High Court interprets words ‘substantially’; lays down 50% threshold for indirect transfer of capita

IT/ILT : There can be no recourse to Explanation 5 to enlarge scope of section 9(1) so as to bring to tax gains or income that may arise from transfer of an asset situated outside India, which does not derive bulk of its value from asset situated in India

No TDS liability of individual under sec. 194H if his turnover didn’t exceed sec. 44AB limit in prec

IT: Where assessee's turnover did not exceed prescribed amount in immediate preceding year, TDS provisions under section 194H was not applicable

Inland haulage charges are part of income from operation of ships; not taxable under India-Belgium D

IT/ILT: Inland Haulage Charges earned by assessee being part of income derived from operation of ships in international traffic are covered under article 8 of Double Tax Avoidance Agreement (DTAA) entered into between India and Belgium and consequently not taxable as business profits in India

Commission earned on meal/gift vouchers facilitating promotion of affiliate’s business was taxable a

Service Tax : Charges/Commission earned by provider of meal/gift vouchers from affiliates where meal/gifts can be received by public using such vouchers is towards promotion of business of affiliates and is liable to service tax under Business Auxiliary Services

SC: Bank manager couldn’t be charged with conspiracy who hadn’t honoured stolen cheque on customer’s

CL: Where one of stolen cheques of accountholder presented in bank was not honoured as per his only instructions, criminal complaint against branch manager for not honouring cheque

Dealer liable for penalty if supplier had admitted issuance of fake Cenvatable invoices without move

Excise & Customs : Where raw material supplier has admitted that he had issued Cenvatable invoices without actually supplying goods and assessee-dealer cannot prove certainly that goods received by him were actually duty-paid and were of said supplier, said facts are sufficient to prove 'fraud' and assessee-dealer is liable to penalty

Bank couldn’t be treated as an assessee-in-default merely due to some technical defects in Form 15G

IT: Where depositors had furnished declaration in prescribed manner requesting deductor not to deduct tax at source, deductor was under a statutory obligation not to deduct tax and in aforesaid circumstances, deductor could not be penalized for not deducting tax at source

GTA service provider isn’t liable for ST, irrespective of status of consignee when consignor is a co

Service Tax : If consignor of goods is a company/factory under Factories Act, then, as per Rule 2(1)(d)(v) of Service Tax Rules, 1994, irrespective of status of consignee, person liable to pay service tax is person liable to pay freight and, therefore, no service tax can be demanded from Goods Transport Agency

Interest paid to minors on their deposits with firm was to be clubbed under sec. 64 as it was capita

IT : Where amount credited in account of minor in partnership firm was to be treated as capital investment, interest paid on such account would be clubbed under section 64(1)(iii) with income of assessee

CLB constitutes Mumbai bench for 'Lok Adalat' to be held in Sept. and Oct. 2014

COMPANIES ACT, 1956 : Section 10E of The Companies Act, 1956, read with Regulation 4 of The Company Law Board Regulations, 1991 – Constitution of Board of Company Law Administration – Constitution of Mumbai Bench – Amendment In Order of Even Number, Dated 25-9-2013

Ministry frames guidelines for nomination of members of SEZ authority

SEZ : Guidelines for Nomination as Member of SEZ Authority

CLB brings all States of Southern India under the jurisdiction of Chennai Bench

COMPANIES ACT, 1956 : Section 10E of The Companies Act, 1956, read with Regulation 4 of The Company Law Board Regulations, 1991 – Constitution of Board of Company Law Administration – Revision in Work Distribution of Chennai Bench – Amendment In Order of Even Number, Dated 25-9-2013

Rectification wasn’t permissible if no mistake was pointed out in order of ITAT; review petition dis

IT : Where assessee had filed review petition against order of Tribunal and grounds raised therein were general in nature and further assessee could not point out any specific mistake in said order, petition was to be dismissed

Royalty on variants of product couldn't be disallowed if royalty on original products were considere

IT/ILT: Where TPO had accepted 'most appropriate method' followed by assessee and approved arm's length price of royalty rate determined by asseesee, with respect to payment of royalty of products, claim of assessee on payments of royalty on variants of products was to be allowed

Imparting training for medical transcription and to insurance agents with aid of technology is vocat

Service Tax : Technology based training for employment skill development and training courses for medical transcription, insurance agents etc. are vocational course and are exempt from service tax

HC gave relief to director as show cause notice alleging default was issued after one year of offenc

CL: Show-cause notice issued beyond period of one year of commission of offence was barred by limitation

Orders/notices sent by CESTAT registry deemed to be duly served if they weren’t retuned back

Excise & Customs : Where notices/orders sent by CESTAT Registry are not returned back, they are to be treated as served on assessee, especially when, subsequent communications at same address were duly received by assessee

Scrutiny assessment set aside by HC as it was made without issuing notice under section 143(2)

IT : Where no notice was issued under section 143(2) to assessee, assessment made under section 143(3) was to be set aside

Unjust enrichment would not apply to refund of ST paid under reverse charge when services weren’t ac

Service Tax : If assessee has paid service tax under reverse charge without actually receiving service from abroad, said services cannot be charged to service tax and amount thereof is liable to refunded without applying unjust enrichment, as burden of service tax has been borne by assessee

AO couldn’t treat agricultural income as income from other sources when assessee had filed due recor

