Amnesty scheme for service tax defaulters made more liberal

In a bid to allay fears of taxpayers, the finance ministry on Thursday liberalised the Service Tax Voluntary Compliance Encouragement Scheme (VCES) that is aimed at promoting self-declaration of tax dues.

In a circular, as well as booklet on frequently asked questions about the scheme, the ministry clarified disclosures made by taxpayers would not be rejected by tax authorities if they meet eligibility criteria.

Finance Minister P Chidambaram on Thursday said of over one million defaulters identified, 1,400 had filed declarations amounting to Rs 650 crore.

The scheme announced in Budget 2013-14 had said a declaration could be rejected by the authorities if it was made by a person against whom an audit had been initiated and it was pending. As it got a lukewarm response from the industry, the Central Board of Excise and Customs has defined its scope.

The industry wanted clarity on what would be considered initiation of audit—the date on which letter is issued or when the auditors visit the taxpayer. Now, it has been clarified that the latter would be taken as the date of initiation of audit. Audit would be considered pending if initiated before March 1, 2013, but not culminated by that date. Another breather for the industry is that if the audit has happened but an issue was not picked up by the authorities, the taxpayer would be eligible for the scheme.

Under this scheme, service tax defaulters can pay half of their dues by December 2013 and the rest by June 2014 to avoid interest, penalty and prosecution. A defaulter can avail of the one-time scheme on the condition that he files a truthful declaration of service tax dues since October 2007 and makes the payment in one or two installments. The finance ministry is expecting the scheme to pick up once the clarification is issued and the deadline for making declaration inches closer.

Chidambaram expressed hope that the scheme would result in substantial disclosure by non-filers and exhorted the service tax assessees to make use of this “golden opportunity”.

The scheme said any person might declare his tax dues in respect of which no notice has been issued before March 1, 2013. Experts argued that since most large taxpayers have received a demand notice, the scheme, in the current form, can only be used by small taxpayers. Taxpayers raised doubt whether the general enquiry notice will also fall under it. The industry expressed concerns regarding Cenvat credit and acknowledgement of declaration. All these issues have been clarified in FAQs.

The service sector contributes about 65 per cent of the gross domestic product (GDP) but the number of service tax payers is quite less. The scheme was launched to bridge this gap and allow defaulting persons and companies to disclose their tax liabilities and file their service tax returns. While there are nearly 1.7 million registered assessees, only about 700,000 file returns.

Revenue Secretary Sumit Bose had earlier held a meeting with representatives of the industry to discuss and know their concerns and doubts with regard to the scheme. The industry had suggested that a negative list of all those categories not eligible under this scheme may be prepared so that the taxpayers know in advance whether they can avail the benefit under it or not. Another suggestion was to make a provision for an opportunity for review within the department rather than taking any other legal course which is time consuming and expensive. Another demand was to allow the taxpayer issue supplementary invoice and recover the service tax paid from the service recipient.

No sec. 10B relief on training fees received from outsiders not associated with business of assessee

IT: Exemption under section 10B could not be allowed on training fees received from professionals, who were neither employees nor associated with business of manufacture or production of any article or thing of assessee

Value of goods sold in course of construction services is deductible from taxable value

ST: Though completion and finishing services relating to construction work are ineligible for abatement, however, goods supplied in course of provision of such services are eligible for exemption/deduction under Notification No. 12/2003-ST

Trust working to promote sale of medicines under guise of preserving environment wasn't charitable t

IT: Where assessee was an association of medical practitioners and its object was only to provide services to medical professionals who were practicing in nutritional medicines; and that academic and research activity in environmental and nutritional medicine was only for purpose of promoting nutritional medicine and not for purpose of preservation of environment, registration under section 12AA could not be granted

Corporate taxes, personal income tax: Direct tax mop-up rises 13.27%

Gross direct tax collections rose 13.27 per cent to Rs 1.57 lakh crore in the April-July period. The collections had totalled Rs 1.38 lakh crore in the corresponding period of the previous fiscal year. Gross collection of corporate taxes increased 9.75 per cent to Rs 92,115 crore in April-July from Rs 83,932 crore a year earlier, the finance ministry said in a statement today. Gross collection of personal income tax was up 19.32 per cent to Rs 63,583 crore in the first four months of the fiscal compared with Rs 53,289 crore in the period a year ago. Net direct tax collections rose 10.37 per cent to Rs 1,16,645 crore during April-July as against Rs 1,05,684 crore year-on-year, according to the statement. Securities Transaction Tax or STT mop-up stands at Rs 1,267 crore. Wealth tax collection posted a growth of 38.62 per cent to Rs 201 crore from Rs 145 crore. The government has fixed a direct tax collection target of over Rs 6.68 lakh crore for the current fiscal, a growth of 19 per cent from Rs 5.65 lakh crore in the previous fiscal.

