ADVOCATES AND SOLICITORS
MONTHLY REPORT FOR OCTOBER, 2011
ADVISER
Mr. Pradeep K. Mittal
B.Com., LL.B., FCS,
Advocate
Central Council Member
The Institute of Company Secretaries of India
E-mail:
9811044365
SEBI-LAWS
Mr. C M Bindal
FCS
Company Secretary in Practice – Jaipur
E-mail : ,
9414962454
INCOME TAX
Mr. Himanshu Goyal
B.Com., LL.B., ACA,
E-mail:
9899566764
VEDIC ASTROLOGY
Mr. Pradeep Kumar Aggarwal
Practicing Chartered Accountant
E-mail:
9811300732
HONORARY ASSOCIATE
Dr. Sanjeev Kumar
M.Com. LL.B., Ph.D, PGDPIRL, AICWA, FCS
WHOLTIME DIRECTOR – BAJAJ HINDUSTHAN LIMITED
SEBI/SECURITIES LAWS BY SHRI C.M.BINDAL FCS - 9414962454
REPORT ON SEBI-SECURITIES LAWS:
NOTIFICATIONS/CIRCULARS/REGULATIONS/RULES:
● Protection of interests of investors in mutual funds. Circular No.Cir/MD/DF/13/2-11 dated 22nd August, 2011.
● Investor Grievances- Redressal in SEBI complaints redressal system in the case of intermediaries. CIR/MIRSD/17.2011 dated 24th August, 2011.
● Investor Grievances- Redressal in SEBI complaints redressal system in the case of stock brokers and sub-brokers. CIR/MIRSD/18/2011 dated 25th August, 2011.
● Investor Grievances- Redressal in SEBI complaints redressal system in the case of credit rating agencies. CIR/MIRSD/19/2011 dated 26th August, 2011
● SEBI allows infrastructure finance companies to raise funds overseas through long-term corporate bonds. CIR/IMD/FIIC/15/2011 dated 26th August, 2011.
● Securities and Exchange Board of India (Prohibition of Insider Trading) (Amendment) Regulations, 2011. Notification No.LAD-NRO/GN/2011-12/16/26150 dated 16th August, 2011.
● Securities and Exchange Board of India (Stock Brokers and Sub-Brokers) (Second Amendment) Regulations, 2011. Notification No. LAD-NRO/GN/2011-12/19/26273 dated 17th August, 2011.
● Securities and Exchange Board of India (Merchant Bankers) (Second Amendment) Regulations, 2011. Notification No.LAD-NRO/GN/2011-12/17/26149 dated 16th August, 2011.
● Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) (Second Amendment) Regulations, 2011. Notification No. LAD-N RO/GN/2011-12/18/26148 dated 16th August, 2011
● Amendments to SEBI (Mutual Funds) Regulations, 1996. Cir/IMD/DF/16/2011 dated 8th September, 2011.
● Redressal of investor grievances against depository participants in SEBI complaints redressal system. CIR/MIRSD/20/2011 dated 12th September, 2011.
● Securities and Exchange Board of India (Mutual Funds) (Amendment) Regulations, 2011. Notification No. LAD-NRO/GN/2011-12/27668 dated 30th August, 2011.
INCOME TAX – BY SH.HIMANSHU GOYAL -CA 9899566764
● DEPUTY COMMISSIONER OF INCOME - TAX Vs. INSILCO LTD. (2011) 59 DTR (Del) 364 Revision – Erroneous and Prejudicial order – Lack of proper enquiry – Tribunal has noted that the assessee had filed copies of documents in respect of the legal cases pending against each of the parties for recovery of the amounts to justify its claim for bad debts before the AO and that there were discussions on various dates thereafter on this issue – Order sheets maintained by the AO show the detailed notes of the discussion that took place before finalizing the assessment with regard to the claim of bad debts – Therefore, it cannot be said that there was no enquiry by the AO – Order u/s 263 rightly aside by the Tribunal.
● COMMISSIONER OF INCOME – TAX Vs. RAJEEV SHARMA (2011)336 ITR 678 (Allahabad) Reassessment – Procedure – Return in response to notice under section 148 – Assessing Officer must apply his mind and issue notice under section 143(2) – Procedure must be followed strictly – Income Tax Act, 1961, ss. 143, 148
● COMMISSIONER OF INCOME – TAX Vs. CONTINENTAL ENGINES LTD. (2011) 60 DTR (Del) 40 Exemption under section 10B – Allowability – Job work got done from sister concern – Assessee is an EOU approved by NEPZ authorities and is making exports – Both CIT(A) and the Tribunal have recorded findings of fact that the assessee is engaged in manufacture of articles or things – Fact that it was getting some job work done from its sister concern cannot deprive the assessee of its EOU status – In the subsequent year AO himself has stated that the second unit of the assessee fulfils the conditions of s. 10B and has allowed deduction thereunder – Therefore, there is no reason to interfere with the order of the Tribunal allowing assessee’s claim under s. 10B.
