TIOL-DDT 865 · 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">TIOL-DDT 865 </font><br>
15.05.2008 <br>
Thursday </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Customs
Officer gets Kirti Chakra; </font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tarun
Kumar Dutta – pride of Indian Customs </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At a sombre and poignant ceremony in the Rashtrapati Bhavan , President Pratibha Patil yesterday presented the Nation's second highest gallantry award posthumously on Customs officer Tarun Kumar Dutta who was gunned down by the drug mafia while working with the DRI in Guwahati. Tarun's wife Mrs Beethi Dutta , who is now working as a tax assistant in the Department, received the award from the President of India. The function was symbolic of pride and sorrow and the Nation's leaders, including the Prime Minister and Defence Minister, had no clue as to how to console the wife of Lance Naik Jyotish Prakash (Shourya Chakra awardee) who was crying inconsolably. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Breaking protocol, the President walked up to the widows of the valiant awardees to present them the awards. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>TIOL </strong> wanted to interview Mrs Dutta , but after the poignant scenes, did not have the heart to go and ask her questions. Instead we caught up with Mr S Dutt Majumder , the Director General, DRI , who attended the function and with whom Tarun had worked, when the former was ADG , DRI at Kolkata. The DRI Chief shared with us some of his memories of Tarun. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">He was grateful for the government's gesture in awarding the Kirti Chakra to Tarun, a unique gesture! Tarun was perhaps the first officer from the Customs and Excise Department to get this honour. He remembered fondly the association he had with Tarun ten years ago as ADG DRI at Kolkata. He remembers that he had gone to personally disburse rewards to informers of Tarun who had a tremendous “human intelligence network”. The Human intelligence network never fails and so Tarun was highly successful in busting drug smuggling. He was also happy that the Department has supported the family and Tarun's wife had been given a job as tax assistant. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mrs. Beethi Dutta , who was quite composed while receiving the award, broke down, when the DG, DRI met her later, and she told the DG that the guilty must be punished and they have some strong suspects. The DG assured her, “I will do my best”. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The DG was proudly carrying a copy of the citation, which read as, </font></p>
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<td><p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shri Tarun Kumar Dutta led a series of operations against the drug cartels in difficult jungles, mountain terrains and insurgent infested areas in the Shillong region fearlessly with the objective of eradicating the scourge of drug smuggling in the area. As a result of his relentless operations against them, he became the target of the mafia and was ruthlessly killed on 12 September, 2006 </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Shri Tarun Kumar Dutta showed exemplary devotion to duty and courage of the highest order and sacrificed his life in the service of the nation. </font></p></td>
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<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cowards die many times before their deaths: The valiant never taste death but once. </strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Committee
of Commissioners – and a jinxed notification – CBEC
amends a wrong notification; </font></strong></font><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Corrects
it wrongly! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In <a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=7121" target="_blank">TIOL-DDT 839 - 04.04.2008</a>, we had pointed out how the Government amended a wrong notification. DDT mentioned, </font></p>
<blockquote>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBEC has issued a notification No. 33/2008 Cus NT dated 28.3.2008. Nothing wrong with it. They are entitled to issue notifications, but the only problem is this notification seeks to amend something which does not exist. This notification seeks to amend Notification No. 40/2005 and substitute Sl. 25 in the notification No. 40/2005. The whole problem is that Notification No. 40/2005 does not have a Sl. No. 25; it ends at sl. No. 20. </font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">What they really wanted to amend was sl. No. 25 of Notification No. 49/2005 and by mistake they amended Notification No. 40/2005. </font></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is really tough for the Board to keep track of the Principal and amending notifications. Apparently Board does not have copies of its own notifications. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now, more than a month after we pointed the lapse, the Board has corrected it albeit wrongly. The new Notification says, Sl No. 25 in Notification No. 40/2005 – Cus NT shall be omitted. Honourable Sir, there is no Sl No. 25 in the table to that notification, and what are you omitting? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Of course the other part of the Notification No. 49/2005 is correctly corrected. Sl No. 25 is amended as we suggested. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Government can avoid much of this kind of embarrassment if it puts up its draft laws for public scrutiny. