Cenvat Credit : If service tax paid on non-taxable activity exceeds credit taken on inputs/services used for such activity, credit can be said to have been reversed in form of payment of service tax and assessee is eligible for waiver of pre-deposit
Friday 20 February 2015
No disallowance if trust was accumulating funds to pay on death of bank employee as it was formed fo
IT: Where assessee-society constituted for welfare of employees of a bank, had accumulated a sum under heading 'Further utilization' for making payments to members or their legal representatives in case of their death, retirement or permanent disability, assessee had fulfilled its obligation as required under section 11(2) and no disallowance was called for
HC quashed block assessment order as it was made on basis of time-barred notice of sec. 158BD
IT : Where notice issued to assessee under section 158BD was beyond time limit specified under section 158BE, block assessment order was void ab initio
Penalty leviable if assessee didn't add back depreciation charged under Companies Act in computation
IT: Where assessee-company charged depreciation both under Companies Act and Income-tax Act while failed to add back depreciation charged under Companies Act, same could not be held as mistake not liable to penalty
ITAT deleted disallowance following earlier order of HC as DRP hadn't given cogent reasons for disal
IT/ILT : Following order passed by High Court in assessee's own case relating to earlier assessment year, in absence of any cogent reasons, disallowance made by TPO in respect of certain allied payments made by assessee to AE such as technical fee, training and testing expenses, was to be deleted
VAT was leviable on supply of goods as works contract was held as divisible
CST & VAT : Karnataka VAT - Where assessee was engaged in execution of works contract awarded for construction of power lines and erection of transmission towers and said contract was in four parts and each one of them was separate, works contract executed by assessee was a divisible contract and not a composite contract
AO couldn't make partial disallowance of exp. After accepting the genuineness
IT: Where Assessing Officer had accepted genuineness of payment of consultancy charges to architect, entire amount should have been allowed and allowing part payment was not justified
Co. engaged in 3D animation software services isn't comparable to a Co. providing various software p
IT/ILT: A company providing variety of software products in area of web solutions, e-commerce, software consultants, content management ERP applications etc. could not be functionally comparable to assessee purely providing software services in field of 3D animation
Penalty rightly levied on assessee as it failed to produce endorsed transit declaration at exit chec
CST & VAT: West Bengal VAT - Where assessee, a transporter, was carrying goods through State of West Bengal and it got endorsed transit declaration at entry check post of West Bengal but did not produce same at exit check post, imposition of penalty under section 80 was justified
Civil court and not CLB is an appropriate forum to decide upon basic rights of parties for allotment
CL : Where rectification sought for in register of members was not a simple rectification, but adjudication of basic right of parties for allotment of shares to become members, appropriate forum to decide same is either by civil court or through arbitration; such issues are outside jurisdiction of CLB
Timely service of sec. 143(2) notice is mandatory and not only a mere procedural requirement
IT : Service of notice under section 143(2) within time-limit prescribed is mandatory and it is not a mere procedural requirement
Sum paid to NR agent for rendering marketing services outside India wasn't taxable in absence of its
IT/ILT: Where foreign agents rendered marketing services to assessee outside India, since those agents did not have PE in India, commission paid to them was not taxable in India
Cabinet Extends Export Subsidy On Raw Sugar
In a relief to sugar mills resorting to distress sales, the government on Thursday approved an export subsidy on raw sugar for the current production season. Sugar mills will be allowed to export 1.4 million tonnes (mt) of raw sugar and can avail of a subsidy of Rs.4,000 per tonne, the Cabinet Committee on Economic Affairs (CCEA) said in a statement.
The export incentive is for the production season 2014-15 (October to September) and will help sugar mills clear dues to cane growers, the CCEA, headed by Prime Minister Narendra Modi, said. In February 2014, the government had announced an export subsidy of Rs.3,300 per tonne for 4 mt. But only 750,000 tonnes were actually exported under the scheme.
The Indian Sugar Mills Association (ISMA) welcomed the government’s decision. “At the current global and domestic prices, raw sugar exports from India is just about viable with the incentives,” said Abinash Verma, director general of ISMA.
