"October, 2012" Archive

Market development fee paid to UK based company not taxable in India as fee for technical services

Gama Industries Coimbatore Ltd. Vs Commissioner of Income-tax-III (ITAT Chennai)

Giving marketing services outside India, even if we consider it as technical services, nothing was made available to the assessee in the nature of any technical knowledge, experience, skill know-how or processes. ...

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Depreciation is to be allowed even if not claimed in Return

Rakesh Singh Vs Assistant Commissioner of Income-tax (ITAT Bangalore)

In view of Explanation 5 to section 32(1), the Assessing Officer was duty-bound to grant depreciation allowance, whether the same is claimed by the assessee or not, provided the conditions mentioned under section 32 are satisfied. ...

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Statement under section 132(4) can be retracted

Jyotichand Bhaichand Saraf & Sons (P.) Ltd. Vs Deputy Commissioner of Income-tax, Circle 11(1) (ITAT Pune)

The case of the assessee is that the statement/admission was made under the mistaken belief of law that Rs. 50 lakhs represents the sale value of stock found short was undisclosed income of the assessee instead of the correct legal position that the gross profit on suppressed sale is the income of the assessee....

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No prescribed time-limit for taking Cenvat credit

Central Bank of India Vs Commissioner of Central Excise & Service Tax (CESTAT Chennai)

No where in the Central Excise Act as well as in the Cenvat Credit Rules not prescribed any period in which credit has to be taken. Although it is mentioned in the Cenvat Credit Rules that assessee can take the credit immediately, but there is no prescribed time limit neither in the Cenvat Credit Rules nor in the Central Excise Act...

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Two or more Assessing Officers having territorial jurisdiction in respect of same income, can exercise concurrent jurisdiction

CR Foods (India) (P.) Ltd. Vs Income-tax Officer-4(1), Agra (Allahbad High Court)

In the present case we find that the petitioner had changed his registered office w.e.f. 4th November, 1989 from first floor and 6376 Naya Bans Delhi to Y-192, Loha Mandi, Naraina, New Delhi, and thereafter w.ef. 3rd October, 2000 from Y-92 Loha Mandi, Naraina, Delhi to Room No.9, Y-3C, Loha Mandi, Naraina, Delhi. The principal place of b...

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If Assessment order Silent, Interest U/s. 234B cannot be charged in demand notice

Commissioner of Income-tax, Shimla Vs Ruchira Papers Ltd. (Himachal Pradesh High Court)

No doubt, payment of interest under Sections 234A, 234B and 234C is mandatory but it is for the Assessing Authority while passing the original assessment order or while passing the reassessment or rectification order to direct payment of interest. ...

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Income from solitary sale of shares is not business income

Commissioner of Income-tax, Central Circle Vs Nadatur Holdings and Investments (P.) Ltd. (Karnataka High Court)

To implement the objects of the company two of the shareholders gifted 25000 shares of M/s. Infosys Technologies Limited. The said shares were shown as investment. Merely because the company has earned profits by selling some of the shares, that doesn't mean that the company is engaged in shares trading. ...

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Notification No.96/2012 – Customs (N. T.) – Change in Tariff Value of RBD Palmolein, Brass Scrap (All Grades) Poppy Seeds, Gold &Silver Notified

Notification No. 96/2012-Customs (N.T.) (31/10/2012)

Notification No.96/2012-Customs (N.T.) New Delhi, 31st, October, 2012 S.O. ____ (E).– In exercise of the powers conferred by sub-section (2) of section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise & Customs, being satisfied that it is necessary and expedient so to do, hereby makes the following amendment in ...

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Bottling of LPG into cylinders for use in kitchen amounts to ‘manufacture’

Hindustan Petroleum Corpn. Ltd. Vs Deputy Commissioner of Income-tax (ITAT Mumbai)

Bottling plant wherein the LPG is filled in the cylinders for domestic and non-domestic kitchen use involves various specialized process and therefore, it is an activity of manufacture/production. Accordingly, the assessee's claim for deduction has to be allowed. ...

