TIOL-DDT 907 · 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 907</font> <br>
14.07.2008 <br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>20- 20 IPL Cricket and Income Tax – are players ‘Stock in trade' or assets? </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the thick of IPL auctions, you must have heard of Dhoni being bought for Rs. 6 Crores or Preeti Zeinta buying up some other player. Now it's time for the Income Tax Department to enter the scene. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The first controversy is about TDS paid on the amounts paid to the players. Is the TDS to be made at 11% or 2%? Are Cricketers professionals? Now the understanding seems to be that the TDS has to be 11.33% (including the all pervasive cess – for education) </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">What will happen when players are traded? Vijay Mallya was not happy with his team and apparently, he would like to buy a few players, if he has his way. If he has his way, what would be the ‘will' of the Income Tax Department? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Are the players “Stock in trade” or are they “assets” (including liabilities)? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">If they are ‘stock in trade' a transfer of a player from one team to the other would be ‘sale' and liable to tax. If they are to be treated as assets, the sale would attract capital gains tax. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Drug in stone elephant </strong></font></p>
<p align="center"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_14july.jpg" alt="Legal Corner Icon" width="175" height="120" hspace="5" border="0" align="left"></b></strong></strong></strong></strong></strong></strong></strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This one metre high stone elephant innocently landed up in Australia from Thailand . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Who would like to rip open such a lovely stone elephant? Customs Of course! And what they found was elephantine! 850 Kgs of pills. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The pills were pseudoephedrine and could have been used to make $297 million worth of the drug <strong>ice </strong>. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBEC Chairman appeals for better compliance </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. PC Jha , the Chairman of the CBEC addressing the Gujarat Chamber of Commerce & Industry in Ahmedabad appealed to the trade and industry for better compliance and pay Customs Excise and Service Tax honestly. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Mr. Jha said that the Revenue from indirect taxes - Customs, Central Excise and Service Tax has constantly increased over the years. In 2007-08, the total revenue of indirect taxes was more than Rs.2 lac Crores and it is estimated that this will further increase to Rs. 3.25 lac Crores in the current year. </font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Take them to the President </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In the recent conference of Chief Commissioners of CBEC, a proposal was made that the probationers should be taken to meet the President, Vice-President, Prime Minister etc,. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The IAS probationers invariably do this! </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Other suggestions on the subject were:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Laptops should be provided to every probationer for effective use during the training so that they become well-versed with computer applications. <br>
<br>
NACEN has to inculcate a culture of integrity on a CONTINUING basis through their training programmes. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><br>
Selection of officers to be posted in the training academy should be done with utmost care, Officers should be selected on merit, who can be a role model to the youngsters who have just got into the service; Good officers should come FORWARD to train at least for a year for the sake of new members of the service. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why to discuss this at the conference at all? The Board can straight away do this. But these are topics for intense debates in conferences, never to be implemented. </font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5"> tiol</font> <font color="#006600">– Tomorrow ' s cases</font></strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><strong><strong><strong><strong><strong><strong><b><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"></b></strong></strong></strong></strong></strong></strong></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>FEMA</strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Non-realisation of export proceeds even after six months; no material produced to prove that requisite steps were taken to repatriate – appeal dismissed: Supreme Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Appellants had placed no material whatsoever as to what steps were taken for repatriation of the amount involved. According to Section 18(2) without general or special permission of the Reserve Bank of India , the exporter is required to repatriate the sale proceeds within the prescribed period of six months. Section 18(3) creates a rebuttable legal presumption against the exporter whenever the prescribed period expires without repatriation of the export proceeds to the effect that exporter had not taken requisite steps to obtain repatriation of the payment </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>L & T case - Appeals by Revenue of Rs 1.83 Cr and by assessee of Rs 6.71 lakhs, both rejected by Tribunal </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THERE</strong> are two appeals filed in the present case. One appeal is by the Revenue against the dropping of a demand of Rs.1.83 crores and the second is by the assessee against confirmation of demand of Rs.6.71 lakhs with equal penalty. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessee is engaged in the manufacture of glass bottles and is availing modvat credit. There are three issues involved in the case – </font></p>
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<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Non-inclusion of the value of primary packing material supplied free of cost by customers;
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<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Clearance of freshly manufactured bottles to customers in place of rejects received;
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<li><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Removal of modvatted inputs without payment of duty. </font></li>
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<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>Assessee cannot confer jurisdiction on Authorities: When power has been conferred upon two authorities concurrently, either one of them can exercise that power and once a decision is taken to exercise power, that exercise must be terminated by that authority only: High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not that one authority can start exercising a power and the other authority having concurrent jurisdiction can conclude the exercise of that power. This perhaps may be permissible in a situation where both the authorities jointly exercise power but it certainly is not permissible where both the authorities concurrently exercise power. One example that immediately comes to the mind is that of grant of anticipatory bail. Both the Sessions Judge and the High Court have concurrent power. It is not as if a part of that power can be exercised by the High Court and the balance power can be exercised by the Sessions Judge. If the High Court is seized of an application for anticipatory bail it must deal with it and similarly if the Sessions Judge is seized of an anticipatory bail, he must deal with it. </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="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT </strong></font></p>
<p align="justify"><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice Day. </font></p>
<p align="justify"><font color="#FF6633" 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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