Personal hearing of assessee is necessary to order transfer of his case from one tax authority to an

IT: Case of assessee cannot be transferred from one income-tax authority to another without giving opportunity of hearing to assessee

DGFT Public Notice No.23/(RE 2013)/2009-14 dated 13-08-2013

Government of India

Ministry of Commerce and Industry

Department of Commerce

Directorate General of Foreign Trade

Public Notice No. 23 (RE-2013) / 2009-14

New Delhi: the 13^th August, 2013

Subject: Export of Finished Leather, Wet Blue and EI Tanned Leather to be permitted through the notified port.

In exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14, as amended from time to time, Director General of Foreign Trade hereby prescribes the following procedure for export of finished leather, Wet Blue and EI Tanned Leather.

2. Finished leather norms were notified through Public Notice No. 21/2009-14 dated 01.12.2009 . In order to ensure that export consignments of finished leather conform to the norms prescribed vide above Public Notice, export of Finished Leather, Wet Blue and EI Tanned Leather shall be subjected to the following procedure:
   
   
   
   1. Export of Finished Leather, Wet Blue and EI Tanned Leather shall be permitted through the Sea Ports of Chennai, Mumbai (JNPT) & Kolkata and ICDs Kanpur & Tughlakabad or any other port/ICDs to be notified by DGFT from time to time.
   
   
   2. Officials of Central Leather Research Institute(CLRI) posted at the above Sea ports/ICDs would draw the sample of finished leather/Wet Blue/EI Tanned Leather from the export consignment, wherever required, in the presence of Customs Officials. Such samples will be tested and certified by CLRI or such other approved labs which may be notified from time to time, testing as per the finished leather norms notified vide Public Notice No. 21/2009-14 dated 01.12.2009 .
   
   
   
   
   


3. Effect of this Public Notice
   

   Export of finished leather will be permitted from the specified Sea ports/ICDs and would be subject to the inspection procedure mentioned in Sub-para (ii) of Para 2 above.

   
   

(Anup K. Pujari)

Director General of Foreign Trade

E-mail: dgft[at]nic[dot]in
(F. No. 01/91/180/1240/AM10/Export Cell)

Customs Notification No. 41/ 2013 dated 13-08-2013

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

(DEPARTMENT OF REVENUE)

Notification No. 41/2013-Customs

New Delhi, the 13^th August, 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 which was published in the Gazette of India, Extraordinary, vide G.S.R. 185(E) dated the 17^th March, 2012, namely: -

In the said notification, in the Table,-

1. against S. No. 116, for the entry in column (5), the entry “8%” shall be substituted;


2. against S. No. 318, for the entry in column (5), the entry “8%” shall be substituted;


3. against S. No. 320, for the entry in column (5), the entry “7%” shall be substituted;


4. in S. No. 321, against item (i) for the entry in column (4), the entry “10%” shall be substituted;


5. against S. No. 322, for the entry in column (4), the entry “10%” shall be substituted;


6. against S. No. 323, for the entry in column (4), the entry “10%” shall be substituted;


7. against S. No. 324, for the entry in column (4), the entry “10%” shall be substituted;


8. against S. No. 328, for the entry in column (4), the entry “10%” shall be substituted;

[F. No.354/95/2013-TRU]

[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 vide notification No-. 40/2013-Customs dated the 2^nd August, 2013 which was published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R.527 (E) dated the 2^nd August, 2013.

HC shows leniency and condones delay in filing appeal as assessee misplaced order of appellant autho

IT : Where condonation of delay was sought for on ground that order of first appellate authority was misplaced by clerk of assessee-company and was wrongly tagged with another file, taking a lenient view of matter and fact that delay was around 77 days, delay should have been condoned by Tribunal by imposing cost

Excessiveness or unreasonableness of payments for section 40A(2) disallowance isn't a question of la

IT : It will be question of fact in each case whether expenditure claimed as a deduction was excessive or unreasonable

Allegations of oppression can be invoked by petitioners in capacity of shareholders and not a direct

CL : Section 397, alleging oppression and mismanagement, can be invoked by members only in capacity of shareholders, and not in capacity of directors

Assessee entitled to get refund of ST paid on export services if tax wasn't collected from foreign c

ST: Where service tax was wrongly paid on exported services under protest and invoices showed that assessee had not collected any service tax from foreign clients, assessee was entitled for refund of entire Service Tax paid.

Trading liability doesn't cease to exist on reasoning of ingenuity if assessee acknowledges it

IT: Credit amount outstanding for several years cannot be held as cessation of trading liability on ground that assessee could not prove genuineness of transaction, where assessee had acknowledged its liability successively over several years

India's Exports Rise 11.64 Percent On Weak Rupee

New Delhi: India's exports registered a healthy 11.64 percent growth in July after contracting in the previous two months, as a weak rupee boosted shipments from Asia's third-largest economy, government data showed.

Exports grew to $25.83 billion in July 2013, which was 11.64 percent higher than the $23.14 billion registered in the same month last year.



The monthly trade deficit was $12.27 billion, almost the same level of the previous month. Trade deficit had narrowed to $12.24 billion in June after hitting a seven-month high in April.



Total value of imports in July 2013 was $38.10 billion, as compared to $40.61 billion recorded in the same month last year, registering a year-on-year drop of 6.20 percent, according to data released by the ministry of commerce and industry.



Recent depreciation in the value of Indian rupee has helped boost shipments from India, Commerce Secretary S.R. Rao told reporters here after releasing the provisional trade data.



The Indian rupee has lost almost 10 percent of its value since the beginning of this year.



Rao, however, said only a stable exchange rate would help Indian exporters get long-term contracts.



“Volatility does not permit exporters to get full value from the depreciation,” the commerce secretary said.



The cumulative value of exports for the period April-July period was $98.29 billion, as against $96.63 billion registering during the same period last year, posting a growth of 1.72 percent.



The value of imports for the first four months of the current fiscal was $160.73 billion, which was 2.82 percent higher than the $156.32 billion registered in April-July period of 2012.



