Appeal restored if pre-deposit couldn’t be made due to financial difficulties of assessee

ST : When pre-deposit directed by Commissioner (Appeals) could not be made due to severe financial difficulties, appeal dismissed for want of such pre-deposit was to be restored back before Commissioner (Appeals)

DGFT Public Notice No.17/(RE 2013)/2009-14 dated 09-07-2013

Government of India

Ministry of Commerce & Industry

Directorate General of Foreign Trade

Public Notice No. 17 (RE: 2013)/2009-2014

New Delhi : Dated 9^th July, 2013

In exercise of the powers conferred under paragraph 2.4 of the Foreign Trade Policy, 2009-2014 and paragraph 1.1 of Handbook of Procedure (Vol. I) the Directorate General of Foreign Trade hereby notifies a new SION A-3643 under Chemicals and Allied Products - in respect of the export product “Fatty Alcohol (Cetyl, Stearyl, Ceto-Stearyl)” as under :

Export Product	Exp. Qty.	SI. No.	Import items	Qty. allowed (Kg.)
Fatty Alcohol (Cetyl, Stearyl, Ceto-Stearyl)	1 Kg.	1.	Palm Fatty Acid Distillate (PFAD)	1.16 Kg
		2.	Copper Chromite Catalyst	0.005 Kg

2. Effect of Public Notice:-

A new SION A 3643 is being notified.

(Anup K Pujari)

Director General of Foreign Trade

E-mail: dgft@nic.in

(Issued from File no. 01/82/162/00471/AM-13/DES-III)

Pari passu claims of workmen to be adjudicated by liquidator of debtor Co. and not by DRT

CL : Claims of workmen who claimed to be entitled to payment pari passu, has to be considered and adjudicated by liquidator of debtor company and not by DRT

Fixed deposits earning you negative returns

By Mayur Shetty, TNN | 10 Jul, 2013, 11.09AM IST

BANGALORE: Holders of fixed deposits have been earning a negative return in real terms for most of the preceding five years, thanks to inflation outstripping interest rates.

To make matters worse, depositors continue to be taxed on this nominal income.

Although bank fixed deposits have never been tax friendly, the level of compliance has been sketchy. But compliance is slowly getting stricter. In the past, RBI norms required banks to take into account deposits in one branch for the purpose of tax deduction at source—a rule which allowed depositors to break up FDs across branches to avoid TDS.

Also, several private banks allowed customers to break up FDs and route them into multiple branches to avoid TDS. But after recent sting operations banks are getting tough and taking into account interest income from all branches for the purpose of TDS.

A study conducted by Ashish Das, professor, IIT Mumbai's department of mathematics, shows that for most of the five years since 2008-09 real returns on bank fixed deposits have been negative.

The lowest real return was -5 .4% in 2009-10 when consumer price index for industrial workers CPI-IW rose by 12.4% and the weighted average deposit rate on term deposits was 6.97%. The weighted average return takes into account the average cost of deposits for banks after factoring in the extent in each maturity basket. Although bankers offer the highest return on deposits of 3-years and above, bulk of bank deposits are around the one-year category.

RBI's weighted average deposit rates are available only up to March 2011. However , given that long-term deposit rates have not crossed 10% and that most deposits are in the one-year basket, it can be safely assumed that the weighted average deposit rates are not above 8.5% for the last two years. The highest real return in recent years has been 2011-12 when the return after being adjusted for inflation stood at 0.2%.

In 2001-02 , bank FDs had recorded a real return of 5.3% given that CPI rose by only 4.3% even as bank deposits yielded over 9.6%. According to Das, the tax on interest income on fixed deposits is unfair to investors.

Society promoting game of golf would qualify for sec. 12AA registration, ITAT favours assessee

IT : Assessee society formed to promote interest in game of golf in general and professional golfers in particular is entitled to registration under section 12AA

Internal comparables to be preferred over external ones for computation of ALP

IT/ILT : Where assessee benchmarked its international transactions with AE, making internal comparison with its international transactions with unrelated parties, same was acceptable, on basis of assessee's own case for preceding two assessment years

Rupee Up 13 Paise Vs Dollar In Early Trade On Rbi Steps

MUMBAI: The rupee today rose by 13 paise to 60.01 against the US dollar in early trade at the Interbank Foreign Exchange market after the RBI took steps to curb volatility in the currency.



Forex dealers said besides dollar selling by exporters and a higher opening in the domestic equity market, the Reserve Bank ordering state-owned oil companies to purchase their dollar requirement from a single public sector bank for every daily transaction to curb volatility in the currency, also supported the rupee.



They said, however, dollar's strength against other currencies overseas, capped the rupee's gain.



The rupee had ended 47 paise higher at 60.14 against the US currency in the previous session.



Meanwhile, the BSE benchmark index Sensex rose by 49.65 points, or 0.26 per cent, to 19,489.13 in early today.

Source:-economictimes.indiatimes.com

Jewellers Smile As Export Orders Hint At Revival

KOLKATA: Gold imports have dropped drastically in June to 40 tonne from 162 tonne in May but the export of diamond and diamond jewellery is showing an upward trend courtesy a revival in demand in the United States. After a gap of two years, jewellery exporters are witnessing orders coming from the US for jewellery and the units operating in Santacruz Electronics Export Processing Zone (SEEPZ) in Mumbai are flooded with enquiries.



The US jobs data for June has also sparked a fresh hope among jewellers. The US economy added a net 195,000 new jobs in June, official figures show. The figure is well above economists' expectations of 165,000.



