TIOL-DDT 336 · the untouched capture
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<strong><font color="#663399" size="3">TIOL-DDT 336</font><br>
04 04 2006<br>
Tuesday</strong></font></div>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Payment
over Rs. 20,000/- in cash – livestock not covered</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As
per the Income Tax Act, if payment of a sum more than twenty thousand is made
otherwise than by a crossed cheque or draft, 20% of the expenditure is not allowed
as deduction. But there is an exception; payment made to the producer for the
purchase of the produce of "animal" husbandry (including hides and
skins). Is this allowed for livestock? Yes! Clarifies the Board. The expression
'the produce of animal husbandry' would include ?livestock and meat? and in
a case where payment exceeding rupees twenty thousand is made to a producer
of the products of animal husbandry (including livestock, meat, hides and skins)
otherwise than by a crossed cheque drawn on a bank or by a crossed bank draft
for the purchase of such produce, no disallowance should be attracted. However
the Board clarifies that the exception will not be available on the payment
for the purchase of livestock, meat, hides and skins from a person who is not
proved to be the producer of these goods and is only a trader, broker or any
other middleman by whatever name called.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2006/it06cir04.htm">CBDT CIRCULAR
NO. 4/2006, Dated: March 29, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Deduction
under Section 10A – STPI units – CBDT calrifies </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section
10A of the Income-tax Act, 1961 provides for 100% deduction of profits and gains
derived by an undertaking from export of articles or things or computer software
manufactured or produced by it. The deduction is available for a period of ten
consecutive assessment years beginning with the assessment year relevant to
the previous year in which the undertaking begins to manufacture or produce
such articles or things or computer software. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It
has come to the notice of the Board that a large number of units registered/approved
by the Director of the STPI are claiming deduction u/s. 10A whereas the STP
scheme requires approval by the Inter-Ministerial Standing Committee of the
Department of Electronics. Accordingly, the cases of such claimants have been
reopened by the field authorities. In view of the ambiguity in the legal status
of the approval by Director of STPs, the Inter-Ministerial Standing Committee
will meet to consider the approvals by Director of STPs issued in the past.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Therefore,
with a view to avoid infructuous demand raised in assessment and reassessment
of assessees claiming deduction u/s. 10A, it has been decided that the claim
of deduction u/s. 10A of the Income-tax Act, shall not be denied to STP units
only on the ground that the approval/registration to such units has been granted
by the Directors of Software Technology Parks. In cases where assessments/reassessments
have already been completed, and the claim u/s. 10A has been disallowed only
on the ground that the approval to the STP has not been granted by the Inter-Ministerial
Standing Committee in accordance with the Scheme, the demand so arising should
be kept in abeyance until further orders.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=36&filename=notification/cbdt/2005/letter01.htm">F.No.
200/20/2006-ITA-I Dated : March 31, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Zero
coupon bond – CBDT issues guidelines</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Zero
coupon bond – is generally understood as a debt instrument where both
the principal and interest are paid at maturity, with no interest payments during
the life of the instrument. The following conditions are prescribed.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the
period of life of the bond is not less than ten years and not more than twenty
years;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the
infrastructure capital company or infrastructure capital fund or public sector
company proposing to issue a zero coupon bond has an investment grade rating
from at least two credit rating agencies registered under sub-section (1A) of
section 12 of the Securities and Exchange Board of India Act, 1992 (15 of 1992);</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) necessary
arrangement has been made by the infrastructure capital company or infrastructure
capital fund or public sector company for listing the zero coupon bond in a
recognised stock exchange in India;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iv) where
the application is made by the infrastructural capital company or infrastructure
capital fund, such company or fund shall furnish along with the application
an undertaking that the money realised on issue of the zero coupon bond shall
be invested by it in the following manner, namely:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) twenty-five
per cent, or more of such realisation before the end of the financial year immediately
following the financial year in which the bond is issued;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the
balance of such realisation within a period of four financial years immediately
following the financial year in which the bond is issued;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(v) where
the application is made by a pubic sector company, such company shall furnish
along with the application an undertaking that the money realised on issue of
the zero coupon bond shall be invested or utilised by it in the following manner,
namely:-</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) fifteen
per cent, or more of such realisation before the end of the financial year immediately
following the financial year in which the bond is issued;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) the
balance of such realisation within a period of six financial years immediately
following the financial year in which the bond is issued;</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2006/it06not093.htm">NOTIFICATION
NO. 93/2006, Dated : March 30, 2006</a> </strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">DEPB
exemption extended for another year</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
DEPB exemption was to expire on 31.3.2006 and this time around the Board did
not wait till it lapsed for extending the validity as it happened last time.
Now the exemption is extended till 31.3.2007 </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=23&filename=notification/custom/2006/ctariff06_032.htm">NOTIFICATION
NO. 32/2006-Cus., Dated: March 31, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Import
allowed through Babarpur ICD</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Babarpur
ICD in Haryana had been notified only for the purpose of loading of export goods.
