"16 December 2009" Archive

CBEC issued clarification regarding labelling and repacking etc. amounting to manufacture.

Circular No. 910/30/2009-CX (16/12/2009)

It has been brought to the notice of Board that certain dealers are receiving liquid chemicals in bulk in containers and offloading the same at the dealers’ premises or godown into drums of 200ltrs for subsequent marketing of these materials to customers. Doubts have been raised as to whether such activity would amount to manufacture in...

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Even exempt capital gains are includible in “book profits”

Growth Avenue Securities vs. DCIT (ITAT Delhi)

The assessee earned long-term capital gains of Rs. 40.57 L which was not chargeable to tax u/s 54EC. As the said gains were credited to the P&L A/c, the assessee excluded the gains whilst computing “book profits” u/s 115JB in view of the Special Bench judgement in Sutlej Cotton Mills 45 ITD 22 (Cal) (SB) where it had been held that no...

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Department of posts to distribute new pension system

The Department of Posts, Government of India, has been enlisted as a Point of Presence (PoP) for distribution of the New Pension System (NPS) by Pension Fund Regulatory & Development Authority (PFRDA). The Department of Posts (DOP) would, to start with, make the NPS available at over 800 of its branches all over the country, and expand th...

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Posted Under: Excise Duty |

Impact of counterfeit currency on National Economy is negligible

Impact of counterfeit currency on National Economy. Reserve Bank of India maintains that the volume of fake currency is negligible, at less than 0.001% (8 notes per million pieces) of the total notes in circulation and, therefore, there is no serious threat to the economy on this account....

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Posted Under: Excise Duty |

UCBs – List of Terrorist individuals / organizations – under UNSCR 1267 (1999) and 1822(2008) on Taliban / Al-Qaida Organisation

RBI/2009-10/258, UBD (PCB) CO.BPD. Cir. No.31/14.01.062/2009-10 (16/12/2009)

Please refer to our circular UBD (PCB) CO.BPD. Cir. No. 15 / 14.01.062 / 2009-10 dated October 22, 2009 on the above subject. We have since received from Government of India (Ministry of External Affairs) copies of notes dated September 3, 2009; September 23, 2009 and October 22, 2009 from the Chairman of UN Security Council's 1267 Commit...

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Prudential Treatment of different types of Provisions in respect of Loan Portfolios

RBI/2009-10/ 256 UBD.BPD(PCB) .Cir.No. 30/09.14.000/ 2008-09 (16/12/2009)

As per the extant instructions, provisions made for NPAs as per prudential norms are deducted from the amount of Gross NPAs to arrive at the amount of Net NPAs. In cases where banks make specific provision for NPAs in excess of what is prescribed under the prudential norms, the total specific provision may be deducted from the amount of G...

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Replacement of Parts, Machines etc., in a production System – Tax Implications

CIT Vs. Janakiram Mills Ltd. [Madras High Court]

It is quite common for the Revenue to treat such expenditure as capital in nature and administer depreciation allowance, only. An assessee would always put forth his argument that such replacement cost is only to maintain the existing level of efficiency of his manufacturing facility and would not result in any increase in its production ...

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Expenditure related to exempt income to be disallowed even if assessee has not earned any tax-free income

Cheminvest Ltd. (ITAT Delhi)

Special Bench of the Income Tax Appellate Tribunal, New Delhi in the case of Cheminvest Ltd. (ITA Nos.87Del//2008, 4788/Del/2007 and 233/Ahd/ 2006) holds that expenditure relating to exempt income to be disallowed even if assessee has not earned any tax-free income....

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Gains on sale of shares allotted under cashless ESOP plan not taxable as capital gains

Mr. Bomi S. Billimoria Vs. A.C, Mumbai (ITAT Mumbai)

The Income-Tax Appellate Tribunal, Mumbai in the case of Mr. Bomi S. Billimoria vs. A.C Cir 23(1), Mumbai (ITA No.2120/Mum/1998) held that in case no payment has been made for acquiring shares under Employee Stock Option Plan, the gain on sale of said shares should not be liable to capital gains tax. As the date of exercise of options and...

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Tax paid by employer on behalf of employee is a non-monetary perquisite subject to single grossing up

Triton Holdings Ltd. Vs Dy. Director of Income Tax, Deharadun (ITAT Delhi)

The Income-tax Appellate Tribunal, Delhi in the case of Triton Holdings Ltd. vs Dy. Director of Income Tax, Deharadun (ITA Nos. 2541 to 2559/Del/2009) held that the tax paid by employer on the behalf of employees should be considered as a non-monetary perquisite in the hands of the employees for the purpose of claiming an exemption under ...

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