IT: Where assessee, in support of his claim of earning agricultural income, produced relevant agricultural record and, moreover, income so earned had been returned and accepted by Department year after year, impugned order passed by Assessing Officer that income in question was taxable as 'income from other sources' was to be set aside

HC upholds reassessment as assessee failed to pay capital gains tax under domestic laws in view of I

IT/ILT: Where in terms of article 14 of Indo-UK DTAA, assessee was a resident of India and he had to pay capital gains in terms of domestic law of this country, if he did not pay same and merely gave a note along with returns, to which Assessing Officer had not applied his mind, reassessment was justified

Month means British calendar month and not '30 days' for purpose of filing an appeal before Commissi

Service Tax : For appeal before Commissioner (Appeals), time-limit for filing appeal has been expressed in 'months' whereunder 'month' would mean 'British Calendar Month' and cannot be construed '30 days'

Mere solvency of a Co. won’t be a valid ground to set aside sec. 434 notice requiring payment of deb

CL : Solvency of company would not constitute a stand alone ground for setting aside a notice under section 434(1)(a) meaning thereby that if a debt is undisputedly owing, then it has to be paid

SEBI's norms raising investment limit of anchor investor is applicable to issuers filing offer docs

SEBI : Amendments to SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009 - Increasing The Investment Bucket for Anchor Investor and Regulations Concerning The Preferential Issue Norms

All directors other than promoters can't be deemed as willful defaulters; RBI's master circular is a

CL : Reserve Bank of India was within its powers to issue RBI Master Circular DBOD No.CID-BC 1/20.16.2003/2011-12, dated 2-7-2012 relating to wilful default and wilful defaulters -Master Circular does not suffer from vice of impermissible delegation of a legislative power. It confirms exactly to power granted - Master Circular has force of law and could be termed as a statutory circular

India Says Not Considering Immediate Gold Import Duty Cut

India is not considering an immediate cut in gold import duties, Trade Minister Nirmala Sitharaman said on Wednesday, extending a policy that has helped narrow the country's trade deficit but is believed to have led to an increase in smuggling.

India's trade and current account deficits have narrowed sharply since New Delhi raised the duty on gold imports to 10 percent from 2 percent through a series of steps last year, helping revive confidence in the country's economy.

But the duties have also fuelled a belief that smuggling has surged, causing some suspicions about distorted data and raising expectations the government will ease some of its restrictions.

"Yes, the current account deficit has come down. But immediately, there is no plan to reduce import duty," Trade Minister Nirmala Sitharaman told reporters.

"I cannot say whether gold smuggling has increased because of hike in import duty," she added in reply to a question.

India will maintain the import duty just as the country is about to enter the key festival period, which traditionally leads to a surge in demand for gold that are given out as gifts.

Although the move at first caused gold prices to rise, they have fallen this year due to a decline in global markets and a stronger rupee.

Source:- af.reuters.com

India Drops Plan To Impose Solar-Panel Duties On Foreign Firms

India's new government has decided not to slap anti-dumping duties on solar panel imports from the United States, China and other countries, reversing a policy of the previous administration, a minister said Wednesday.

Under the previous left-leaning Congress government, India announced it would impose duties on imported solar panels to shield domestic manufacturers who said their prices were being undercut by foreign rivals.

The order to impose the duties emerged from a government-ordered probe launched in 2011. But the decision needed to be validated by the finance ministry within a certain time period before it could be implemented.

"There was no notification [of the Congress government's order]. We allowed it to lapse," junior finance minister Nirmala Sitharaman told a news conference.

New right-wing Prime Minister Narendra Modi, who took office in late May as head of the Bharatiya Janata Party government, is a strong proponent of solar power and set up various projects when he served earlier as chief minister of the prosperous western state of Gujarat.

Blackouts in India are frequent and solving the country's energy shortage is seen as key to helping power industrial economic growth. In the last few years, India has been flipping the switch on a series of huge new solar energy projects.

Greater economies of scale, better technology and cheap foreign panels that turn sunshine into electricity have hammered down once sky-high solar generation costs to competitive levels.

To build solar plants, India has been importing equipment, mainly from China, but also from the United States and Taiwan. Indian companies have insisted that unless imports are curbed, the country will never develop an indigenous solar industry.

Since 2010, India has hiked installed solar power capacity from a meagre 17.8 megawatts to more than 2,600MW, official figures show, as part of the government's aim to make "the sun occupy center-stage" in the energy mix.

India has set a target of generating 20,000MW of grid-connected solar power and 2,000MW of off-grid generation, such as roof panels, by 2022.

Power Minister Piyush Goyal had said earlier that domestic solar equipment manufacturing capacity of 700MW-800MW was insufficient to meet the government's ambitious solar energy plans.

There was no immediate reaction available from Indian solar equipment manufacturers, many of which have been closing down in the face of foreign competition.

Source:- industryweek.com

Manufacturing Domestic Market Before Exports

The one challenge which is common right across all countries in the world, without exception, is the need to create more jobs. Even a country like Saudi Arabia, which has more than enough resources to take care of its citizens, wants to create jobs.

A job is clearly not just a means of livelihood but also a way of keeping the country's youth constructively engaged.

