"June, 2012" Archive

Assessing Officer must record ‘reasons’ before issuing notice u/s. 148

Dadanbai B. Bachani Vs ITO (ITAT Mumbai)

Adverting to the present case, it is clearly evident that 'reasons recorded' were not provided to the assessee despite categorical directions by the ITAT and even when the so-called "reasons recorded" have been supplied after a gap of almost 11 years, it is amply clear from the face of it that the 'reasons' were not recorded prior to the ...

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Person reimbursing the freight not liable to pay Service Tax

Bhagyalaxmi Electroplast (P.) Ltd. Vs Commissioner of Customs & Central Excise, Hyderabad (CESTAT Bangalore)

Entire demand on the freight element is based on Rule 2(1)(d)(v) of the Service Tax Rules, 1994. Sub-clause (v) was inserted in Rule 2(1)(d) only on 3.12.2004 and the same cast Service Tax liability on the person paying the freight. Prima facie, the appellant did not pay the freight and therefore there is no tax liability on their part....

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Service Tax Payable on Reimbursement of ‘Integral and inseparable’ expenses

Commissioner of Central Excise, Indore Vs International Logistics (CESTAT Delhi)

Expenses incurred to provide taxable services shall be part of assessable value if such expenses are inseparable and are integrally connected with the performance of the taxable services. Such expenses shall necessarily form part of the assessable value. Therefore, the assessee was not entitled to any relief on account of expenses not dis...

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Section 531A Prohibits lease of property for 30 years by a Company one year prior to its winding up petition

Sri Krishnasamy Reddiar Educational Trust Vs Official Liquidator (Madras High Court)

The appellant is said to have entered into a lease agreement with the company-in-liquidation on 22-1-2000, for demised building of 8,400 sq.ft. along with adjacent vacant land (about 5.33 acres) for a lease rent of Rs. 5,000 per month for a period of 11 months, which expired on 21-12-2000. Again, the company-in-liquidation is said to have...

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No Penalty for Non payment of service tax due to sudden crash in stock market

N.V. Securities Vs Commissioner of Central Excise & Service Tax, Siliguri (CESTAT Kolkata)

The assessee had reflected the service tax liability on account of service provided by him during the period April, 2007 to September, 2007 in the ST-3 returns filed with the department. The reason for delay in making payment had been sufficiently explained by the assessee in his reply, stating that due to sudden crash in the stock market...

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Service Tax on study materials provided by Commercial training or coaching service provider

FIITJEE Ltd. Vs Commissioner of Service Tax, Delhi (CESTAT Delhi)

Prima facie coaching material has intimate connection with the commercial coaching provided by the assessee and the contents of the study material are relevant to the coaching to make the later fruitful and meaningful so that the enrolled candidates are benefited out of commercial coaching. There was no evidence to effect that these coach...

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Service Tax – Things to consider to grant benefit of Section 80 of Finance Act, 1994

B.S. Cable Network Vs Commissioner of Central Excise (CESTAT Delhi)

Since the appellant prays that it has a case for consideration under Section 80 of the Finance Act, 1994 it is desirable to bring to record about the date on which liability arose, date of return ought to have been filed, date on which admitted tax liability should have been discharged and the date of discharge of duty liability. If these...

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Lapse on the part of litigant concerned in filing appeal on time alone is not enough to turn down his plea

Sree Rajendra Mill Ltd. Vs IOCEE Exports Ltd. (Madras High Court)

When the defendant has alleged non-receipt of the said letter dated July 31, 2006 and urges the same for not taking steps, the reasons stated by the appellant do not appear to be false or frivolous. It must be remembered that in every case of delay, there is some lapse on the part of the litigant concerned. That alone is not enough to tur...

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Party to the dispute entitled to know the grounds on which authority has rejected his claim

Fraport AG Frankfurt Airport Services Worldwide Vs Asst. Director of IT (ITAT Delhi)

Recording of reasons in support of a decision on a disputed claim by a quasi-judicial authority ensures that the decision is reached according to law and is not the result of caprice, whim or fancy or reached on grounds of policy or expediency. A party to the dispute is ordinarily entitled to know the grounds on which the authority has re...

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Common area has to be excluded while computing built-up area for benefit u/s. 80-IB(10)

CIT Vs Raghavendra Constructions (Karntaka High Court)

Keeping in mind the fact that obstacles were put in assessees getting the benefit, the Legislature introduced the definition of built-up area in sub-section (14)(a) of section 80-IB. From a reading of the definition of built-up area, the intention is clear. In calculating the built-up area it is only the inner measurements of the resident...

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Premium paid to LIC under Group Leave Encashment Scheme is deductible u/s. 37(1)

CIT Vs Hindustan Latex Ltd. (Kerala High Court)

Calcutta High Court decision in Exide Industries case (supra). The Calcutta High Court held that leave encashment is neither a statutory liability nor a contingent liability and it is a provision to be made for the entitlement of an employee achieved in a particular financial year. Testing clause (f) with the objects sought to be achieved...