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Incidentally what is the Law Ministry doing? They are supposed to vet the legislation! </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=24&filename=notification/custom/2008/cnt08_041.htm" target="_blank">Notification Nos. 41</a> and <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_042.htm" target="_blank">42/2008- Cus., ( N.T. ) Dated: May 12, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBI arrests ITAT Member while accepting Rs. 30 Lakhs bribe </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI caught red-handed an Accountant Member of the Income Tax Appellate Tribunal, Kolkata accepting a bribe of Rs. 30 lakhs from a Kolkata based firm for showing undue favours to the firm in the income-tax matters of various parties represented by the said firm. The accused official and the two private persons offering the bribe amount were arrested at the residence of the accused official at Nizam Palace , Kolkata. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI , Kolkata received a reliable information that the accused official had negotiated a bribe of Rs. 30 lakhs from the firm, which was to be paid to him at his residence on the instructions of the Proprietor of the firm on 13.5.2008 about 8.30 p.m. by one of the arrested persons after collecting the same from the other arrested person, who is an employee of a private Securities Firm of Kolkata. A trap was laid by the CBI team and the Accountant Member was caught red-handed while accepting the bribe amount from the two private persons. The trio (the bribe taker and the bribe givers) were arrested on the spot and the Proprietor of the firm, on whose instructions the money was to be paid was arrested subsequently. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Following the trap, the premises of the accused persons were searched and incriminating documents seized during the searches are being scrutinised. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While this may perhaps be the first time that a high power judge is caught red handed, the Government needs to look into this malady more seriously. You have appointed somebody as a judge with powers to decide cases involving Crores of rupees and you don't give him a car, a steno or any other facilities for effective functioning. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The other day, I called on a Vice-President of the ITAT. There was no power (electric) when I visited him. His office had no generator. His calling bell was not functioning and he went out himself to call his Office Superintendent when I complained to him that we were not getting their orders. The OS informed him that he did not have enough facilities for paper and photocopying! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If the standard of life that you provide to a Tribunal Member is so pathetic, you will only have more such CBI raids. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Such raids don't prove anything except eroding public confidence in such high judicial forums. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Fake Indian Currency – prohibited!!! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Under Section 135 of the Customs Act, any offence relating to <strong><font color="#FF6633">prohibited goods</font> </strong> as the Central Government may, by notification in the Official Gazette, specify, is liable for a sentence up to seven years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the Government has notified Fake Indian Currency as the goods falling in the category of prohibited goods for the purposes of the section. </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=24&filename=notification/custom/2008/cnt08_043.htm" target="_blank">Notification No. 43 /2008- Cus., ( N.T. ) Dated: May 13, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Export of Basmati Rice – Port restriction not to apply to gift from France ! </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Port restriction mentioned under “Nature of Restriction” shall not apply to export of 400 MTs of basmati rice from Chennai port to Myanmar to be sent by Government of France as relief material. </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=45&filename=notification/dgft/2008/dgft08not008.htm" target="_blank">DDFT Notification No. 8 (RE-2008)/2004-2009, Dated: May 13, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Any Time Money – Customer charges for ATM use – RBI instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Automated Teller Machines (ATMs) have gained prominence as a delivery channel for banking transactions in India . Banks have been deploying ATMs to increase their reach. While ATMs facilitate a variety of banking transactions for customers, their main utility has been for cash withdrawal and balance enquiry. As at the end of December 2007, the number of ATMs deployed in India was 32,342. Commensurate with the branch network, larger banks have deployed more ATMs. Most banks prefer to deploy ATMs at locations where they have a large customer base or expect considerable use. To increase the usage of ATMs as a delivery channel, banks have also entered into bilateral or multilateral arrangements with other banks to have inter-bank ATM networks. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is evident that the charges levied on the customers vary from bank to bank and also vary according to the ATM network that is used for the transaction. Consequently, a customer is not aware, beforehand, of the charges that will be levied for a particular ATM transaction, while using an ATM of another bank. This generally discourages the customer from using the ATMs of other banks. It is, therefore, essential to ensure greater transparency. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now RBI has directed that service charges would be implemented by all banks as </font></p>
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<td valign="top" width="40"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Sr. No. </strong></font></p></td>
<td valign="top" width="234"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Service </strong></font></p></td>
<td valign="top" width="295"><p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Charges </strong></font></p></td>