"Jewellers are expecting a 25%-30% growth in the US market in the current fiscal. The US is gradually coming out of recession and this is reflected in the enquiries that are coming from the country. We are seeing this sort of a demand after a gap of almost two years," said Vipul Shah, chairman of Gem & Jewellery Export Promotion Council.



An increase in exports of gem and jewellery is a good news for the government which is trying hard to control the rising current account deficit (CAD) by curbing gold imports through a slew of measures. But for jewellery exporters, the government is ready to walk an extra mile.



Shah said Union commerce minister Anand Sharma has held a meeting with jewellery exporters and assured them of a steady supply of gold for exports. "He said that if any nominated agencies fail to supply gold, he would take action against them," Shah said.



The jewellery units operating in SEEPZ are receiving a good flow of orders. Rajeev S Pandya, past president, SEEPZ Gems & Jewellery Manufacturers Association, said: "There has been an improvement in order position from June end. The industry had organised a jewellery show in Las Vegas in early June. The samples shown there have been well accepted by customers and they have started placing orders.



These are orders for the Christmas season. Some of the units in SEEPZ have their hands full while some have started receiving orders from the US. The US is compensating for the loss in Europe." The Europe market is still reeling under a crisis and jewellers do not see an immediate recovery in that market.



"However, the West Asia and China markets are showing a good growth," said Shah.

Source:-economictimes.indiatimes.com

Tea Exporters Count Gains

Calcutta, July 9: Tea exporters are expecting to earn more on account of the rupee slump and be in a position to hedge risks such as a rise in freight costs.



If the situation continues till August, Kenyan tea is likely to face stiff competition from India in the export market. The African country, known for its crush, tear, curl (CTC) variety, had a bumper crop in May when India lost a lot of trade enquiries to it. However, a dry weather has now pushed up prices there leaving India with an opportunity to regain the lost ground.



“We are sensing a lot of demand. At this time, during the second flush period, the demand is primarily from the Continent and the UK. We are being able to sell at a good value. A lot of trade negotiations with importers are on.



“The effect of rupee devaluation is not on in full force yet. The real test will come in August when we compete with Kenya. India is becoming attractive to importers because of the currency devaluation,” said Azam Monem, whole-time director at McLeod Russel and additional vice-chairman of the Indian Tea Association.



So far, the second flush crop has seen a volume growth of about 10 per cent, while its value is up 8-10 per cent in rupee terms. However, there are concerns over whether India will be able to meet the demand for the CTC variety because a good demand for orthodox tea in the export market is likely to encourage planters to switch to orthodox production. India exports close to 200 million kg.



“Enquiries are trickling in for July and August. We believe from July-September, there will be a renewed spurt in buying. Key buyers are relocating their interest to India. In the next 2-3 weeks, we hope to get business from even non-traditional countries in West Asia and Pakistan. The currency issue will only mitigate export risks such as freight costs, which have gone up in select destinations,” he said.



Shishir Agarwal, director (finance), Agarmet Corporation, said though the fall in rupee was a positive sign for exporters, there was a need to be cautious.



“Other currencies such as the euro and yen are also suffering against the dollar. Japan and Europe are good buyers of Indian tea. As the currency is hitting them, they are likely to refrain from placing large orders,” he said.



We have seen freight costs move up 5-10 per cent for the past three months on an average,” he said.



Darjeeling Tea Association chairman, S.S. Bagaria adds that with the rupee depreciating about 10 per cent, it would mean a 10 per cent gain for exporters.



“India is becoming attractive to importers because of the currency devaluation. In May, there was more tea in Kenya. We were sceptical as many trade enquiries went to them. But now because of a dry weather there, Kenyan prices are up a little. So again an equation equilibrium is coming through,”

Source:-www.telegraphindia.com

India Increases Import Tax On Sugar

July 9, 2013

NEW DELHI—India on Tuesday raised its import tax on sugar to 15% from 10% with immediate effect, aiming to stem a recent flood of cheap imports because of low global prices.



Global sugar prices are close to three-year lows as a result of production exceeding demand for the past three years and the prospect of another big surplus in 2013-2014. Sugar refiners in India, the world's second-largest producer and biggest consumer, have seen both their domestic and overseas sales hit by an inability to compete at these levels as they need to pay high government-set prices to sugar-cane farmers.



India imported about 700,000 metric tons of sugar so far in the marketing year that started in October 2012, according to the Indian Sugar Mills Association, the country's first imports in two years.



Domestic sugar prices are currently around 32,000 rupees ($524.50) per ton, or 17 cents a pound, while benchmark ICE sugar prices in New York are near 16 cents a pound. New York prices are now less than half of the levels seen in February 2011.



"Imports will stop at these prices," said Gautam Goel, managing director of Dhampur Sugar Mills Ltd., a large north India-based sugar mill, referring to the impact of the new tax. India's high stock levels mean there is no need to take foreign sugar, he added.



He and other industry executives say they are unable to sell down their abundant stocks at reduced prices, as they have to buy cane from growers at high state-fixed prices. The government raised the price of cane by 17% for the current marketing year to 1,700 rupees per ton, and it has announced a further 24% increase for the next marketing year.



Even so, some Indian mills have started selling at below-cost to compete with imports from countries such as Thailand and Brazil.



India is expected to produce 25 million tons of sugar in the current marketing year, three million tons more than forecast domestic consumption.



The Indian Sugar Mills Association, an industry body, wants the import tax on sugar raised even higher. It would need to be between 30% and 40% to completely halt imports, the association said in a news release.



There is a need to protect the Indian farmer and industry from cheap Brazilian imports because the cane price paid to farmers in Brazil is almost half of that paid to the Indian farmers, the association said.