Further, the one common approach to creating more jobs globally, without exception, is to encourage manufacturing. India is, therefore, not unique in her approach to try and encourage manufacturing to create more jobs.

As every country wants to encourage manufacturing, the room to export is getting increasingly constrained. Countries are competing with each other, using varying toolsto attract investments.

Some like Brazil, Russia, Saudi Arabia, Algeria and Angola are using the wealth from their natural resources and particularly oil & gas; some like Germany and Scandinavia are using their highly-skilled manpower, some like Singapore and Dubai are using efficient governance and some like China and India are using the demand of their large population.

But it is clear that every country needs some competitive advantage to attract investment in manufacturing.

The two levers that India has with her to attract manufacturing investment are the demand of the domestic market and the quantum of intellectual capital. India has thus far achieved only limited success in using either of these two levers to attract investment in manufacturing.

The first point that we need to accept is that manufacturing in India will succeed only on the basis of the domestic market, and exports can at best be supplementary.

Attempting to base a manufacturing strategy predominantly based on exports will take a long time to achieve because manufacturing in India has competitive disadvantages like high cost of power, high cost of capital, infrastructure bottlenecks and lack of core technology. We, therefore, have to first ensure that our domestic market is attractive in terms of scale, is profitable for manufacturers and is a place which is easy to do business in.

Exports will then follow. It is indeed ironic if on the one hand we position India as a large and attractive market but on the other make policies that essentially rely on promoting exports without addressing the challenges of the domestic market.

It is critical for India to be one homogenous market that provides scale. Uniform taxation, uniform standards, uniform regulation, uniform laws, free movement of goods and people are critical in making this happen. We currently have challenges in each of these areas which present India as a very fragmented market.

Secondly, our own strength in innovation to meet our domestic customer needs will have to precede manufacturing. When we talk about manufacturing in India, it is predominantly based on technology from the developed world. The developed world technology has been essentially designed to meet the requirements of those market, which we then try and tinker with to suit our own local needs. While we in India have done brilliantly in innovating on disruptive business models, we have done little innovation on new products meant for our specific needs.

The process to innovate new products has to begin by a good understanding of market needs and even more importantly, to then convert that understanding into a sharp definition of a product.

Once the product definition has been set , it is a relatively easier job to actually make that product. Converting a market need into a sharp product definition is a rare skill, which is a combination of market understanding, knowledge of technology and entrepreneurship.

It is evident that judgement plays a crucial part in innovation. It is expected that failures will be part of the game. If we are to encourage innovation, then we also need to embrace failures and even celebrate them. Our culture in India does not respect failures and, in fact, ridicules them. This will have to change if we want to get manufacturing going.One way of encouraging innovation and eliminating the "losses" due to failure is to value intellectual property.

Source:- economictimes.indiatimes.com

Service recipient can file refund claim if burden of tax is borne by it

Service Tax : Section 11B of Central Excise Act, 1944 (applicable to service tax) provides for a purchaser/service recipient presenting a claim for refund, provided he is able to establish that he has not passed on burden to another person; hence, refund claim by service recipient for refund of excess service tax borne by him, is valid

Gain arising from sale of inherited land after its conversion into smaller plots was taxable as busi

IT: Where assessee converted ancestral land into smaller plots and after providing road, parking space etc., sold same over a period of years, assessee's claim that he converted capital asset i.e. land into stock-in-trade and, thus, income arising from sale of land was taxable as business income was to be accepted

No input tax credit if VAT return didn’t contain details of input credit and particulars of register

CST & VAT: Where assessee in returns filed had not claimed any input tax credit and they did not contain particulars of registered dealers from whom purchases had been made and actual tax paid on such purchases, assessee was not entitled to input tax credit

Indian Cos. can issue shares to NRs under automatic route if they comply with FDI Sectoral cap and o

FEMA/ILT/INDIAN ACTS & RULES : FEM (Transfer or Issue of Security by A Person Resident Outside India) (Twelfth Amendment) Regulations, 2014 – Amendment in Schedule 1

VAT Rules amended by Rajasthan Govt.; mandating e-registration and initiating Composition Scheme for

CST & VAT/INDIAN ACTS & RULES : Rajasthan Value Added Tax (Amendment) Rules, 2014 – Amendment in Rules 14, 16, 17, 18, 19, 21, 22, 31, 38 & Form VAT-45A; Substitution of Rules 9, 12, 15, 19A, 40, 71, 72, Form VAT-01, Form Vat-07A, VAT-08A, Form VAT-10, Form VAT-10A, Form VAT-11, Form VAT-40, Form VAT-40A, Form VAT-58 ; Omission of Rules 12A, 40A, 67, 67A, 67B, 68, 69, 69A, 70, Form VAT-01A, Form VAT-12, Form VAT-16, Form VAT-40, Form VAT-41A and Insertion of Rules 17A, 22A, 79A, Form VAT-06a, Fo

Income generated by Museum from ancillary activities couldn’t be deemed as business receipt; sec. 11

IT : Where assessee, was settled with object of establishing a museum portraying pictures, paintings, antique coins etc., its activities were to be regarded as falling under category of 'general public utility' within meaning of section 2(15)

All types of coachings/training are covered under Commercial trainings services irrespective of degr