The country's trade deficit has jumped to $62.44 billion in the first four months of the current fiscal as compared to $59.69 billion recorded during the same period last fiscal.



Federation of Indian Export Organisations (FIEO) president M. Rafeeque Ahmed said the depreciation of the rupee and incentives announced by the government had boosted exports.



“Double-digit growth in exports coupled with positive signs emanating from the US and EU reassures me of continuance of the trend in months to come,” Ahmed said.



Oil imports dropped by 8.02 percent to $12.70 billion in July. For April-July period total value of oil import was $54.58 billion, 2.65 percent higher than the oil import bill of $53.17 billion in the same period last year.



Non-oil import dropped by 5.26 percent at $25.39 billion in July. For April-July period, value of non-oil imports posted an increase of 2.9 percent at $106.15 billion.

Source:-www.indolink.com

Goods and Services Tax (GST) - A step forward

1.What is the concept of GST?

Goods and Services Tax (GST) is a part of the proposed tax reforms that centre round evolving an efficient and harmonized consumption tax system in the country. The goods and service tax (GST) is proposed to be a comprehensive indirect tax levy on manufacture, sale and consumption of goods as well as services at a national level.

CAG Mr. Vinod Rai in his inaugural address to the National Conference on GST put forth the concept as "An integrated scheme of taxation that does not discriminate between goods and services and is a part of the proposed tax reforms that centre on evolving an efficient and harmonized consumption tax system in the country."

According to the First Discussion Paper on Goods and Services Tax in India by the Empowered Committee of State Finance Ministers dated Nov. 10th, 2009 , the five key features of the proposed plan of the Goods and Services Tax for the Indian economy, approved by the Government of India and Empowered Committee of State Finance Ministers comprises :

> Two components: one levied by the Centre (hereinafter referred to as Central GST), and the other levied by the States (hereinafter referred to as State GST) ,rates for which would be prescribed appropriately, reflecting revenue considerations and acceptability.

> The Central GST and the State GST would be applicable to all transactions of goods and services made for a consideration except the exempted goods and services, goods which are outside the purview of GST

> The Empowered Committee has decided to adopt a two-rate structure -a lower rate for necessary items and goods of basic importance and a standard rate for goods in general. There will also be a special rate for precious metals and a list of exempted items

> The GST will be levied on import of goods and services into the country

> The administration of the Central GST to the Centre and for State GST to the States would be given. This would imply a reduction in unhealthy competition among the centre and the states over tax revenue that was prevalent earlier and an increase in harmonious functioning between them.

2.What are the key problems in the current taxation system for goods and services in India that the proposed GST plans to improve upon?

The key problems in the current taxation system in India can be categorized into:

Taxation at Manufacturing Level i.e. CENVAT is levied on goods manufactured or produced in India which gives rise to definitional issues as to what constitutes manufacturing, and valuation issues for determining the value on which the tax is to be levied which through judicial proceedings has been observed to be a severe impediment to an efficient and neutral application of tax

Exclusion of Services from state taxation has posed difficulties in taxation of goods supplied as part of a composite works contract involving a supply of both goods and services, and under leasing contracts, which entail a transfer of the right to use goods without any transfer of their ownership. Though these problems have been addressed by amending the Constitution to bring such transactions within the purview of the State taxation, services per se remain outside the scope of state taxation powers.

Govt nod to set up Tax Administration Reform Commission

Government today approved setting up of a Tax Administration Reform Commission (TARC) to remove ambiguity and establish a stable and non-adversarial tax administration.

The decision was taken at the Cabinet meeting headed by Prime Minister Manmohan Singh here.

"The Commission will help in removing ambiguity in application of tax policy and tax laws, thereby establishing a stable tax regime and a non-adversarial tax administration," an official statement said after the Cabinet meeting.

The TARC "will facilitate an efficient tax administrative system that would enhance the tax base as well as tax payer base," the release added.

The Commission will consist of a Chairman, two full time members and four part-time members, of which at least two part-time members will be from the private sector.

The TARC will review the application of tax policies and tax laws in India in the context of global best practices and recommend measures to strengthen the capacity of the tax system in India that would reflect best global practices.

The Chairman will be an "eminent person" having wide experience of tax administration and policy making, the release said.

Full-time members of the Commission will be one member each with a background in revenue service pertaining to Income Tax and Central Excise and Customs respectively.

The term of the Commission will be 18 months. In his Budget speech, Finance Minister P Chidambaram talked about setting up the TARC.

"An emerging economy must have a tax system that reflects best global practices. I propose to set up a Tax Administration Reform Commission to review the application of tax policies and tax laws and submit periodic reports that can be implemented to strengthen the capacity of our tax system," he had said in the Budget speech on February 28.

Confident Agriculture Minister To Hold Off Rice Imports

The government has yet to decide whether or not it will import rice to secure stock for the year-end, hoping that the prolonged wet season will boost rice production in the country.



Agriculture Minister Suswono said his ministry had called on farmers to take advantage of the frequent precipitation by planting paddy. This will add more rice reserves and avoid importing the staple food.



The climate is deemed suitable to boost rice production with rain that is quite regular and, thankfully, not excessive — something that can reduce possibility of harvest failures due to drought and floods.



“Whether or not we will import more rice depends on how much Bulog [the State Logistic Agency] can absorb domestic production. The amount of imports will be decided on how much Bulog needs to fulfill its minimum year-end stock of two million tons of rice,” Suswono told reporters on Monday.



“We, however, are still studying how much we can produce until the end of this year as the prolonged wet season has big potential to boost production that we might not need to import rice at all.”



Bulog president director Sutarto Alimoeso previously said that the country might have to import at least 600,000 tons of rice later this year due to low production caused by weather anomalies and poor irrigation systems.



Sutarto said rice imports were unavoidable because Bulog’s inventory had declined sharply after being used to provide the poor with 700,000 tons of rice as a government compensation scheme following the increase of the subsidized fuel price.