● RANBAXY LABORATORIES LTD. Vs. COMMISSIONER OF INCOME – TAX (2011) 336 ITR 136(Delhi) Reassessment – Items of income said to have escaped assessment on which reassessment proposed not added but other deductions reduced – Not permissible – Income – Tax Act, 1961, ss. 147, 148
● VINEETKUMAR RAGHAVJIBHAI BHALODIA Vs. INCOME TAX OFFICER (2011) 140 TTJ (Rajkot) 58 Income from other sources – Chargeability – Gift received by member from HUF – An HUF consists of all persons lineally descended from a common ancestor and includes their mothers, wives or widows and unmarried daughters – All these persons fall within the definition of “relative” as provided in Explanation to s. 56(2)(vi) – Thus, an HUF is a ‘group of relatives’ – Intention of the legislature as evident from a plain reading of s. 56(2)(v) read with Explanation thereto is that a gift received from “relative”, whether from an individual relative or a group of relatives, is exempt from tax under the provisions of s. 56(2)(vi).
● MAHENDRA C. SHAH VS. ADDITIONAL COMMISSIONER OF INCOME TAX (2011) 140 TTJ (Mumbai) 16 It is held that the same assessee can hold the shares in two different portfolios i.e, one portfolio for stock – in – trade and another portfolio for investment – This position has been recognized by the CBDT in Circular no. 665, dt, 5th Oct., 1993 – In the instant case, assessee has shown the shares as investment in his balance sheets – Though the investment value increased substantially from year to year, the number of companies whose shares were held by the assessee remained more or less constant and in fact it actually fell to 131 from the earlier high of 159 – Moreover the stand by the assessee that he is an investor has been accepted by the Revenue authorities in the asst. yrs 2001-02 and 2004-05 in the assessment orders passed under s. 143(3) – Significantly , Revenue has not filed any appeal against the findings of the CIT(A) that the long term capital gains declared by the assessee should be assessed as such and not as business income
● COMMISSIONER OF INCOME TAX Vs. JAI DRINKS P. LTD. (2011) 336 ITR 383 (Delhi) Deduction of tax at source – Commisssion – Agreement for distribution of products manufactured by assessee – Distributor purchasing products at pre-determined price for sale within specified area – Assessee and Distributor collecting and paying Sales tax separately – Payment of incentive to distributor – Not Commission – Tax not deductible at source on such payment – Income – Tax Act, 1961, s. 194H
● COMMISSIONER OF INCOME TAX Vs. CONTINENTAL CONSTRUCTION LTD. (2011) 336 ITR 394(Delhi) Held, dismissing the appeals , that when it came to the meaning that was to be assigned to “tax effect” and the modified manner / formula was prescribed in O.M dated May 15, 2008, such a circular on this respect had to be treated as having prospective application especially when para. 11 thereof specifically so provided, Therefore, the appeals were not maintainable and were to be dismissed.
● COMMISSIONER OF INCOME TAX Vs. SADHU FORGINF LTD. (2011) 336 ITR 444 (Delhi) Industrial undertaking – Special deduction- Manufacturer of steel forging – Scrap sale charges and job works/labour charges – findings that job works / labour charges derived from industrial undertakings – Receipts of sale of scrap part and parcel of activity – Assessee entitled to deduction – Income Tax Act, 1961, s. 80 – IB
● COMMISSIONER OF INCOME TAX Vs. V.S,DEMPO AND CO. P. LTD. (2011) 336 ITR 209 (Bom) Business Expenditure – Disallowance – Excessive and unreasonable payments – Payment to related person – Subsidiary company not a related person within the meaning of section 40A (2) – Higher price paid for raw materials to subsidiary company in consideration of assured supply of material of uniform quality – Finding that price not unreasonable – Part of price could not be disallowed – Income Tax Act, 1961 s. 40A (2) (b).
● COMMISSIONER OF INCOME TAX Vs. RAJ OVERSAES (2011) 336 ITR 261 (P&H) Penalty – Concealment of Income – Bona fide claim for deduction – Not concealment or furnishing of inaccurate particulars – Penalty could not be imposed – Income Tax Act, 1961, s. 271(1)(c).