IT industry raises service tax, TDS issues with Shome panel

Amidst its tax woes, the IT industry raised issue of service tax refunds and interpretation on tax deducted at source (TDS) on softwares with Finance Ministry's high-level committee.

Also read: IRDA eases premium payment modes for policyholders

The committee, headed by the adviser to Finance Minister Parthasarthy Shome, was set up by the government last month to address tax-related issues that affect the industry.

"We had the first meeting among industry bodies with the Shome committee yesterday. This format is a very productive way of dealing with the industry issues in a collaborative manner," IT-ITeS industry body Nasscom President Som Mittal told PTI.

The industry has other issues also and Nasscom will seek another date from the committee after it has met with other industry sectors, he added.

On the issues raised by the industry, Mittal said: "We discussed about service tax refunds and what can be done there. We talked about interpretation issues on TDS on software products as there is a major problem on cascading of the TDS for small companies.

"Also issues on how the safe harbour provisions will come in, implementation of Rangachary committee recommendations, etc."

During the discussion, some of the issues were brought to the knowledge of the government on which it said will get back. On others the industry was asked to come back with further clarifications, he added.

"It was a very structured meeting, and we were asked to put our issues before the meeting and they had studied the issue. We met for an hour and 45 minutes. We had members from IT industry and Shome had people from direct and indirect taxes," he said.

Officers of the Tax Policy and Legislation (TPL) wing of the Central Board of Direct Taxes (CBDT) and the Tax Research Unit (TRU) of the Central Board of Excise and Customs ( CBEC) were also present at the meeting.

IT-ITeS sector has been demanding more clarity on tax on software treated as royalty, removal of the minimal contiguous land requirement for SEZs, dual levy of VAT and service tax on domestic software sales, and implementation of the Rangachary committee, among other issues.

India: Govt Not To Ban Onion Export For Now

8/8/2013

The Government has decided not to ban export of onions at the moment, as shipments this year have been lower than last year. It also feels that the sharp rise in onion prices in the domestic market is mainly due to supply problems and not exports.



An inter-ministerial committee comprising senior officials from the Department of Commerce, the Agriculture Ministry, the Food Processing Ministry, the Consumer Affairs Ministry and Nafed has decided against an export ban after examining figures for production, export and prices.



“We have analysed the situation and feel that placing a ban on exports will not have a significant effect on domestic prices as exports are already lower than last year and international prices, too, are not ruling high,” Commerce Department Joint Secretary Asit Tripathy, who is heading the inter-ministerial committee, told Business Line.



Tripathy, however, said that monitoring prices and supplies was a continuous mechanism and the committee would be meeting periodically to review its decision.



Both the Agriculture and Consumer Affairs ministries are strongly opposed to a ban on exports. Agriculture Minister Sharad Pawar has gone on record saying that he was not in favour of banning exports and the spurt in prices of onion was only a temporary phenomenon.

Source:-www.freshplaza.com

India To Milk Advantage From Curbs On New Zealand Dairy Products

Aug 08 2013

Mumbai: India, the world’s biggest milk producer, hopes to seize on a New Zealand dairy product contamination scare to increase its exports and add market share in China and other emerging Asian countries.

India’s milk production is likely to rise almost 5% in the year to next March to 133 million tonnes, said R.G. Chandramogan, managing director of Hatsun Agro Products Ltd, one of the country’s leading milk powder exporters.

Traditionally, most of that production stays at home as a protein staple for a population of 1.2 billion, but with domestic demand pegged at around 128 million tonnes, there should be more milk available to make skimmed milk powder (SMP) for export. The Indian government also usually restricts overseas sales to keep a lid on local prices.

But, with more milk powder, a weaker rupee currency and Chinese restrictions on using some New Zealand products in the wake of Fonterra’s whey powder concentrate contamination scare, India expects its SMP exports to jump by more than half to 100,000 tonnes this year, said R.S. Sodhi, managing director of Gujarat Cooperative Milk Marketing Federation Ltd (GCMMF), India’s top milk product exporter and owner of Amul, the nation’s best-known milk and dairy products brand.

Referring to New Zealand’s food safety issue, Sodhi said: “We don’t have such a problem. This is a very good opportunity for India. Definitely our exports will rise this year.”

