TIOL-DDT 912 · 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 912</font> <br>
21.07.2008 <br>
Monday </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax - Mandatory e-payment – not necessarily from your own account – CBDT clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Notification S.O.No.493 (E) dated 13.3.2008, the following categories of taxpayers have to make payments electronically. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. A company </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. A person (other than a company), to whom provisions of section 44AB of the Income-tax Act, 1961 are applicable. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The provisions of Section 44AB are applicable to every person </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Carrying on business if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds forty lakh rupees in any previous year; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Carrying on profession if his gross receipts in profession exceed ten lakh rupees in any previous year; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Carrying on the business if the profits and gains from the business are deemed to be the profits and gains of such person under section 44AD or section 44AE or section 44AF or section 44BB or section 44BBB, as the case may be, and he has claimed his income to be lower than the profits or gains so deemed to be the profits and gains of his business, as the case may be, in any previous year. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>What does electronic payment mean? </strong>It is defined as payment of tax by way of </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">( i ) Internet banking facility of the authorized bank; or </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(ii) Credit or debit cards. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Board has received representations from some foreign and resident assessees highlighting difficulties in availing internet banking facilities of the authorized banks. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has clarified that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. An assessee can make electronic payment of taxes also from the account of any other person. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. However, the challan for making such payment must clearly indicate the Permanent Account Number (PAN) of the assessee on whose behalf the payment is made. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. It is not necessary for the assessee to make payment of taxes from his own account in an authorized bank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Further, Board has also clarified that payment of any amount by a deductor by way of tax deducted at source (TDS) or tax collected at source (TCS) shall fall within the meaning of ‘tax' for the purpose of the rule 125 of the Income-tax Rules, 1962. </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/2008/it08cir05.htm" target="_blank">CBDT Circular No. 5/2008, Dated: July 14, 2008</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IT Returns for AY 2008 -09 – no enclosures, please – but please keep the TDS certificates in safe custody – you may be asked to produce them later - CBDT instructions </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has clarified that all returns except ITR -7 are annexure-less; No document is to be attached to these returns. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT notes that in spite of their instructions, officers are accepting returns with annexures. CBDT wants Chief Commissioners to ensure strict compliance of the Board instructions. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">No disallowance of claim for TDS/TCS shall be made by the assessing officer only on the ground that the TDS/TCS certificates have not been filed along with the return of income or Form ITR -V. The same procedure shall also apply in respect of challans relating to Advance Tax and Self Assessment Tax.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT has advised assessees to retain with themselves all annexures relating to computation of income, TDS/TCS certificates, counterfoil of challans relating to payment of advance tax and self assessment tax, audit reports and any other document which they would have otherwise liked to file in support of their claims. The original documents and certificates may be produced by them as and when called for by the assessing officer. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope the officers receiving the returns read these instructions – we had reported last year the confusion at various centres, which the Board now acknowledges. </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/2008/it08cir06.htm" target="_blank">CBDT Circular No. 6/2008, Dated: July 18, 2008 </a></strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Commissioner appointed for specific adjudication </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Commissioner of Customs (Import), Jawaharlal Nehru Custom House has been appointed to act as a common adjudicating authority to exercise the powers and discharge the duties conferred or imposed on:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(i) the Commissioner of Customs and Central Excise, Nagpur; (ii) the Commissioner of Customs and Central Excise, Hyderabad-II; (iii) the Commissioner of Customs, Customs House, Kandla ; and (iv) the Commissioner of Customs (Port-Import), Chennai </font><font size="2" face="Verdana, Arial, Helvetica, sans-serif">for the purpose of adjudicating the matters relating to show cause notice pertaining to M/s Agarvanshi Aluminium Limited issued by DRI . </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similarly, Commissioner of Customs (Import), New Customs House, Ballard Estate, Mumbai is appointed to adjudicate show cause notice pertaining to M/s Arushi Exports, issued by DRI . </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/2008/cnt08_089.htm" target="_blank">Notification No. 89</a> </strong> and <strong> <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=24&filename=notification/custom/2008/cnt08_090.htm" target="_blank">90/2008- Cus., (N.T.), Dated: July 17, 2008</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Payments in Indian Rupees by Tourist Transport Operator regarded as foreign exchange earned for the purpose of EO under EPCG Scheme – DGFT clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT has clarified that the following types of payments received in Indian Rupees by tourist transport operator will be considered for discharge of EO under EPCG Scheme in addition to the direct earning of Foreign Exchange:- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(a) Payment received from foreigners in Indian rupees against encashment certificate (Original to be enclosed). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) Payment received in Indian rupees from travel agents/tour operators; earned for use of services of tourist transport operator by foreign tourists (considered as foreign exchange under section 80HHD of Income Tax Act). </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Travel agents/Tour Operators shall not be eligible to count such Foreign Exchange i.e , Foreign Exchange earnings disclaimed in favour of Tourist Transport Operator(Service Provider), against fulfilment of EO for their own EPCG Authorizations </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(c) Payment received from foreign airlines in Indian rupees against their repatriable earnings. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(d) Payment received in Indian rupees, from diplomats, embassies, UN organisation out of their convertible foreign exchange </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=46&filename=notification/dgft/2008/dgft08cir021.htm" target="_blank">DGFT Policy Circular No. 21 (RE-08)/2004-09 Dated: July 17, 2008</a> </strong></font></p>