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Non-compete fees to form part of price offered to public shareholders if payment to promoters not justified

IP holding Asia Singapore Pte. Ltd. Vs Securities & Exchange Board of India (Securities Appelate Tribunal Mumbai)

It was argued by the appellants that the covenants in the non-compete agreement provide for both non-compete obligations as well as an obligation to maintain confidentiality. According to them, it is necessary and advisable to do so as a non-compete obligation without a corresponding obligation to maintain confidentiality, would render an...

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Posted Under: Income Tax |

Compulsory online filing of Annual Return in Form VAT 20 in Punjab

No Manual Annual Return in Form VAT 20 after 31st October 2012 for Assessment Year 2011-12 under Punjab Value Added Tax Act, 2005 ...

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Posted Under: Income Tax |

Consultancy Service used for modernisation of Plant eligible for Cenvat credit

Shree Bhawani Paper Mills Ltd. Vs Commissioner of Central Excise, Lucknow (CESTAT Delhi)

Installing projects of high technical equipment is nothing but Modernisation of a factory and as per Cenvat credit Rules, 2004, services used in relation to modernisation are eligible for Cenvat credit....

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Section 56 not Applicable to Gift in Kind Received prior to 1st Oct., 2009

ACIT Vs Anuj Jitendra Mehta (ITAT Mumbai)

There is also force in the submissions of the counsel for the assessee that prior to introduction of S. 56(2)(vii) by the Finance Act, 2009, w.e.f. 1st Oct., 2009, gifts in kind were outside the purview of s. 56(2)(v) or (vi)....

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To Claim deduction u/s. 35DDA, VRS need not be in compliance of condition of rule 2BA of Income-tax Rules, 1962

Commissioner of Income-tax Vs Sony India (P.) Ltd. (Delhi High Court)

Rule 2BA is in the form of guidelines for the purpose of section 10(10C), which relates to taxation of income/amount received by an employee under VRS scheme. The said rule does not deal with the expenditure incurred by the employer when the assessee makes payment under the VRS scheme formulated by them. ...

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Section 80-IA(7) provides for determination of amount of deduction not for deduction actually allowable

Hotel & Allied Trades (P.) Ltd. Vs Deputy Commissioner of Income-tax, Circle-1(1) (ITAT Cochin)

A combined reading of the provisions of sub sec. 7 of sec. 80-IA and sec. 80AB would suggest that (a) the Profits and gains of an eligible business, to which the provisions of sec. 80-IA(1) shall apply, shall be restricted to the amount of income of that nature that is included in the Gross total income and...

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2nd Quarter Review of Monetary Policy 2012-13 – RBI Cuts CRR by 25 basis points

A short while ago, we put out the Second Quarter Review. Based on an assessment of the current macroeconomic situation, we have decided to: Cut the cash reserve ratio (CRR) of scheduled banks by 25 basis points from 4.5 per cent to 4.25 per cent of their net demand and time liabilities (NDTL) effective the fortnight beginning November 3,...

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Posted Under: Income Tax |

CBDT assures HC that there would be no laxity in assistance rendered to court in future

Commissioner of Income Tax Delhi Vs Jackson Engineers Ltd. (Delhi High Court)

It is stated by them that insofar as the revamping the system and giving better assistance to the court is concerned, all necessary action as they would take has been taken. We would thus naturally expect that now there would no lack of proper assistance to the court....

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Non Explanation of Fund Received from partner sufficient ground for Reassessment

Kaveri Associates Vs Assistant Commissioner of Income-tax, Circle 5(1) (Karnataka High Court)

Ultimately the assessing officer was of the opinion that a firm, which had the capacity to lend an amount of Rs. 71,50,000/- that too, to one of its partners or others is reasonably presumed to have the taxable income and if the assessee had never disclosed its expenditure or otherwise earlier and in such circumstances, if the officer re...

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CA given life term for creating mid-air hijack scare

A chartered accountant was today sentenced to life imprisonment by a court here for triggering a mid-air hijack scare in February 2009 by claiming aboard a Goa-Delhi Indigo airlines flight that he had infected needles and a gun....