Amul branded products won’t be appearing in Chinese supermarkets just yet—Indian supplies will go to milk product makers who then use their own packaging. GCMMF expects to ship 25,000 tonnes of SMP this year—five times last year’s levels.

“This year there is no (export) restriction and market conditions are better,” said Sodhi.

Peak season

Nearly 90% of China’s $1.9 billion in milk powder imports last year originated in New Zealand. India’s milk product exports are tiny in comparison—just $230 million last year, mainly to south Asian countries and the Middle East. India only felt comfortable enough with its domestic supplies to lift an SMP export ban in June 2012.

“We are heading towards the flush season, so there will be more milk available for SMP. We are getting good export orders for SMP,” said Vinayak Patil, chairman of the Maharashtra State Cooperative Milk Federation. August marks the start of a two-three month peak milk production season in some Indian states.

Rising export prices are also boosting sales, especially with the rupee’s weakness. The currency hit a record low of 61.80 to the dollar on Tuesday, and has lost one-tenth of its value so far this year.

“SMP prices have risen more than 15% in six months in dollar terms,” said an official at a Delhi-based co-operative dairy. “With the rupee depreciation,” he added, “SMP exports are now lucrative for dairies.”

Source:-www.livemint.com

Agency (CPWD) awarding annual repair and maintenance works wasn't dominant player in presence of oth

Competition Act : Where opposite party (OP), a Central Govt. agency, was not a dominant purchaser of services in field of repair and maintenance of civil works due to presence of number of buildings owned by private bodies, OP could not be charged of abusing its dominant position

Govt Lowers Exports Target For Fy14 To $325 Bn From $500 Bn Earlier

August 8, 2013

The government has lowered the exports target for the current financial year to $325 billion, sharply down from its earlier projection of $500 billion.



In its exports policy announced in May 2011, the government had set a target to more than double exports to $500 billion by 2013-14 from $246 billion recorded in 2010-11.



"The export target for the year 2013-14, for merchandise trade, as finalised by the department of commerce is $325 billion," said Minister of State for Commerce and Industry D. Purandeswari.



"The target was revised due to factors such as weak industrial growth, higher cost of credit, rupee depreciation, Eurozone sovereign debt crisis, recession in developed economies and sluggish global economic growth which have adversely impacted India's exports," the minister said in written reply to a question in the Rajya Sabha.



Source:-businesstoday.intoday.in

Indian Rupee Posts Best Gain In Two Weeks

Mumbai: The rupee posted its best single-day gain in two weeks on Thursday, boosted by hopes of a package from the government and the Reserve Bank of India (RBI) over the weekend which would help bring in much needed dollar inflows to fund the current account gap.



"Wait till the end of the week," Economic Affairs Secretary Arvind Mayaram told reporters in Mumbai when asked about further likely steps to prop up the rupee. "Finance minister will talk about this later," he added.



Among the steps being considered are raising dollars via state-run banks or companies and easing overseas borrowing rules.



The RBI could also announce additional steps to follow its cash-draining measures announced last month.



Traders, however, were cautious of reacting too early, especially as repeated comments from policymakers earlier have led to no concrete outcome, preventing a much sharper rally.



"RBI's earlier measures have not been sufficient to stop rupee's fall. The news that finance minister is going to speak soon, especially after the rupee hit the latest record low, is raising hopes for more steps," said Pramod Patil, assistant vice president, forex and money markets at United Overseas Bank.



"It is a bit difficult to predict rupee's movement next week as on the one hand fundamentals point to further weakness and on the other, there is uncertainty on RBI's next course of action. But it should broadly hold in a 60.50 to 61.50 range," he added.



The partially convertible rupee closed at 60.88/89 per dollar compared with 61.30/31 on Wednesday. The pair moved in a wide band of 60.82 to 61.40 during the session.



The unit gained 0.7 percent on day, its best daily gain since July 24. On the week, the rupee gained 0.4 percent.



Traders said there was intermittent dollar selling by state-run banks, likely on behalf of the central bank to prevent a sharp fall in the rupee.



However, 61.40 levels are being seen as a strong support for the rupee in the near-term, with exporters expected to step in whenever the unit tries to breach past that level.



In the offshore non-deliverable forwards, the one-month contract was at 61.39 while the three-month was at 62.31.



In the currency futures market, the most-traded near-month dollar/rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 61.14 with a total traded volume of USD 2.4 billion.

Source:-zeenews.india.com

Excise Based On Mfg Cost Of Cars To Apply Prospectively

08-Aug-2013

In a relief to auto makers, the revenue department today said the decision to levy excise duty on manufacturing cost instead of discounted sale price will apply prospectively.