The tax increase will improve sales by domestic millers and help them pay arrears to cane growers, said Vinay Kumar, managing director of National Federation of Cooperative Sugar Factories Ltd., a growers' association.



Indian sugar-cane farmers have a history of quickly switching to other crops whenever they feel their payments are delayed inordinately, leading to cycles of higher and lower sugar output.



India was a substantial exporter of the commodity until last year, as global prices were above domestic rates until then. But since the start of the current marketing year, exports have fallen to no more than 300,000 tons as a consequence of a very big Brazil harvest and falling prices, Mr. Kumar said.



A depreciation in the value of the Indian rupee against the dollar in recent months has so far not hit imports, as this has been offset by the lower international price of sugar.



Meanwhile, the Indian Sugar Mills Association said the country's sugar production in the next marketing year will likely decline by about 5% to 23.7 million tons because a drought last year had reduced the area under sugar cane.

Source:-online.wsj.com

RBI allows rescheduling of an Outstanding Forex loan at a higher cost of borrowing

FEMA/ILT : Fem (Borrowing or Lending in Foreign Exchange) (Second Amendment) Regulations, 2013 - Amendment in Schedule II & Schedule III

CBDT following HC’s mandamus instructs AO to give credit for TDS mismatch if deductor has deposited

IT : Section 139, Read with Section 199 of The Income-Tax Act, 1961 - Return of Income - Credit of TDS U/S 199 to an Assessee when the Tax Deducted has been Deposited with Revenue by Deductor - Direction of Hon'ble Delhi HC in The Case 'Court on its Own Motion Vs. Union of India &Ors. in WP(C) 2659/2012 & WP(C) 5443/2012'

No withholding taxes from payment of commission to an overseas agent for services rendered outside I

IT/ILT : No tax is deductible at source on commission payment to overseas agent for services rendered outside India

Speed post is an acceptable mode for service of notice; registered and speed post are same mode of s

ST: Since object of sending post by registered post is to keep a record, which is also served by sending an article by speed post through same agency, 'Registered Post' and 'Speed Post' are same methods of service and sending order by speed post is valid compliance with section 37C of Central Excise Act, 1944

Onus to disapprove claim doesn’t shift to AO unless assessee furnishes prima facie evidence in its s

IT : Until prima facie evidence in support of claim or contention is adduced, onus does not shift to Assessing Officer to disprove same

Gift by close relative through banking channels along with proof of return isn’t an unexplained gift

IT : A gift by a close relative through banking channels along with copy of cheque and acknowledgement of filing return in USA by him, is not an unexplained gift

Personal tax: Sources of income you must declare in your returns

[unable to retrieve full-text content]The due date for filing personal tax returns for FY13 is July 31. Many of us are aware that salary, rental income, etc., are taxable. However, we tend to overlook incomes like interest, gifts, etc., which need to be declared.Here is a list of some such incomes.Interest from fixed deposit Interest f...

Notional interest on deposit of rental isn’t relevant to figure out annual letting value of leasehol

IT : While determining annual letting value of a leasehold property, Assessing Officer cannot take into consideration notional interest on lease rent deposit

Appeal by Revenue against penalty order not admitted as its appeal against assessment order was alre

IT: Where assessment order itself was dismissed by High Court, consequential penalty order becomes infructuous

RBI/2013-14/127 A.P. (DIR Series) Circular No. 07 dated 08-07-2013

RBI/2013-14/127

A.P. (DIR Series) Circular No. 7

July 8, 2013

To,

All Authorised Dealer Category - I Banks

Madam / Sir,

Risk Management and Inter Bank Dealings

Attention of Authorized Dealers Category – I (AD Category – I) banks is invited to the A.P.(DIR Series) Circular No.129 dated May 21, 2012 regarding participation in Currency Futures / Exchange Traded Currency Options markets.

2. On a review of the evolving market conditions, it has been decided that AD Category – I banks should not carry out any proprietary trading in the currency futures / exchange traded currency options markets. In other words, any transaction by the AD Category – I banks in these markets will have to be necessarily on behalf of their clients.


3. These instructions shall come in to effect immediately and shall be in force till further orders.


4. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act 1999 (42 of 1999) and are without prejudice to permissions/approvals, if any, required under any other law.

Yours faithfully,

(Rudra Narayan Kar)

Chief General Manager-in-Charge

Customs Notification No. 34/ 2013 dated 08-07-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 34 /2013 - Customs

New Delhi, the 8^th July, 2013

G.S.R. (E).- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 12/2012-Customs, dated the 17^th March, 2012 , published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E) dated the 17^th March, 2012, namely :-

In the said notification, in the Table,-

1. against S. No.76, for the entry in column (4), the entry 15% shall be substituted;


2. against S. No.77, for the entry in column (4), the entry 15% shall be substituted;


3. against S.No.78, for the entry in column (4), the entry 15% shall be substituted.

[F. No.354/78/2009-TRU Pt I]

(Raj Kumar Digvijay)

Under Secretary to the Government of India

Note.- The principal notification No.12/2012-Customs, dated the 17^th March, 2012 , was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 185(E), dated the 17^th March, 2012 and was last amended by notification No. 31/2013-Customs, dated the 5^th June, 2013 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.357(E), dated the 5^th June, 2013.