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Posted Under: Income Tax |

RBI permits Urban Cooperative Banks to undertake ready forward contracts in corporate debt securities

RBI/2012-13/270 IDMD.PCD. 1423/14.03.02/2012-13 (30/10/2012)

As announced in the Second Quarter Review of the Monetary Policy Statement 2012-13 (para 77) and in exercise of powers conferred on Reserve Bank under the Repo in Corporate Debt Securities (Reserve Bank) Directions 2010, it has now been decided to permit scheduled Urban Cooperative Banks to undertake ready forward contracts in corporate ...

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Service used, rendered & enjoyed in India – Taxable in India

Life Care Medical Systems Vs Commissioner of Service Tax, Mumbai-II (CESTAT Mumbai)

In the instant case, the service rendered is promotion/marketing of the goods of the client in India by rendering various services such as demonstration, installation, after sales warranty and advertising services for which the appellant received a consideration. These activities are rendered in India and their effective use and enjoyment...

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Secretary of Society is Public Servant & can be booked for Corruption – HC

S. Karunakaran Vs The State rep. by the Inspector of Police,Vigilance and Anti Corruption Coimbatore (Madras High Court)

The petitioner who was serving as the Secretary of the Avinashi Co-operative Housing Society Limited, Avinashi was charged with offences punishable under section 7 and 13(2) r/w. 13( 1)(d) of the Prevention of Corruption Act, 1988....

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Income tax E-Filing Website likely to be closed for few days

The e-Filing Portal is migrating to a revamped new portal in next few days and the existing website services are likely to be closed for few days....

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Posted Under: Income Tax |

Issue of notice to general power of attorney holder of assessee is valid

Smt. Ruhina Ahmed Vs Income-tax Officer, Ward 5(3), Hyderabad (ITAT Hyderabad)

In the instant case, the GPA holder of the assessee received the notice which is evident from the acknowledgement furnished before us. The assessee was having transactions in India and when the notice was serviced through the process server of the department, the notice is deemed to have been served as it can ordinarily be expected that t...

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FM Statement on Kelkar Committee Report, Fiscal Roadmap & Consolidation

Income tax press release (29/10/2012)

The Kelkar Committee has cautioned us that a business-as-usual scenario for the current year may lead to the fiscal deficit rising to 6.1 per cent of GDP. This would have grave consequences for the economy is, therefore, totally unacceptable. The Committee has recommended a number of reform measures in taxation, disinvestment and expendit...

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Cenvat Credit cannot be denied if invoice number was handwritten or rubber stamped

Pepsico India Holding Pvt. Ltd. Vs. Commissioner of Central Excise (CESTAT Mumbai)

Whether the Cenvat credit can be denied on the ground that the invoice number was handwritten or rubber stamped but not printed on invoice? The appellants are in appeal against the impugned orders wherein input credit taken by them on duty paid invoice was denied only on the basis that the invoice number was handwritten or rubber stamped...

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Penalty justified if deduction claimed is not permissible & there was no debatable or contentious issue

Commissioner of Income-tax Vs Anand Duplex Ltd. (Allahabad High court)

The assessee had wrongly taken the benefit of Section 80IA on the gross total income by reducing the loss of Unit-II from Unit-I and thereby declaring the return at Nil and carried forward the loss of Rs. 23,94,827/-, which was not permissible....

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Period taken to approach Settlement Commission & its rejection is to be excluded for block assessment

Super Cloth Vs Assistant Commissioner of Income-tax (Madras High Court)

Given the fact that the Settlement Commission order was made on 11.6.2002 and as on the date of insertion to Explanation 1(iv) with effect from 1.6.2002 the applications were pending before the Settlement Commission, we have no hesitation in rejecting the assessees' contention that the Explanation should not be given retrospective effect...

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Notification No. 45-Income Tax Dated 29/10/2012

Notification No. 45/2012-Income Tax (29/10/2012)

Notification No. 45/2012-Income Tax It is hereby notified for general information that the organization National Institute of Ocean Technology, Chennai has been approved by the Central Government for the purpose of clause (ii) of sub-section (1) of section 35 of the Income-tax Act, 1961 [said Act], read with rules 5C and 5E of the Income-...