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Post amendment in S.36(1)(vii), assessee is not required to demonstrate that debt is bad

ACIT Vs. M/s. Bobcards Ltd. (ITAT Mumbai)

AO has not given any reason for disallowing the claim. We also find that the AO has simply followed the findings of earlier assessment years. As similar additions in earlier assessment year has been deleted by Ld. CIT(A) which has been accepted by the Revenue as Committee on Dispute declined to give permission to the department to proceed...

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Exemption to taxable services received by an exporter of goods & used for export of goods

Notification No 42/2012 - ST (29/06/2012)

Notification No 42/2012 Service provided by a commission agent located outside India and engaged under a contract or agreement or any other document by the exporter in India, to act on behalf of the exporter, to cause sale of goods exported by him....

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Law Minister again embarks on special drive to reduce pendency in courts

Encouraged by the success of the last year’s Pendency Reduction Drive, undertaken for reduction in pendency in the courts from 1st July 2011 to 31st December 2011, the Minister of Law & Justice, Shri Salman Khurshid, has requested the Chief Justices of all the High Courts to undertake another drive this year from 1st July 2012 to 31st D...

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Posted Under: Income Tax |

Note On Service Tax Amendments – June 2012

From the date the Finance Bill 2012 was introduced on March 17, 2012 until date, there have been numerous amendments made in the service tax law. Several notifications have been issued over the last three months and many of them have already been superseded by a fresh set of notifications issued on June 20, 2012. In all 40 Notifications h...

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Posted Under: Income Tax | ,

Companies Bill 2011, towards a higher level of transparency & accountability

Companies Bill 2011, if passed, will take the place of nearly 55 years old yet significant law Companies Act 1956. This act came into force when our fore fathers use to do the business but the things have changed now the number of companies in India in 1956 was 30,000 which is more than 7laks now. Although the companies act has gone nearl...

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Posted Under: Income Tax |

Amendments to schedule entries under Maharashtra Value Added Tax Act, 2002

Trade Circular No. 9 T of 2012 (30/06/2012)

To give effect to the Budget proposals certain changes in the schedule entries under the Maharashtra Value Added Tax Act,2002 are made by the above referred notification. These changes in tax rates are effective from 1st April 2012 (except otherwise stated) and are briefly explained below....

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Service tax on Advocates – Applicability, Exemptions & SSI provisions

Advocates were resisting being brought within the ambit of Service Tax by their argument that their basic function is to assist the Court in effective justice delivery system and while doing so they function more like officers of the Court than as service provides. They were assisting the litigants in obtaining justice and that charging o...

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Posted Under: Income Tax | ,

ICAI President’s Message – July 2012

Representation on Definition of Accountant in Direct Taxes Code Bill: As the members are aware, widening of the scope of the definition of accountant has been recommended by the Standing Committee in its 49th report on the Direct Taxes Code Bill. As the report is still under consideration of Parliament, we have submitted a representation ...

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Posted Under: Income Tax |

Exemption to Charitable institution cannot be denied on the basis of a hypothetical assumption of an event that will happen in future

Additional Commissioner of Income-tax Vs N.L. Education Society (ITAT Agra)

The whole case revolves upon the lease deed dated 24.12.2004 executed between the lessor, Smt. Sudha Saraswat and the assessee-society through which the land measuring 5150.48 sq. meter was let out to assessee society for 30 years. Copy of the lease deed is appended with the assessment order. The assessee paid Rs. 10,000/- as premium and ...

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80G approval to be valid in perpetuity even if assessee files an application for renewal

Vishav Namdhari Sangat Vs CIT (ITAT Chandigarh)

Approval u/s. 80G once granted shall continue to be valid in perpetuity unless and until a show-cause notice is issued by the concerned CIT showing his intention to withdraw already granted such approval. ...

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Mumbai Court can admit an appeal against company listed in other state for fraud occurred in its jurisdiction

Western Projects Ltd. Vs State of Maharashtra (Bombay High Court)

There is no much substance in the first argument as to aspect of lack of jurisdiction of the Metropolitan Magistrate's Court to entertain the criminal complaint of respondent No.2. This is so, in view of the factual position as to major transaction between the complainant and the accused took place at Mumbai though the complainant is resi...

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Every information required to be disclosed is to stock exchange is not necessarily a ‘price sensitive information’

Anil Harish Vs Securities and Exchange Board of India (Securities Appallete Tribunal Mumbai)

When a company having contracts worth Rs.1000 crores pending with it for execution bags a few new projects through the tendering process such information need not necessarily be price sensitive. ...

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Posted Under: Income Tax |

Independent legal issue is beyond scope of adjudication through cross objection u/s. 253(4)

DCIT Vs Sandip M. Patel (ITAT Ahmedabad)

Tribunal is not empowered to pass an order 'thereon' on the subject-matter which is not in appeal as per the appeal memo to be adjudicated upon. As far as the question of withdrawal of cross-objection is concerned, in the light of the above discussion, had the cross-objection was not withdrawn, even then, such a legal issue was beyond the...

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Extension of time in Filing of annual return by LLPs

General Circular No. 15/2012 (29/06/2012)

In order to have better understanding of the circular, it is clarified that the time limit of 60 days shall be read as 122 days for filing of Form 11 by LLPs in respect of the Financial Year ending on 31.03.2012. This circular shall be effective from....