He said rice imports were also necessary because of the lower-than-expected unhusked rice production this year, which was expected to increase only 0.31 percent to 69.27 million tons, according to a forecast made by the State Logistic Agency (Bulog). Bulog has to keep the year-end stock of 2 million tons to supply needs and stabilize the price during the January-March planting period, when stocks are low.



According to Central Statistic Agency (BPS) data, last year Indonesia produced 69.06 million tons of unhusked rice or equal to around 40 million tons of rice.



Suswono said that BPS data was just a forecast that the government should study thoroughly before making any decision.



“Rather than importing rice, most of which are old stocks that are needed to be distributed quickly to avoid degrading quality, Bulog should better rely on fresh domestic production. If we import rice and harvests turn out to be abundant, it will only lead to significant price falls,” he explained.



In July last year, the government told Bulog to import up to 1 million tons of rice, but only 670,000 tons were brought in — 600,000 tons from Vietnam and 70,000 tons from India.



State-Owned Enterprises Minister Dahlan Iskan previously said that with the positive trend in production, Indonesia would not need to import more rice this year.



Indonesia was self-sufficient on rice in 2008 and 2009, but imported rice in 2010 to maintain reserves after failed harvests, before seeing a gradual increase in production in subsequent years



Indonesia signed a deal with Myanmar last year, which agreed to sell the country up to 200,000 tons of the commodity per year if necessary.

Source:- thejakartapost.com

Export Of Finished, Tanned Leather Allowed Via Sea Ports, Icds

13-Aug-2013

NEW DELHI: The government today allowed exports of finished and tanned leather only through the sea ports of Chennai, Mumbai and Kolkata.



It has also permitted the shipments from Inland Container Depots (ICDs) of Kanpur and Tughlakabad, Directorate General of Foreign Trade (DGFT) said.



"Export of finished leather, wet blue and EI tanned leather shall be permitted through the sea ports of Chennai, Mumbai (JNPT) and Kolkata and ICDs Kanpur and Tughlakabad or any other port/ICDs to be notified by DGFT from time to time," it said.



Earlier, these exports were allowed through all the ports and ICDs.



However, these exports are now subjected to an inspection procedure.



As per the procedure, "officials of Central Leather Research Institute (CLRI) posted at the above Sea ports/ICDs would draw the sample of finished leather/Wet Blue/EI Tanned Leather from the export consignment, wherever required, in the presence of Customs Officials.



"Such samples will be tested and certified by CLRI or such other approved labs which may be notified from time to time, testing as per the finished leather norms...," it said.



A senior official said that the move would help in restricting exports of raw leather.



"Our aim is to export value added products. Now at these ports and ICDs, technical people of Council for Leather Exports will be present to check the consignments," the official added.

Source:- economictimes.indiatimes.com

Cm Seeks Cut In Onion Export

NEW DELHI: Worried over soaring onion prices, chief minister Sheila Dikshit has written to Union agriculture minister Sharad Pawar seeking his intervention to curtail export of onion in order to stabilize the prices and increase arrivals in Delhi. The price of onions in the wholesale market on Tuesday was between Rs 25 to Rs 50 per kg, and in retail stores it ranged between Rs 60-80 a kg.



The BJP has decided to hold a protest outside the Delhi CM's residence on Wednesday. In a statement issued on Tuesday, Dikshit expressed concern over the rising onion prices. "The shortfall in arrival is due to rains in onion-producing states. The arrival in Delhi used to be around 2,000 to 2,500 tonnes per day whereas it has gone down to 800 to 1,000 tonnes per day," a senior official said.



The issue was discussed in a meeting attended by Delhi urban development minister Raj Kumar Chauhan, food & supplies minister Haroon Yusuf, commissioner (F&S) SS Yadav and senior officers of the food & supplies department and APMC.



The government has decided to monitor the stocks and rising trend in onion prices across the city. In order to mitigate the effect of soaring onion prices, the government plans to arrange for sale of onions at reasonable rates through 50 mobile vans across the city from August 17.



The government has issued a public warning saying strict action will be taken against those hoarding onions and black-marketers. The government has also decided to approach other states including Maharashtra, Madhya Pradesh and Rajasthan to take action against hoarders

Source:- timesofindia.indiatimes.com

FAR analysis can't be done without establishing product similarity while selecting comparables

IT/ILT : It is not practically possible to judge FAR, without first establishing product similarly while selecting comparables for computing arm's length price

Palm Imports Seen Falling As Rupee Slumps To Record

Palm oil imports by India, the world's largest buyer, probably declined for the first time in three months, as the rupee dropped to a record, prompting importers to scale back purchases.



Inbound shipments fell 8.2 per cent to 550,000 tonnes in July from 599,128 tonnes a year earlier, according to the median of estimates from five processors and brokers compiled by Bloomberg. The Solvent Extractors' Association of India will release the data this week. Total vegetable oil imports, including for industrial use, dropped 2.3 per cent to 850,000 tonnes from 870,328 tonnes, the survey showed. A decline in purchases may boost stockpiles in Malaysia, the largest producer after Indonesia, just as the country starts its high-output cycle, pressuring futures in Kuala Lumpur.



The rupee slumped to an all-time low this month on concern that the current-account deficit will widen from a record in the year ended March. The gap is the biggest risk to the $1.9 trillion economy, according to the central bank.



"The volatility was hurting importers," said Pradip Desai, managing director of broker Palmtrade Services Pvt. "They've been cautious and scaling back purchases. We need more imports but are getting less. If imports do not pick up in August, then availability may be tight in September."



Consumption of oils usually rises during the festival season, which lasts from this month through November. India, the biggest user after China, meets more than half its demand from imports. The country buys palm from Indonesia and Malaysia and soybean oil from the US, Brazil and Argentina.



