TIOL-DDT 762 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT
762</font><br>
14.12.2007 <br>
Friday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TDS on salaries - CBDT instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Normally the CBDT issues a mega circular in September - October which is a sort of master guide to the tax deductors as well as tax payers belonging to the salaried class - our most honest tax payers! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We were wondering why the Board had not issued this year's circular and we came to know that the Circular had been indeed issued, though belatedly, on 5.12.2007 and for love or money, you simply can't get this circular anywhere. It is really surprising that the Board has taken the trouble of drafting a circular which runs into more than 63 pages but ensures that the circular does not reach the target audience! We bring you the circular today. If you are responsible for deducting tax from your employees, do download this circular and read it several times. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Highlights from the Circular. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>BROAD Method of Tax Calculation: </strong>The income- tax is required to be deducted on average at the time of each payment. No tax will, however, be required to be deducted at source in any case unless the estimated salary income including the value of perquisites, for the financial year exceeds Rs.1 ,10,000 /- or Rs.1,45,000 /- or Rs.1,95,000 /-, as the case may be, depending upon the age and gender of the employee </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Payment of Tax on Non-monetary Perquisites by Employer: </strong>An option has been given to the employer to pay the tax on non-monetary perquisites given to an employee. The employer may, at his option, make payment of the tax on such perquisites himself without making any TDS from the salary of the employee. The employer will have to pay such tax at the time when such tax was otherwise deductible i.e. at the time of payment of income chargeable under the head salaries to the employee. ( <font color="#663399">we
will bring you a case law on this very soon</font> ) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Computation of Average Income Tax: </strong>For the purpose of making the payment of tax, it is to be determined at the average of income tax computed on the basis of rate in force for the financial year, on the income chargeable under the head "salaries", including the value of perquisites for which tax has been paid by the employer himself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Salary From More Than One Employer: </strong>Sub- section (2) of section 192 deals with situations where an individual is working under more than one employer or has changed from one employer to another. It provides for deduction of tax at source by such employer (as the tax payer may choose) from the aggregate salary of the employee who is or has been in receipt of salary from more than one employer. The employee is now required to furnish to the present/chosen employer details of the income under the head "Salaries" due or received from the former/other employer and also tax deducted at source there from , in writing and duly verified by him and by the former/other employer. The present/ chosen employer will be required to deduct tax at source on the aggregate amount of salary (including salary received from the former or other employer). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Relief When Salary Paid in Arrear or Advance: </strong>Under sub-section ( 2A )of section 192 where the assessee, being a Government servant or an employee in a company, co-operative society, local authority, university, institution, association or body is entitled to the relief under Sub-section (1) of Section 89, he may furnish to the person responsible for making the payment referred to in Para (3.1), such particulars in Form No. 10E duly verified by him, and thereupon the person responsible as aforesaid shall compute the relief on the basis of such particulars and take the same into account in making the deduction under Para(3.1) above. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Conditions for Claim of Deduction of Interest on Borrowed Capital for Computation of Income From House Property </strong>For the purpose of computing income / loss under the head `Income from House Property' in respect of a self-occupied residential house, a normal deduction of Rs.30,000 /- is allowable in respect of interest on borrowed capital. However, a deduction on account of interest up to a maximum limit of Rs.1 ,50,000 /- is available if such loan has been taken on or after 1.4.1999 for constructing or acquiring the residential house and the construction or acquisition of the residential unit out of such loan has been completed within three years from the end of the financial year in which capital was borrowed. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Adjustment for Excess or Shortfall of Deduction: </strong>The provisions of sub-section (3) of Section 192 allow the deductor to make adjustments for any excess or shortfall in the deduction of tax already made during the financial year, in subsequent deductions for that employee within that financial year itself. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>PERSONS RESPONSIBLE FOR DEDUCTING TAX AND THEIR DUTIES: </strong>Under clause ( i ) of Section 204 of the Act the "persons responsible for paying" for the purpose of Section 192 means the employer himself or if the employer is a Company, the Company itself including the Principal Officer thereof The tax determined as per para 6 should be deducted from the salary u/s 192 of the Act. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Deduction of Tax at Lower Rate: </strong>Section 197 enables the tax-payer to make an application in form No.13 to his Assessing Officer, and, if the Assessing Officer is satisfied that the total income of the taxpayer justifies the deduction of income-tax at any lower rate or no deduction of income tax, he may issue an appropriate certificate to that effect which should be taken into account by the Drawing and Disbursing Officer while deducting tax at source. In the absence of such a certificate furnished by the employee, the employer should deduct income tax on the salary payable at the normal rates </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Deposit of Tax Deducted: </strong>According to the provisions of section 200, any person deducting any sum in accordance with the provisions of Section 192 or paying tax on non-monetary perquisites on behalf of the employee under Section 192( 1A ), shall pay the sum so deducted or tax so calculated on the said non-monetary perquisites, as the case may be, to the credit of the Central Government in prescribed manner (vide Rule 30 of the Income-tax Rules, 1962).In the case of deductions made by, or, on behalf of the Government, the payment has to be made on the day of the tax-deduction itself. In other cases, the payment has to be made within one week from the last day of month in which deduction is made. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Penalty for Failure to Deposit Tax Deducted: </strong>If a person fails to deduct the whole or any part of the tax at source, or, after deducting, fails to pay the whole or any part of the tax to the credit of the Central Government within the prescribed time, he shall be liable to action in accordance with the provisions of section 201. Sub-section ( 1A ) of section 201 lays down that such person shall be liable to pay simple interest at twelve per cent per annum on the amount of such tax from the date on which such tax was deductible to the date on which the tax is actually paid. Such interest, if chargeable, has to be paid before furnishing of quarterly statement of TDS for each quarter. Section 271C lays down that if any person fails to deduct tax at source, he shall be liable to pay, by way of penalty, a sum equal to the amount of tax not deducted by him. Further, section 276B lays down that if a person fails to pay to the credit of the Central Government within the prescribed time the tax deducted at source by him, he shall be punishable with rigorous imprisonment for a term which shall be between 3 months and 7 years, along with fine. ( <font color="#663399"><b>DDOs
