact of rule 10(a) is clearly seen in the fact that it totally nullifies/makes irrelevant the existence of Section 4(3)(b)(i) and the detailed definition of inter-connected undertakings in the Explanation under Section 4(3) of the Act. Rule 10 requires that either the two parties should share holding company-subsidiary company relationship or they should meet the criterion as per one of the other three sub-clauses under Section 4(3)(b). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. The absence of clear provisions concerning what would constitute mutuality of interest for the purposes of sub-clause (iv) of Section 4(3)(b) coupled with the introduction of the additional requirement of <em>"holding and subsidiary relationship"</em> may in fact have resulted in providing a means for several inter-connected undertakings to pay tax on lower value than envisaged by Parliament. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5.Until July 2000 when the amended Section 4 was introduced, "related person" meant a person so associated with the assessee that they have interest, directly or indirectly, in the business of each other and includes a holding company, a subsidiary company, a relative and a distributor of the assessee, and any sub-distributor of such distributor. Thus, rule 10 in fact has had the effect of restoring/ reintroducing the previous definition of "related person". </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Recommendations </strong>: CAG has recommended that: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(a) The Ministry should review rule 10 of the Central Excise Valuation (Determination of Price of Excisable Goods) Rules, as it imposes an additional requirement of "holding and subsidiary relationship" not envisaged by the Act. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>(b) Clear provisions need to be introduced indicating what would constitute "mutuality of interest in each other's business" for the purposes of clause (iv) of Section 4 (3) (b) of the Act just as the expressions "inter-connected undertakings", "group", "related persons", "under the same management" have been explained in the law. </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why did CAG wait for 14 years to discover this eureka and will the Board oblige the AG by upsetting settled law? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em><font color="#990000">Source: CAG's Report No.33 of 2014 </font></em></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Use of Private e-mails by Government </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THIS</strong> was an issue before the Delhi High Court in a writ petition filed by Govindacharya. The Department of Electronics and Information Technology (DeitY) in a recent advisory to the Secretaries of all Central Government Departments noted: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Internet has given the flexibility of accessing information from anywhere, any time through variety of techniques and technology be it computer system, mobile phone or Tablets. The email and the web services have emerged today as one of the most essential mode of communication between people to people, people to organization, and organizations to organizations. At the same time security risks have also increased while accessing information over the Internet through email or web as some of the adversaries have launched targeted attacks to steal or damage the information for different purposes and interests. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. There are number of organizations in the country as well as outside the country providing email and web services to any person irrespective of the location. The National Informatics Centre (NIC) under Department of Electronics and Information Technology (DeitY) has hosted email and web hosting services in the country for use by employees of Government, be it Central or State Government, for government related communications and disseminating the information within government as well as outside the government. NIC has been quite liberal in creating the email and web accounts for Government employees both in the Central and State governments. They are also regularly engaged in strengthening the infrastructure both from the point of view of faster access and security. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It has been observed that a number of officials in the Ministries/Departments in the central and state government are using the private mail services particularly hosted and operated from outside India for official communications. Such official communications are government and also the public records. It is to mention that data pertaining to such emails and web services is stored by these service providers outside India and is fully under their control. At the time of any security breach incident or data loss it becomes very difficult to obtain data from those service providers apart from the possibility of leakage of information as they are controlled by the service providers outside the country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. The High Court of Delhi in a writ petition W.P.(C) 3672/2012 <em>K.N. Govindacharya versus Union of India </em> has been particularly concerned with the official communications made through email and web using services provided by and from service providers outside the country. </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So the Department has issued an advisory that <strong>All the Ministries/Departments of Central and State Governments should either use e-mail services provided by National Informatics Centre (NIC) or they should use their own e-mail and web services, being fully controlled by them and hosted in India for official communication. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Delhi High Court observed on this, "<em>We are happy that the government has taken these steps to plug any violation of Section 4 of the Public Records Act, 1993, particularly with regard to e-mail communications.</em>" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>DDT </strong>had raised this question several times. Please see <a href="http://www.taxindiaonline.com/RC2/NewsDesc.php?MpoQSrPnM=MTEyOTk="><strong>Can Government Officials use Private Email ids for Official Correspondence? </strong></a>in <strong>DDT 1428 20.08.2010 </strong>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/notDesc.php?MpoQSrPnM=MTczNzY=" target="_blank"><strong>DeitYO.M in No.2(103)/2014-CERT-In communicated in CBDT F.No.Dir(Hqrs.)/Ch(DT)/25(5)/2014/1114., Dated: December 17, 2014 </strong></a></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Why Google is paying Service Tax while Facebook is not? </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>RECENTLY</strong> the Delhi High Court (in the same writ) wanted to know from the Government why Google is paying Service Tax while Facebook is not. