"20 July 2012" Archive

Simultaneous proceedings under section 397/398?

It is known that section 399 of the Companies Act, 1956 entitles minority shareholders, subject to the qualification prescribed, to approach the Company Law Board (CLB) under section 397/398 of the Companies Act, 1956 seeking relief against the ‘oppression and mis-management’ from the majority shareholders in the Company. As majority ...

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Posted Under: Company Law |

Order of Commissioner under earstwhile provision of S. 84 not appealable to Tribunal

Nihon Trading Company Vs Commissioner of Service Tax (CESTAT Bangalore)

The impugned order was passed by the Commissioner under section 84 as this section stood prior to 19-8-2009. It was passed on 24-3-2011. With effect from 19-8-2009, the date on which a new appellate remedy was granted in the place of the erstwhile revisionary remedy against orders passed by Central Excise officers subordinate to Commissio...

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S. 54 Exemption available on capital gain from sale of multiple house invested in a new house

Deputy Commissioner of Income-tax Vs Ranjit Vithaldas (ITAT Mumbai)

Whether the exemption u/s 54 will be available, in case, capital gain arising from sale of more than one residential house, is invested in one residential house. The ld. counsel appearing for the assessee argued that there was no restriction under section 54 that capital gain arising from two residential houses cannot be invested in one r...

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No HRA Exemption on Rent reimbursed to employer for rent-free accommodation

DCIT Vs. Kuldeep D Kaura (ITAT Ahmedabad)

The assessee is getting twin benefit from the employer, one of which is not taxed on the basis of reimbursement of rent by the assessee to the employer. The first benefit is of rent free accommodation provided by the employer to the assessee employee for which the employer is incurring rental expenditure of Rs. 1.70 lacs per month in addi...

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Admission of a new partner in consideration of payment not amounts to providing service to him

KapHag Renditefonds 35 Spreecenter Berlin-Hellersdorf 3. Tranche GbR Vs Finanzamt Charlottenburg (Europian Court of Justice)

A partnership which admits a partner in consideration of payment of a contribution in cash does not effect towards that person a supply of services for consideration within the meaning of Article 2(1) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes - Com...

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Posted Under: Company Law |

Difference b/w Market & Offer Price of ESOP is deductible expenditure

Additional CIT Vs Spray Engineering Devices Ltd. (ITAT Chandigarh)

The issue raised vide present grounds of appeal is in relation to the equity shares to be issued to the employees as sweat equity. The assessee vide special resolution passed at the extraordinary general meeting held on 31.3.2006 had allotted 394692 number of equity shares @ Rs. 106.26 amounting to Rs.4.19 crores to its employees as sweat...

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No Penalty If in Assessment Order AO not stated that there was concealment

Global Green Company Limited Vs. DCIT (ITAT Delhi)

The assessee had also challenged that in the assessment order the AO has not recorded finding that there was concealment of income. He has placed reliance on the decision of Hon’ble Delhi High Court in the case of Madhu Shree Gupta while examining the constitutional validity of sub-sec.1B of section 271(1)(c) has held that the presence ...

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Investor Education and Protection Fund (Uploading of Information Regarding unpaid and Unclaimed Amounts Lying with Companies) Rules, 2012

The information is to be filed in Form 5- INV as per the above mentioned rules; and thereafter an excel sheet containing detailed investor wise details is to be filed separately. The e Form, the excel template and detailed steps are provided in the IEPF application link on the portal www.iepf.gov.in.For financial year ended on 31st March...

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Posted Under: Company Law |

No deemed dividend if shareholding of a common shareholder is less than 20%

Income-tax Officer Vs Anand Rathi Direct India (P.) Ltd. (ITAT Mumbai)

The Assessing Officer had considered that a common shareholder 'P' has substantial shareholding of more than 10 per cent. While analyzing substantial interest, the Assessing Officer has only considered Explanation 3 with reference to a person having beneficial interest entitled to not less than 20 per cent of income of such concern so as ...