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Ed. Cess and SH Ed. Cess to continue even after 30.06.2012

Circular No. 160/11/2012-ST (29/06/2012)

Circular No. 160/11/2012-ST There has been some doubt regarding the applicability of provisions of the Finance Act, 2004 relating to education cess and the Finance Act, 2007 relating to secondary and higher education cess as the concerned Acts make reference to section 66 of the Finance Act, 1994, which shall cease to have effect from Jul...

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Notification No 42/2012 – Service Tax dated 29th June, 2012

Notification No. 42/2012-Service Tax (29/06/2012)

(1) The exporter shall declare the amount of commission paid or payable to the commission agent in the shipping bill or bill of export, as the case may be. (2) The exemption shall be limited to the service tax calculated on a value of ten per cent of the free on board value of export goods for which the said service has been used. (3) The...

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Circular No. 52/17/CAB‐2011, Dated: 29.06.2012

Circular No. 52/17/CAB‐2011 (29/06/2012)

In continuation of MCA’s General Circular No. 8/2012 dated 10th May, 2012, it has been decided that filing of Cost Audit Reports and Compliance Reports with the Central Government in the XBRL mode shall be allowed after 31st July, 2012. The Institute is requested to circulate this for the information of all concerned....

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MRTP Commission can modify or revoke its interim order if it thinks that such a direction could only be considered at time of finally deciding complaint

A.B.N.A. Vs Managing Director, U.P.S.I.D.C. Ltd., Kanpur (Supreme Court of India)

On a perusal of the impugned order dated 4-3-2009, however, it is found that although the respondents cited the judgment of the Court in Ghaziabad Development Authority v. Ved Prakash Aggarwal [2009] 91 SCL 281 (SC) and contended before the MRTP Commission that the MRTP Commission had no authority to order handing over of possession and t...

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Office Memorandum No. 17/46/2012-CL-V, Dated: 29.06.2012

Office Memorandum No. 17/46/2012-CL-V (29/06/2012)

In continuation of this office O.M. of even number dated L03.2011 the undersigned is directed to say that Chairman, SEBI or his nominee shall also be the member of the Committee with immediate effect to formulate a policy document on Corporate Governance....

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Service tax payable on specified services – Corrigendum

Corrigendum to Notification No. 30/2012-Service Tax (29/06/2012)

Notification [F. No.334/1/2012 -TRU], dated 29-6-2012 In the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 30/2012- Service Tax, dated the 20th June, 2012 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 472 (E), dated the 20th June,...

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Exemption to Specified Services Received By Exporter of Goods – Corrigendum

Corrigendum to Notification No. 31/2012-Service Tax (29/06/2012)

In the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 31/2012-Service Tax, dated the 20th June, 2012 published in the Gazette of India, Extraordinary, Part II, section 3, sub-section (i) vide number G.S.R. 473 (E), dated the 20th June, 2012, in the proviso, in clause (d),-...

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Salient features of the Companies Bill, 2011

The following are the salient features of the Companies Bill, 2011:- (i) E-Governance:- Maintenance and allowing inspection of documents by companies in electronic form being allowed for the first time. (ii) Concept of Corporate Social Responsibility is being introduced. (iii) Enhanced Accountability on the part of Companies:...

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Posted Under: Income Tax |

New Provisions introduced in Companies Bill, 2011

While incorporating the several recommendations of the Standing Committee on Finance, as also some of the suggestions/ representations received subsequent to submission of report of Committee, the provisions of the Companies Bill, 2009 were revised and a fresh Bill was formulated as Companies Bill, 2011 and introduced in Lok Sabha on 26.0...

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Posted Under: Income Tax |

Amendment in Tatkal Scheme of Railway

With a view to further improve the delivery of Tatkal tickets to passengers, the Ministry of Railways has decided that with effect from 10.07.2012 booking of Tatkal ticket will start at 1000 hours on the previous day of journey from train originating station instead of 0800 hours at present. ...

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Posted Under: Income Tax |

Instruction relating applicability of Ed. Cess & SH Ed. Cess in new Service Tax Regime

Instruction D.O.F. No. 334/1/2012-TRU (29/06/2012)

Instruction D.O.F. No. 334/1/2012 Applicability of provisions of Finance Act, 2004 and 2007 relating to education cess and secondary & higher education cess respectively. There has been some doubt regarding the applicability of provisions of the Finance Act, 2004 relating to education cess and the Finance Act, 2007 relating to secondary a...

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Salient Features of New All India Time Table ‘Trains at a Glance’

The Ministry of Railways has released its new All India Railway Time Table known as TRAINS AT A GLANCE (TAG) which has come into effect from 1st July, 2012. In addition to this All India Time table, all the 17 zonal Railways have also released their zonal railway time tables which too have come into effect from 1st July, 2012. Passenge...

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Posted Under: Income Tax |

Insertion of Explanation to section 66B of the Finance Act, 1994

ORDER NO. 2/2012 (29/06/2012)

ORDER NO. 2/2012, Service Tax (Removal of Difficulties) Second Order, 2012 - Insertion of Explanation to section 66B of the Finance Act, 1994 Whereas difficulties have arisen in giving effect to the provisions of section 143 of the Finance Act, 2012 (23 of 2012), in so far as it relates to insertion of section 66B in Chapter V of the Fina...