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Rs. 20,000/- penalty for non-filing of Quarterly Service Tax return??

ACES has started accepting Service Tax (ST-3) returns for the period April to June 2012 revising the earlier forms by removing few bugs. The extended time to file now is till 25th Nov for Apr to Jun 12 ST Returns. Returns for July to September 2012 is still undergoing some structural changes. ...

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Posted Under: Income Tax | ,

Clearance of containers and imported goods – regarding

F.No.450/24/2012-Cus.IV (29/10/2012)

Instances have come to notice of the Board that clearance of some containers were allowed without filing of Bill of Entry and payment of Customs duty by using forged signatures of Customs officials on manual Out of Charge orders (gate passes) leading to substantial loss of revenue to the Government exchequer. These cases highlight the hig...

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Details of reshuffle in Union Council of Ministers

The President of India, as advised by the Prime Minister, appointed and administered the Oaths of Office and Secrecy to the following members of the Union Council of Ministers:-  CABINET MINISTERS  1. Shri K. Rahman Khan 2. Shri Dinsha J. Patel 3. Shri Ajay Maken 4. Shri M.M. Pallam Raju 5. Shri Ashwani Kumar 6. […]...

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Posted Under: Income Tax |

PF, ESI paid after 31st March but before filing of return is allowable

Commissioner of Income-tax, Central Circle, Bangalore Vs Solar Exports (Karnataka High Court)

The grievance of the revenue is that proviso appended to section 43B of the Act permitting allowing of deduction of PF, ESI etc., subsequent to the close of the accounting period but before the return is filed, should not have been followed but disallowance must be upheld. It has not been disputed before us that the proviso has been inser...

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No Section 54 exemption If assessee himself demolishes building before sale

Commissioner of Income-tax, Central Circle Vs Ved Prakash Rakhra (Karnataka High Court)

As per the Development Agreement entered into between the parties, the assessee and his brothers have demolished the existing residential building and handed over the vacant space to an extent of 16800 sq ft. to the Developer for construction of the apartment. Since the residential building has already been demolished by the assessee and ...

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Filing returns without full particulars fell within the mischief of section 271(1)(c)

Commissioner of Income-tax Vs Smt. Meera Devi (Delhi High Court)

Section 271(1)(c) empowers the Assessing Officer to impose penalties wherever the assessee does not furnish accurate particulars, in the form of returns, such as concealing the sources of income, or withholding true and full information. This duty was spelt out by the Supreme Court as one cast on the assessee to disclose all facts, includ...

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Striking off of a company can only be done on companies own admission that it is defunct

Basanti Cotton Mills (1998) (P.) Ltd. Vs Registrar of Companies, West Bengal (Calcutta High Court)

On reading sub-sections (1), (2), (3) and (5) of Section 560, it does seem to me that a company can only be defunct, if it does not reply to the notice or says in reply that it does not carry on any business or is not in operation. If it asserts to the contrary, it cannot be struck off at all. Hence striking off is on the admission by the...

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In case of common services credit attributable to trading activity is required to be reversed

Lacto Cosmetics (VAPI) (P.) Ltd. Vs Commissioner of Central Excise, Daman (CESTAT Ahmedabad)

Coming to the cenvat credit proposed to be denied on the ground that services were used for both exempted and non exempted goods as per the denial of proportionate credit as per the OIA, it has to be noted that admittedly the first appellant was engaged in the manufacture of animal feed which is exempted and was also engaged in trading ac...

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Deduction u/s. 80-IB(10) cannot be denied for unauthorised excess construction

Income-tax Officer, Ward 4(3), Bangalore Vs Mahaveer Calyx (ITAT Bangalore)

As for the excess area constructed, as rightly held by the learned CIT(A), it is for the BBMP to look into the violations if any in the construction of the housing project. That however does not authorize the Assessing Officer to hold that the assessee has not got approval for the housing project OR that the conditions laid down in sectio...