However, the Central Board of Excise and Customs (CBEC) has made it clear that following the Supreme Court order all car makers will have to pay excise duty on manufacturing cost and not on discounted sale price.



"There will be no retrospective application of the Supreme Court order. Tax Department will go after car makers in case of genuine suppression of tax dues. Excise levy will have to be paid even in case of sale price being lower than manufacturing cost," a finance ministry official told PTI.



The CBEC, the official added, "is working on extending the decisions for automakers to companies in other sectors as well. The Supreme Court judgement will apply to all sectors". The companies will have to pay excise on the manufacturing cost, he added.



In order to beat the declining sales, automakers are offering huge discounts but they are required to pay excise levy on manufacturing cost. However, the CBEC at their meeting has softened their stance and decided that the levy be only applied prospectively.



The chief commissioners of central excise met the board of indirect tax yesterday and decided that automakers would be given time to present their case.



"Tax Department will not harass automakers," the official said.



The Supreme Court in a judgement last year had held that if a company sells its products at a loss for a long period because of commercial considerations or competitive pressures, then price is not the sole consideration and excise duty should be paid on manufacturing cost, plus a 'reasonable' profit margin.



The department's decision to extend this rule to other manufacturing sectors where companies offer discounts and sell below cost price to boost sales would have impact on the revenues of the company.



Manufacturing sector output has already been slowing and the government is trying to boost output of the sector, which had expanded by just 1% last fiscal.

Source:-www.business-standard.com

Machinery Exports At Low Ebb In First Half

2013-08-07

Growth in China's machinery exports slowed to a crawl in the first half of the year, hurt by weak demand amid an economic slowdown, said a senior official of an industry federation on Tuesday.



First-half machinery exports were up just 1.5 percent year-on-year to $175.3 billion, the China Machinery Industry Federation said. The year-earlier growth rate was about 9.3 percent.



Compared with the country's total export growth in the first half, the machinery industry's export growth rate was 8.9 percentage points lower.



"Last year, machinery exports grew 8 percent, which is unlikely to happen this year, given current conditions," said Cai Weici, vice-president of the federation.



In June, machinery exports actually declined, falling 4.6 percent to $29.9 billion.



However, Cai said the European and US markets have been improving since April.



"If Chinese machinery companies make a strenuous effort to adapt their products better for foreign markets, it is possible that export growth will be the same as last year."



Major companies in the industry reported orders increased slightly during the first half, compared with shrinking orders last year. First-half orders for major companies grew 3.8 percent, the federation said.



Cai forecast that total industry profits will grow 8 percent this year considering the challenges facing the industry, including weak domestic demand and slow export growth.



First-half industry revenues rose 12.9 percent to 9.45 trillion yuan ($1.53 trillion), with profits of 600 billion yuan, up 12.6 percent.



However, about 12,000 machinery producers, or 16 percent of all companies in the sector, recorded losses in the first half. That was still an improvement from the start of the year, when 22 percent of companies in the industry were losing money.



Cai said companies should step up efforts to develop new technology and products, as demand for traditional machinery products is falling rapidly. If companies can't offer higher value-added products for export, the harsh conditions will persist, said Cai.



Gabriela Schulz, a freelance writer for a German construction magazine, said that Chinese companies should expand their distribution networks in Europe to gain market share.



Cai said it is important that companies should explore new markets, reduce costs with new technology and increase their profits by replacing imports.



Some Chinese companies have achieved some success in these areas.



Cai noted the growth rate of machinery imports also fell off during the first half as many domestic companies have been making products that had to be imported in the past. Many of these products are used in power grids and vehicle manufacturing.



The vehicle manufacturing sector, which has seen rapid growth in the Chinese market in recent years, is also facing a weak overseas market, said Dong Yang, deputy chief of the China Association of Automobile Manufacturers.



"However, China's auto export growth will keep growing in the coming years, because it has a relatively lower export ratio compared with other machinery manufacturing industries," he said.

Source:-usa.chinadaily.com.cn

Cabinet Committee Approves 20 Lakh Tonnes Of Wheat Exports

The Cabinet Committee on Economic Affairs on Thursday approved export of 20 lakh tonnes of wheat at $300 per tonne, a statement said.



According to the statement, a similar procedure will be followed for this export as was done earlier for export of 45 lakh tonne of wheat.



The export of 20 lakh tonne of wheat from the surplus central stocks would make available space for storage of fresh grains in government warehouses, the statement said.