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CBDT Invites Comments/Suggestions on Draft GAAR Guidelines

The Central Board of Direct Taxes (CBDT), Ministry of Finance has invited comments/suggestions on the Draft Guidelines regarding implementation of General Anti Avoidance Rules (GAAR) in terms of Section 101 of The Income Tax Act, 1961.The Draft GARR Guidelines were issued yesterday along with the relevant Annexures. All these details are ...

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Posted Under: Income Tax |

Notification No. 41/2012-Service Tax, Dated: 29.06.2012

Notification No. 41/2012-Service Tax (29/06/2012)

Notification No. 41/2012-ST, the rebate shall be granted by way of refund of service tax paid on the specified services. specified services means- (i) in the case of excisable goods, taxable services that have been used beyond the place of removal, for the export of said goods; (ii) in the case of goods other than (i) above, taxable se...

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Export of onions allowed without any MEP (Minimum Export Price)

Notification No. 03(RE-2012)/2009-2014 (29/07/2012)

In exercise of powers conferred by Section 5 of the Foreign Trade (Development & Regulation) Act, 1992 (No. 22 of 1992) read with Para 2.1 of the Foreign Trade Policy, 2009-2014, the Central Government amends para 2 of Notification No.116(RE-2010)/2009-14 dated 08.05.2012 with immediate effect ....

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Maintenance of CRR on Foreign Currency (Non-Resident) [FCNR (B)] Scheme

RBI/2011-12/628 DBOD. No. Ret.BC.113/12.01.001/2011-12 (29/06/2012)

Please refer to our circulars DBOD No. BC.39/12.01.001/95 dated April 05, 1995 and DBOD No. BC.50/12.01.001/2000-01 dated November 07, 2000 on the captioned subject, advising banks that in order to determine the rupee equivalent liability under FCNR (B) Scheme for the purpose of Cash Reserve Ratio (CRR), the FEDAI indicative rate for all ...

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Filing of Cost Audit Report (Form‐I) and Compliance Report (Form‐A) in XBRL mode

52/17/CAB‐2011 (29/06/2012)

52/17/CAB‐2011 In continuation of MCA’s General Circular No. 8/2012 dated 10th May, 2012, it has been decided that filing of Cost Audit Reports and Compliance Reports with the Central Government in the XBRL mode shall be allowed after 31st July, 2012. ...

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Extension of time in Filing of annual return by Limited Liability Partnerships

Circular No. 15/2012 (29/06/2012)

Circular No. 15 /2012 In order to have better understanding of the circular, it is clarified that the time limit of 60 days shall be read as 122 days for filing of Form 11 by LLPs in respect of the Financial Year ending on 31.03.2012. This circular shall be effective from 30.06.2012. ...

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Change in Tariff Value of Brass Scrap (All Grades), Gold & Silver -Notification No. 55/2012-Customs (N.T.)

Notification No. 55/2012-Customs (N.T.) (29/06/2012)

Notification No. 55/2012-CUSTOMS (N. T.) Central Board of Excise & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 36/2001-Customs (N.T.), dated the 3rd August, 2001, published i...

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Draft guidelines on implementation of GAAR

Draft guidelines regarding implementation of General Anti Avoidance Rules (GAAR) in terms of section 101 of the Income Tax Act, 1961. - The Chairman, CBDT, Vide OM F.NO. 500/111/2009-FTD-1 Dated 27 February, 2012 constituted a Committee under the Chairmanship of the Director General of the Income Tax (International Taxation) to give recom...

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Posted Under: Income Tax |

Notification No. 54/2012 – Customs (N.T.) Dated: 29.06.2012

Notification No. 54/2012-Customs (N.T.) (29/06/2012)

Notification No. 54/2012 - Customs (N.T.) CBEC, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 14/2002-Customs (N.T.), dated the 7th March, 2002, published in the Gazette of India, vide number G.S.R. 170(E), dated the 7th March, 2002, na...

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No Tax deduction required on reimbursement of expenses

ITO Vs M/s Planet Herbs Life Science Pvt. Ltd. (ITAT Delhi)

Section 195 of the Act clearly states that any person responsible for paying to a non resident any interest or any other sum chargeable under the provisions of this Act shall at the time of credit of such income will income tax thereon at the rate inforce at the time of payment or credit. Therefore, the first test to be applied for deduct...

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Tax Deduction on Payment to Contractor Under PVAT Act, 2005

As per the scheme of the Punjab Value Added Tax Act, 2005 Contractee who entered into Contract for Works Contract with Contractor is under an obligation to deduct 5 % while making the payment to the contractee if execution of which involves transfer of property in goods and liability on account of such contract exceeds Rs. 5 Lacs in a sin...

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Posted Under: Income Tax |

Report of Parliamentary Standing Committee on Finance on The Companies Bill, 2011

I. Dissent note submitted by Shri Gurudas Dasgupta, MP II. Minutes of the sittings of the Committee held on 24 January, 2012 , 18 May, 2012 and 7 June, 2012 III. The Companies Bill, 2011...