Indian Stockpiles

Vegetable oil purchases in the eight months through June rose 12 per cent to 7.15 million tonnes, association data show. Cooking oil demand may jump to 23 million tonnes by 2020 from 17.5 million tonnes and imports will grow significantly, says the food ministry. The rupee fell to 61.8050 per dollar on August 6.



Palm for delivery in October climbed 1.8 per cent to 2,282 ringgit ($700) a ton on the Malaysia Derivatives Exchange at 4:57 pm local time. Prices slumped 21 per cent in the past year.



Output in Malaysia probably expanded more slowly than a year earlier in July, keeping inventories at the lowest in more than two years, a Bloomberg survey showed on August 6. Production rose 10 per cent to 1.56 million tonnes in July from a month earlier, while reserves held at 1.65 million tonnes, it showed.



Inventories in India, including those at ports and in the pipeline, were probably 2 million tonnes at the start of August from 2.06 million tonnes in July, said Sandeep Bajoria, chief executive officer of Mumbai-based broker Sunvin Group.



"With the festival season starting soon these stocks should come down," he said. "Consumers have been mostly protected from the impact of the depreciating rupee as overseas prices are weak."



Crude soybean oil imports probably jumped to 230,000 tonnes in July from 156,720 tonnes a year earlier, while sunflower oil purchases may have declined to 60,000 tonnes from 80,101 tonnes, the survey showed.

Source:-www.business-standard.com

Amendment to Special Economic Zone Rules, 2006

SEZ : Special Economic Zones (Amendment) Rules, 2013 - Amendment in Rules 5, 11 & 19 and Insertion of Rule 74A & Annexure IVA

SEBI Meet: Illegal mobilization of funds by unregistered entities held as fraudulent and unfair trad

SEBI : Sebi Board Meeting - Clarificatory Amendment to The Sebi (Prohibition of Fraudulent and Unfair Trade Practices Relating to Securities Markets) Regulations, 2003; Securities Laws (Amendment) Ordinance, 2013 and Independent Consultant

NRIs can open non-interest bearing Rupee account without RBI's approval to acquire shares in a Stock

FEMA/ILT : Fem (Deposit) (Second Amendment) Regulations, 2013 - Amendment in Regulation 5

NRIs may open an escrow account in INR if it is funded by inward remittance via normal banking chann

FEMA/ILT : Fem (Transfer or Issue of Security by A Person Resident Outside India) (Fifth Amendement) Regulations, 2013 - Amendment in Regulation 10

Resident individuals allowed for ODI in foreign JV or WOS; prohibition on investment in real estate

FEMA/ILT : Fem (Transfer or Issue of Any Foreign Security) (Amendment) Regulations, 2013 - Insertion of Regulation 20A and Schedule V

Sum paid for compounding of FEMA violations to be refunded via NEFT if compounding couldn't be proce

FEMA/ILT : Foreign Exchange (Compounding Proceedings) Rules, 2000 - Compounding of Contraventions under FEMA, 1999