beware!</b></font> ) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Furnishing of Certificate for Tax Deducted: </strong>According to the provisions of section 203, every person responsible for deducting tax at source is required to furnish a certificate to the payee to the effect that tax has been deducted and to specify therein the amount deducted and certain other particulars. This certificate, usually called the " TDS certificate", has to be furnished within a period of one month from the end of the relevant financial year. Even the banks deducting tax at the time of payment of pension are required to issue such certificates. In the case of employees receiving salary income (including pension), the certificate has to be issued in Form No.16 . However, in the case of an employee who is resident in India and whose income from salaries does not exceed Rs.1 ,50,000 /-, the certificate of deduction of tax shall be issued in Form No. 16AA . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Quarterly Statement of TDS : </strong>The person deducting the tax (employer in case of salary income), is required to file Quarterly Statements of TDS for the periods ending on 30th June, 30th September, 31st December and 31 st March of each financial year, duly verified, to the Director General of Income Tax (Systems) or M/s National Securities Depository Ltd ( NSDL ). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>ESTIMATION OF INCOME UNDER THE HEAD "SALARIES" </strong>Income chargeable under the head "Salaries". </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The following income shall be chargeable to income-tax under the head "Salaries" </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">a . any salary due from an employer or a former employer to an assessee in the previous year, whether paid or not; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">b. any salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer though not due or before it became due to him. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">c . any arrears of salary paid or allowed to him in the previous year by or on behalf of an employer or a former employer, if not charged to income-tax for any earlier previous year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Option to issue TDS Certificates by way of digital signatures: </strong>Since the requirement of annexing the TDS certificates with the return of income has been dispensed with, the TDS certificates will be now issued only for the purpose of personal record of the deductees subject to the condition that they may be required to produce the same on demand before the Assessing Officer in terms of section 139C , inserted by the Finance Act, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Quarterly Statement of TDS : </strong>The person deducting the tax (employer in case of salary income), is required to file Quarterly Statements of TDS for the periods ending on 30th June, 30th September, 31st December and 31st March of each financial year, duly verified, to the Director General of Income Tax (Systems) or M/s National Securities Depository Ltd ( NSDL ). These statements are required to be filed on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year and on or before the 15th June following the last quarter of the financial year. The requirement of filing an annual return of TDS has been done away with w.e.f . 1.4.2006. The quarterly statement or the last quarter filed in Form 24Q shall be treated as the annual return of TDS . It is now mandatory for all offices of the Government and all companies to file quarterly statements of TDS on computer media only in accordance with the "Electronic Filing of Returns of Tax Deducted at Source Scheme, 2003" as notified vide NotificationNo . S.O. 974 (E) dated 26.8.2003 . </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/pdfdocs/it07cir08.pdf">CBDT Circular No. 8/2007 [ F.No.275 /192/2007- IT( B)] dated the 5th December, 2007 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commencement of Double Shift System for Customs examination work at N.S. Docks </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At present, the examination of the import/export cargo is being done by the Customs Appraisers/Examiners on a single shift basis i.e., 10 AM to 5 PM , 6 days a week (except second Saturday and holidays), at NSD / KPD , Kolkata. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There
has been a demand from the trade, the Port Trust authorities and other stakeholders
for extending the examination to double shift in view of the increasing containerized
traffic at Kolkata. The High Powered Committee set up by the Ministry of
Shipping, Road Transport & Highways, Government of India, has also recommended
introduction of double shift (apart from various Other recommendations for
augmentation of infrastructure by the Port). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As an interim measure, the strength of the Customs Appraisers at NSD / KPD was increased from 5 to 7 by posting of 2 additional officers with effect from 03.12.2007. Now, as a measure of further trade facilitation, it has been decided to introduce (on a trial basis and w.e.f . 10.12.07) the second shift for the purpose of import/export examination and out-of-charge/let-export-orders by the Customs Appraisers/Examiners at the NSD / KPD . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/suggestion.htm">PUBLIC NOTICE NO. 66/2007 Dated: December 07, 2007 of Custom Home : Kolkata </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Custom House Agents - valuation of taxable services </strong></font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner of Service Tax, Chennai has clarified that some Custom House Agents are not including the following charges in their valuation of taxable services, which is against the provisions of Law. </font></p>
<table border="1" align="center" cellpadding="3" cellspacing="0">
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Documentation charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Forms and Stamp Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Postage / Courier Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fax Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Telephone Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">6 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Conveyance </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">7</font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Transportation Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">8 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Consolidation Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">9 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Palletization Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">10 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Container Weighment Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">11 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fuel Surcharges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">12 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Security Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">13 