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Posted Under: Income Tax |

Settlement by company amounts to compounding with principal debtor & results in discharge of surety

Kundanmal Dabriwala Vs Haryana Financial Corporation (Punjab and Hariyana High Court)

'Whether the revival scheme submitted by the petitioner under sections 391 and 394 of the Companies Act, 1956 and accepted by Court amounts to compounding with the principal debtor leading to the discharge of the surety within the meaning of sections 134 and 135 of the Indian Contract Act, 1872? ...

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Whether law of pleadings & provisions of Evidence Act, 1872 apply to CLB proceedings?

K. Muthusamy Vs S. Balasubramanian (Madras High Court)

The second contention of the appellants is that the law of pleadings and the provisions of the Indian Evidence Act, 1872, apply to the proceedings before the CLB. Therefore, the CLB ought not to have taken note of the new pleadings made by the impleaded parties and ought not to have accepted the pleadings made without any evidence. ...

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Loan Guarantor Liability terminates once bank accepts repayment under settlement scheme

Union Bank of India Vs Chairperson, Debts Recovery Appellate Tribunal (Allahabad High Court)

The bank had provided credit facilities to the company. The private respondents in the two writ petitions were the guarantors to the said credit facilities provided by the bank. As there was default in payment of the bank dues, an application was filed before the DRT by the bank against the company and private respondents in these petitio...

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Benefit of exemption available to RBI would be available to its agent too

Canara Bank Vs Commissioner of Service Tax, Bangalore (CESTAT Ahmedabad)

The first question that we have to consider is whether an agent of a principal who is also a dealer under the Act is entitled to the same rights as his principal has under the Act. Under the general law the agent merely represents his principal. Therefore, while functioning within the scope of the agency he can exercise all the rights whi...

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Mere Registration as Charitable Trust Under I.T. Act not entitle appellant to claim service tax exemption

Bombay Flying Club Vs Commissioner of Service Tax, Mumbai-II (CESTAT Mumbai)

Since the appellant is a charitable institution, can they be considered as a commercial training or coaching centre ? Here again the answer is negative. So long as the appellant imparts training or skill in any subject or field other than sports for a consideration, the said activity would come under the purview of commercial training or ...

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Service tax is required to be paid when the service is provided

British Airways PLC Vs Commissioner of Service Tax, New Delhi (CESTAT Delhi)

The second issue involved in the appeal is levy of service tax on tickets sold before 1.5.2006 and used after 1st May 2006. The appellant's contention is that the appellant sold the tickets to the passenger prior to 1.5.2006 and at that time there was no provision under the law of charging service tax Therefore, the service tax cannot be ...

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Cenvat credit admissible on service tax paid on workmen compensation insurance

Surani Ceramics Ltd. Vs Commissioner of Central Excise, Rajkot (CESTAT Ahmedabad)

In case of an accident within the factory, the compensation has to be paid by the company in accordance with the law and this is obligatory. To fulfil this legal obligation, the assessee has taken insurance. Therefore, it can be said that in this case the insurance premium is definitely relatable to business activity and is to fulfil one ...

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Activities of implementing ERP software are in the field of engineering & not in the field of management

Intelligroup Asia (P.) Ltd. Vs Commissioner of Central Excise, Hyderabad (CESTAT Bangalore)

The appellants are actually implementing applications software like SAP, Oracle, people soft. They are also into upgradation of application software from existing release level to higher version. They are also specifically into running of electronic data processing centre, business of data processing, word processing etc. Even if there is...

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SCN u/s. 73 to recover service tax from recipient of clearing & forwarding agent’s service for 16-7-1997 to 31-8-1999 not maintainable

Commissioner of Service Tax Vs Goetze TP (India) Ltd. (CESTAT Bangalore)

Appellant has been issued with a show cause notice on 19.05.2004 for the demand of Service Tax liability for the period 16.11.1997 to 2.6.1998 on the ground that the appellant has received the services of goods transport agency/operator which is liable to pay service tax as per the retrospective amendment and has not filed returns and dis...

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Grand daughters of promoters of professionally run company cannot claim proportional representation in management of company by being a family member alone

G. Vijayalakshmi Vs Tirupur Textiles (P.) Ltd. (Company Law Board, Chennai)

A list of professionals appointed by the company from 1957 onwards is extracted in the written submissions filed by the respondents to argue that the Board seat was not reserved for family members on representative basis. The list includes several non-family directors. Therefore, it is contented that though the company is promoted by thre...

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Posted Under: Income Tax |

CLB cannot issue injunction in implementing decision to be taken by shareholders in meeting, unless decision is prejudicial to public interest or company at large.

N. Ram Vs N. Ravi (Madras High Court)

On consideration, the contention raised by the appellants is found to have force. The Company Law Board, cannot issue injunction in implementing the decision to be taken by the shareholders in its meeting, unless the prima facie finding is recorded, that the decision is prejudicial to the public interest or the company at large. ...