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ASG appearing for the Government submitted: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>The service tax is being collected as per the provisions of Chapter V of the Finance Act, 1994. The said Act is applicable to the whole of territory of India other than the State of Jammu and Kashmir. The taxable services, as defined in the said Act, provided or agreed to be provided to a person in the territory of India by the companies having their fixed establishment or business establishment outside India are liable to be taxed in the hands of the recipients of such services. The Internet companies having their fixed establishments or business establishments outside India and providing taxable services in India are not liable to pay service tax themselves. However, the recipient of said taxable services in India are liable to pay services tax under the provisions of said Act. In the Budget 2014-15, Govt. of India has announced that sale of space or time slots for advertisements other than advertisements broadcast by Radio and Television, have been removed from ‘negative List of Services', and hence, all companies/entities, which are providing such services, are now amenable to Service Tax. This provision has come into force w.e.f. 01.10.2014. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>2. That as and when it comes to the notice of the Department of Service Tax, that there is a shortfall/non-payment of service tax by any company/entity, necessary action is initiated in accordance with law for effecting recovery etc. from such defaulting entities. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>3. This practice is followed regularly/periodically as per law. </em></font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ASG has also assured the Court that service tax shall be collected in accordance with law. </font></p>
<p align="center"><font color="#006600" size="3" face="Georgia, Times New Roman, Times, serif"><em><strong>A personal hearing memo is not an appealable order - appeal not maintainable</strong></em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE </strong>appellant, claiming to be the finest boutique hotel, where one can reconnect their mind, body & soul filed an appeal before the CESTAT against the <strong><font color="#FF0000">Personal Hearing (PH) memo</font> </strong> issued by the Adjudicating authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A division Bench of the Tribunal heard the matter and held that - <em>A personal hearing memo is not an appealable order and, therefore, the appeal is not maintainable. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Counsel for the appellant informed the Bench that the adjudicating authority has subsequently passed a final order and they would be filing an appeal against that order. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Bench chose not to dwell more on this factual information but observed - <em>"As far as the present appeal is concerned, we dismiss the same as not maintainable." </em></font></p>
<p align="justify"><font color="#FF0000" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>One can fathom the time, money and manpower wasted in this perhaps frivolous appeal - and we always blame the Revenue for such things! </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By the way, the preamble to the order mentions - "Arising out of Order-in-Original no. S/3-Misc-9/2014/Adj(X)/ACC dated 27/08/2014 passed by the Commissioner of Customs (Export), ACC, Mumbai." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See <a href="http://www.taxindiaonline.com/RC2/caseLawDet.php?QoPmnXyZ=OTgzNDM=" target="_blank">2014-TIOL-2602-CESTAT-MUM</a></strong></font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>CBEC Promotes 19 as Chief Commissioners - They are already working as Chief Commissioners - Cadre Review Confusion. </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> the Central Excise and Customs Department, the confusion of Commissioners is really mind-boggling. The other day I was talking to the PA of a Chief Commissioner. (Actually the PA is now called Principal Chief PS or something like that). She told me that her boss has been recently promoted as Principal Commissioner. I explained to her that her boss is already a Chief Commissioner. "Yes sir, I know", she said, "From Chief Commissioner he has been promoted as Principal Commissioner". I had a tough time explaining to her that Chief Commissioner is above the Principal Commissioner and one does not get promoted from Chief Commissioner to PC. What is the mystery? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us take a sample case: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Kameswari Subramanyam was promoted as Chief Commissioner in the pay scale of Rs.67,000-79,000/- by an order dated 17.12.2012. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By an Order dated 02.04.2013, her promotion was regularised. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In June 2014 she was given a non-functional up-gradation as Principal Commissioner with effect from 07.08.2012. The Principal Commissioner is in the same scale as Rs.67,000-79,000/.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Yesterday the CBEC promoted her as Chief Commissioner in the pay scale of Rs.75500 - 80000/-. (Her example is taken, as hers is the last name in the latest promotion order). But was she not functioning as a Chief Commissioner all these days?</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The fact seems to be that as part of the cadre review, all the Chief Commissioners were re-designated as Principal Commissioners in the same scale they were drawing. That means till yesterday there were no Chief Commissioners - they were all PCs. Yesterday19 of them became Chief Commissioners. And soon most of them will become Principal Chief Commissioners and even Members. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But then PCs are not equal to CCs - How are they heading the zones? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With so many verities of Commissioners around, confusion is unavoidable - even for the departmental officers. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=70&filename=pitara/sernews/order/cbecorder_221_2014.htm" target="_blank"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC F. No. A-32012/13/2014-Ad.II; Dated:December 23, 2014 </strong></font></a></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>Tribunal should not dispose of appeals in a light hearted or casual manner - High Court </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Bombay High Court in a recent judgement observed, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We are not happy in the manner in which the Tribunal has decided the Miscellaneous Application. We do not think that interest of justice and equity is served by non-consideration of vital materials by the last fact finding authority, namely the Income Tax Appellate Tribunal. That the Tribunal was required to recall its earlier orders and for the reasons which have been assigned by it would indicate that it failed to apply its mind at the initial stage to the grounds raised in the Appeal and in their entirety. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>The matters of vital importance affecting the interest of public should not be disposed of in a light hearted or casual manner </strong>. The record must be perused in its entirety and properly and minutely. That is the function and which the judicial body is required to perform and oblige to carry out as well. In these circumstances and the unsatisfactory and unhappy manner in which the Miscellaneous Application has been dealt with and decided that we have directed the revival of the Appeal. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><strong><font color="#006600"><em>GST win win - Who pays? Mango Man"</em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>A</strong> friend asked me, <em>"if GST is such win win scheme where the Centre and the States gain, who will foot the bill - the mango man?" </em></font></p>