Source:-ibnlive.in.com

Revised instructions mandate DTA supplier to furnish certificate to developer regarding Cenvat credi

SEZ : Amendment to the Instruction No. 9 Regarding Procedure for Reimbursement of Duty (ROD) in LIEU of Drawback for Supply of Goods to SEZ Developers against Indian Rupees

RBI asks banks to switch over to XBRL mode for submission of monthly data on NR deposits w.e.f. Octo

FEMA/ILT : Non-Resident Deposits - Comprehensive Single Return (NRD-CSR): Submission under XBRL

TP adjustment can be made only for transactions amongst AEs and not on entire turnover of assessee

IT/ILT : Transfer pricing adjustment is permissible only on transaction with associate enterprise and not on entire turnover

When AMP exp. promotes brand and marketing intangibles it shall be deemed as 'international transact

IT/ILT : Advertisement, marketing and sales promotion expenses incurred by assessee are international transactions, constituting brand promotion and development of marketing intangible for its associated enterprise

If damages for default weren't fixed, the liquidating co. had to pay max interest at 4% on overdue d

CL: In case of no agreed rate for payment of interest on any dues, maximum rate of interest to be paid by company-in-liquidation on deposit after period of maturity cannot exceed simple interest rate of 4 per cent

Concealment penalty upheld as assessee surrendered income after reassessment notice and not voluntar

IT : Where amount was surrendered only when notice under section 148 issued, and not voluntarily, imposition of penalty under section 271(1)(c) was justified

THE COMMISSIONER OF INCOME TAX XVI Vs. SH. IKUJU YABUKI

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 08.07.2013 Decided on: 31.07.2013 + ITA 379/2007 THE COMMISSIONER OF INCOME TAX XVI ....Appellant versus SH. SASHI MUKUNDAN ..... Respondent + ITA 387/2008 THE COMMISSIONER OF INCOME TAX XVI ...Appellant versus MR. SHORT DONALD ..... Respondent + ITA 212/2009 THE COMMISSIONER OF INCOME TAX ......Appellant versus MR. FUMIO GOTO ..... Respondent + ITA 15/2010 THE COMMISSIONER OF INCOME TAX-XIV .....Appellant versus MR. DUNCAN ETHERINGTION ..... Respondent + ITA 351/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 408/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. IKUJU YABUKI ..... Respondent + ITA 450/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 1 versus SHRI TOSHIHORU SUNAHARA ..... Respondent + ITA 534/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SOJITZ CORPORATION AS AGENT ..... Respondent + ITA 635/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 1354/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. JASWINDER SINGH .... Respondent + ITA 1556/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 1561/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 370/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus GORAM WESTERBERG ..... Respondent + ITA 1557/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JOHN TRIPLETT ..... Respondent ITA 379/2007 & connected matters Page 2 + REV. PET. 708/2011 IN ITA 1369/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. FUMIO GOTO ..... Respondent + ITA 761/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. K.P.HOSTELLEY ..... Respondent + ITA 798/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 800/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 680/2007 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 681/2007 THE COMMISSIONER OF INCOME TAX XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 1215/2008 COMMISSIONER OF INCOME TAX DELHI XIV ..... Appellant versus MR. GHORAYEB EMILE, C/O AIR FRANCE ..... Respondent + ITA 494/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 3 versus SH. HIROYASU KITADA ..... Respondent + ITA 508/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. HIROYASU KITADA ..... Respondent + ITA 577/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. SCOTT R BAYMAN ..... Respondent + ITA 631/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. VENKAT RAO SHRIDHAR ..... Respondent + ITA 699/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JEROME SUDAN ..... Respondent + ITA 1912/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. PANKAJ SHAH ..... Respondent + ITA 528/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MARCH FRANCOIS JEAN SOULACROUP ..... Respondent .....Appearance Through: Mr. Rajiv Tyagi with Mr. Ajay Kumar, Mr. Gyanendra Sharma and Ms. Renu Narula, Advocates, for respondent in ITA 379/07. ITA 379/2007 & connected matters Page 4 Mr. Pawan Sharma with Ms. Madhavi Swaroop, Advocates, in ITA 15/2010. Mr. Piyush Kaushik, Advocate, in ITA 450/10 & ITA 534/10. Ms. Amita Kalkal Chaudhary, Proxy for Mr. Naresh Kaushik, Advocate, in ITA 1354/10. Mr. S. Ganesh, Sr. Advocate with Mr. Pawan Sharma, Ms. Madhavi Swaroop, Ms. Roohina Dua and Ms. Preeti Goel, Advocates, in ITA 577/10. Mr. Satyen Sethi with Mr. Arta Trana Panda, Advocates, in ITA 1912/10. Ms. Shreya Verma, Advocate, for Respondent in ITA 681/07 & ITA 1215/08. Mr. Salil Kapoor, Mr. Vikas Jain, Mr. Manomeet Dalal and Ms. Preity Goel, Advocates, for Respondents in ITA 212/09, ITA 1556/10, 1561/10, 1369/10, 370/11, 494/10, 508/10 and ITA 631/10. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S. RAVINDRA BHAT % 1. For detailed judgment please see ITA 441/2003 titled YOSHIO KUBO vs. COMMISSIONER OF INCOME TAX. S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) JULY 31, 2013 ITA 379/2007 & connected matters Page 5

