"26 May 2011" Archive

Tax paid by contractee on goods supplied to contractor, is allowable as Input Tax Credit to such contractor

The Punjab & Haryana High Court has held in an important case namely Lajpat Rai Chanana V State of Haryana & others (2011) 38 PHT 390 (P&H) that input tax credit to a works contractor executing the works contract will be justified if the contractee has already paid the tax on the goods supplied by him to the contractor. The assessee was a...

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Despite detection in survey, No penalty U/s. 271(1)(c)

CIT Vs. SAS Pharmaceuticals (Delhi High Court)

CIT vs. SAS Pharmaceuticals (Delhi High Court) Though it is possible that but for detection in the survey, the assessee might not have offered the income, penalty u/s 271(1)(c) can only be levied if “in the course of proceedings” the AO is satisfied that there is “concealment” or “furnishing of inaccurate particulars“. The wor...

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ABC International Inc USA (2011) 241 CTR 289 / 55 DTR 393 (AAR)

ABC International Inc. (AAR Delhi)

A.A.R. No. 840 of 2010 in the case of ABC International Inc. USA- Foreign corporates with subsidiaries in the country are not subject to payment of withholding tax for financial services like discounting of bills provided to their Indian arms. In a ruling, the Authority of Advanced Rulings (AAR) also held such companies are also not liab...

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India inks DTAA with Ethiopia to check tax evasion

India signed a Double Taxation Avoidance Agreement (DTAA) with the Federal Democratic Republic of Ethiopia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 25th May, 2011 at Addis Ababa. The Agreement was signed by Shri S.M. Krishna, External Affairs Minister on behalf of the...

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RBI to soon release guidelines on new bank branches

The Reserve Bank will soon release guidelines for implementing its proposal to locate at least a quarter of the new bank branches in the unbanked areas, which generally fall in the rural areas. RBI will issue guidelines for 25% rural branches soon, said a banker present at the central bank's post-policy meeting today....

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OECD pegs India’s growth at 8.5 percent in 2011-12

The OECD on Wednesday pegged India’s growth at 8.5 per cent for the current fiscal, indicating that economic expansion would be slower. The Organisation for Economic Cooperation and Development has projected the Indian economy to expand 8.5 per cent in 2011-12, much lower than the growth of 9.6 per cent witnessed in 2010-11 financial ye...

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Regarding processing for or on behalf of client, in relation to agriculture – causing sale or purchase of agricultural produce

Circular No. 143/12/ 2011 – ST (26/05/2011)

Circular No. 143/12/ 2011 – ST Representations have been received that client processing of tobacco involving threshing and drying of tobacco leaves and client processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel, are considered by the field formations as not falling within the meaning...

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Export of Guar gum

Notification No. 49 (RE- 2010)/2009-2014 (26/05/2011)

DGFT Notification No 49 (RE – 2010)/2009-2014 - Notification No. 47 of 18.05.2011 stipulating export of Guar gum to EU to be allowed only if it does not contain Penta Chlorophenol (PCP) in any proportion, has been rescinded. Thus, the earlier stipulation of Notification No. 50 of 06.07.2010 of allowing presence of upto 0.01 mg/Kg. of ...

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Despite Loan, Shares Gain is STCG and Not Business Profit

Shri Mahendra C Shah, Mumbai Vs Additional Commissioner of Income Tax (ITAT Mumbai)

Mahendra C Shah vs. Addl CIT (ITAT Mumbai) - The fact that the assessee borrowed for the purpose of buying shares is not conclusive that the assessee intended to do business in shares and not merely invest in them if the interest is capitalized as cost of the shares & not claimed as a revenue expenditure (Shanmugam 120 ITD 469 (Pune) foll...

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Internal Vigilance in Private Sector/foreign Banks

RBI/2010-11/554 DBS.CO.FrMC.BC.No. 9/23.04.001/2010-11 (26/05/2011)

DBS.CO.FrMC.BC.No. 9/23.04.001/2010-11 - RBI has also issued various circulars for the prevention of frauds and malpractices in banks. In this connection reference is specifically drawn to circulars DBOD. No.BC.20.17.04.001 dated August 25, 1992 on the recommendation of the Committee to enquire into various aspects relating to frauds and ...

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