RBI/2013-14/124 A.P. (DIR Series) Circular No. 4 dated 08-07-2013

RBI/2013-14/124

A.P. (DIR Series) Circular No. 4

July 8, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

Exim Bank's Line of Credit of USD 10 million to the Government of Seychelles

Export-Import Bank of India (Exim Bank) has concluded an Agreement dated December 18, 2012 with the Government of Seychelles, for making available to the latter, a Line of Credit (LOC) of USD 10 million (USD Ten million) for financing eligible goods, services, machinery and equipment including consultancy services from India for the purpose of import of goods and services for specific projects funded by Development Bank of Seychelles in Seychelles. The goods, services, machinery and equipment including consultancy services from India for exports under this Agreement are those which are eligible for export under the Foreign Trade Policy of the Government of India and whose purchase may be agreed to be financed by the Exim Bank under this Agreement. Out of the total credit by Exim Bank under this Agreement, the goods and services including consultancy services of the value of at least 75 per cent of the contract price shall be supplied by the seller from India and the remaining 25 percent goods and services (other than consultancy services) may be procured by the seller for the purpose of Eligible Contract from outside India. Provided, however that, a suitable relaxation not exceeding 10 % may be considered on case to case basis for projects having civil construction.

2. The Credit Agreement under the LOC is effective from June 10, 2013 and the date of execution of Agreement is December 18, 2012. Under the LOC, the last date for opening of Letters of Credit and Disbursement will be 48 months from the scheduled completion date(s) of contract(s) in the case of project exports and 72 months (December 17, 2018) from the execution date of the Credit Agreement in the case of supply contracts.


3. Shipments under the LOC will have to be declared on GR / SDF Forms as per instructions issued by the Reserve Bank from time to time.


4. No agency commission is payable under the above LOC. However, if required, the exporter may use his own resources or utilize balances in his Exchange Earners’ Foreign Currency Account for payment of commission in free foreign exchange. Authorised Dealer Category- l (AD Category-l) banks may allow such remittance after realization of full payment of contract value subject to compliance with the prevailing instructions for payment of agency commission.


5. AD Category-I banks may bring the contents of this circular to the notice of their exporter constituents and advise them to obtain full details of the Line of Credit from the Exim Bank’s office at Centre One, Floor 21, World Trade Centre Complex, Cuffe Parade, Mumbai 400 005 or log on to www.eximbankindia.in.


6. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(C. D. Srinivasan)

Chief General Manager

RBI/2013-14/125 A.P. (DIR Series) Circular No. 5 dated 08-07-2013

RBI/2013-14/125

A.P. (DIR Series) Circular No. 5

July 8, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

Deferred Payment Protocols dated April 30, 1981 and December 23, 1985 between Government of India and erstwhile USSR

Attention of Authorised Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 03 dated July 04, 2013 , wherein the Rupee value of the Special Currency Basket was indicated as Rs.78.374512 effective from June 13, 2013.

2. AD Category-I banks are advised that a further revision has taken place on June 20, 2013 and accordingly, the Rupee value of the Special Currency Basket has been fixed at Rs.80.972091 with effect from June 25, 2013.


3. AD Category-I banks may bring the contents of this circular to the notice of their constituents concerned.


4. The Directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act (FEMA), 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully,

(C.D. Srinivasan)

Chief General Manager

RBI/2013-14/126 A.P. (DIR Series) Circular No. 6 dated 08-07-2013

RBI/2013-14/126

A.P. (DIR Series) Circular No. 6

July 8, 2013

To

All Category - I Authorised Dealer Banks

Madam / Sir,

External Commercial Borrowings (ECB) Policy - Non-Banking Finance Company – Asset Finance Companies (NBFC - AFCs)

Attention of Authorized Dealer Category-I (AD Category-I) banks is invited to A.P. (DIR Series) Circular No. 5 dated August 1, 2005 and A.P. (DIR Series) Circular No. 69 dated January 7, 2013 relating to External Commercial Borrowings (ECB).

2. As per the extant guidelines, non-banking financial companies (NBFCs) are allowed to avail of ECB under approval route from multilateral financial institutions, reputable regional financial institutions, official export credit agencies and international banks with minimum average maturity of 5 years to finance import of infrastructure equipment for leasing to infrastructure projects. Further, NBFC – Infrastructure Finance Companies (IFCs) have been permitted to avail of ECB for on-lending to infrastructure sector both under automatic and approval routes subject to certain terms and conditions.


3. On a review of ECB policy, it has been decided to allow NBFCs, categorised as Asset Finance Companies (AFCs) by the Reserve Bank and complying with the norms prescribed in the Circular DNBS. PD. CC. No. 85/03.02.089/2006-07 dated December 6, 2006 of the Bank, as amended from time to time, to avail of ECB subject to following conditions:
   
   
   
   1. NBFC-AFCs are allowed to avail of ECB under the automatic route from all recognised lenders as per the extant ECB guidelines with minimum average maturity period of five years in order to finance the import of infrastructure equipment for leasing to infrastructure projects;
   
   
   2. in cases, where the NBFC-AFCs avail of ECB in the form of Foreign Currency Bonds from international capital markets, such ECBs will be permitted to be raised only from those international capital markets that are subject to regulations prescribed by the host country regulator in a Financial Action Task Force (FATF) member country compliant with FATF guidelines;
   
   
   3. such ECBs (including outstanding ECBs) under the automatic route can be availed upto 75 per cent of owned funds of NBFC-AFCs, subject to a maximum of USD 200 million or its equivalent per financial year;
   
   
   4. ECBs by AFCs above 75 per cent of their owned funds will be considered under approval route by Reserve Bank; and
   
   
   5. the currency risk of such ECBs is required to be hedged in full.
   