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Commission on sales is to be allowed in year of sale even if sale was realised in next financial year

Devendra Exports (P.) Ltd. Vs Assistant Commissioner of Income-tax Company Circle-1(4) (ITAT Chennai)

In the instant case, the liability to pay commission Rs. 2,94,701/- has arisen by virtue of sales in the financial year 2004-05 relevant to the assessment year 2005-06. The realization of sale amount in the next financial year will not make much difference as the liability to pay commission had crystallized in the financial year 2004-05 i...

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Penalty cannot be levied for mere rejection of debatable claim

Deputy Commissioner of Income-tax Vs Integrated Master Securities (P.) Ltd. (ITAT Delhi)

What is to be seen in the instant case, is whether the claim for deduction of depreciation u/s 32 of the Act, made by the assessee was bona-fide and whether all the material facts relevant thereto have been furnished and once it is so established, the assessee cannot be held liable for concealment penalty u/s 271(1)(c) of the Act....

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Approval U/s. 10(23C)(vi) cannot be refused on Mere inference by DGIT(E) as to irregularities in accounts

Mahavira Foundation Vs Director General of Income-tax (Delhi High Court)

Having regard to the facts noted above as well as explanation adduced by the assessee in respect of the payments and the suspicious approach of the DGIT(E) towards the evidence adduced by the assessee without noticing the crucial facts such as payment by cheques etc., it seems that the DGIT(E) was not justified in law in readily inferring...

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Penalty not justified for disallowance of Bona fide claim

Skil Infrastructure Ltd. Vs Assistant Commissioner of Income-tax (ITAT Mumbai)

As explained by assessee, the income could not be offered as assessee sought approval under section 10(23G) as early as of 24-8-2005 which was followed with reminder letter addressed to the CCIT on 17-1-2006. Since the application was made in form No. 56E, it is natural that the Board will either accept or reject the application in a reas...

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Simply paying share application money not entitle any applicant of shares to allotment of shares

Peoples Heritage Hospital Ltd. Vs Deputy Commissioner of Income-tax, Circle 1(4), Agra (ITAT Agra)

In the light of the above discussions, the admitted facts of the case under consideration are that during the year under consideration share holding of the company has changed by more than 51% and management and control of the company has been passed on to Pippal family....

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Interest on debt capital borrowed from shareholders can not be disallowed as thin capitalization rules not in force

Director of Income-tax, International Taxation-II, Mumbai Vs Besix Kier Dabhol SA (Bombay high Court)

During the course of the proceedings before the Tribunal the revenue contended that the borrowings on which the interest has been claimed as a deduction are in fact capital of the assessee and brought only under the nomenclature of loan for tax consideration. It was the case of the appellant-revenue before the Tribunal that debt capital i...

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Insurance of vehicles used in transportation of goods / employees is input service

Manikgarh Cement Vs Commissioner of Central Excise & Customs, Nagpur (CESTAT Mumbai)

The definition of 'input service' provided under rule 2(l) of CENVAT Credit Rules, 2004 covers a gamut of activities relating to the business undertaken by the manufacturer or the service provider. In the case under consideration the appellant has used the vehicles owned by them either for transportation of their employees or for transpor...

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No S. 80(IB)(10) denial for mere delay in permission for business

Commissioner of Income-tax - IV Vs Tarnetar Corporation (Gujarat High Court)

In the present case, therefore, the fact that the assessee had completed the construction well before 31st March, 2008 is not in doubt. It is, of course, true that formally BU permission was not granted by the Municipal Authority by such date. It is equally true that explanation to clause (a) to section 80-IB(10) links the completion of t...

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Disallowance of consultancy charges partly u/s. 40A(2) without determining market value not justified

Commissioner of Income-tax Vs Modi Revlon (P.) Ltd. (Delhi High Court)

In order to determine whether the payment is not sustainable, the Assessing Officer has to first return a finding that the payment made is excessive under section 40A (2). If it is found to be so, then the Assessing Officer has to determine what constitutes the fair market value of the services rendered and disallow the difference between...