“As per our estimates, there is surplus sugar of around 2.5 mt and therefore the industry will require incentives for another 1-1.5 mt. This is the only way for the industry to pay cane price even at the FRP (fair and remunerative price) level this season; otherwise cane price arrears (to growers) which are at Rs.12,300 crore will very soon cross Rs.13,000 crore, (the peak) recorded in last season,” he said.
According to ISMA, the industry’s debt burden has more than tripled from Rs.11,443 crore in 2007-08 to Rs.36,601 crore in 2012-13. Local mills are expected to produce 26 mt of sugar?this year against a domestic demand of 24.7-24.8 mt.
In another decision, CCEA approved the widening of four highways: the six-laning of the 145km Chakeri-Allahabad section of National Highway (NH) 2 in?Uttar?Pradesh, worth Rs.1,999.85 crore; 137km Baleshwar-Chandikhole section of NH5 in Odisha worth Rs.2,296.82 crore; and 72.4km Handia-Varanasi section of NH2 in Uttar Pradesh worth Rs.2,378.59 crore. CCEA also approved the four- and six-laning of the 127km Raipur-Bilaspur section of NH130 in Chhattisgarh worth Rs.1,963.88 crore.
Source:livemint.com
Order of Commissioner(A) is binding precedent for adjudication authority even if such order is pendi
Excise & Customs : Where an adjudication order has been passed without reference to orders passed by superior authorities viz. order passed by Commissioner (Appeals) as well as CESTAT, same is liable to be set aside and writ is maintainable thereagainst.
Reassessment initiated on receiving info of TDS default made by assessee after scrutiny assessment h
IT : Assessee cannot challenge disallowance made under section 40(a)(ia) taking a plea that it could not collect Form 15-I from recipients due to lapse of time
Stainless Steel Makers Seek Higher Customs Duty
Ahead of the budget, stainless steel firms have asked the Finance Ministry to increase customs duty to 25 per cent from 10 per cent at present to safeguard the interest of domestic firms in view of growing imports.
"There is an urgent need to control the growing imports and one way to achieve this is by increasing the customs duty rates. However, this is not possible with a small differential between MFN rate and peak rate of duty," Indian Stainless Steel Development Association (ISSDA) wrote in a letter to Finance Minister Arun Jaitley.
An MFN tariff is the lowest possible tariff a country can assess on another country.
"Therefore, it is suggested that the peak rate of duty for stainless steel products may be increased from 10 per cent to 25 per cent to enable any maneuverability in MFN rates as and when need arises," it added.
"It is, therefore, requested that in order to safeguard huge investment made towards development of Indian stainless steel industry, peak duty rates may be raised to 25 per cent from the existing 10 per cent," ISSDA said.
India is the third largest consumer of stainless steel in the world and has 2.68 million tonnes production capacity per annum. The domestic industry is reeling under a surge in imports primarily from China and other nations.
Overall, stainless steel imports have risen from 2.39 lakh tonnes (LT) in 2011-12 to 3.24 LT in 2013-14. Imports are expected to rise to 4.23 LT by the end of this fiscal.
India had pruned the peak customs duty from 12.5 per cent to 10 per cent for all goods other than agriculture products in the Union Budget of 2007-08.
"During this period, the import of stainless steel was a meager 1.44 LT against 3.24 LT in 2013-14. This surge of more than 80 per cent in import volumes has been largely due to the low levels of import duties on stainless steel flat products," ISSDA said.
In the last Budget, the government had raised basic customs duty on stainless steel products from 5 per cent to 7.5 per cent.
Source:profit.ndtv.com
India's Gold Imports May Rise To 35-40 Tonnes In February
India's gold imports are likely to rise to 35-40 tonnes in the current month as compared to 26 tonnes in the corresponding period last year, according to gold and silver refiner MMTC Pamp.
"The country has already imported 23.2 tonnes of gold in the first fortnight of this month. Total shipments at the end of the month could reach 35-40 tonnes," a senior official at MMTC Pamp told PTI.
The imports could see further increase during the wedding season, which begins in March, the official added. MMTC Pamp is a joint venture between state-run MMTC and Switzerland's PAMP.
In January, imports rose marginally to 36 tonnes from 31 tonnes in the same month of corresponding year.