● COMMISSIONER OF INCOME TAX Vs. Manak Shoes Co. (P) Ltd. (2011) 200 Taxmann 133 (Delhi) Section 147 of the Income – tax Act, 1961 – Income escaping assessment – Non – disclosure of primary facts – Assessment year 2002-03 – Assessing officer reopened assessee’s assessment for relevant assessment year on ground that though there was no manufacturing activity during previous year, still assessee had claimed depreciation on plant, machinery, factory dies and moulds, etc., and had also claimed expenses on power and fuel charges , job charges and raw material – thereafter , Assessing officer passed assessment order under section 143/147 disallowing depreciation and said expenses – Whether when at time of original assessment proceedings, assessee has brought all relevant facts to notice of Assessing officer and original assessment order unequivocally manifested that Assessing officer specially went into issue as to whether there was a manufacturing activity or not, reopening of assessment constituted a change of opinion – held, yes.
● FAB INDIA OVERSEAS (P) LTD. Vs. COMMISSIONER OF INCOME TAX (2011) 201 TAXMANN 173/12 TAXMANN.COM 360 (DELHI) Whether lack of enquiry on part of Assessing officer made assessment order erroneous and, thus, impugned revisional order was rightly upheld by Tribunal – Held, Yes
● COMMISSIONER OF INCOME TAX Vs. BAJRANG LAL BANSAL (2011) 200 TAXMANN 188 (DELHI) Whether, in any event, opinion of DVO, per se, is not an information and cannot be relied upon without books of accounting being rejected – Held, yes – Whether since, in instant case, no evidence much less incriminating evidence was found as a result of search to suggest that assessee has made any payment over and above consideration mentioned in its return, impugned addition was rightly deleted by authorities below – Held, yes.
● GE INDIA TECHNOLOGY CENTRE (P.) LTD. Vs. COMMISSIONER OF INCOME TAX (2011) 201 TAXMANN 191 Whether so far as other direction of DRP regarding rejection of assessee’s claim under section 10A was concerned, since in proposed draft order there was no proposal to hold that assessee was not entitled to any benefit under section 10A and what was proposed was only rejection of excess claim under section 10A, impugned direction issued by DRP was wholly without jurisdiction and suffered from inherent lack of jurisdiction – Held Yes
CENTRAL EXCISE - BY SHRI PRADEEP K MITTAL 9811044365
● If the Department wish to auction a plot of land for recovery of arrears of excise duty during the pendency of the appeal despite the contention that the plot belongs to the earstwhile Director of the Company, the Tribunal cannot refuse to grant interim relief against coercive action as it would amount to violation of justice. Geetika S.Gupta Vs CCE 2011 (269) ELT 59 (Bombay).
● In case one of the inputs is gases has been lost during manufacturing process, the cenvat credit cannot be disallowed on the contention that the said gas has not been used in or in relation to the manufacturing process. CCE Vs. BOC India Ltd. 2004 (166) ELT 254.
● The writ petition can be entertained at the Show Cause Notice State provided the Show Cause Notice is without jurisdiction or is an abuse of the process of law, but, however, such interference by writ petition should be rare and not as a matter of routine. AGV Alfab Ltd. Vs. CCE 2011 (270) ELT 331.
● The Cenvat Credit of the services tax paid by a party to a consultant who arranged private equity is permissible as the activity of arranging capital is a business activity within the meaning of Rule 2(l) of the Cenvat Credit Rules, 2004. Ahmednagar Forgings Ltd. Vs. CCE 2011 (23) STR 261.
● The Cenvat Credit lying in the account of a party can be used both for payment of excise duty payable on manufacture of excisable goods and also for providing taxable services and there is no need to have separate account of cenvat credit which has arisen out of excise duty paid on input and service tax paid on input services. CCE Vs. Lakshmi Technology and Engineering Industries Ltd. 2011 (23) STR 265.
● The corringendum of the Show Cause Notice is permissible so long as it does not have the effect of altering or changing the dates of issuance of Show Cause Notice and such alterations relates back to the original date of issuance of Show Cause Notice. Pandurang SSK Ltd. Vs. CCE 2011 (23) STR 300.
● One of the fundamental requirement of principle of natural justicfe is that the hearing should be done by a judge with an unbiased mind. State of West Bengal Vs. Shiva Nanda Pathak 1998 (5) SCC 513.
● The Gujarat High Court, while affirming its own earlier judgment in the case of Viral Laminats (P) Ltd 1998(100)ELT 335), has held that Excise & Service Tax Tribunal, has no powers to dismiss the appeal due to non-appearance of appellant and the Tribunal must decide on merits. Kiran Ship Breaking Corpn Vs. CCE 2011(269) ELT 491 (Guj).