Service Tax : Taxability under 'commercial training or coaching' services will arise irrespective of : (a) discipline or academic areas (b) nomenclature or description of institute or establishment, as a coaching or training centre or an educational institution; (c) whether institute or establishment is incorporated by or registered under any law; and (d) distinctions on basis of curriculum, course content, teaching methodology, course duration or otherwise

Erecting bus queue shelters by advertising Co. isn’t pre-operative exp. even if they aren’t yet read

IT: Where in pursuance of contract awarded by NDMC for construction of Bus Queue Shelters (BQS), assessee entered into manufacturing agreement with third party for manufacture and installation of BQS and also made advance payment, assessee's business could be said to commence in relevant year and, therefore, revenue authorities were not justified in rejecting assessee's claim for deduction of certain expenses taking a view that said expenses were in nature of pre-operative expenses as business w

Now 'Telangana' State covered under the jurisdiction of Development Commissioner of Vishakapatnam SE

SEZ/INDIAN ACTS & RULES : Special Economic Zones (Amendment) Rules, 2014 – Amendment in Annexure III

Foreign Co. had to file return in response to sec. 148 notice even if issue of existence of PE was i

IT/ILT: Even where existence of PE of petitioner non-resident company was in dispute, if petitioner had not filed return in response to notice issued under section 148, it did not act strictly in accordance with law

Waiver of loan couldn’t be held as remission under sec. 41(1) if loan amount was never claimed as de

IT: Where principal amount of loan being never been claimed by assessee as its expenditure, its waiver would not amount to income of assessee

Supreme Court allows appellant to produce authorization for complaint filed on dishonor of cheque

Negotiable Instrument: Failure to produce authorisation to file complaint under section 138 could not be ground for dismissal of complaint

Fabricated items supplied to mega-power projects were classifiable as part of such project; eligible

Excise & Customs : Fabricated items falling under Chapter Heading 73.08 of Excise Tariff, supplied to mega power projects are prima facie 'parts' of said projects falling under Heading 98.01 and are eligible for exemption

HC asks for afresh proceeding as ITAT simply allowed exp. in year of payment of TDS without consider

IT : Where without interpreting law, Tribunal, simply based on concession given by counsel, proceeded to opine that expenditure could be claimed in year of payment of TDS, matter was to be remanded

Services provided by common effluent treatment plant are exempt from service tax

Service Tax : Services provided by Club or Association in relation to common facilities set up for treatment and recycling effluent and solid waste, with financial assistance from Central & State Government, are exempt

No adjustment of excess payment of ST without intimation when amount of adjustment exceeded one lakh

Service Tax : Where assessee had made adjustment of excess service tax paid exceeding limit Rs. 1 lakh and further, no intimation was actually served on Department within 15 days' time, benefit of adjustment could not be allowed to assessee; but, penalties were waived in view of bona fide belief

Deputation of persons for exchange of Forex between licensed money changers isn’t in violation of FE

FERA : In case of exchange of foreign currency between two licenced full fledged money changers through persons deputed by them is not violative of FERA or Memorandum of FLM

No withholding taxes from freight paid to foreign shipping Co. or to its agent which was assessed un

IT/ILT: Where assessee claims that tax is not required to be deducted at source as payment of freight has been made to foreign shipping company, in such a case, assessee has to show that shipping companies to whom payments have been made are not only non-residents but also that they have been assessed under section 172

Steel Min Asks Finmin To Roll Back Duty Of Coking Coal Imports

The Steel and Mines Ministry has sought rollback of 2.5 per cent duty on coking coal imports, imposed in the last Budget, to unburden domestic steel makers.

Finance Minister Arun Jaitley in Budget 2014-15 had imposed 2.5 per cent duty on coking coal imports, which the steel industry had said could lead to an increase in cost of steel production by Rs. 200 a tonne.

“We have written to the Finance Ministry urging to bring down the import duty to nil. However, we are yet to hear from the Finance Ministry,” a senior steel ministry official said.

“Coking coal is an essential raw material for the making of steel and our steel makers do not get them adequately from domestic sources. Hence, they have to import them from abroad. We believe the cost of raw material should always be lower,” he said.

Reacting to the Budget proposal, domestic steel makers had said that in view of the current shortage of domestic coal for both steel and power sector, increase in basic customs duty on coking coal “requires to be reconsidered”.

Indian steel makers mostly used imported coking coal for use in the blast furnace and the annual volume goes up beyond 35 million tonnes. This is due to subdued and stagnant supply from state-run Coal India Ltd.Production of one tonne of steel requires 0.8 tonnes of coking coal.

Source:- thehindu.com

India Says Not Considering Immediate Gold Import Duty Cut

The government is not considering an immediate gold import duty cut, Trade Minister Nirmala Sitharaman told reporters on Wednesday.

New Delhi had raised the import duty on the yellow metal last year to 10 percent to limit overseas purchases by the second-biggest bullion consumer and help trim its bloated current account deficit.However, a dramatic improvement in the deficit had raised market expectations of a duty cut.

Source:- in.reuters.com

High Agri Imports Under Govt Lens

Faced with a burgeoning trade deficit due to rising import, the ministry of commerce has identified nine agricultural commodities of which annual import constitutes more than $100 million each for action in this regard.

The commerce ministry initiative is following a directive from the Prime Minister’s Office (PMO).It has written to the respective sector councils and associations, seeking ways to reduce such imports. The nine commodities are vegetable oils, pulses, fresh fruits, cashew, sugar, alcoholic beverages, processed items, cocoa products and sesame seeds.