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Stuffing Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">14 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Seal Fee Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">15 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">B.L Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">16 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Washing Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">17 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Storage Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">18 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Trucking Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">19 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">X-Ray Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">20 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Empty Container Return Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">21 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Loading and Unloading Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">22 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Halting Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">23 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Shipment Expenses </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">24 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Vehicle Parking Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">25 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Delivery Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">26 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidental Expenses </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">27 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Steamer Agent Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">28 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">LCL / FCL Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">29 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DO Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">30 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Customs Examination Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">31 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Fumigation Expenses </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">32 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Survey Charges </font></p></td>
<td valign="top" width="55"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">33 </font></p></td>
<td valign="top" width="99"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Port Charges </font></p></td>
</tr>
<tr>
<td valign="top" width="64"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">34 </font></p></td>
<td valign="top" width="106"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Terminal Handling Charges </font></p></td>
<td valign="top" width="55"></td>
<td valign="top" width="106"></td>
<td valign="top" width="55"></td>
<td valign="top" width="99"></td>
</tr>
</table>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He wants this to be brought to the notice of the assessees to enable them to discharge their tax liability correctly and also to avoid payment of interest and penalty for short payment of Service Tax. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=41&filename=notification/servicetax/2007/cha.htm" target="_blank">C.No.III /10/1325/07-IA Dated: 07.12.2007 of THE COMMISSIONER OF SERVICE TAX, Chennai </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden <font color="#663399" size="5">tiol</font> - Monday's cases </strong><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><b><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_31.gif" alt="Legal Corner Icon" width="191" height="160" hspace="5" border="0" align="left"></b></strong></b></font></b></font></b></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">Central Excise </font> </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Clearance effected under the provisions of para 9.10(b) of the Exim Policy 1997-2002 by 100% EOU against foreign exchange - Benefit of notification 2/ 95CE & 20/ 98CE available but not 125/ 84CE - Larger Bench of the Tribunal. </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The appellant, a 100% EOU , engaged in the manufacture of polyester textured yarn, twisted/sized and polyester grey fabrics, was granted permission by the Development Commissioner, Kandla Special Economic Zone for sale of the goods viz. grey fabrics in DTA through EEFC account. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per the conditions laid down in the permission, the assessees were required to pay full duties of Customs and Central Excise as applicable at the time of clearance of goods against EEFC account. However, clearances were effected against Foreign Exchange at the lower rate (6%) of Central Excise duty during the period from Feb 2002 to June 2002. Supplies of polyester grey fabrics in DTA were also effected by the assessee in terms of erstwhile para 9.10(b) of the Exim Policy 1997-2002 but at the lower rate of Central Excise duty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The department was of the view that the benefit of Notification no. 2/95-CE dated 4.1.95, 8/97 CE dtd . 1.3.97 and 20/98-CE dated 18.7.98 was available only to clearance made in DTA under the provisions of 9.9(a), (b), (c), (d) or (f) or para 9.20 of the Exim Policy 1997-2002 whereas, the clearance has been effected by the assessees under the provisions of para 9.10(b) of the Exim Policy and, therefore, the benefit of concessional rate of duty under the above Notification was not available and duty was to be charged at full rate as prescribed under the proviso to Sec.3 of the Central Excise Act, 1944. </font></p>
<p align="justify"><font color="#6633CC" 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>Exports of tea - Deduction u/s 80HHC - Assessee not entitled to deduction against entire composite income as only 40% of such income is chargeable and computable under I-T Act : Supreme Court </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether Sec 80HHC deduction is to be allowed i.e. before the 60 : 40 apportionment under Rule 8(1) or from 40% profits on sales taxable as Business Income? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">And the answer that has come from the Bench is that the Sec 80HHC deduction is required to be allowed after apportionment of income under Rule 8(1) of the 1962 Rule. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Principles for reckoning of the limitation period for completion of block assessment under provisions of S. 158 BE- Search and Seizures under Sec 142 of the Act- conclusive proof is required to show that the seized documents disclose concealment of any income having been earned by the assessee and not disclosed- ITAT </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee is a company mainly engaged in the business of investment in shares and finance. A search and seizure operations u/s 132(1) of the Income Tax Act, was conducted at the various business premises of the Mesco Group and also at the premises of its auditors M/s A.R. Associates, between the period 26.2.97 to 1.5.97. The assessee is a company related to the aforesaid group. During the search, various books of accounts and loose papers were found and seized. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns Monday for the judgements </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Monday with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice weekend. </font></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@taxindiaonline.com">vijaywrite@taxindiaonline.com </a></font></p>
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