No registration to a trust seeking employment for students in lieu of subscription fees

IT: Where assessee trust was created to provide opportunities for students of a college to seek employment and assessee was charging money for registration and subscription from enrolled students as well as getting subscription from companies who came to campus for providing employment to enrolled students, assessee's activities were not charitable in nature

No additions if impugned materials neither belonged to assessee nor were recovered from his possessi

IT: No addition could have been made in income of assessee on basis of material seized which neither belonged to him nor recovered from his possession

THE COMMISSIONER OF INCOME TAX- XIV Vs. MR. DUNCAN ETHERINGTION

* IN THE HIGH COURT OF DELHI AT NEW DELHI Reserved on: 08.07.2013 Decided on: 31.07.2013 + ITA 379/2007 THE COMMISSIONER OF INCOME TAX XVI ....Appellant versus SH. SASHI MUKUNDAN ..... Respondent + ITA 387/2008 THE COMMISSIONER OF INCOME TAX XVI ...Appellant versus MR. SHORT DONALD ..... Respondent + ITA 212/2009 THE COMMISSIONER OF INCOME TAX ......Appellant versus MR. FUMIO GOTO ..... Respondent + ITA 15/2010 THE COMMISSIONER OF INCOME TAX-XIV .....Appellant versus MR. DUNCAN ETHERINGTION ..... Respondent + ITA 351/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 408/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. IKUJU YABUKI ..... Respondent + ITA 450/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 1 versus SHRI TOSHIHORU SUNAHARA ..... Respondent + ITA 534/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SOJITZ CORPORATION AS AGENT ..... Respondent + ITA 635/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. YASHIMITSU ZAUTSU ..... Respondent + ITA 1354/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. JASWINDER SINGH .... Respondent + ITA 1556/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 1561/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. MOHAMMAD RAUFF NABI BAX ..... Respondent + ITA 370/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus GORAM WESTERBERG ..... Respondent + ITA 1557/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JOHN TRIPLETT ..... Respondent ITA 379/2007 & connected matters Page 2 + REV. PET. 708/2011 IN ITA 1369/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. FUMIO GOTO ..... Respondent + ITA 761/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. K.P.HOSTELLEY ..... Respondent + ITA 798/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 800/2005 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. YOSHIO KUBO ..... Respondent + ITA 680/2007 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 681/2007 THE COMMISSIONER OF INCOME TAX XVI ..... Appellant versus SH. MOHAN RAI ..... Respondent + ITA 1215/2008 COMMISSIONER OF INCOME TAX DELHI XIV ..... Appellant versus MR. GHORAYEB EMILE, C/O AIR FRANCE ..... Respondent + ITA 494/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant ITA 379/2007 & connected matters Page 3 versus SH. HIROYASU KITADA ..... Respondent + ITA 508/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. HIROYASU KITADA ..... Respondent + ITA 577/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. SCOTT R BAYMAN ..... Respondent + ITA 631/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. VENKAT RAO SHRIDHAR ..... Respondent + ITA 699/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus MR. JEROME SUDAN ..... Respondent + ITA 1912/2010 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. PANKAJ SHAH ..... Respondent + ITA 528/2011 THE COMMISSIONER OF INCOME TAX-XVI ..... Appellant versus SH. MARCH FRANCOIS JEAN SOULACROUP ..... Respondent .....Appearance Through: Mr. Rajiv Tyagi with Mr. Ajay Kumar, Mr. Gyanendra Sharma and Ms. Renu Narula, Advocates, for respondent in ITA 379/07. ITA 379/2007 & connected matters Page 4 Mr. Pawan Sharma with Ms. Madhavi Swaroop, Advocates, in ITA 15/2010. Mr. Piyush Kaushik, Advocate, in ITA 450/10 & ITA 534/10. Ms. Amita Kalkal Chaudhary, Proxy for Mr. Naresh Kaushik, Advocate, in ITA 1354/10. Mr. S. Ganesh, Sr. Advocate with Mr. Pawan Sharma, Ms. Madhavi Swaroop, Ms. Roohina Dua and Ms. Preeti Goel, Advocates, in ITA 577/10. Mr. Satyen Sethi with Mr. Arta Trana Panda, Advocates, in ITA 1912/10. Ms. Shreya Verma, Advocate, for Respondent in ITA 681/07 & ITA 1215/08. Mr. Salil Kapoor, Mr. Vikas Jain, Mr. Manomeet Dalal and Ms. Preity Goel, Advocates, for Respondents in ITA 212/09, ITA 1556/10, 1561/10, 1369/10, 370/11, 494/10, 508/10 and ITA 631/10. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.V. EASWAR MR. JUSTICE S. RAVINDRA BHAT % 1. For detailed judgment please see ITA 441/2003 titled YOSHIO KUBO vs. COMMISSIONER OF INCOME TAX. S. RAVINDRA BHAT (JUDGE) R.V. EASWAR (JUDGE) JULY 31, 2013 ITA 379/2007 & connected matters Page 5