One such letter, addressed to the chairman of the Agricultural & Processed Food Products Export Development Authority (Apeda) and industry bodies such as the Solvent Extractors' Association of India (SEA) and Indian Oilseeds Produce and Export Promotion Council, reads: "There is a directive from the Prime Minister's Office on institutionalising import appraisal and reducing import dependence. Department of commerce is required to prepare a policy paper containing strategy, goal, road map and outcome for reducing (such) unwarranted dependence. It has been decided that import items of a value more than $100 mn may be analysed in the first instance."

Edible oil leads the agri commodities' import basket with a 60 per cent share. Pulses (15 per cent), fresh fruits (10 per cent), cashew (six per cent) and sugar (three per cent) also contribute.

India's annual consumption of edible oil is estimated at 19.5 mn tonnes, of which around 60 per cent is met through import, largely from Indonesia and Malaysia. The dependence on imported pulses is 18 per cent of the total 20 mt of annual consumption. The import bill for edible oil was $7,250 mn in 2013-14 ($9,851 mn in 2012-13). Pulses worth $1,828 mn was imported in 2013-14, compared with $2,450 mn the previous year.

“To check import of vegetable oils, we should increase domestic production of oilseeds. At 1,000-1,100 kg per hectare (ha), oilseeds production is half of the global average. Since India’s strength lies in soybean and cotton seed, their production should be increased at least by 50 per cent in the next five years,” said Vijay Data, president of SEA.

It also recommends introduction of genetically modified oilseeds for cultivation.India is also a major importer of fresh fruits and juices to the tune of $1,273 mn (in 2013-14, versus $1,138 mn the previous year).

“The only way to contain import is to increase domestic production. Apart from focus on increasing productivity, we need to concentrate on reducing post-harvest loss and to increase cold storage capacity. Attempts made in the last two Plan periods have resulted in an increase in pulses production by three mt to 17 mt (yearly) now. That efforts need to be continued to make India self reliant in pulses in the next five-six years,” said Santosh Sarangi, chairman of Apeda.

For this, we needs to invest immensely on research and development. According to Bimal Kothari, vice-president of India Pulses and Grains Association, our average yeild of pulses is one of the lowest in the world.Abinash Verma, director-general of India Sugar Mills Association, wants import duties raised to stop a supply glut.

Source:- business-standard.com

Rupee Weakens To Near One-Month Low On Fed Worries

The rupee weakened to its lowest in nearly a month on Wednesday tracking falls in emerging markets due to worries the U.S. Federal Reserve would raise interest rates earlier than expected, although exporters' dollar sales capped broader falls.

Emerging markets tracked falls in Wall Street and a rise in U.S. bond yields after a San Francisco Federal Reserve Bank paper released on Monday showed investors underestimated the speed at which the Fed might raise interest rates.

That raised concerns the U.S. central bank could signal an earlier-than-expected rate hike at its next policy meeting on Sept. 16-17.

The partially convertible rupee traded at 60.8850/8950 per dollar, its weakest level since Aug. 14, at 12:50 p.m. The rupee had ended trade on Tuesday at 60.60/61.Traders expect the rupee to hold in a 60.70 to 61.00 to a dollar range in the rest of the session.

Source:- businesstoday.intoday.in

Service of notice even at wrong address deemed as valid service if it was received and acknowledged

Service Tax : If notices, orders, etc. addressed at wrong Plot No. are ultimately received and acknowledged by assessee, same are to be treated as validly served for purposes of section 37C of the Central Excise Act, 1944.

Advance to a screenplay writer for sale of rights of his film to be taxed in year in which he perfor

IT : Where assessee, a screenplay writer, received certain amount as advance for sale of negative rights of his film which was to be adjusted subsequently on signing formal agreement with purchaser, amount so received was to be considered as income of assessee in year in which he performed his part of work and not during relevant assessment year even if assessee was following cash system of accounting

Input tax credit of purchases made from first registered dealer and resold to another registered dea

CST & VAT : Where assessee, a registered dealer, in connection with its business had purchased plant and machinery from another registered dealer and subsequently it had resold said assets (entire undertaking) to a third registered dealer, assessee was entitled to input tax credit on purchases of assets

Income from leasing of equipment wasn’t income from house property if earlier it was taxed as busine

IT : Once department had assessed income from hiring of office equipments along with property as business income in preceding assessment year, then without anything being brought on record to deviate from said finding, revenue could not assess such hire charges as income from property

Municipalities are liable to ST on bus fee or advertisement revenue collected by them

Service Tax : Since amounts collected by municipality in name of bus fee or advertisements, etc. do not go in Government Treasury, but go to funds of Municipality, prima facie, they cannot be regarded as statutory activity and are not eligible for benefit of Circular No. 89/7/2006-ST dated 18-12-2006

Revised audit report filed after completion of assessment should be considered by CIT to allow sec.