   
   
   
   


4. The above modifications to the ECB guidelines will come into force with immediate effect. All other aspects of extant ECB guidelines shall remain unchanged.


5. AD Category-I banks may bring the contents of this circular to the notice of their constituents and customers.


6. The directions contained in this circular have been issued under sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999 (42 of 1999) and are without prejudice to permissions / approvals, if any, required under any other law.

Yours faithfully

(Rudra Narayan Kar)

Chief General Manager-in-Charge

COMMISSIONER OF INCOME TAX-X Vs. M/S AAR BEE INDUSTRIES

THE HIGH COURT OF DELHI AT NEW DELHI % Judgment delivered on: 02.07.2013 + ITA Nos. 148/2012, ITA 149/2012 & ITA 2/2013 COMMISSIONER OF INCOME TAX-X ... Appellant versus M/S AAR BEE INDUSTRIES ... Respondent Advocates who appeared in this case: For the Appellant : Mr N. P. Sahni For the Respondent : Mr C.S. Aggarwal, Sr Advocate with Mr Prakash Kumar, Ms Pushpa Sharma CORAM:- HON'BLE MR JUSTICE BADAR DURREZ AHMED, THE ACTING CHIEF JUSTICE HON'BLE MR JUSTICE R.V. EASWAR JUDGMENT BADAR DURREZ AHMED, ACJ 1. These appeals (ITA No.149/2012, 148/2012 and 2/2013) relate to the assessment years 2005-06, 2006-07 and 2008-09, respectively. The first two appeals arise out of the common order dated 24.06.2011 passed by the Income-tax Appellate Tribunal, Amritsar Bench, in ITA Nos.179- 180/Asr/2011, respectively. The third appeal (ITA 2/2013) arises out of the order dated 27.07.2012 passed by the said Tribunal in ITA No.343/Asr/2011. All the three appeals have been preferred by the revenue. In the first two appeals pertaining to the assessment years 2005- 06 and 2006-07, condonation of delay applications have been filed. ITA No.148/12, 149/12 & 2/13 Page 1 of 13 2. When these matters came up for hearing before this Bench, the issue of jurisdiction was raised by the learned counsel for the respondent / assessee. It was contended on behalf of the respondent that this court did not have jurisdiction to entertain these appeals inasmuch as the assessment order was passed by the Assessing Officer in Jammu, the appellate order was passed by the Commissioner of Income-tax (Appeals) at Jammu and the Tribunal's order is also of the Amritsar Bench of Income-tax Appellate Tribunal which had jurisdiction in respect of the appeals from, inter alia, the State of Jammu and Kashmir. It was, therefore, contended that the High Court having jurisdiction over the Assessing Officer at Jammu, who passed the assessment order would have jurisdiction and not this court. 3. On the other hand, the learned counsel for the appellant / revenue submitted that it is this court alone which would have jurisdiction to hear these appeals inasmuch as the `case' of the respondent has been transferred from the Income-tax Officer, Ward-I(1), Jammu to the Income-tax Officer, Ward-29(1), New Delhi. It was contended that since the `case' stands transferred to the Assessing Officer in New Delhi, it is this court which would have jurisdiction to entertain these appeals under Section 260-A of the Income-tax Act, 1961 (hereinafter referred to as `the said Act'). 4. We shall refer to the facts in ITA 149/2012, which pertains to the assessment year 2005-06. The learned counsel for the respondent / assessee filed its return of income on 31.10.2005 in Jammu. The Assessing Officer was the Income-tax Officer, Ward-I(1), Jammu. In that return, the respondent / assessee, inter alia, claimed deduction under Section 80-IB(4) ITA No.148/12, 149/12 & 2/13 Page 2 of 13 of the said Act. The said Assessing Officer at Jammu issued notices under Section 143(2)/142(1) on 04.07.2006 and took up the matter for regular assessment. The assessment proceedings culminated in the assessment order dated 23.03.2007 which was passed by the said Assessing Officer at Jammu. The said Assessing Officer had disallowed the deduction claimed by the respondent / assessee under Section 80-IB(4) of the said Act. 5. Being aggrieved by the disallowance, the respondent filed an appeal before the Commissioner of Income-tax (Appeals), Jammu. That appeal, was decided in favour of the respondent / assessee by the said Commissioner of Income-tax (Appeals), Jammu on 23.02.2011 by following the decision of the Jammu & Kashmir High Court in the case of Shree Balaji Alloys v. CIT: 333 ITR 335 (J&K). In effect, the Commissioner of Income-tax (Appeals) allowed the respondent's claim for deduction under Section 80-IB(4) of the said Act. 6. Thereafter, the revenue filed an appeal before the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar being ITA No.179/Asr/2011. It may be pointed out that as per the relevant Standing Order under the Income-tax (Appellate Tribunal) Rules, 1963 and, in particular, rule 4(1) thereof, the jurisdiction of the Amritsar Bench of the Income-tax Appellate Tribunal extended to, inter alia, the State of Jammu and Kashmir. The said Tribunal heard the appeal alongwith ITA No.180/Asr/2011 pertaining to the assessment year 2006-07 and dismissed both the appeals of the revenue by a common order dated 24.06.2011. The said Amritsar Bench of the ITA No.148/12, 149/12 & 2/13 Page 3 of 13 Tribunal followed the jurisdictional High Court decision in the case of Shree Balaji Alloys (supra) of the Jammu and Kashmir High Court. 7. Aggrieved by the order dated 24.06.2011, appeals (ITA Nos. 149/2012 and 148/2012) have been preferred before this court. Under similar circumstances, the Amritsar Bench of the Tribunal dismissed the revenue's appeal in respect of the assessment year 2008-09 by an order dated 27.07.2012 in ITA No.343/Asr/2011. Against that decision, ITA No. 2/2013 has been preferred. 8. On 23.03.2011, while the appeals were pending before the Tribunal, the respondent / assessee sent a letter to the Commissioner of Income-tax, Jammu & Kashmir (Jammu) seeking transfer of its case to Delhi. Pursuant thereto, by an order dated 20.09.2011 issued under Section 127 of the said Act, the case of the respondent / assessee was transferred with effect from 26.09.2011 from the Income-tax Officer, Ward-I(1), Jammu to the Income- tax Officer, Ward-29(1), New Delhi. In the meanwhile, the impugned order dated 24.06.2011 passed by the Amritsar Bench of the Tribunal had been received in the office of the Commissioner of Income-tax, Jammu on 05.07.2011. That order was forwarded to the Commissioner of Income-tax (X), Delhi and it was received in his office on 10.10.2011. It is, thereafter that the appeals being ITA No. 148/2012 and ITA No.149/2012 were filed some time in February, 2012. Under similar circumstances, the third appeal being ITA No.2/2013 was also filed in November, 2012. 