THE COMMISSIONER OF INCOME TAX-XVI Vs. GORAM WESTERBERG

* 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

CIT Vs. HCIL KALINDEE ARSSPL

$~10-11 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 480/2012 % Date of Decision: 29th July, 2013 CIT ..... Appellant Through Mr. Rohit Madan, Advocate. versus HCIL KALINDEE ARSSPL ..... Respondent Through None. + ITA 481/2012 CIT ..... Appellant Through Mr. Rohit Madan, Advocate. versus HCIL ARSSPL TRIVENI (JV) ..... Respondent Through None. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J. (Oral) 1. These two appeals by the Revenue arise out of a common order of Income Tax Appellate Tribunal dated 25.11.2011 in the case of M/s. HCIL ARSSPL TRIVENI (JV) vs. ACIT and M/s. HCIL KALINDEE ARSSPAL (JV) vs. ACIT. The appeals ITA 480/2012 Page 1 of 11 relate to Assessment Year 2007-2008. 2. By order dated 30.10.2012, the following substantial question of law was framed in these two appeals. "Whether the ITAT erred in law and on merits in deleting the penalty levied u/s 271 (1) (c) of the Income Tax Act, 1961? 3. The respondent assessees had claimed deduction under Section 80IA of the Act. They had also filed a copy of Form No.3CB and 3CD and Form No.10CCB in support. In the regular assessment proceedings, the Assessing Officer collected details from M/s. Rail Vikas Nigam Ltd and M/s. Rites Ltd. and came to the conclusion that HCIL ARSSPL TRIVENI (JV) had not executed the work but had given sub-contract to M/s. HCIL. Respondent assessee M/s. HCIL Kalindee ARSSPL similarly had not done any work but sub-contracted the work to M/s HCIL and M/s Kalindee Rail Nirman Project Ltd. 4. The aforesaid factual position was put to the respondent assessees and they were asked to reply and explain. Reply furnished was not accepted by the Assessing Officer, who also relied on Explanation to sub-Section 13 of Section 80IA of the Act which stipulates that the Section 80IA is not applicable to an assessee engaged in the execution of works contract. ITA 480/2012 Page 2 of 11 Deduction under Section 80IA was denied and an addition of Rs.70,07,615/- and Rs.41,83,622 was made in the case of M/s. HCIL Kalindee ARSSPL (JV) and HCIL ARSSPL Triveni (JV) respectively. The assessees accepted the quantum order and did not file any appeal. Additions made attained finality. 5. Concealment penalty proceedings under Section 271(1)(c) were initiated and penalty of Rs.23,02,665/- imposed on M/s. HCIL Kalindee ARSSPL (JV) and Rs.13,52,107 on M/s. HCIL ARSSPL Triveni (JV), were upheld by the CIT (Appeals). They specifically rejected the contention that the assessees had acted bonafidely and were not liable as they had relied upon opinion in view of the forms which had been filled up by the Chartered Accountant. 6. The Tribunal in the impugned order dated 25.11.2011 while deleting the penalty has held:- "7.4 In the light of aforesaid observations of the Hon'ble Apex Court, what is to be seen in the instant case, is whether the claim for deduction u/s 801A of the Act, on the basis of certificate of the accountant, made by the assessee was bona-fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271 (i) (c) of the Act. The Assessing Officer has not been able to establish that the claim ITA 480/2012 Page 3 of 11 of the assessee for deduction under section 801A of the Act was not bona fide. A mere rejection of the claim of the assessee by relying on difference interpretations does not amount to concealment of the particulars of income of furnishing inaccurate particulars thereof by the assessee. Hon'ble Apex Court in CIT V. Reliance Petroproducts (P) Ltd. [2010] 322 ITR 158/189 Taxman 322, after considering various decisions including Dilip N. Shroff v. Jt. CIT [2007] 291 ITR 519/161 Taxman 218 (SC) and Union of India V. Dharmendra Textile Processors [2008] 306 ITR 277/174 Taxman 571 (SC) concluded that a mere making of a claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such a claim made in the return cannot amount to furnishing inaccurate particulars. Following this decision, Hon'ble jurisdictional High Court in M/S Dharpal Premchand (Supra) upheld the cancellation of penalty levied in relation to incorrect claim of deduction u/s 801A & 801B of the Act. Mere disallowance of a claim will not amount to filing of inaccurate particulars of income. It can at best be a "wrong calim"not a "false claim". In such circumstances, Hon'ble Delhi High Court held in the case of Commissioner of Income-Tax vs Bacardi Martini India Limited, 288 ITR 585 (Del) that no penalty was leviable. In the case under consideration, there is nothing to suggest that the assessee furnished any inaccurate particulars or concealed the particulars. Admittedly, the claim for deduction u/s 801A was duly supported by the certificate of the chartered accountant in the prescribed form. In these circumstances no fault can be found with the claim of the assessee that it had claimed the deduction in a bona fide manner. In somewhat similar circumstances. Hon'ble Punjab and Haryana High Court cancelled the penalty levied in respect of disallowance of deduction u/s. 801 in the case of CIT Vs SD Rice Mills, 275 ITR 206 (P & H). Similar view was taken in ACIT Vs. Arisudana Spinning Mills Ltd., 19 DTR.1 (Chd) and Model ITA 480/2012 Page 4 of 11 Footwear P Ltd. Vs. ITO, 124 ITD 353(Del.). Moreover, mere fact that the report prepared by the CA in the form 10 CCB was not in accordance with the provisions of section 801A(7) of the Act, was not enought to hold that the mistake was not bona fide. This view is supported by the decision in the case of CIT Vs. Deep Tools Pvt. Ltd., 274 ITR 603 (P&H), where in also levy of penalty was held to be unjustified. In CIT Vs. Caplin Point Laboratories Ltd., 298 ITR 524 (Mad) Hon''ble High Court while adjudicating the levy of penalty in relation to incorrect claim for deduction u/s 80 HHC & 801 of the Act held in the light of aforesaid decision of the Hon'ble Apex Court in Dilip N. Shroff (supra) that a mere rejection of the claim of the assessee by relying on different interpretations does not amount to concealment of the particulars of income furnishing inaccurate particulars of income by the assessee." 7. Penalty provisions are not criminal and do not require culpable mens rea. Whether or not the assessee had acted malafidely is not the relevant question to be asked and answered. The relevant question to be asked and answered is whether the assessee has discharged the onus and satisfied the conditions mentioned in Explanation 1 to Section 271(1)(c) of the Act. The said explanation reads as : "Explanation 1- Where in respect of any facts material to the computation of the total income of any person under this Act:- (A) Such person falls to offer an explanation or offers an explanation which is found by the Assessing Officer or the Commissioner (Appeals) or the Commissioner to be false, or (B)Such person offers an explanation which he is ITA 480/2012 Page 5 of 11 not able to substantiate and fails to prove that such explanation is bone fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, Then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed." 8. Penalty under Section 271(1)(c) of the Act is imposed when an assessee has concealed his income or furnished inaccurate particulars. In terms of the explanation quoted above, we have to examine whether the case falls within sub-clause (A) or (B) and the effect thereof. Sub-clause (A) applies when the assessee fails to furnish any explanation or when an explanation is found to be false. In the present case, sub-clause (A) would not be applicable as assessee has furnished an explanation, and the explanation has not been found to be "factually" false. The assessee had made a wrong claim for deduction under Section 80IA and, therefore, had furnished inaccurate particulars as the claim was not admissible. Sub-clause (B) of the explanation is, therefore, applicable and we have to examine the two conditions whether: (1) The assessee has been able to show that the explanation was bonafide; and (2) Facts and material relating to computation of his income had been disclosed. ITA 480/2012 Page 6 of 11 9. Onus of establishing that the assessee satisfied the two conditions is on him i.e. the assessee. We shall examine the first condition i.e. whether the explanation of the assessee was bonafide. The second condition is satisfied. 10. In the present case, we note that Tribunal has proceeded on the premise that the claim for deduction under Section 80IA of the Act was duly supported by the Chartered Accountant 's Certificate and prescribed forms signed by the Chartered Accountant. For claiming deduction under Section 80IA of the Act, filing of certificate and forms signed by the Chartered Accountant is mandatory and a requirement of law. All returns, where deduction under Section 80IA is claimed, must have such certificates and forms. Mere filing of the said forms/certificate cannot absolve and protect an assessee who furnishes in-accurate particulars. If the explanation and the reasoning of the Tribunal is accepted, then in all cases where a form/certificate is furnished by the Chartered Accountant but a wrong claim of deduction is made, no penalty under Section 271(1)(c) can be imposed. Merely because the assessee complies with the statutory procedural requirement of filing the prescribed form and certificate of the Chartered Accountant, cannot absolve the assessee of its liability if the act or attempt in claiming the ITA 480/2012 Page 7 of 11 deduction was not bonafide. 11. Two reasons were given by the Assessing Officer why the claim for deduction under Section 80IA of the Act was rejected and should be denied. The first reason was that the respondent assessees were involved in works contracts and Explanation to Section 80IA (13) stipulates that benefit under the said Section was/is not available to a contractor carrying on works contract. The said "clarificatory" explanation was inserted by the Finance Act, 2007 with retrospective effect from 01.04.2000. The CIT (Appeals) in the first appellate order has specifically mentioned that the Finance Act, 2007 received the Presidential assent on 11.05.2007 [(2007) 291 ITR (St.) 1]. The returns of income were filed by M/s. HCIL Kalindee ARSSPL (JV) and M/s. HCIL ARSSPL Triveni (JV) on 01.11.2007. An amendment of this nature invariably attracts attention and is seldom missed. Such amendments become topic of discussion and conversation in the professional circles. To show and establish bonafides, the assessees had to show some more "tangible material" or basis as to why a clear statutory provision which excludes works contracts was ignored. 12. We are not stating or holding that penalty for concealment ITA 480/2012 Page 8 of 11 can be imposed and is justified merely because interpretation or claim of the assessee is rejected. For interpretation and understanding tax laws assessees necessarily and do rely on professional or expert opinion and they cannot be subjected to penalty when the assessee discharges the onus that the claim was bonafide [see Devsons Logistics Pvt. Ltd. vs. CIT (2010)329 ITR 483 (Del.) and decision of this court dated 28th May, 2013 in ITA 804/2011 titled Shervani Hospitalities Ltd. vs. CIT]. The Act i.e. the Income Tax Act, 1961 is one of most vexed and complicated legislation. It has been subjected to numerous amendments from time to time. It requires highest degree of interpretative skills and divergent views on interpretation of tax provisions have been subject matter of plethora of judgments. It is not necessary that there should be uniformity or consistency of opinion on aspects of law. Law does not postulate that an assessee must accept an interpretation against him, even when a favourable view is credible and tenable. Penalty of concealment cannot be imposed because the assessee has taken a particular stand or had preferred an interpretation which was plausible and reasonable, but has not been accepted, unless the assessee had not disclosed facts before the authorities. Such cases have to be distinguished from cases where the claim of the assessee is ITA 480/2012 Page 9 of 11 farcical or farfetched. Dubious and fanciful claims under the garb of interpretation, are a mere pretence and not bonafide. 13. It is not the case of the respondent assessee that there were conflicting decisions of High Court or there was a recent decision of the Supreme Court which had escaped attention or was not understood or an appeal or review etc. was pending before the Supreme Court. The explanation added was clear and categorical. The Tribunal has not referred to the Explanation to Section 80IA as to why and on what basis divergent interpretations were possible. Absurd or illogical interpretations cannot be pleaded and become pretence and excuses to escape penalty. "Bonafides" have to be shown and cannot be assumed. In the present case, the respondents have not been able to discharge the said onus and establish that they had acted bonafidely. 14. We also notice that the Tribunal has not dealt with the second reasoning given by the Assessing Officer to make the said addition; that the assessees had not carried out the work but had sub-contracted the same to a third party/parties. 15. In view of the aforesaid position, we answer the question of law in affirmative i.e. in favour of the Revenue and against ITA 480/2012 Page 10 of 11 the respondent assessees. Order of the Tribunal deleting penalty is held to be contrary to law. Penalty imposed is upheld. The appeals are disposed of. No costs. (SANJIV KHANNA) JUDGE (SANJEEV SACHDEVA) JUDGE JULY 29, 2013 st/kkb ITA 480/2012 Page 11 of 11