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Interest u/s 132B is allowable on entire sum seized regardless of any post-assessment adjustments

G.L. Jain Vs Commissioner of Income-tax-XI (Delhi High Court)

Section-132B(4) cannot be construed or interpreted in a manner as to defeat the rights of the assessee/writ petitioner to the property itself. The fact that it limits the liability to the point of time when assessment is completed would mean that authorities have to be alive of this fact and release the amount within reasonable time....

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Commissioner (Appeals) do not have power of remand under Service Tax Laws

Commissioner of Service Tax, Kolkata Vs Devansh Exports (CESTAT Kolkata)

Thus in case of service tax also the Commissioner (A) is not empowered to remand the matter, he has to decide the matter by himself. Therefore the order of ld. Commissioner (Appeals) remanding the case to the lower authority, is not sustainable. ...

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No penalty levied on Akhilesh yadav for violation of Sec. 269SS, as reasonable cause was exist

Deputy Commissioner of Income-tax, Circle-5 Vs Akhilesh Kumar Yadav (ITAT Agra)

In the instant case, the AO did not dispute the genuineness of the transaction entered into between the assessee and Samajwadi Party and no addition had been made in this regard. Instead of cash, if the assessee had taken loan through cheque, it would have taken some time for process in clearing. Since the amount was deposited and withdra...

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Where liaison office of assessee merely co-ordinated its purchases in India, it could not be regarded as assessee’s PE in India

Deputy Director of Income-tax (International Taxation) Vs M. Fabricant & Sons Inc. (ITAT Mumbai)

Section 9 does not seek to bring into the tax net the profits of a non-resident which cannot reasonably be attributed to operations carried out in India. Even if there be a business connection in India, the whole of the profit accruing or arising from the business connection is not deemed to accrue or arise in India. It is only that porti...

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Error in e-filling of Income tax Return can be rectified u/s. 154 application

Shrikant Real Estates (P.) Ltd. Vs Income-tax Officer (ITAT Mumbai)

In the present system of e-filing of return which is totally depended upon the usage of software, It is possible that some clerical errors may occur at the time of entering the data in the electronic form. The return is prepared electronically which is converted into an XML file either through the free down loaded software provided by the...

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Service Tax – No Half Yearly Returns This Time

While September is the month for filing Income Tax returns by business entities, in Service Tax, it is October of the year which keeps all services providers busy in filing their Service Tax returns for first six months ,i.e. April to September. The last date is 25th October of the year after which penalty is attracted which may go upto R...

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Posted Under: Income Tax | ,

CENVAT credit not available on GTA service used for transportation of final product from place of removal

Madras Cements Ltd. Vs Commissioner of Central Excise (CESTAT Bangalore)

Appellant is not entitled to claim CENVAT credit on the GTA service used by them for transportation of their final product from the place of removal for any period after 31/3/2008:...

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Payment of goodwill on transfer of business not business auxiliary services

Commissioner of Central Excise, Nashik Vs S S Engineers & Contractors (CESTAT Mumbai)

One for transfer of business goodwill and the other for collection, delivery and handling of fly ash on which service tax liability is being discharged. By no stretch imagination, payment of goodwill on transfer of business can come under the category of business auxiliary services; therefore, we do not find any merit in the Revenue's app...

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Accounting Standard Committee recommends 14 new Tax Accounting Standards

Income Tax Press release (26/10/2012)

Committee recommended that the AS notified under the Act should be made applicable only to the computation of taxable income and a taxpayer would not be required to maintain books of account on the basis of AS notified under the Act. The Committee examined all the 31 AS issued by the ICAI and recommended notification of AS on 14 issues un...

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Public Notice No. 28 (RE 2012)/2009-14, Dated: 26.10.2012

Public Notice No. 28 (RE 2012)/2009-14 (26/10/2012)

In exercise of the powers conferred under Paragraph 2.4 of the Foreign Trade Policy, 2009-14 and Paragraph 1.1 of the Handbook of Procedures (Vol. 1), the Directorate General of Foreign Trade hereby amends SION A-1578, as under....