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Wrong or default which is complete but whose effect may continue to be felt even after its completion is not a continuing wrong or defaul

Siddhartha Sen Vs Registrar of Companies (Orrissa High Court)

The offence alleged in the complaint against the petitioner is not a 'continuous wrong' and, therefore, the bar to take cognizance as contemplated under section 468(2)(b) of the Code of Criminal Procedure applies to the complaint lodged in the present case and, therefore, taking cognizance of such an offence after more than 11 years is cl...

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Auditors to pay fees for Filing of Form 23B wef 22.07.2012

Ministry of Corporate affairs has vide its General Circular No. 14/2012, dated 21-6-2012 imposed fees on various forms which were free of cost. One such form was E-form-23B which in an Intimation to ROC by statutory auditors regarding their appointment. So now fee shall be payable based on Authorised Capital of the Company. Additional fe...

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Posted Under: Income Tax | ,

Approval u/s.80G(5) to continue unless withdrawn as per law

Bhole Bhandari Charitable Trust Vs CIT (ITAT Chandigarh)

Bhole Bhandari Charitable Trust v. CIT From the proviso attached to the section 293C of the Act, it is crystal clear that even if any Income-tax Authority wants to withdraw approval, he shall issue a show-cause notice against the proposed withdrawal to the assessee concerned and after giving a reasonable opportunity of being heard shall w...

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Income Tax Department cracks Modus operandi of Refund Frauds

An internal probe by the Income Tax department, to detect the occurrence of a spate of refund frauds, has found that swindlers have hacked into the user-ids of retired officials and unclaimed suspense refunds were generated to siphon off the taxpayers hard-earned money....

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Posted Under: Income Tax |

Central Processing – Key Highlights- F. Y. 2012 & Challenges Ahead

In FY2012, CPC processed 1.32 crores returns, a 47% increase over FY 2011. Rectification requests received by CPC has dropped from over 10% of returns filed in AY08-09, to 6.5% in AY 09-10, to 3.8% in AY 10-11 and further to just about 2.9% in AY 11-12. FY 2012 saw several milestones / records set by CPC. Between October 2011 and December...

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Posted Under: Income Tax |

Section 43 of the Prevention of Money Laundering Act, 2002 – Special Courts – Notified Courts – Amendment in Notification No. SO 841(E), dated 1-6-2006

Notification No. S.O. 1434(E) (28/06/2012)

In exercise of the powers conferred by sub-section (1) of section 43 of the Prevention of Money-laundering Act, 2002 (15 of 2003) and in consultation with the Chief Justice of the High Court of Delhi, the Central Government hereby makes the following amendment to the notification of the Government of India in the Ministry of Finance, Depa...

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Section 43 of the Prevention of Money Laundering Act, 2002 – Special Courts – Notified Courts – Notification No. S.O. 1435(E), dated 28-6-2012

Notification No. S.O. 1435(E) (28/06/2012)

In exercise of the powers conferred by sub-section (1) of section 43 of the Prevention of Money-laundering Act, 2002 (15 of 2003), the Central Government in consultation with the Chief Justice of the High Court of Jharkhand, hereby designates the Court of Special Judge-I, CBI (ACB), Ranchi, being a Court of Session, as the Special Court t...

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Consideration of service tax while deducting TDS

Whether Service Tax should be considered while deducting Income tax at source (TDS) or not ? Often we have no clarity on the question that while making the payment of rent or professional or technical fees, the deduction of income tax at source (TDS) should be made on which amount? Including service tax or excluding […]...

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Posted Under: Income Tax |

B/F business loss &unabsorbed depreciation should not be adjusted before computing deduction u/s. 10A

CIT Vs Tyco Electronics Corpn. India (P.) Ltd. (Karnataka High Court)

CIT v. Tyco Electronics Corpn. India (P.) Ltd. As deduction under section 10-A has to be excluded from the total income of the assessee, the question of unabsorbed business loss being set off against such profit and game of the undertaking would not arise. ...

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Prior to 1-4-2005, Balcony to be excluded in calculating built-up area for sec. 80-IB

CIT Vs G.R. Developers (Karnataka High Court)

CIT v. G.R. Developers Insofar as balconies are concerned, prior to 01.04.2005, the area covered by them has to be excluded in calculating the built-up area. As the housing project was approved on 14.06.2002 and in the said plan, all these balconies are shown and excluding those balconies, the construction put up is admittedly less than 1...

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CIT(A) can set aside assessment not made in accordance with ITAT’s direction

CIT Vs Hindustan Zinc Ltd. (Rajasthan High Court)

CIT v. Hindustan Zinc Ltd. Amendment in the clause (a) of section 251(1) has been made so as to provide that the Commissioner (Appeals) may not set aside the assessment and refer the case back to the Assessing Officer for making fresh assessment with a view to help bringing an early finalization of the assessment, it cannot be assumed tha...

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Transfer & Posting Order in the cadre of Addl./Joint Director of Income Tax for various Directorates of International Taxation & Transfer Pricing

OFFICE ORDER F No. DGIT (Intl Tax.)/T & P orders/60/2012-13/635 (27/06/2012)

The following transfer and postings in the cadre of Addl./Joint Director of income-tax under various Directorates of International Taxation and Transfer Pricing are hereby ordered with immediate effect and until further orders:....