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Unless proved Share Broker cannot be held Guilty of Circular Trading

Networth Stock Broking Ltd. Vs Securities and Exchange Board of India (Securities Appelate Tribunal Mumbai)

It has been specifically pleaded by the appellant that during the investigation period, i.e. in the year 2002, there was no software available for carrying out long or real time surveillance and it was not possible to carry out surveillance of thousands of transactions of all clients on a daily basis. It has also been pleaded by the appel...

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Posted Under: Company Law |

Outward transportation of manufactured goods up to place of removal is input service

M.P. Biscuits (P.) Ltd. Vs Commissioner of Central Excise, Allahabad (CESTAT Delhi)

The appellant has placed on record the authorization letter dated 15.3.2005 addressed by PBPL to Assistant /Deputy Commissioner, Central Excise, Varanasi authorising the appellant to manufacture biscuit on their behalf. Further perusal of the terms and conditions mutually agreed upon between PBPL and the appellant would show that as per ...

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No penalty proceeding if Assessee pays service tax before issue of SCN

Manan Motors (P.) Ltd. Vs Commissioner of Central Excise (CESTAT Ahmedabad)

Provisions of the section 73(1A) of the Finance Act, 1994 will apply in full force in this case, as there is payment of entire amount of service tax liability and interest thereof before the issuance of show cause notice (SCN). In my view, it is a fit case wherein the proceedings initiated against the assessee for the imposition of penalt...

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Service tax Penalty for late payment cannot exceed tax amount

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

The ld. A.R. submits that penalties have been imposed because they did not pay in time the tax due. We find that there is no case for imposing penalty for an amount more than net tax liability. So the penalty under Section 78 is reduced to Rs. 18,889/-. Further, penalty under Section 76 is waived and also the appellant is given an opportu...

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Amendment to definition of QFI & QFI investment in debt mutual fund schemes which invest in infrastructure

Circular No. IMD/FII&C/18/2012, (20/07/2012)

Circular NO. IMD/FII&C/18/2012, dated 20-7-2012 1. Vide SEBI circulars IMD/DF/14/2011 and IMD/FII&C/3/2012 dated August 09, 2011 and January 13, 2012, respectively, QFIs were allowed to invest in schemes of Indian mutual funds and Indian equity shares subject to terms and conditions mentioned therein. Subsequently, vide SEBI circular IMD...

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IRDA launches Online application to compare Non Life Insurance products

The Insurance Regulatory and Development Authority has introduced an online application that enables the user to compare coverages, exclusions etc. under non life insurance products currently being sold by different insurers in the market. The application currently lets users to browse through the different features of the products so as ...

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Posted Under: Company Law |

Personal guarantee must before loan restructuring

The RBI may do away with the regulatory forbearance regarding asset classification, provisioning and capital adequacy on restructuring of loan and advances in line with the international prudential measures. However, in view of the current domestic macroeconomic situation as also global situation, this measure could be considered say, aft...

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Posted Under: Company Law |

Revised RBI Guidelines on Priority Sector Lending-Targets & Classification

The priority sectors are broadly taken as those sectors of the economy which, if not designated as priority sectors, may not get timely and adequate credit. Typically these are small value loans to farmers for agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low inco...

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Posted Under: Company Law |

No Penalty for non payment of service tax under bona fide belief of non-taxability

Rajesh Auto Finance Vs Commissioner of Central Excise (CESTAT Ahmedabad)

Issue involved in this case is regarding the bona fide belief of the assessee during the relevant period. During the relevant period, the activity of receiving commission from the bankers for providing the help of identifying the purchasers of the vehicles and completing all the formalities was in dispute before the Tribunal. The said dis...

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Restriction to use 20% of credit in case of non-maintenance of separate Cenvat a/cs for taxable & exempted services is only in respect of inputs service credit

Bharat Sanchar Nigam Ltd. Vs Commissioner of Central Excise, Meerut-II (CESTAT Delhi)

Learned Advocate submits that lower authorities have also taken into account the Service Tax availed on the capital goods whereas the restriction of 20% utilisation is only in respect of the input service credit. He draws my attention to two precedent decision of the Tribunal in the same appellants case being BSNL v. CCE&C [2009] 21 STT 1...