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<td valign="top" width="40"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1 </font></p></td>
<td valign="top" width="234"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For use of own ATMs for any purpose </font></p></td>
<td valign="top" width="295"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Free (with immediate effect) </font></p></td>
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<td valign="top" width="40"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2 </font></p></td>
<td valign="top" width="234"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For use of other bank ATMs for balance enquiry </font></p></td>
<td valign="top" width="295"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Free (with immediate effect) </font></p></td>
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<td valign="top" width="40"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3 </font></p></td>
<td valign="top" width="234"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">For use of other bank ATMs for cash withdrawals </font></p></td>
<td valign="top" width="295"><p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Banks which are charging more than Rs. 20 per transaction shall reduce the charges to a maximum of Rs. 20 per transaction with immediate effect. </font></p>
<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Free with effect from April 1, 2009 </font></p></td>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=wnew/rbi_notification.htm" target="_blank">RBI's RPCD.CO.RF.BC.No. 69 / 07.06.00 / 2007-08 Dated: May 13, 2008 </a></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Jurispruden<font color="#FF6633" size="5"> tiol</font> – Tomorrow ' s cases </strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><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="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><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></font></strong></font></strong></font></strong></font></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>“business profits" under Section 80HHC(3) would include Cash Compensatory Allowance and Duty Drawback – Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">By Finance Act, 1990, the Parliament had clarified that Cash Compensatory Support and Duty Drawback shall be taxable under Section 28 of the Income Tax Act, 1961. By the said Finance Act, 1990, clause (iiib) came to be inserted as one of the incomes chargeable to income tax under the head "business profits" vide Section 28. Clause (iiib) covers cash assistance (by whatever name called) `received or receivable' by any person against exports under any scheme of the Government of India . At the relevant time an issue arose as to whether cash assistance though includible in business profits under Section 28(iiib) would or would not constitute eligible income for the purposes of deduction under Section 80HHC. Since there was some doubt, CBDT had issued a Circular. By the said Circular, CBDT clarified that export incentives, namely, Cash Compensatory Support and Duty Drawback have to be included in the profits of the business for computing the deduction under Section 80HHC. </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Tribunal's power of rectifying any mistake cannot be used as a tool by a disgruntled unsuccessful party to prolong the proceeding - ROM application rejected by Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">AN</font> </strong>appeal filed by the assessee in the year 1995 was dismissed by the Tribunal in the month of August 2000 the order of the CCE confirming a demand of Rs.40,519/- penalty of Rs.5000/- was upheld. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A ROM application was filed matter came to be listed for the first time in February 2007. The Tribunal was astonished a ROM application against a final order of the year 2000 coming up seven years later! Noticing that the provisions of Section 35C warrant the Tribunal to rectify any mistake apparent on record within six months meaning to say that the application in this behalf has to be necessarily made within the period of six months, the Tribunal made enquiries as to whether the ROM was indeed filed within the said period. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finding that there still remained some unanswered questions about the whole “filing episode, the Tribunal found it prudent to proceed and decide whether the ROM was maintainable. </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>Depreciation - entitlement to higher rate - it's not income from hiring of lorries but the fact that whether assessee was into business of giving trucks on hire would decide issue </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Depreciation u/s 32 - Assessee imports timber and sells the same in the market - claims 40% depreciation on trailers and loaders - AO disallows on the ground that the assessee was not into the business of giving lorries on hire - CIT (A) goes by the business income declared from the hiring business and allows the assessee's appeal - Tribunal & High Court both allow the CIT (A) order - Normally, concurrent findings of the lower authories need not be disturbed but in this case a vital issue was ignored that what would decide the entitlement to higher depreciation to the assessee is not the income from the lorry-hiring business but the fact that whether giving lorries on hire was a regular business of the assessee or not? - Matter remanded to the CIT (A) for fresh examination </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>See our columns tomorrow for the judgements </strong></font></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"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day. </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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