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Exim Bank’s Line of Credit to the Government of the Republic of Zambia

Circular No. 138/2012 - Income Tax (28/06/2012)

A.P. (DIR Series) Circular No. 138 Export-Import Bank of India (Exim Bank) has concluded an Agreement dated March 29, 2012 with the Government of the Republic of Zambia, making available to the latter, a Line of Credit (LOC) of USD 50 million (USD Fifty million) for financing eligible goods, services, machinery and equipments including co...

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Foreign Investment in India – Sector Specific conditions

RBI/2011-12/626 A.P. (DIR Series) Circular No. 137 (28/06/2012)

The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India has been updating/notifying the FDI policy through issue of Consolidated FDI Policy Circular. Accordingly, Government has notified the latest FDI policy changes vide FDI Policy Circular 1 of 2012 dated April 10, 2012 and the s...

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Merchant Discount Rates Structure for Debit Card Transactions

RBI/2011-12/625 DPSS.CO.PD.No.2361/02.14.003/ 2011-12 (28/06/2012)

The Merchant Discount Rate (MDR) for debit and credit cards has hitherto been similar in India. The debit card is a secured product with the card usage being linked to the availability of funds in the accounts of the customers. Credit cards, on the other hand, are a part of the unsecured credit product portfolio of the issuers. The credit...

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Alternative Capital Buffer for India

In a Working Paper published by the Reserve Bank of India has argued that the guidance given by Basel Committee on Banking Supervision (BCBS) is not appropriate for India. The finding is based on the analysis of annual banking data for the last 60 years since 1950-51. The authors have also showcased an alternative capital buffer guidance ...

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Posted Under: Income Tax |

Monetary Policy Transmission in India – A Peep Inside the Black Box

Monetary policy transmission is a process through which monetary policy decisions affect the economy in general and the price level in particular. It is a complex process, wherein the transmission of policy actions to market interest rates and further to real sector may proceed through several channels. Therefore, monetary policy transmis...

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Posted Under: Income Tax |

RBI releases Draft Payment System Vision Document 2012-15 for Public Comments

The Mission statement indicates RBI’s renewed commitment towards providing a safe, efficient, accessible, inclusive, interoperable and authorised payment and settlement systems for the country. Payments systems will be driven by customer demands of convenience, ease of use and access that will impel the necessary convergence in innovati...

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Posted Under: Income Tax |

If DTAA caps tax rate, education cess is not payable by foreign assessee

DIC Asia Pacific Pte Ltd Vs Assistant Director of Income Tax (ITAT Kolkata)

DIC Asia Pacific Pte Ltd vs. ADIT Article 2(1) of the applicable tax treaty provides that the taxes covered shall include tax and surcharge thereon. Once we come to the conclusion that education cess is nothing but an additional surcharge, it is only corollary thereto that the education cess will also be covered by the scope of Article 2....

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Only Top-level Managerial Persons Exempt from Tax under DTAA with Poland

DCIT Vs. Shri Mohan Balakrishnan Pookulanagara (ITAT Ahmedabad)

It is a fact that the assessee was employed as ‘Service Provider’ and during the period under dispute he was providing the service from Bangalore in India. As per the Co¬operation agreement dated 14.12.2004 entered into between the assessee and the Polish Company, the function of the assessee was ‘to support establishing and prepar...

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Assessee not in-default for non-deduction of TDS till certificate issued u/s. 197 is in force

CIT, International Taxation Vs Bovis Lend Lease (India) (P.) Ltd. (Karnataka High Court)

CIT v. Bovis Lend Lease (India) (P.) Ltd. In the instant case, it is the consistent stand of both the assessee and LLAH that the consideration paid under the agreement is by way of reimbursement of actual expanses. Therefore, even when a credit entry was made in the accounts as the assessee was treating it only as a reimbursement of actua...

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All About Hedge funds

A hedge fund is a private, largely unregulated pool of capital whose managers can buy or sell any assets, bet on falling as well as rising assets and participate substantially in profits from money invested. It charges both a performance fee and a management fee. An investment fund must be open to a limited number of accredited investors ...

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Posted Under: Income Tax |

Double Taxation Avoidance Agreement

Double taxation is the imposition of two or more taxes on the same income (in the case of income taxes), asset (in the case of capital taxes), or financial transaction (in the case of sales taxes). It refers to two distinct situations: Taxation of divided income without relief or credit for taxes paid by the company paying the dividend ...

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Posted Under: Income Tax |

AC, first class rail fares to rise from 1st July on a/c of Service Tax

Service tax on passenger travel and freight was introduced in the general budget for 2009-10, but was kept on hold due to the then Railway Minister Mamata Banerjee's opposition. The exemption has been extended since then on quarterly basis but this time the Finance Ministry has decided to exclude freight charges and AC rail travel from th...

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Posted Under: Income Tax |

RBI – Phasing out Tier-III capital for standalone Primary Dealers (PDs)

RBI/2011-12/623 IDMD.PCD.No.4896/14.03.05/2011-12 (27/06/2012)

It has been decided to phase out short term subordinated debt (Tier-III bonds) as an eligible source of capital for standalone PDs. Accordingly, PDs should not raise fresh funds through issuance of Tier-III bonds with effect from July 1, 2012....