IT: Even if revised audit report for purpose of claiming deduction under section 80-IB is filed after date of passing of assessment order, same should be taken into cognizance for examining allowability of deduction

Govt. notifies comprehensive DTAA with Bhutan

IT/ILT : Section 90 of the Income-Tax Act, 1961 - Double Taxation Agreement - Agreement for Avoidance of Double Taxation and Prevention of Fiscal Evasion with Foreign Countries - Bhutan

Tribunal’s decision was rectifiable if it was based on presumed facts, says CESTAT

Excise & Customs : Where Tribunal, based on no records or findings, presumed erroneous facts which led to erroneous decision, then, since these facts are apparent on record, it should be rectified.

Comparables with high turnover, abnormal profits and high capital infrastructure to be excluded for

IT/ILT: Where TPO made certain addition to assessee's ALP in respect of providing customer support services to its AE, in view of fact that one of comparables selected by TPO was improper as it was earning abnormal profits on account of its huge turnover and high capital infrastructure, impugned addition was to be set aside

Extended period was not invokable if assessee had duly disclosed all details in ST-3 returns

Service Tax : Where demand is based on ST-3 returns i.e., all details were disclosed in periodical returns by assessee and figures indicated were not wrong, charge of suppression cannot be invoked and extended period cannot be invocable

‘Capital’ includes borrowed capital to compute limit on investment by trust in institute where trust

IT: Word 'capital' as appearing in section 13(4) includes not only share capital but even borrowed capital and, therefore, where investment made by assessee-trust in another institute in which trustees were directors, did not exceed 5 per cent of total capital of said Institute, assessee's claim for exemption of income could not be denied on account of violation of provisions of section 13(4)

Interior work of existing buildings isn't 'completion and finishing services'; eligible for abatemen

Service-tax : Completion and finishing services necessarily relate to new building or a civil structure; activities of repair, alteration, renovation or restoration of existing building cannot be classified as 'completion and finishing services' and benefit of abatement under Notification No. 1/2006-S.T. cannot be denied thereon

Banks can treat guarantors as willful defaulters on their refusal to honour claims even if they have

BANKING : Guidelines on Wilful Defaulters – Clarification Regarding Guarantor, Lender and unit

RBI fixes 70 years as upper age-limit for retirement of MD/whole time directors/CEOs of private bank

BANKING : Upper Age Limit for Whole Time Directors on the Boards of Banks

ITAT directs AO to allow 80% depreciation on windmill as it was erected before Sept. 30, 2007

IT: When assessee had erected windmill, generated wind power and sold it to state electricity board prior to 30th September of year, income from which was taxed, depreciation was to be allowed at full rate

Mere deposit of TDS on pending dues before detection of employee’s manipulation wouldn’t amount to a

CL: Mere fact that income-tax was deposited with tax authorities for a payment that was proposed to be made to petitioner employee prior to discovery of alleged manipulation done by employee would not amount to a clear admission of debt on part of respondent-company

Payer couldn’t be subject to interest for TDS default if payee wasn’t subjected to tax on similar pa

IT/ILT: Payer couldn’t be subject to interest for TDS default if payee wasn’t subjected to tax on similar payments in past

Tripura Govt. prescribes new mechanism to determine TDS liability in case of transfer of right to us

CST & VAT/INDIAN ACTS & RULES : Tripura Value Added Tax (Fourth Amendment) Rules, 2013 – Amendment in Rule 7

India's Cotton Exports Likely To Fall 35% This Year

India, the world's second-biggest producer of cotton, is likely to export 7.69 million bales of the fibre this year, down by 35 per cent from last year, due to sluggish demand from China, says the latest USDA report.

With a slump in purchases by top cotton consumer China, Bangladesh and Vietnam are emerging as the leading export destinations for India, it added.

In its latest report, the US Department of Agriculture (USDA) has pegged India's overall cotton exports at 7.69 million bales for 2014-15 marketing year (August-July), as against 11.75 million bales last year.

One bale is equal to 170 kg.

"Export shipments since June have been relatively slow as trade sources report demand from China has been sluggish... cumulative exports in June and July are estimated around 4,85,000 bales," it said.

In August, exports have declined to 68,000 bales, as against 2,60,571 bales in the same month last year, it said, adding that, however, India is expected to remain a strong regional supplier to Pakistan and Bangladesh as well as southeast Asia.

"In general, however, as global demand remains sluggish and Indian ex-gin prices are above the Cotlook A Index, there may be tempered demand for processed cotton out of India and the USDA anticipates flat year-over-year demand given current circumstances," it added.

"China is not showing interest because the country is under pressure to bring down its inventories. It is planning to offload its stocks and provide subsidies directly to farmers," a senior official from the Confederation of Indian Textiles Industry (CITI) said.

Global cotton prices are expected to decline if China plans to offload its stocks, the official said.

According to the USDA, cotton production in India is expected to be 37.8 million bales this year, slightly lower than 39.1 million bales in 2013-14 marketing year.

Meanwhile, the country's overall consumption has been pegged at 30.1 million bales for this year.China is the top cotton export market for India, followed by Bangladesh and Pakistan.

Source: -business-standard.com

Goat Imports Swell As Dashain Nears

Goat imports from India have swelled with the Dashain festival approaching. Jamunapari, Totapari and Desh breeds of goats from Kanpur and Lucknow are being brought to Nepalgunj from where they will be shipped to major markets around the country like Kathmandu, Pokhara and Butwal.

Since the supply of local goats is inadequate to fulfil festival demand, traders rely on farmers from India to make up the deficit. Despite the immense demand for goat meat during major celebrations, lack of commercial farming has compelled traders to rely on Indian farmers.