Insurance cos can't take credit of repair services provided by service stations to insured

ST: Insurance companies cannot claim credit of repair of motor vehicle carried on by garage-owner/authorised service stations, as services are provided to insured and there is no receipt of service by insurance companies

Form- A Quarterly return for production and removal of goods under area based exemption

Form-A (See rule 12) 1. Name and address of the assessee / manufacturer : 2. PAN : 3. Range ________Division________________Commissionerate________________ 4. Period of return : Quarter ending _______________________ 5. Details of the manufacture and removal of goods under Notification No. 49/2003-CE th th dated the 10 June, 2003 or Notification No. 50/2003-CE dated the 10 June, 2003 (Tick whichever is applicable) : Table 8- Digit Description Unit of Quantity Quantity and value of goods removed Central of goods quantity manufactured from factory Excise Export Sale within India Other removals Tariff not involving Item No. sale such as transfer of goods to a depot or transfer to another factory, etc. Quantity Value Quantity Value Quantity Value (Rs) (Rs) (Rs) (1) ( 2) ( 3) (4) (5) (6) ( 7) ( 8) ( 9) (10) 6. Please indicate if any raw material or inputs have been procured from or any clearances mentioned in from Column (7) to (10) have been made to any related person or another unit of the same manufacturer. If so, please furnish the following information : (a) Name and address of the related person/unit : (b) PAN number of the related person/unit : (c) Quantity of raw material/input received_____ and value thereof _______ (d) Quantity of goods cleared________ and value thereof __________ I hereby declare that the information given above is true, correct and complete in every respect. (Signature and name of the manufacturer or authorized signatory) Place:_________ Date:__________ ACKNOWLEDGMENT Q Q Y Y Y Y Return of goods produced and manufactured by availing exemption notification No.49/2003-CE / No.50/2003-CE for the quarter ending D D M M Y Y Y Y Date of receipt (Name and signature of the competent Officer with official seal) **************************** Instructions. 1. In case, more than one item is manufactured, additional row may be inserted in the table, wherever necessary. 2. Wherever quantity codes appear, indicate relevant abbreviations as given below. Quantities Abbreviations Quantities Abbreviations Centimetre(s) cm Metre(s) m Cubic Cm3 Square m2 centimetre(s) metre(s) Cubic metre(s) M3 Millimetre(s) Mm Gram(s) G Metric tonne Mt Kilogram kg Number of pairs Pa Kilolitre kl Quintal Q Litre(s) L Tonne(s) T Thousand in Tu Number U number 3. 8-Digit Central Excise Tariff Item number for each and every excisable good is available in the Central Excise Tariff and same should be indicated without decimal point. 4. In column numbers (5) to (10), the value means - (1) If the goods are sold from the factory, the sale invoice value of the goods excluding all taxes; (2) If the goods are exported from the factory, the export invoice value of the goods; (3) In any other case of removal like transfer of goods to a depot or transfer to another factory, the value of the excisable goods may be taken as the value of such goods, excluding all taxes, sold by the manufacturer for delivery at any other time nearest to the time of the removal of goods being reported upon. 5. For the purpose of filing this return, "related person" shall have the same meaning assigned to it in clause (b) of sub-section (3) of section 4 of Central Excise Act, 1944."