Gold shipments have been steadily rising after the Reserve Bank in November 2014 scrapped the 80:20 rule, under which it was mandatory for traders to export 20 per cent of the import. The RBI has been easing import curbs on gold since November 2014.
Also, on February 18, the central bank lifted ban on import of gold coins and medallions and allowed banks to lend gold on loan to jewellers. Ahead of the Budget, the industry is expecting a cut in import duty from the existing 10 per cent. India, the world's largest consumer of gold, imports around 800-900 tonnes of gold annually.
Source:economictimes.indiatimes.com
No reassessment alleging excess payment to related if there was no failure of assessee to disclose m
IT : In absence of any failure on assessee's part to disclose all material facts necessary for assessment, Assessing Officer could not initiate reassessment proceedings merely on basis of change of opinion that assessee had paid excessive interest on loan taken from related parties
Transformation of underground raw water into packaged drinking water won't amount to manufacture
CST & VAT : Assam VAT - Transformation of non commercial underground raw water into packaged drinking water did not amount to manufacture under section 2(30) of Assam VAT Act and under section 2(22) of Assam Sales Tax Act
MCA mandates IndAS from FY16-17 for companies having net worth above Rs 500 crore; notifies IndAS ru
COMPANIES ACT, 2013/INDIAN ACTS & RULES : Companies (Indian Accounting Standards) Rules, 2015
Rupee Strengthens To 62.25 Per Dollar In Afternoon Trade
The Indian rupee on Friday strengthened against the dollar on selling of the US currency by custodial banks, according to a banker.
At 2.01pm, the home currency was trading at 62.25, up 0.15% from Wednesday’s close of 62.34. The local unit opened at 62.22 per dollar. Rupee was shut on Thursday on account of a public holiday.
“There are some flows coming in from foreign investors and therefore custodial banks are selling dollars. The appreciation would have been higher but there is month end demand from oil companies which is offsetting the rise,” a banker at a public sector bank said on condition of anonymity. The benchmark Sensex fell 0.69% to 29,258.40 points.
Major Asian currencies were trading lower against the dollar. The Malaysian ringgit was down 0.71%, Taiwanese dollar 0.33%, South Korean won 0.33%, Indonesian rupiah 0.22%, Singaporean dollar 0.14%, Philippines Peso 0.12%.
The yield on India’s 10-year benchmark bond was trading at 7.688% compared with its Wednesday’s close of 7.710%. Bond yields and prices move in opposite directions.
Since the beginning of this year, the rupee has gained 1.13%, while foreign institutional investors have bought $2.49 billion from local equity and $4.68 billion from bond markets.
The dollar index, which measures the US currency’s strength against major currencies, trading at 94.559, up 0.17% from the previous close of 94.404.
Source:livemint.com
HC couldn't re-appreciate evidentiary material as it wasn't in scope of appeal
Excise & Customs : Where submission urged by assessee requires High Court to re-appreciate evidentiary material, same does not lie within scope of appeal, as appeal can be entertained only on a substantial question of law
Estimated addition curtailed by CIT(A) following ITAT's order of preceding year couldn't be interfer
IT : Where Commissioner (Appeals) had reduced net profit rate to 7.75 per cent from 12.5 per cent as applied by Assessing Officer, following Tribunal's order in immediately preceding year, no interference was required with Tribunal's order
No reversal of credit on loss of inputs due to moisture content after their delivery in factory
Cenvat Credit : Process of manufacture starts from stage of taking raw material from storage base to factory; hence, loss of inputs due to moisture after inputs were received in factory, is a loss during process of manufacture of finished products and there is no requirement of reversal of credit in relation to said inputs
Department couldn't lift corporate veil of Co. to recover tax dues from director during pendency of
CST & VAT : U.P. VAT - Where Assessing Authority passed assessment order on a company and raised tax demand upon it and appeal against impugned order was pending consideration, doctrine of lifting corporate veil was not applicable in instant case and director and authorised representative of company could not be made personally responsible for recovery of arrears of tax due from company
ITAT couldn't delete sec. 68 addition when mystery pertaining to creditworthiness remained unresolve
IT : Mystery pertaining to creditworthiness being unsolved, matter was remanded to Tribunal for fresh adjudication where it deleted addition made under section 68 in absence of departmental representatives
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