Traders imported around 9,600 goats in the past two weeks, said the Livestock Quarantine Office, Nepalgunj. Likewise, a total of 13,129 goats were imported during the period between mid-July to mid-August.

The import of animals increases during the Dashain festival as domestic production is not enough, said Dr Sanjay Mijar, head of the Quarantine Office, Nepalgunj. “The animals are transported to Pokhara and Kathmandu which is the main reason why there has been a surge in imports here,” added Mijar.

During Dashain last year, 30,000 goats were imported through this customs point. According to the Quarantine Office, animals worth Rs 15 million are imported from India during festive occasions in Nepal.This shows that there is immense potential for those wishing to take up livestock farming in this region.

Source:- ekantipur.com

August Natural Rubber Imports Rise 15 Per Cent M/M: Board Official

India's natural rubber imports in August rose 15 per cent from a month ago to 42,499 tonnes as a drop in global prices prompted tyre makers to raise overseas purchases to meet rising local demand, said an official at the state-run Rubber Board.

The south Asian country mainly imports natural rubber from Indonesia, Thailand, Vietnam and Malaysia.India's imports in the first five months of the financial year that started on April 1 stood at 176,288 tonnes, up 37 percent from a year ago, the official said on Monday.

A revival in India's auto industry could lift imports of natural rubber for making tyres by a quarter this fiscal year, which would take inbound shipments to a record and may provide some support for global prices languishing at multi-year lows.

Source:- articles.economictimes.indiatimes.com

India's Mmtc Floats 10,000 T Rice Import Tender

India's state-run trader MMTC Ltd floated a tender on Tuesday to import 10,000 tonnes of rice for delivery in the eastern state of Mizoram.

India, the world's second biggest rice producer, has huge surplus stocks. Imports are sometimes required because of poor transportation links to ship grain to interior areas in northeast India, said a trade source.

The state trader is seeking 25 percent broken white rice supply from overseas sellers for delivery between Oct. 15 to Nov. 15, the statement said. Bids close on Sept. 23.

On Monday, another state-run trader, State Trading Corp. , floated a similar tender to import 25 percent broken white rice for delivery in the eastern state of Manipur.

Source:- in.reuters.com

Law doesn't mandate issuance of notice by CCI before directing further investigation against parties

Competition Act : Stage of section 26(7) is an "initial stage" which is not determinative in nature and substance; "further investigation" is also a pre-cogniznace stage; issuance of notice to person/enterprise informed/referred against, at that stage cannot be implied

Competition Act : Stage of section 26(7) is an "initial stage" which is not determinative in nature

Competition Act : Stage of section 26(7) is an "initial stage" which is not determinative in nature and substance; "further investigation" is also a pre-cogniznace stage; issuance of notice to person/enterprise informed/referred against, at that stage cannot be implied

Rupee Falls To 60.44 Tracking Broad Dollar Rally

The rupee was weaker at 60.44/45 versus its Monday's close of 60.29/30. Dollar traded at 14-month highs against a basket of major currencies early on Tuesday.

The index of the dollar against six majors was up 0.27 per cent. The pair is expected to trade in a 60.20-60.60 range during the session.

Most other Asian currencies were also trading weaker compared with the dollar. Traders will continue to monitor foreign fund flows for direction,

Source:- profit.ndtv.com

Coaching in spoken English doesn’t amount to ‘vocational training’ and liable to service tax

Service Tax : Coaching in Spoken English, generally for purposes of call centres, by way of a 2-week course does not amount to 'vocational training' and is not exempt from service tax

No concealment penalty if amount surrendered in search wasn’t disclosed in return but advance tax wa

IT-I : Where pursuant to search proceedings, assessee filed his return wherein amount surrendered was not disclosed due to unintentional mistake, in view of fact that surrendered income had been duly reflected in cash flow chart and balance sheet and moreover, assessee had paid advance tax on said amount, there being no concealment of particulars of income, impugned penalty order passed under section 271(1)(c) was to be set aside

Conclusion of VAT assessment for AYs 1989-90 and 1990-91 on 30-3-1998 was valid in view of amended p

CST & VAT: Where Assessing Authority finalised assessments of assessee for assessment years 1989-90 and 1990-91 on 30-3-1998, in view of sub-section (2) of section 21, as amended by U.P. Act No. 11 of 1997, with effect from 8-8-1997, assessment orders were not barred by time

Time-limit to rectify mistake under sec. 154 could go beyond 6 months but on merits; HC considers CB

IT : Assessing Authority can pass order in respect of application under section 154, even after expiry of 6 months on merit in accordance with law

CESTAT can hear appeal filed against order of Commissioner (Appeals) dismissing appeal on failure to

Service Tax : Tribunal may hear appeals against order of Commissioner (Appeals) dismissing appeal for failure of pre-deposit and in such hearing, Tribunal may consider correctness of pre-deposit order and may modify pre-deposit order and remand matter back to Commissioner (Appeals) for disposal on merits

Section 251 empowers CIT (Appeals) to remit case back to Assessing Officer instead of deciding it

IT : Commissioner (Appeals) is empowered under section 251(1)(c) to remit case back to file of Assessing Officer instead of deciding it