Reebok India Co vs. ACIT (ITAT Delhi)

Transfer Pricing: Scope in the context of expenditure (royalty payment) explained The assessee paid royalty at the rate of 5% to its associated enterprise and claimed that the same was at arm’s length basis by applying the CUP method. The TPO and DRP determined the ALP of the royalty at Nil on the basis that (a) the approval given by the Government for payment of royalty did not automatically mean that the transaction was at arm’s length; (b) the assessee had not furnished a cost benefit analysis, (c) the technology had in fact not helped the assessee in earning better margins. It was held that as the technology had not contributed to the assessee’s profitability and there was no commercial benefit received, no independent enterprise would have make payment for royalty for the technology and so its ALP had to be determined at Nil. On appeal by the assessee to the Tribunal, HELD reversing the TPO & DRP: (a) The TPO’s argument that the assessee need not have paid for the technology as it did not derive any benefit therefrom is not acceptable. The assessee is free to conduct business in the manner it deems fit and the commercial and business expediency of incurring any expenditure has to be seen from the assessee’s point of view. The Revenue cannot step into the shoe of the assessee and decide what is prudent for the business. On facts, the very survival of the assessee in the industry depended upon the licence and technology & know how provided by the AE. There has been a considerable increase in the sales figures and the growth in revenue clearly demonstrates the benefits derived by the assessee from the use of technology; (b) the payment of royalty was approved by the Government of India. Though it is not conclusive proof, the said approval of the Government has to be given consideration while considering the arms length price of the transaction; (c) Under Rule 10B(1)/ s. 92C(2), the arm’s length price has to be determined by one of the five methods which is found to be most appropriate method. While the assessee rightly considered the CUP method for determining the ALP, the TPO’s conclusion that the arms length price of the royalty payment should be NIL without specifying any cogent basis is not sustainable (EKL Appliances 345 ITR 241 (Del), Ericsson 146 TTJ 708 (Del), ThyssenKrupp Industries 154 TTJ 689(Mum), Dresser Rand 55 SOT 167 (Mum), SC Enviro Agro 143 ITD 195 (Mum) etc followed)

General Motors India Pvt. Ltd vs. DCIT (ITAT Ahmedabad)

Transfer Pricing: Foreign associated enterprise can be taken as ‘Tested Party’ The assessee bought CKD Kits from General Motor Daewoo Auto & Technology (GMDAT), a foreign associated enterprise. The assessee claimed that to determine whether the transactions were at arm’s length, GMDAT had to be selected as the tested party on the ground that the functions and risks of the assessee are more complex in nature and that numerous adjustments would have to be made if the assessee were taken as the selected part. The TPO & DRP rejected the assessee’s contention on the basis that (a) a foreign entity could not be a tested party, (b) GMDAT is a complex entity owing valuable intangibles & (c) the data for comparability of GMDAT is not available. On appeal by the assessee to the Tribunal, HELD: While there is nothing in the transfer pricing law as to the selection of the tested party, the tested party normally should be the party in respect of which reliable data for comparison is easily and readily available and fewest adjustments in computations are needed. It may be local or foreign entity, i.e., one party to the transaction. The object of transfer pricing exercise is to gather reliable data, which can be considered without difficulty by both the parties, i.e., taxpayer and the revenue. It is also true that generally least of the complex controlled taxpayer should be taken as a tested party. But where comparable or almost comparable, controlled and uncontrolled transactions or entities are available, it may not be right to eliminate them from consideration because they look to be complex. If the taxpayer wishes to take foreign AE as a tested party, then it must ensure that it is such an entity for which the relevant data for comparison is available in public domain or is furnished to the tax administration. The taxpayer is not then entitled to take a stand that such data cannot be called for or insisted upon from the taxpayer. This is supported by the United Nation’s Practical Manual on Transfer Pricing for Developing Countries which stated that a foreign entity (a foreign AE) could also be taken as a tested party for comparison. The revenue’s argument that GMDAT should not be selected as a ‘tested party’ as it does not fall within the ambit of TPO’s jurisdiction and he can neither call for any additional information nor scrutinize their books of accounts is not acceptable because the Revenue can get all the relevant particulars around the globe by using the latest technology under its thumb or direct the assessee to furnish the same (Ranbaxy Laboratories 110 ITD 428 (Del), Mastek Limited, Development Consultants 136 TTJ 129 & Sony India 114 ITD 448 (Del) followed; Onward Technologies (Mum) & Aurionpro Solutions (Mum) not followed/ distinguished)

Sum incurred to defend directors arrested for narcotics offence was not an allowable business exp.

IT : Expenditure incurred on professional fees to defend directors of assessee-company who were arrested under NDPS Act, 1985 could not be allowed being squarely covered within meaning of Explanation to section 37(1)