9. The learned counsel for the respondent / assessee had placed reliance on the following decisions:- ITA No.148/12, 149/12 & 2/13 Page 4 of 13 1. Ambica Industries v. CCE: 2007 (6) SCC 769; 2. Commissioner of Income-tax v. Digvijay Chemicals Limited: 294 ITR 359 (Del); 3. Suresh Desai and Associates v. Commissioner of Income- tax: 230 ITR 912 (Del); 4. Seth Banarsi Dass Gupta v. Commissioner of Income-tax: 113 ITR 817 (Del); 5. Commissioner of Income-tax v. Motorola India Limited: 326 ITR 156 (P&H). On the other hand, the learned counsel for the revenue had placed reliance on a judgment of a Division Bench of this court in the case of CIT v. Sahara India Financial Corporation Limited: 294 ITR 363 (Del). 10. The decisions of Seth Banarsi Dass (supra), Suresh Desai (supra) and Digvijay Chemicals (supra) are in the same line. In fact, Digvijay Chemicals (supra) being the latest of these three decisions has referred to and relied upon both the decisions in Seth Banarasi Dass (supra) and Suresh Desai (supra). In Digvijay Chemicals (supra), this court observed as under:- "We have given our anxious consideration to the submissions made before us at the Bar. The material facts are not in dispute. The assessee was being assessed at Bulandshahar for the earlier years including the assessment years 1993-94 and 1994-95. The assessment orders passed for the above two assessment years were assailed before the Commissioner of Income-tax (Appeals), Meerut, who had dismissed the same on April 23, 1998. Appeals against the said order were filed before the Income-tax Appellate Tribunal at Delhi as the Tribunal located at Delhi was exercising jurisdiction even over territories falling ITA No.148/12, 149/12 & 2/13 Page 5 of 13 in the adjoining State of Uttar Pradesh. The Tribunal eventually decided the appeal on October 28, 2004. In the meantime the assessment records for the assessment years 1988-89, 2000-01 and 2001-02 were transferred to Delhi in terms of an order passed under section 127 of the Income-tax Act. The question is, whether the said order of transfer would alter the course of events in so far as the filing of an appeal before the High Court competent to hear the same is concerned. In our view it does not. We say so because the forum of appeal is determined by reference to the situs of the Assessing Officer and not the Tribunal. The Division Bench decisions of this court in Seth Banarsi Dass Gupta's case [1978] 113 ITR 817 and in Suresh Desai's case [1998] 230 ITR 912 relied upon by Mr. Aggarwal sufficiently settle the legal position in that regard. This court has in Seth Banarsi Dass Gupta's case [1978] 113 ITR 817 held that when an Appellate Tribunal hears and determines an appeal from any particular State, it would be appropriate for the Bench to state the case to the High Court of the State from which the appeal arose. That principle stated in relation to the position that existed before the introduction of section 260A of the Act would, in our opinion, hold good even after the remedy by way of a reference is substituted by a regular appeal. The test for determining the jurisdiction of the High Court would be whether the assessment proceedings were completed within its territorial limits. Viewed thus, not only were the assessment proceedings in the instant case completed in Bulandshahar, but even the appeals arising out of the said proceedings were heard and disposed of by the Commissioner of Income-tax (Appeals), Meerut. We have in that view no difficulty in holding that an appeal against the order passed by the Tribunal even though located in Delhi ought to be filed in the High Court at Allahabad." ITA No.148/12, 149/12 & 2/13 Page 6 of 13 11. These three decisions would, therefore, apparently tend to support the case of the respondent / assessee. However, these very decisions have been considered by a Division Bench of this court in a subsequent decision in the case of Sahra India (supra). The said decisions in Banarasi Dass Gupta (supra), Suresh Desai (supra) and Digvijay Chemicals (supra) have been distinguished in Sahara India (supra). The Division Bench in Sahara India (supra) observed as under:- "Learned counsel for the assessee contended that since the assessment orders had already been passed in respect of the assessee and a decision had also been taken by the Tribunal, there was no question of transferring the jurisdiction in respect of the assessee from one place to another. We are of the view that this argument is completely misplaced. The Explanation to section 127(4) of the Act tells us what the word "case" means in relation to any person whose name is specified in any order or direction issued under section 127 of the Act. The Explanation says that "case" means all proceedings under the Act in respect of any year :(i) which may be pending on the date of the order or direction ;(ii) which may have been completed on or before the date of the order or direction ;(iii) including all proceedings which may be commenced after the date of the order or direction in respect of any year. In other words, the Explanation to section 127(4) of the Act talks of proceedings, past, present and future in respect of a person whose name is specified in the order or direction passed under section 127 of the Act and this would apply to any previous year. The order passed under section 127(2) of the Act clearly relates to the "case" of the assessee mentioned in the Schedule, and by virtue of the Explanation, all future proceedings that may be taken under the Act (obviously including an appeal under section 260A thereof) would now have to be in harmony with the order passed under section 127(2) of the Act. Consequently, the jurisdiction in respect of the "case" and the ITA No.148/12, 