THE COMMISSIONER OF INCOME TAX-XVI Vs. SH. FUMIO GOTO

* 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

Tolerable limit not available if only one comparable is selected for computation of ALP

IT/ILT: Where only one comparable is finally selected for purpose of determining ALP, benefit of ± 5 per cent adjustment in terms of proviso to section 92C(2) is not available

Karnataka HC dismisses revenue's appeal as minimum tax effect was less than prescribed limit

IT : Where tax effect is less than prescribed monetary limit, no appeal is maintainable

Chit funds are a form of fund management and are liable to service tax

ST: Chit funds are a form of 'fund management'/'cash management' and are liable to service tax under Banking and Other Financial Services after amendment by Finance Act, 2007

Unsustainable re-assessment to disallow an exp. for TDS default when assessee possessed nil TDS cert

IT : Where details of commission paid to company in question were furnished to Assessing Officer and entire expenditure was disallowed under section 40A(2)(b) in order of assessment under section 143(3), reassessment proceedings to disallow such commission under section 40(a)(ia) could not be sustained

HC directed fresh orders on stay of demand as valid reasons were given by assessee for non-appearanc

IT: Where assessee explained reasons for absence on date of hearing, fresh order on application for stay of demand was called for

The Service Tax Voluntary Compliance Encouragement Schemeclarifications regarding.

