TIOL-DDT 331 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <b><font color="#663399" size="3">TIOL-DDT
331</font><br>
28 03 2006<br>
Tuesday</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income
Tax acquires property for Rs. 16 Crores – thoroughly useless</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2100 square metres
of prime land at Delhi’s Saket. The USP of the plot are that a sewer
line, a water supply line, three covered storm water drains and a metalled
road constructed by MCD were running through the plot of land. Besides, a
‘nallah’ was also flowing adjacent to the plot. The public was
using the road as a thoroughfare. Will any one buy such a plot? Income Tax
will. And at a huge cost. The Income Tax department bought this plot in 1993
for Rs. 15.30 Crores from DDA for construction of an office building. They
also paid an interest of Rs. 45.9 Lakhs for late payment of the amount. And
for the last 13 years the plot is rich with the sewers but no sight
of the building coming up.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Surprised? Here’s
another story.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Income Tax
buys a 12-storey building and keeps it vacant, because the jurisdiction of
the High Court would clash.</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Department
bought a ready built office space of 15000 square metres at Vaishali from
GDA at a cost of Rs. 19.94 crore. Then they spent over 16 Crores on civil
and electrical works. The beautiful building was ready for occupation in 2003,
but the offices did not move in because somebody said that the jurisdiction
of the High Court would shift to Allahabad from Delhi.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">These interesting
facts are revealed by the CAG in his latest report. The report laments,</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>Improper planning
and casual approach of the Income Tax Department in utilising land and
buildings acquired for office and residential purposes resulted in idling
of Rs. 50.37 crore for periods ranging between 2 and 12 years and avoidable
expenditure of Rs. 11.55 crore on payment of interest/extension charges and
rent of hired buildings. The Department also incurred additional expenditure
of Rs. 1.23 crore on the maintenance of unoccupied building between March
2003 and February 2005 and continued to incur expenditure of Rs. 5.74 crore
per annum on rent and maintenance of other hired and unoccupied buildings
beyond February 2005. </b><br>
<br>
<b>Though the AG has reported this in the Income Tax department report, there
are several such unoccupied buildings acquired by the customs and Central
Excise department.</b></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><b>CAG
raps IITs – Service Tax not collected</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The mighty IITs
don’t impress our auditors. They have caught the top technocrats of
the nation napping. The Audit highlighted,<br>
<br>
<b>Irregular expenditure due to non-recovery of service tax Indian Institute
of Technology (IIT), Delhi; Kharagpur; Mumbai; MNNIT Allahabad; NITIE Mumbai
and VNIT Nagpur failed to recover service tax amounting to Rs. 1.16 crore
from their clients on consultancy services rendered to them and incurred expenditure
out of their own funds for depositing the tax.</b><br>
<br>
Audit noted that IIT, Delhi had received Rs. 4.21 crore on account of consultancy
services rendered during the period from 16 July 2001 to 26 December 2002
without recovering service tax of Rs. 21.05 lakh at the prevailing rate of
five percent. In response to Audit observation (February 2004), the Institute
deposited (April 2004) Rs. 21.05 lakh as service tax out of its own income
instead of recovering it from the clients. Thus, failure to adhere to the
statutory conditions relating to recovery of service tax resulted in the IIT
incurring expenditure out of its own funds. IIT Delhi also confirmed the facts
and added that it had started collecting service tax from clients from 27
December 2002. Other IITs were not lagging behind.</font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">
<b>FM says pay taxes and be healthy - LTU to be in place by July 1st</b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The first of
the five LTUs to be set up in Bangalore, Chennai, Delhi, Kolkata and Mumbai
will start functioning from 1st July. The FM addressed a seminar on LTU in
Bangalore yesterday. Mr Chidambaram said more than 843 tax payers across the
country pay taxes in excess of Rs five crore and of them 90 are in Bangalore.
LTUs would act as single window facilitation centre for all large entities
paying excise duty, corporate tax, income tax and service tax. <br>
</font></p>
<P align=center><B><IMG height=62 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_txt.jpg" width=375></B></P>
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<TD><IMG height=67 hspace=5 src="http://www.taxindiaonline.com/RC2/image/ddt/gnl_word.jpg" width=67 align=absMiddle vspace=5><B><I> In
Limine </I></B></TD>
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
<b><font color="#663399">On the threshold, at the very outset</font></b></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ It is for
the Court to decide whether to entertain an appeal or not - When point of
law raised in the case is of general public importance, appeal not to be dismissed
in limine on preliminary issue of maintainability on account of finality of
earlier decisions of High Court relied on<br>
<br>
++ Dismissed in limine - Non-speaking order of the Supreme Court does not
mean that it has necessarily decided implicitly in relation to the merits
of the award under challenge</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">++ Appeal against
Tribunal order dismissed by Supreme Court at admission stage in limine - Order
of Tribunal does not become binding precedent.</font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><i><font color="#663399"><b>You
really can't beat the game. If you earn anything, it's minus taxes. If you
buy anything it's plus taxes.</b></font></i><br>
<br>
<font color="#FF6666"><b>Until Tomorrow with more DDT</b></font></font></p>
<p><font color="#FF6666"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
Have a nice Day.<br>
<br>
Mail your comments to</font></b></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">
<a href="vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font>
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