<p align="center"><font color="#006600" face="Georgia, Times New Roman, Times, serif"><strong><font size="3"><em>GST suffers a setback … well, almost! </em></font></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FINANCE</strong> Minister Abdul Rahim Rather's record in J&K Assembly ended yesterday when he lost the 2014 elections. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rather was a legislator for a record 36 years in the Assembly lost this one. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Rather (70) was first elected to the assembly in 1977. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A law graduate, Rather was a practicing lawyer from 1971 to 1982 and earlier held the post of Speaker. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He was Finance Minister several times. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But, why this election results in DDT column, one may ask? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally, Abdul Rahim Rather had been elected as the new Chairman of the Empowered Committee of State Finance Ministers on GST in June 2013 after the Bihar Finance Minister Sushil Kumar Modi resigned following the JD(U)-BJP split in Bihar. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">With the GST Bill having been introduced in the LokSabha, the responsibilities of the Chairman have grown manifold. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, in the days to come, we may have a new Chairman. </font></p>
<p align="center"><font size="3" face="Georgia, Times New Roman, Times, serif"><em><strong><strong><font color="#006600">Jurispruden</font></strong></strong></em><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><em><font color="#FF6633" size="4">tiol</font></em></strong></font></strong></font><em><strong><strong><font color="#006600">-Friday's cases</font></strong></strong></em></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">NDPS </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Failure to examine panch witness and variation in purity of samples results in acquittal of accused under NDPS Act by the High Court</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> High Court held: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In a large number of cases involving the NCB, there is a failure to produce the panch witness named. There are cases where panch witnesses are not associated at all and it is sought to be explained by the prosecution that despite its request no person from the public came forward to join in the raid. The latter explanation has been accepted by some Courts by taking judicial notice of the fact that the members of the public are generally reluctant to be involved in criminal cases as witnesses. However, in a case where the NCB specifically names a public witness as being associated in the arrest and seizure, its failure to produce such person for cross-examination must be specifically explained by it. </em></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the present case the failure to produce the public witness was attributable to a false address given for the witness. This raises serious doubts as to whether such a witness existed at all. It will amount to falsification of the trial Court record if the thumb impression on the arrest and seizure memo is attributed to a witness who is not able to be produced and it is shown that the address given for him, even in the first instance in the summons issued by NCB, was false. This casts serious doubts on the trustworthiness of the prosecution version and in that circumstance the benefit of doubt should certainly go to the accused. </em></font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether payment on sale of shares can be treated as mere accommodation of cash, in case of availability of DMAT account showing credit of share transactions and contract notes from brokers - NO: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee is an individual. It was noted that the assessee was purchasing and selling the shares through a broker in Mumbai. It was also noted that the assessee however transacted through the broker at Calcutta, which itself raised doubt about the genuineness of the transaction. The companies, whose shares were traded on exchange namely Bolton Properties, Prime Capital and Mantra were not having sufficient business activities justifying the increase in their shares prices. The AO, therefore, concluded that certain operators and brokers devised a scheme to convert the unaccounted money of the assessee to accounted income and the assessee utilized this scheme. Therefore, assessee's claim regarding capital gain was disallowed and addition of Rs.25,93,150/- was made u/s 68. On appeal, the CIT(A) upheld the order of AO. On further appeal, the Tribunal reversed the order of the CIT(A). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issue before the Bench is - Whether payment on sale of shares can be treated as mere accommodation of cash, in case of availability of DMAT account showing credit of share transactions and contract notes from the brokers. NO is the answer. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">A one line sentence that the case in volves a pre-meditated modus operandi and is a prima facie case in favour of revenue cannot constitute an order of pre-deposit - since no sufficient reasons given, matter remanded to Commr(A) for disposal of appeal on merits: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> <em>Commissioner of Customs (Appeals), Mumbai - II </em> dismissed the appeals filed by the appellant and its proprietor for non-compliance with the provisions of Section 129E of the Customs Act, 1962. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the interim order dated 22/01/2013, the only reason given for ordering pre-deposit is that the instant case involves a pre-meditated <em>modus operandi </em> and, therefore, a <em>prima facie </em> case is made out in favour of Revenue. Accordingly, the lower appellate authority had directed the Proprietor to pre-deposit Rs.5 lakhs and the appellant was directed to pre-deposit Rs.48,29,708/- being the differential duty confirmed in the order passed by the adjudicating authority. </font></p>
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<p align="justify"> <font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our Columns Friday for the judgements </strong></font>
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<p align="justify"> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Until Friday with more DDT
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