Circular No. 169/4 /2013 - ST F. No. B1/19/2013-TRU Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs Tax Research Unit ***** New Delhi, dated the 13th May, 2013 To, Chief Commissioners of Central Excise and Customs (All), Director General (Service Tax), Director General (Systems), Director General (Central Excise Intelligence), Director General (Audit), Commissioners of Service Tax (All), Commissioners of Central Excise (All), Commissioners of Central Excise and Customs (All) Madam/Sir, Sub: The Service Tax Voluntary Compliance Encouragement Scheme- clarifications regarding. The Service Tax Voluntary Compliance Encouragement Scheme (VCES) has come into effect upon enactment of the Finance Bill 2013 on the 10th May, 2013. The Service Tax Voluntary Compliance Encouragement Rules, 2013 has been issued to bring into effect the Scheme. Some references have been received seeking clarification as regards the scope and applicability of the Scheme. 2. The issues have been examined and clarifications thereto are as follows: S. Issues Clarification No. 1 Whether a person who has not Any person who has tax dues to declare can obtained service tax make a declaration in terms of the provisions of registration so far can make a VCES. If such person does not already have a declaration under VCES? service tax registration he will be required to take registration before making such declaration. 2 Whether a declarant shall get Yes. It has been provided in VCES that, beside immunity from payment of late interest and penalty, immunity would also be fee/penalty for having not available from any other proceeding under the taken registration earlier or Finance Act, 1994 and Rules made thereunder. not filed the return or for delay in filing of return. 3 Whether an assessee to whom In terms of section 106 (1) of the Finance Act, show cause notice or order of 2013 and second proviso thereto, the tax dues in determination has been issued respect of which any show cause notice or order can file declaration in respect of determination under section 72, section 73 or of tax dues which are not section 73A has been issued or which pertains to covered by such SCN or order the same issue for the subsequent period are of determination? excluded from the ambit of the Scheme. Any other tax dues could be declared under the Scheme subject to the other provisions of the Scheme. 4. What is the scope of section Section 106 (2) (a)(iii) of the Finance Act, 2013 106 (2)(a)(iii)? provides for rejection of declaration if such Whether a communication declaration is made by a person against whom from department seeking an inquiry or investigation in respect of service general information from the tax not levied or not paid or short-levied or short declarant would lead to paid, has been initiated by way of requiring invoking of section 106 (2) production of accounts, documents or other (a)(iii) for rejection of evidence under the chapter or the rules made declaration under the said thereunder, and such inquiry or investigation is section? pending as on the 1st day of March, 2013. The relevant provisions, beside section 14 of the Central Excise Act as made applicable to service tax vide section 83 of the Finance Act,1994, under which accounts, documents or other evidences can be requisitioned by the Central Excise Officer for the purposes of inquiry or investigation, are as follows,- (i) Section 72 of the Act envisages requisition of documents and evidences by the Central Excise Officer if any person liable to pay service tax fails to furnish the return or having made a return fails to assess the tax in accordance with the provision of the Chapter or rules made thereunder. (ii) Rule 5A of the Service Tax Rules, 1994 prescribes for requisition of specified documents by an officer authorised by the Commissioner for the purposes specified therein. The provision of section 106 (2)(a)(iii) shall be attracted only in such cases where accounts, documents or other evidences are requisitioned by the authorised officer from the declarant under the authority of any of the above stated statutory provisions and the inquiry so initiated against the declarant is pending as on the 1st day of March, 2013. No other communication from the department would attract the provisions of section 106 (2)(a)(iii) and thus would not lead to rejection of the declaration. 3. Trade Notice/Public Notice may be issued to the field formations and tax payers. Please acknowledge receipt of this Circular. Hindi version follows. Yours sincerely, (S. Jayaprahasam) Technical Officer, TRU Tel: 011-2309 2037

Exemption can be claimed even after payment of ST except when assessee passes on burden to recipient

ST/ECJ: An assessee may claim exemption even after provision of service and payment of tax thereon only if he has not passed that tax on to persons following him in chain of supply

Vaghjibhai S. Bishnoi vs. ITO (Gujarat High Court)

Department’s practice of not giving prompt & full credit for TDS condemned The assessee filed a return of income in which he claimed a refund of Rs. 2.11 lakhs. An intimation u/s 143(1) was issued by the CPC Bangalore in which credit for certain TDS certificates was omitted to be given. The assessee filed a rectification application u/s 154 before the AO which was not acted upon. The assessee filed a writ petition to challenge the neglect of the AO to give proper TDS credit. Before the High Court the AO argued inter alia that as the details of the e-return had not been transferred to him by the CPC, he was not authorized to accede to any request of the assessee. It was also claimed that the assessee had not filed full details relating to the claim. HELD by the High Court allowing the Petition: Form 26AS, available on the department’s website, clearly reflects the assessee’s entitlement to credit for TDS. Instead of giving credit for the TDS, the department has adamantly continued to take the stand that there is a failure on the part of the assessee to furnish details. We are not impressed with such a stand. Computerization is with the object to facilitate easy access to the assessee and make the system more viable and transparent. In the event of any shortcoming of software programme or any genuine mistake, the Department is expected to respond to such inadvertence spontaneously by rectifying the mistake and give corresponding relief to the assessee. Instead of that, even when it is being brought to the notice of the Department by the assessee, by a rectification application and subsequent communication, not only it has chosen not to rectify the mistake, but, the lack of inter departmental coordination has driven the assessee to this Court for getting his legitimate due. This attitude for sure does not find favour with the Court, as more responsive and litigant centric system is expected; particularly in the era of computerization. Tax payers friendly regime is promised in this electronic age. For want of necessary coordination between the two departments, the assessee cannot be expected to be sent from pillar to the post. If the Centralized Processing Center meant for return processing, accounts, refund, storage of data etc. adds to the difficulties of the Tax payers, due to lack of distribution of work between back office and front office, and that too, after having been pointed out the actual error, a serious re-look is expected.

RBI/2013-14/177 A.P. (DIR Series) Circular No. 21 dated 12-08-2013

Reserve Bank Of India

A.P. (DIR Series) Circular No. 21

August 12, 2013

To,

All Category - I Authorised Dealer Banks

Madam / Sir,

Exim Bank's Line of Credit of USD 28.60 million to the Republic of Zimbabwe

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated June 21, 2013 with the Republic of Zimbabwe, for making available to the latter, a Line of Credit (LOC) of USD 28.60 million (USD Twenty- eight million six hundred thousand only) for financing eligible goods, services, machinery and equipment including consultancy services from India for the purpose of financing upgradation of Deka Pumping Station and River Water Intake System in Zimbabwe. 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 may be procured by the seller for the purpose of Eligible Contract from outside India.