149/12 & 2/13 Page 7 of 13 asses-see having been shifted from Lucknow to Delhi, the Revenue could file the appeal under section 260A of the Act only in Delhi and it could not have filed an appeal in the Lucknow Bench of the Allahabad High Court. Learned counsel for the assessee relied upon two decisions of this court to contend that the situs of the Assessing Officer is what determines the jurisdiction of the High Court in respect of entertaining an appeal under section 260A of the Act. In support of his argument, learned counsel relied upon Suresh Desai and Associates v. CIT [1998] 230 ITR 912 (Delhi) and CIT v. Digvijay Chemicals Ltd. [2007] 294 ITR 359 (Delhi).We have gone through both these decisions with the assistance of learned counsel for the parties and while the accepted general principle is that the situs of the Assessing Officer is what determines the High Court having jurisdiction over the case, none of these decisions deals with one important aspect of the case (because it did not arise), namely, what would happen when the situs of the Assessing Officer is changed by an order passed under section 127 of the Act, as has happened in the present case. One important fact in both the above decisions was that even though there was a transfer of jurisdiction from one place to another, the proceedings in respect of the relevant previous year had not been transferred from one jurisdiction to another. In Suresh Desai [1998] 230 ITR 912 (Delhi), the relevant assessment year was 1980-81 and as mentioned in the decision, the assessment records of the petitioner were ordered to be transferred from Bombay to Delhi but the transfer did not pertain to the assessment year 1980-81. Similarly, in Digvijay Chemicals Ltd. [2007] 294 ITR 359 (Delhi) the relevant assessment year was 1993-94 but the assessment records that were transferred to Delhi were those pertaining to the assessment years 1988-89, 2000-01 and 2001- 02. It is for this reason that the effect of the transfer of jurisdiction under section 127 of the Act was not discussed either in Suresh Desai [1998] 230 ITR 912 (Delhi) or in Digvijay Chemicals [2007] 294 ITR 359 (Delhi) because that question, on the facts of the case, did not arise for consideration. Learned counsel for the assessee, therefore, ITA No.148/12, 149/12 & 2/13 Page 8 of 13 cannot draw any assistance from any of the two decisions cited by him. On the other hand, the effect of the transfer of jurisdiction from Luc-know to Delhi specifically arises in the present case and we are of the view that the jurisdiction in respect of the assessee having been transferred to Delhi lock, stock and barrel and all the records of the assessee also having been transferred from Lucknow to Delhi, it is only the High Court in Delhi that can entertain an appeal under section 260A of the Act directed against the order passed by the Tribunal on July 22, 2005. Our conclusion follows from a plain reading of the Explanation to section 127(4) of the Act as well as from the effect of the order dated July 29, 2005, passed by the Com- missioner of Income-tax (Central), Kanpur, under section 127(2) of the Act. Consequently, with effect from September 29, 2005, (the date from which the order passed under section 127(2) of the Act is enforced) the jurisdiction in respect of the assessee for future proceedings under section 260A of the Act is with the Delhi High Court. Admittedly, the present appeals have been filed after September 29, 2005, and so they would be maintainable in this court and no other High Court. Under the circumstances, we reject the contention of learned counsel for the assessee." 12. The important fact pointed out in Sahara India (supra) was that the decisions in Suresh Desai (supra) and Digvijay Chemicals (supra), even though they involved a transfer of jurisdiction from one place to another, the proceedings in respect of the relevant previous years had not been transferred from one jurisdiction to another. For example, in Suresh Desai (supra), the relevant assessment year was 1980-81. But, the transfer did not pertain to the assessment year 1980-81. In Digvijay Chemicals (supra), the relevant assessment year was 1993-94, but the assessment records, which were transferred to Delhi pertained to the assessment years 1988-89, 2000-01 and 2001-02. In other words, the assessment records for the ITA No.148/12, 149/12 & 2/13 Page 9 of 13 relevant assessment years had not been transferred in those cases and, obviously, the question of considering the provisions of the Explanation to Section 127(4) of the said Act, which explained the meaning of the word `case', had not been considered in those decisions. 13. The point in issue in the present case is entirely covered by the decision in the case of Sahara India (supra). The learned counsel for the respondent had placed reliance on the decision of the Punjab & Haryana High Court in the case of Motorola India (supra) to contend that the Explanation to Section 127 of the said Act with regard to the meaning of the expression `case', was wholly misplaced because Section 120 of the said Act did not deal with the jurisdiction of the Tribunal or the High Court and it only had a reference to the income-tax authorities under the said Act which obviously did not include the ITAT or the High Court. The Punjab & Haryana High Court in the case of Motorola India (supra) observed as under:- "The decision of the High Court is binding on the subordinate courts and authorities or Tribunals under its superintendence throughout the territory in relation to which it exercises jurisdiction but it does not extend beyond its territorial jurisdiction. In other words, the decision of one High Court is not a binding precedent for another High Court or for courts or tribunals outside its territorial jurisdiction. The doctrine of precedents and the rule of binding efficacy of the law laid down by the High Court within its territorial jurisdiction, the questions of law arising out of decision in a reference, has to be determined by the High Court which exercises territorial jurisdiction over the situs of the Assessing Officer and if it was otherwise then it would result in serious anomalies as an assessee affected by an