<p align="justify"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Requirement of endorsement of specific ITC (HS) Code against each input allowed as per Standard Input Output Norms (SION) under Export Promotion Schemes such as Advance Authorization, DFRC , DFIA – DGFT clarifies </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">While issuing Advance Authorizations and DFIAs by Regional Authorities, import items are endorsed with corresponding ITC (HS) Code, as declared by the applicant at the time of filing the application. Representations have been received from the Trade and Industry that they are facing difficulties in utilization of these Authorizations/scrips, in particular, the transferable scrips like DFIA , DFRC , etc. They have stated that ITC (HS) Code Nos. mentioned by them in the application are only indicative and not final for deciding the items of import. Further, in the SION also, corresponding ITC (HS) codes have not been indicated. Accordingly, Trade & Industry Associations have requested that the ITC (HS) Code considered by Customs Authorities for the purpose of assessment and duty calculation should be taken as final and which, in practice, is without any reference to the ITC (HS) Code endorsed by the Regional Authority on the scrips/Authorizations against the inputs allowed for imports. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">DGFT clarifies that </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The ITC (HS) Code endorsement by Regional Authority against each input under the aforesaid Schemes shall continue. It is the responsibility of the exporters to declare the correct ITC (HS) Code. Corrections in ITC (HS) Code, even subsequent to issuance of these scrips/ endorsement of transferability, can be examined and allowed by RAs based on the representation of Authorization Holder(s). However, during examination of cargo/ shipping documents, the Customs can determine the correct ITC (HS) Code number of the items of import and allow clearance after assessment or ask the importer to get the ITC (HS) Code number corrected from the concerned Regional Authority of DGFT. </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=46&filename=notification/dgft/2008/dgft08cir022.htm" target="_blank">DGFT Policy Circular No. 22 (RE-08)/2004-09 Dated: July 18, 2008</a> </strong></font></p>
<p align="center"><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Import of spices - Value Addition – DGFT clarification </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Second Sub-para of Para 6.7(c) of Handbook of Procedures Vol.I now reads as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">However in case of import of spices for VA purpose like crushing / grounding / sterlisation or for manufacture of oils and oleoresins and not for simple cleaning, grading, re-packing etc., EO shall be fulfilled within 120 days. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this is amended to read as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">“However, in case of import of spices for VA purpose like crushing/grinding/sterilization or for manufacture of oils and oleoresins of pepper, cardamom and chillies (and not for simple cleaning, grading, repacking etc.), EO shall be fulfilled within 120 days from the date of importation of first consignment. In case of import of spices (other than pepper, cardamom and chillies) for manufacture of spice oils and oleoresins, EO shall be fulfilled within 12 months.” </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=47&filename=notification/dgft/2008/dgft08pn050.htm" target="_blank">DGFT Public Notice No. 50 (RE-2008)/2004- 09,Dated : July 17 , 2008 </a></strong></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></strong></font><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif"> – Tomorrow's cases</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><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 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_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left"></b></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></strong></font></font></strong></font><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Whether interest is payable on differential duty paid before finalization of provisional assessments? - Matter goes to Larger Bench </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">THE revenue failed to get the matter referred to the Larger Bench earlier at Mumbai, but they had success at Chennai. The issue is, in case of provisional assessments, when the assessee pays the differential duty on his own before the finalization of the assessments whether he is liable to pay interest under Section 11AB? </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In case of M/s Tata Motors Ltd Vs CCE Pune , <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2008/2008-TIOL-447-CESTAT-MUM.htm" target="_blank"><font size="1"><strong>2008-TIOL-447-CESTAT-MUM</strong></font> </a>when the matter came up before the Tribunal, it was held that no interest is payable under Rule 7(4) of Central Excise Rules, 2002 in such cases. The Tribunal observed that the interpretation of Rule 7(4) by the Commissioner (Appeals) while confirming that interest is payable is not proper </font></p>
<p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Customs </strong></font></p>
<p align="justify"><font color="#FF6600" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Cess – Export of fish – Prawns not fish: Madras High Court </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">HE</font> </strong>questions
is whether the term “Fish” under the Agricultural Produce Cess Act, 1940,
would include “Prawn”. This matter was dealt at length by the Tribunal in
Chennai in <strong>Commissioner of Customs, Tuticorin Vs Edhayam Frozen Foods </strong> in <a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=52&filename=legal/cestat/2006/2006-TIOL-08-CESTAT-MAD.htm"><strong><font size="1">2006-TIOL-08-CESTAT-MAD</font> </strong></a> where
the Tribunal held that Fish and Prawn are two different items and held that
the Cess under the Agricultural Produce Cess Act, 1940, will not apply for
export of Prawn. In the departmental appeal, the Hon'ble Madras High
Court did a thesis on this issue and had delivered a very detailed decision.
There are several facts about Fish and Prawn which are bound to be
great interest to those who have an appetite for Fish and Prawn as well as
for those who have an appetite for interpretation of law. </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>Benefits under RBI's Optional Early Retirement Scheme – Not eligible for deduction under Section 10 (10C): Madras HC </strong></font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633">THE</font> </strong>assessee was an employee of Reserve Bank of India and has during the year retired under the Optional Early Retirement Scheme floated by the Reserve Bank of India . The assessee in his return of income for the assessment year 2000-05, has claimed exemption under Section 10 (10C), out of the compensation received under the said Scheme. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The assessing officer disallowed the claim of the assessee as the scheme which was adopted by the assessee was not in consonance with the rules prescribed under Rule 2BA of the Income Tax Act. Aggrieved by the said order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who upheld the order of the assessing officer and dismissed the appeal. The assessee preferred an appeal to the Income Tax Appellate Tribunal, which allowed the appeal. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Revenue is before the High Court </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 size="2" face="Verdana, Arial, Helvetica, sans-serif"><font color="#FF6666">Until Tomorrow with more <strong>DDT </strong></font></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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