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CENVAT credit available on Freight Paid for transportation of goods from factory to place of removal

Commissioner of Central Excise, Visakhapatnam Vs GMR Industries Ltd. (CESTA T Bangalore)

Short question which has to be considered in this case is whether the respondent is entitled to claim CENVAT credit of service tax paid by themselves on GTA service which was used for transportation of their final product from factory to the port for export. The respondent recovered FOB value from the foreign buyer, implying that the owne...

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Assessee eligible for refund of duty paid on inputs used in manufacture of exported goods

Commissioner of Central Excise Vs Motherson Sumi Electric Wires (Karnataka High Couurt)

It is not in dispute that the assessees used the inputs and have exported the impugned goods and the refund is only in respect of input credit attributable to the inputs utilized in the exported goods. It is not necessary to prove one-to-one correlation of inputs with that of exported goods. The assessees were not in a position to utilize...

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Cestat has no power to modify to stay order passed by HC

Logos Constructions (P.) Ltd. Vs Commissioner of Service Tax, Chennai (CESTAT Chennai)

Appellants have filed a writ petition against the stay order dated 13.10.2011 passed by the Tribunal and Hon'ble Madras High Court had dismissed the writ petition. As the order passed by the Tribunal is merged with the order passed by the Hon'ble High Court, hence the Tribunal has no power to modify the stay order dated 13.10.2011. Furthe...

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Cestat granted stay despite non-production of payment challans

State Bank of India Vs Commissioner of Central Excise (CESTAT Ahmedabad)

Since a substantial amount has already been paid and regarding the balance amount also the appellant claims to have paid but does not have the evidence in view of the destruction of documents in flood, I consider that the appellant has made out a strong prima facie case for waiver of pre-deposit and grant of stay. Accordingly, the require...

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No concealment penalty for exemption claimed by Assessee based on certificate issued by department

Additional Director of Income-tax (International Taxation) Vs R Liners Ltd. (ITAT Mumbai)

RL is a tax resident of Mauritius and in support of this, tax residency certificate has been furnished. This fact has also been accepted by the learned DR in the written submission. It is also undisputed fact that, based on this tax residency certificate, the RL has applied for exemption certificate for grant of 100% DIT relief, which was...

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AAR – Substance over form overlooked, Treaty shopping upheld, reliance placed on azadi bachao andolon case

Re. Dynamic India Fund I (AAR Delhi)

The argument that unless the capital gain is actually taxed in Mauritius the DTAC would not apply in the context of section 90(1) and section 90(2) of the Act, though attractive, cannot be entertained in view of the decision in Union of India vs. Azadi Bachao Andolan. Even though capital gain is not actually taxed in Mauritius, the questi...

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Effect of improper presentation of ‘SARFAESI APPEAL’?

It is alleged that the Banks or the officials of the Bank often misuse the provision of ‘The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act, 2002)”. It is also alleged that the Bank officials help some clients/borrowers using all technicalities and their expertise in ...

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Posted Under: Company Law |

Bad-Debts Cannot be relevant factor to determine ALP of royalty transaction between licensor & licensee

The Commissioner of Income Tax – 10 Vs CA Computer Associates India Pvt. Ltd. (Bombay High Court)

Whether on facts and circumstances of the case and in law, the ITAT was justified in deleting the disallowance made of royalty paid by the respondent to CAMI USA for distribution of software products in India without appreciating that the royalty had been paid on the amount of bad debts even where the software had not worked at all?” ...

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It is no longer open to demand duty at 10% or 5% of price as the case may be of exempted products

Burn Standard Co. Ltd. Vs Commissioner of Central Excise (CESTAT Chennai)

After the amendment of Rule 6 of CENVAT credit Rules, 2004 by Finance Act, 2010, in view of the provisions section 73 of Finance Act, 2010, when an assessee gave a calculation of credit attributable to the inputs used in the manufacture of exempted products, the only option available to Revenue was to either accept the calculation or say ...

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