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Involvement of broker of Assessee in unfair trade practice not make assessee’s share transactions bogus

Commissioner of Income-tax, Jamshedpur Vs Arun Kumar Agarwal (HUF) (Jharkhand High Court)

Even in a case where the share broker was found involved in unfair trade practice and was involved in lowering and rising of the share price, and any person, who himself is not involved in that type of transaction, if purchased the share from that broker innocently and bonafidely and if he show his bonafidein transaction by showing relev...

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Trust imparting education irrespective of caste, creed & religion entitled to registration u/s 12AA

Tunbridge English High School Education Society Vs Director of Income-tax (Exemption), Bangalore (ITAT Bangalore)

DIT (E) was not justified in forming an opinion that the objects of the assessee are for a specific community being violative of the provisions of s. 13(1)(b) of the Act. As a matter of fact, the assessee has been serving the public irrespective of caste, creed and religion by imparting education and, thus, it is entitled to registration ...

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Reassessment not valid if Assessee fully & truly disclosed all material facts

Qualcomm Incorporated Vs Assistant Director of Income-tax (Delhi High Court)

In the present case, we find that not only is there a change of opinion but also the re-opening is barred by limitation inasmuch as the condition that the escapement of income must have resulted from the failure on the part of the petitioner to fully and truly disclose all material facts, has not been satisfied. The impugned order dated 2...

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Compensation for termination of distributorship agreement is revenue receipt

Larsen & Toubro Ltd. Vs Commissioner of Income-tax (Bombay High Court)

Our conclusion is based on the fact that the assessee has not established that the termination of the distributorship agreement has resulted in a loss of source of income or has affected its trading contract. This was not even the assessee's case before the authorities before whom it was contended that the receipt was in the nature of a g...

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India Signs Protocol for Amending the Convention for Avoidance of Double Taxation & Prevention of Fiscal Evasion

Protocol for Amending the Convention and Protocol Between the Republic of India And the Kingdom of Spain for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital Signed....

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Posted Under: Income Tax |

Loan advisory fees taxable in year of receipt itself & not over loan term, if not refundable in any case

Deputy Director of Income-tax, (International Taxation) 2(1), Mumbai Vs Toronto Dominion Bank Ltd. (ITAT Mumbai)

Assessee stated before the A.O. that this advisory fee related to the loan granted and pertaining to setting covenants, negotiations and execution of documentation, creation of security etc. It shows that the amount from each party was one time receipt related with the rendering of such services for the purposes of sanction of loan....

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TP adjustments must be made on the basis of actual transactions with AE

Pennzoil Quaker State India Ltd. Vs Deputy Commissioner of Income-tax, Range 1(2) (ITAT Mumbai)

The limited dispute raised is regarding transfer pricing adjustment in relation to international transactions entered into by the assessee with associate enterprises. There is no dispute either regarding TNMM method followed by the AO or about variables selected for computation of transfer pricing adjustment. ...

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Housing Project of built-up area of more than 2000 sq. ft. not eligible for Deduction u/s. 80-IB (10)(d) from A.Y. 2005-06

Income-tax Officer-6(2)(3), Mumbai Vs Everest Home Construction (India) (P.) Ltd. (ITAT Mumbai)

The ratio laid down by the Supreme Court in the case of Reliance Jute & Industries Ltd. v. CIT [1979] 120 ITR 921, squarely apply on the facts of the case as the assessee had not fulfilled the conditions precedent provided under section 80-IB(10)(d) as applicable from assessment year 2005-06....

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Payment for supply of technical personnel in India not taxable as FTS

Apollo Consulting Services Corporation Vs Director of Income-tax (International Taxation), Mumbai (ITAT Mumbai)

All the agreements, invoices and related documents produced before us lead to the fact that the payments have been made only for supply of manpower for certain amount of hours and nothing more. Since there is no technology, skill, experience, technical plan, design, etc. had been made available either by the assessee or the ACSC as held b...

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Interest cannot be charged u/s. 234B on brought forward MAT credit balance -SC

Commissioner of Income-tax, New Delhi Vs Sage Metals Ltd. (Supreme Court of India)

A short question which arises for determination in this appeal is, whether the Department is entitled to charge interest under Section 234B of the Income Tax Act, 1961, on the assessee bringing forward the tax credit balance into the year of account relevant to Assessment Year 2001-2002?...