assessment order at Bombay may invoke the jurisdiction of the Delhi High Court to take ITA No.148/12, 149/12 & 2/13 Page 10 of 13 advantage of a suitable decision taken by it. Thus, such an assessee may avoid application of inconvenient law laid down by the jurisdictional High Court of Bombay. On the basis of the aforementioned reasoning, the Division Bench sustained the objection that the jurisdiction to entertain the application under sub-sections (1) and (2) of section 256 of the Act vested in the High Court of Bombay and not of Delhi. We are in respectful agreement with the aforementioned reasoning of the Delhi High Court. Accordingly, we hold that the preliminary objection raised by learned counsel for the assessee-respondent is sustainable. It is true that transfer order under section 127 of the Act has been passed on May 20, 2005, but it would not affect the assessment framed by the Assessing Officer in respect of the assessment year 1996-97. The reliance of the Revenue on the Explanation to section 127 of the Act with regard to the meaning of the expression "case" is wholly misplaced and is liable to be rejected because section 120 of the Act does not deal with jurisdiction of the Tribunal or the High Court." After setting out the provisions of Section 120 and Section 127 of the said Act, the Punjab & Haryana High Court in the case of Motorola India (supra) observed as under:- "A conjoint reading of the aforementioned provisions makes it evident that the Director General or Chief Commissioner or Commissioner is empowered to transfer any case from one or more Assessing Officers sub-ordinate to him to any other Assessing Officer. It also deals with the procedure when the case is transferred from one Assessing Officer subordinate to a Director General or Chief Commissioner or Commissioner to an Assessing Officer who is not subordinate to the same Director General, Commissioner or Commissioner. The aforementioned situation and the definition of the expression "case" in relation to jurisdiction of an Assessing Officer is quite understandable but it has got nothing to do with the territorial jurisdiction of the Tribunal or High Courts merely because section 127 of the Act dealing with transfer has been incorporated in the same Chapter. Therefore, the argument ITA No.148/12, 149/12 & 2/13 Page 11 of 13 raised is completely devoid of sub-stance and we have no hesitation to reject the same." 14. We are afraid and with respect we say so that we are unable to agree with the views expressed by the Punjab & Haryana High Court and are bound to follow the decision of this court in Sahara India (supra). We are not inclined to accept the view taken by the Punjab & Haryana High Court, because while it is true that the reference to the case is with regard to the jurisdiction of an income-tax authority, it is also true that the jurisdiction of the High Court is determined by the situs of the Assessing Officer. When the Assessing Officer itself has been changed from one place to another, the High Court exercising jurisdiction in respect of the territory covered by the transferee Assessing Officer would be the one which would have jurisdiction to hear the appeal under Section 260-A. Even in Ambica Industries (supra), a decision relied upon by the learned counsel for the respondent / assessee, it has been held that it would be the situs of the Assessing Officer and not the situs of the Tribunal which would have the determinative factor with regard to the jurisdiction of the High Court hearing an appeal. Of course, the decision in Ambica Industries (supra) was not one rendered under the Income-tax Act, but was one which pertained to an appeal to the High Court under the Central Excise Act, 1944. We may also point out that the Central Excise Act does not deal with a transfer of a `case' as is the position under the Income-tax Act. In any event, there is nothing in Ambica Industries (supra), which would enable us to take a view different from that taken by this court in Sahara India (supra). It is a well accepted principle that there can be only one Assessing ITA No.148/12, 149/12 & 2/13 Page 12 of 13 Officer in respect of a case. At the point of time when the present appeals were filed, the Assessing Officer insofar as all the cases of the respondent were concerned, was the Assessing Officer at Delhi. The fact that the Amritsar Bench of the Tribunal had passed the impugned orders or the fact that the initial assessment orders were passed by the Assessing Officer at Jammu would not be relevant for the purposes of determining the jurisdiction of the court at the point of time at which an appeal under Section 260-A of the said Act is filed. It is the date on which the appeal is filed which would be the material point of time for considering as to in which court the appeal is to be filed. On the dates on which the present appeals were filed, the Assessing Officer of the respondent was the Assessing Officer at New Delhi and, therefore, this court would have jurisdiction to entertain these appeals. 15. In view of the foregoing, we hold that the present appeals are maintainable before this court. Consequently, we direct that the appeals be listed before the roster bench hearing such matters on 22.07.2013 when the appeals would be taken up for admission as well as for consideration of the pending condonation of delay applications in two of the appeals. BADAR DURREZ AHMED, ACJ R.V. EASWAR, J July 02, 2013 dutt ITA No.148/12, 149/12 & 2/13 Page 13 of 13

Round-trips without stopover at foreign port are liable to ST in India

ST/ECJ : In case of sea voyages by way of 'round trips' i.e., without stopover at a foreign port, entire services are liable to service tax in India

Application of CUP method deals with prices of a product not the profit margin earned thereon

IT/ILT : Comparing margins instead of prices is incorrect application of internal CUP method

Reserves aren’t subsidy or reimbursements which could be reduced from cost of assets under Expl 10 t

IT : Since reserves are part of shareholder's funds, Assessing Officer's opinion, that reserves represented subsidy or reimbursement from which cost of assets were met as per Explanation 10 to section 43(1), was unjustified