2. The Credit Agreement under the LOC is effective from July 25, 2013 and the date of execution of Agreement is June 21, 2013. 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 (June 20, 2019) 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/2013-14/177

RBI/2013-14/178 A.P. (DIR Series) Circular No. 22 dated 12-08-2013

Reserve Bank Of India

A.P. (DIR Series) Circular No. 22

August 12, 2013

To,

All Category - I Authorised Dealer Banks

Madam / Sir,

Exim Bank's Line of Credit of USD 300 million to the Government of the Federal Democratic Republic of Ethiopia

Export-Import Bank of India (Exim Bank) has entered into an Agreement dated June 13, 2013 with the Government of the Federal Democratic Republic of Ethiopia, for making available to the latter, a Line of Credit (LOC) of USD 300 million (USD Three hundred million only) for financing eligible goods, including machinery and equipment and services(including preparation of the Detailed Project Report) including consultancy services from India for the purpose of financing new Ethio-Djibouti Railway Line [the Asaita-Tadjourah portion] Project in Republic of Ethiopia/ Republic of Djibouti. 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 may be procured by the seller for the purpose of Eligible Contract from outside India.

2. The Credit Agreement under the LOC is effective from July 15, 2013 and the date of execution of Agreement is June 13, 2013. 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 (June 12, 2019) 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/2013-14/178

INCOME TAX APPELLATE TRIBUANL : KOLKATA BENCHS : KOLKATA REVISED WEEKLY BENCH CONSTITUTION FROM 12/08/2013 TO 14/08/2013

[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUANL : KOLKATA BENCHS : KOLKATA REVISED WEEKLY BENCH CONSTITUTION FROM 12/08/2013 TO 14/08/2013 {ad} For more information...

Application for refund of duty/interest

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RBI/2013-14/176 A.P. (DIR Series) Circular No. 20 dated 13-08-2013

Reserve Bank Of India

A.P. (DIR Series) Circular No. 20

August 12, 2013

To,

All Category - I Authorised Dealer Banks

Madam / Sir,

Foreign Exchange Management Act, 1999 (FEMA) Foreign Exchange (Compounding Proceedings) Rules, 2000 (the Rules) - Compounding of Contraventions under FEMA, 1999

Attention of Authorised Dealers (ADs) and their constituents is invited to paragraph 7.2 of A.P. (DIR Series) Circular No. 56 dated June 28, 2010 wherein they were advised to ensure that the applications for compounding are submitted only after the transactions are complete and all the requisite approvals are in place. Of late, we have been receiving a number of applications for compounding of contraventions of FEMA, 1999 which are submitted without obtaining proper approvals or permission from the concerned authorities leading to avoidable correspondence with the applicants and also return of applications. In case the application has to be returned for this reason or any other reason, the application fees of Rs.5000/- received along with the application fees is also returned.

2. To expedite the refund of compounding fees in such cases, it has been decided to credit the same to the applicant’s account through NEFT. The applicants are advised to furnish their mandate and details of their bank account as per ANNEX along with the application in the prescribed format and other documents required to be submitted in terms of the instructions contained in A.P. (DIR Series)Circular Nos. 56 and 57 dated June 28, 2010 and December 13, 2011 respectively.


3. Further, the Annexes relating to Foreign Direct Investment, External Commercial Borrowings, Overseas Direct Investment and Branch Office / Liaison Office, as given in A.P.(Dir Series) Circular No. 57 dated December 13, 2011 , have also been modified to include the details of income-tax PAN and the activity as per NIC codes – 1987. It may please be noted that the application will be treated as incomplete without these details.


4. The applicants may also note to bring to the notice of the compounding authority change, if any, in the address/contact details of the applicant during the pendency of the compounding application with Reserve Bank.


5. Authorised Dealers may bring the contents of this circular to the notice of their constituents and customers concerned.


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).

Yours faithfully,

(Rudra Narayan Kar)

Chief General Manager-in-Charge

RBI/2013-14/176

DGFT Public Notice No.22/(RE 2013)/2009-14 dated 12-08-2013

GOVERNMENT OF INDIA

MINISTRY OF COMMERCE AND INDUSTRY

DEPARTMENT OF COMMERCE

PUBLIC NOTICE No. 22(RE-2013)/ 2009-2014

NEW DELHI, DATED THE 12^th August, 2013

Subject: Option to close cases of default in Export Obligation.

In exercise of powers conferred under Paragraph 2.4 the Foreign Trade Policy, 2009-2014, the Director General of Foreign Trade hereby provides a procedure to close cases of default in Export Obligation under (a) Duty Exemption Scheme (para 4.28 of the HBP v1and (b) EPCG Scheme (para 5.14 of HBPv1 RE-2012).

1. All pending cases of the default in meeting Export Obligation (EO) can be regularised by the authorisation holder on payment of applicable customs duty, corresponding to the shortfall in export obligation, along with interest on such customs duty; but the interest component to be so paid shall not exceed the amount of customs duty payable for this default.
   

   [Here is an example: Suppose the default in EO is 100%, this would mean the complete duty saved amount has to be refunded. The interest on this duty saved amount has to be calculated from the date of import till the date of payment. The interest component under this dispensation would be limited to the duty saved amount. If the duty saved amount were Rs. 150, then the interest component would be limited to Rs. 150 and therefore for regularising this case the maximum amount to be paid by the authorisation holder would be Rs. 300. However, for the same duty saved amount of Rs. 150, if the default in EO were 30%, then the corresponding duty saved amount becomes Rs. 45 (30% of Rs. 150). Hence the interest component will be limited to Rs. 45. Thus, duty + interest will not exceed Rs. 90 for this regularisation of 30% default in EO for a duty saved amount of Rs. 150.]

   
   


2. In line with the existing policy the customs duty could be paid either in cash or by way of debiting of any valid duty credit scrips issued under Chapter 3 of the Foreign Trade Policy. The interest component however, has to be paid in cash only.


3. Any authorisation holder choosing to avail this benefit must complete the process of payment on or before 31^st March 2014.


4. Necessary procedures including a system of filing required reports by the respective RAs would be indicated separately.

Effect of this Public Notice: An option is being provided for redemption/regularisation of old cases of EO default.

(Anup K. Pujari)

Director General of Foreign Trade

e-mail: dgft@nic.in

(Issued from F. No. 01/94/180/395/AM13/PC-4)