Vessels operating under SEZ exempted from condition of usage within SEZ in case of oil spillage emer

SEZ : Exemption of Vessels Operating Under the SEZ Rules, 2006 for Oil Spill Response

RBI allows FPIs to hedge against coupon receipts arising out of their investments in debt securities

FEMA/ILT : Risk Management and Inter Bank Dealings : Hedging Facilites for Foreign Portfolio Investors (FPIs)

No disallowance for TDS default from commission paid to NR as Circular No. 786 was effective in year

IT/ILT: Disallowance under section 40(a)(i) for year 2008-09 be deleted since circular No. 786 was applicable which obliged assessee not to deduct TDS

Cheque discounting charges aren’t includible in excisable value as they fall in category of interest

Excise & Customs : Cheque discounting charges are in nature of interest and are, therefore, not includible in assessable value under Central Excise

No registration of shares in name of petitioner as it failed to enforce its right when such right ac

CL: Where petitioner had not challenged refusal to register transfer of share by respondent-company when right to challenge accrued and decision of Board of respondent-company to refuse registration of transfer was on 'sufficient cause', no relief could be granted to petitioner

Post-graduate diploma in management is not a 'vocational course'; liable to service tax

Service Tax : 2-year course in Post Graduate Diploma in Management is a professional management course and not vocational course; therefore, same is not exempt from service tax under Notification No. 24/2004-S.T.

Central Excise dues shall have precedence over dues of State Investment and Financial Corporation: H

Excise & Customs : Section 11E prevails over any right of investment/financial corporation to recover dues of borrower/mortgagee under State Financial Corporation Act and also prevail over mortgage created prior to enactment of section 11E; hence, central excise dues have precedence over dues of investment/financial corporation

Value of derivative transactions in commodities at MCX won’t be included in turnover for tax audit p

IT : Value of sale transactions of commodity through MCX without delivery cannot be considered as turnover for purpose of section 44AB and, therefore, failure on part of assessee to get its accounts audited in such a case, would not lead to levy of penalty under section 271B

Show cause notice issued in compliance with principles of natural justice couldn't be said to be arb

Service Tax : Where show cause notice has been issued in compliance with principles of natural justice, it cannot be said to be arbitrary or illegal and therefore, writ petition filed thereagainst was disposed of with a direction to assessee to submit their explanation thereto

Investment in share capital of overseas subsidiaries not to be deemed as an international transactio

IT/ILT : Following order passed in case of Vijai Electricals Ltd. v. Addl. CIT [2013] 60 SOT 77 (URO)/36 taxman.com 386 (Hyd.), it was to be concluded that amount representing investment in share capital of subsidiaries outside India was not in nature of transaction referred to section 92B and, thus, transfer pricing provisions were not applicable to such a transaction

Civil Court can entertain petition challenging appointment of directors as it isn’t barred under Com

BL: Appointments of directors to board of banking company being not made according to sub-section (3) or (4) of section 10A of Banking Regulation Act, protection of sub-section (6) would not be available; such appointments being not final could be challenged

Appeal dismissed for want of COD clearance can be restored after discontinuation of COD system

Excise & Customs : Where appeal had been dismissed for want of clearance from CoD (Committee on Disputes), said appeals could be restored after said system of CoD was recalled/discontinued by subsequent judgment of Supreme Court

Pre-deposit must be determined after considering available Cevnat credit when SSI exemption is denie

Service Tax : If small service provider exemption is denied, assessee would become entitled to Cenvat credit; therefore, pre-deposit in such cases must be determined after deducting Cenvat Credit available

Circuitous transfer of funds to shareholder’s firm wasn’t deemed dividend if Co. got back its fund o

IT : Circuitous transfer of funds to shareholder’s firm wasn’t deemed dividend if Co. got back its fund on same day

AO to initiate fresh examination under Karnataka Sales Tax Act after considering cases cited by asse

CST & VAT : Where Assessing Officer passed assessment order on assessee without considering case law relied upon by it, matter was remitted back to Assessing Officer to pass assessment order afresh

AO is duty bound to refer matter to DVO if assessee objects to stamp duty valuation

IT: Where assessee had clearly objected before Assessing Officer against adoption of stamp duty valuation, it was duty of Assessing Officer to refer valuation of property to Valuation Cell of Income-tax Department

ALP of corporate guarantee couldn’t be compared with yield on domestic bonds without analysing AE’s

IT/ILT : Where TPO made addition to assessee's ALP taking a view that assessee had not charged any fee for corporate guarantee for taking loans in USA given on behalf of its AE, since TPO could not arrive at credit rating of AE without there being any analysis on creditworthiness of AE and, moreover, addition made by TPO on basis of difference between domestic bond yield and that of loan availed in USA could not be accepted as domestic yield so as to compare it with loans in US and rates charged

Exp. on repair and renovation of rented premises used for the purpose of business is revenue in natu

IT : Where assessee incurred expenditure on repairs and renovation of rented premises but neither any capital asset had been created nor enduring benefit had been derived and it was incurred merely for carrying on its business efficiently, it had to be treated as revenue in nature

CLB allowed right issue to existing shareholders in equal proportion as Co. needed funds for expansi

CL : Where company required funds for its expansion and managing its affairs and proposed right issue to all shareholder in same proportion without prejudice to any shareholder, such issue was to be allowed