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Apparently no restriction on Input Service Distributor to distribute credit only to one manufacturing unit

Anglo French Drugs & Industries Ltd. Vs Commissioner of Central Excise, Bangalore (CESTAT Bangalore)

The Adjudicating Authority has proceeded on the basis of provisions of Rule 7 and Board's circular which according to him, the credit distributor should have distributed the service tax credit to all units. We find strong force in the contentions raised by the ld. Counsel that the decision of the Tribunal in the case of Ecof Industries (P...

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e-Voting System of NSDL for Shareholders

e-Voting is voting through an electronic system where shareholders can vote on resolutions of companies requiring voting through Postal Ballot as per extant rules and regulations without having the necessity of sending their votes through post. Ministry of Corporate Affairs has authorised NSDL for setting up an electronic platform to faci...

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Posted Under: Income Tax |

500 listed companies to provide for electronic voting

SEBI Board Meeting - Platform for e-voting by shareholders of listed entities; manner of dealing with audit reports filed by listed entities and amendment to certain provisions in SEBI (ICDR) regulations relating to infrastructure sector, etc....

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Posted Under: Income Tax |

ICAI Extends Common Proficiency Course Registration date upto 5th October, 2012

In view of the closure of banks on account of half yearly closing on 29th September, 2012 followed by Sunday i.e. 30th September, 2012, the last date for registration for Common Proficiency Course (CPC) shall be 5th October, 2012 for being eligible to appear in the Common Proficiency Test (CPT) to be held in December, 2012....

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Posted Under: Income Tax |

Regarding extension of Bank Guarantee as an option in respect of duty exemption for Mega/ Ultra mega power projects

Notification No. 28/2012-Central Excise (27/06/2012)

Government of India, in the Ministry of Finance (Department of Revenue), No. 12/2012-Central Excise, dated the 17th March, 2012, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) vide number G.S.R. 163(E), dated 17th March, 2012, namely:- ...

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Registration of Partnership Firms in Punjab

The law relating to a partnership firm is contained in the Indian Partnership Act, 1932.Under Section 58 of the Act, a firm may be registered at any time (not merely at the time of its formation but subsequently also) by filing an application with the Registrar of Firms of the area in which any place of business of the firm is situated or...

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Posted Under: Income Tax |

Once CIT grants registration u/s 12AA,He can not cancel the same if activities are in accordance with objects

CIT Vs Sarvodaya Ilakkiya Pannai (Madras High Court)

Under section 12AA, the Commissioner is empowered to grant or refuse the registration and after granting registration, would be empowered to cancel and that too, only on two conditions laid down under section 12AA(3) of the Act. Whether the income derived from such transaction would be assessed for tax and also whether the trust would be ...

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ICSI Opens five new Examination Centres

The Institute is pleased to announce opening of five new Examination Centres at Alwar (Rajasthan) Gorakhpur (U.P.), Jallandhar (Punjab), Hooghly (West Bengal) and Howrah (West Bengal), for conduct of ‘Company Secretaries’ examinations, on an experimental basis beginning from December, 2012 examination onwards....

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Posted Under: Income Tax |

ICSI revises fee for Verification of Marks & supply of certified copies of Answer books

REVISION IN PAYMENT OF FEES - The Institute announces the revision in payment of following fees effective from June, 2012 session of examination : Fee for Verification of Marks under Regulation 46(2) of the Company Secretaries Regulations, 1982 -Rs.250 per paper...

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Posted Under: Income Tax |

ICSI – Post Membership (PMQ) Examination to be held only once in a year

The Council in its 208th meeting held on 8th and 9th June, 2012 had decided that henceforth the Post Membership Qualification (PMQ) Examination in ‘Corporate Governance” will be held only once in a year in the month of June....

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Posted Under: Income Tax |

Extension of Bank Guarantee as an option in respect of Custom duty exemption for Mega/ Ultra mega power projects

Notification No. 43/2012-Customs (27/06/2012)

Notification No. 43/2012-Customs Central Government, on being satisfied that it is necessary in the public interest so to do, hereby makes the following further amendments in the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 12/2012- Customs, dated the 17th March, 2012, which was published...

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CLB have no jurisdiction over asset acquired & sold by director on companies behalf but in his own name

T. Vinayaka Perumal Vs T. Balan (Madras High Court)

In the instant case, admittedly, sale deed was executed in favour of the respondent-director in the year 1989, while purchasing the land on behalf of the company. The property was mortgaged by the respondent-director in his individual capacity. The parties also came to know about the property being in the name of the respondent-director, ...

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Board Meetings without quorum & irregularities in filing Form 32 is Oppression & Mismanagement

Naresh Mohan Mittal Vs Sangeeta Construction (P.) Ltd. (Company Law Board Delhi)

The fiduciary capacity within which directors have to act enjoins duty upon them to act on behalf of the company with utmost care and skill and due diligence and in the interest of the company. More so, in a family company where even directorial complaints can be looked into. Directors have a duty to make full and honest disclosures to sh...

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