Now it is notified for unloading of imported goods also.</font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_041.htm">NOTIFICATION
NO. 41/2006-Cus NT dated: March 31, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Adjudication
Commissioners appointed</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The
Central Excise adjudication Commissioner, Bangalore is appointed to act as Commissioner
of Customs, Visakhapatnam to adjudicate a case booked by ADG, DRI, Chennai and
the Commissioner of Customs, Amritsar, to act as Commissioner of Customs, Kandla,
Gujarat for another DRI case</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_042.htm">NOTIFICATION
NO. 42</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2006/cnt06_043.htm">43/2006-Cus
NT dated: March 31, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Target
plus abolished</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In
a terse notification, the Government has abolished the Target Plus Scheme with
effect from 1.4.2006. The DGFT says this is in public interest. It should be.
It seems the Finance Ministry was never comfortable with the scheme with no
substantial growth in exports but a deep drain in the revenue. Revenue bosses
feel that industries are claiming the benefit on thrird party exports which
was not what was originally visualized. Already there is a big case booked by
DRI against the Adani group on this issue. The Commerce minister ius likely
to announce a new scheme in the policy this weekend.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=45&filename=notification/dgft/2005/dgft05not057.htm">DGFT
NOTIFICATION NO. 57(RE-2005)/2004-2009, Dated: March 31, 2006</a></strong></font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Export
of sandal wood oil – DGFT prescribes procedure</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT
has allowed export of 10 MT of sandalwood oil subject to the conditions:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) All
such exports shall be permitted only against an Authorisation Letter to be issued
by the Director General of Foreign Trade to manufacturer exporter</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Prospective
manufacturer exporters shall submit their application in Aayaat Niryaat
Form to the DGFT (Headquarters Office</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(iii) The
application shall be accompanied by the following documents:-</font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) A
copy of the valid export order/irrevocable Letter of Credit from the foreign
buyer;</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Manufacturer
Exporters should submit a copy of Legal Procurement Certificate(s)/Certificate
of Origin issued in their name by Principal Chief Conservator of Forests
of the concerned State stating that Exporter/s himself / themselves have
purchased Sandalwood </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) A
copy of Certificate of Physical Verification from the Regional Deputy Director
(Wildlife), Delhi, Chennai, Kolkata and Mumbai or from the DCF/ DFO of the
concerned Division. The Physical Verification Report must be accompanied
by the transit permit. The unexported material against the Authorisation
Letter obtained but lying in the premises/godowns of the firm must be duly
reflected in the Physical Verification Report. Where the Transit Permit
or the necessary formats in this context are not available for the consignment,
Railway Receipt must be enclosed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) At
the time of issue of Authorisation Letter, the exporters shall produce the
Original Legal Procurement Certificate and Certificate of Physical Verification
complete in all respect of Sandalwood Root/Ainchilta Class to the D.G.F.T
for an endorsement to the effect that against the said Legal Procurement Certificate(s)/Certificate(s)
of Origin, an authorization letter for export of the quantity of Sandalwood
Oil as specified in the said authorization letter has been issued.</font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=47&filename=notification/dgft/2005/dgft05pn095.htm">PUBLIC
NOTICE NO. 95(RE-2005)/2004-2009, Dated: March 30, 2006</a></strong></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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<TR>
<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> <font size="2" face="Verdana, Arial, Helvetica, sans-serif">Sui
generis</font> - </I></B></TD>
</TR>
</TBODY>
</TABLE>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">literally
meaning of its own kind/genus or unique in its characteristics. In law, it is
used for a legal classification that exists independently of other categorizations
because of its uniqueness.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Service
Tax – Architects and Chartered Accountants – Constitutional validity
-considering the language which aims at the “service sectors” alone,
in the light of the attendant circumstances like the purpose and object of the
enactment it cannot be said that this subject of legislation is not sui generis
and in reality pertains to a field of “state legislation” -
the impugned provisions do not in any manner offend Art. 14 of the Constitution
of India. – Madras High Court in INDIAN INSTITUTE OF ARCHITECTS v UNION
OF INDIA - <strong><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=51&filename=legal/hc/2003/2003-TIOL-120-HC-MAD-ST.htm">2003-TIOL-120-HC-Mad-ST</a></strong>
</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Levy
of Central Excise duty under first proviso to the Central Excise Act, 1944 in
case of an EOU Section 3 is <em><font color="#0000FF">sui generis</font></em>,
it cannot be equated with the concept of levy as on other goods produced or
manufactured in another unit.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Erroneous
refund of Modvat credit under Rule 57F(3) of erstwhile Central Excise Rules,
1944 and not under Section 11B of Central Excise Act, 1944 is not hit by ’unjust
enrichment’ - Such refund is <em><font color="#0000FF">sui generi</font>s</em>
which is not covered under omnibus term ‘erroneous refund’ under
the Section 11A.</font></p>
<p align="justify"><font color="#0000FF" size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>‘Pilfered’
in Sections 13, 23 and 45(3) of Customs Act, 1962 is sui-generis as regards
goods lost which have landed but are not available for home clearance and on
which duty is not required to be paid by the importer.</em></font></p>
<p align="justify"><font color="#993300" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">That
whether you're an honest man or whether you're a thief depends on whose solicitor
has given me my brief</font> - (Sir
W.S. Gilbert (1836-1911)</strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6666">Until
tomorrow with more DDT</font></strong></font></p>
<p align="justify"><font color="#FF6666"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Have
a nice day. </font></strong></font></p>
<p align="justify"><font color="#FF6666"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail
your comments to</font></strong></font> <font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="mailto:vijaywrite@taxindiaonline.com">vijaywrite@taxindiaonline.com</a></font></p>
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