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No Penalty for bona fide mistake in calculation of deduction u/s. 54F

Sarv Prakash Kapoor Vs Deputy Commissioner of Income-tax-4(1), Agra (ITAT Agra)

The mistake on the part of the assessee is that the assessee invested a part amount of sale consideration/ capital gain in residential house instead of gross sale consideration and claimed deduction under section 54F. It is relevant to note that for claiming deduction under section 54 of the Act investment of capital gain is the requireme...

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Property seller can forfeit buyer’s earnest money – SC

Satish Batra Vs. Sudhir Rawal (Supreme Court of India)

To justify the forfeiture of advance money being part of 'earnest money' the terms of the contract should be clear and explicit. Earnest money is paid or given at the time when the contract is entered into and, as a pledge for its due performance by the depositor to be forfeited in case of non-performance, by the depositor. ...

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Tax effect in a case means overall tax effect in respect of disputed issues in a particular year

Income-tax Officer, (International Taxation) Vs CMA CGM Agencies (India) (P.) Ltd. (ITAT Rajkot)

Paragraph 2 of the Instruction No. 3/2011, dated 9-2-2011 shows that that it is the policy of the Government to file appeal before this Tribunal only in those cases where tax effect is more than Rs.3 lakhs. Tax effect has been defined in paragraph 4 of the said instructions as the difference between the tax on the total income assessed an...

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Social works by Rajat Gupta helps him in getting milder Jail Term for Insider Trading

United States of America Vs Rajat K. Gupta (United States Distric Court of New York)

USDC held that no one really knows how much jail time is necessary to materially deter insider trading; but common sense suggests that most business executives fear even a modest prison term to a degree that more hardened types might not. Thus, a relatively modest prison term should be sufficient, but not more than necessary, for this pu...

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Posted Under: Income Tax |

Overview of the Micro, Small & Medium Enterprises Sector

Worldwide, the micro and small enterprises (MSEs) have been accepted as the engine of economic growth and for promoting equitable development. The MSEs constitute over 90% of total enterprises in most of the economies and are credited with generating the highest rates of employment growth and account for a major share of industrial produc...

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PAN Application -Persons authorized to make Credit card / Debit card / Net banking payment

Persons authorized to make Credit card / Debit card / Net banking payment are as below: Category of Applicant Payment by Credit Card / Debit Card / Net Banking can be made by / for Individual Self, immediate family members (parents, spouse, children) HUF Karta of the HUF Company Any Director of the Company Firm […]...

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Posted Under: Income Tax |

Mounting Pendency of Appeals before CsIT(A) & tardy disposal by CsIT(A) – Performance appraisal of CsIT(A)

Letter [F.NO. 279/M - 73/2012-ITJ] (25/10/2012)

Mounting pendency of appeals before CIT(A) and huge amounts disputed therein has been a matter of serious concern for the Department. The C&AG, Standing Committee on Finance, PAC have been adversely commenting upon this issue and calling upon the department to take up the issue on priority to clear the pendency and liquidate the demand lo...

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Nomination of officers for SAARC seminar on taxpayer services at Dhulikhel, Nepal

Income tax press release (25/10/2012)

SAARC Secretariat, Katmandu, Nepal has conveyed that the Government of Nepal proposes to organize a four day Seminar on Tax Payer Services in Dhulikhel (about 30km. southeast from Kathmandu) during 27th-30th November, 2012....

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If existence of income is presumed, existence of expenditure is also to be presumed

Commissioner of Income-tax Vs Indeo Airways (P.) Ltd. (Delhi High Court)

If the revenue was of the opinion that the expenses claimed towards 'green boxes' was inadmissible or was excessive, or not genuine, in order to reject the entries in the books of account and other documents of the assessee, seized during the search, it ought to have relied on other materials. Having once drawn the presumption that the co...

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XBRL filing due date extended to 15th December,2012

General Circular No. 34/2012 (25/10/2012)

In continuation of the Ministry's General Circular No. 16/2012 dated 06.07.2012, on the subject cited above, it is stated that the time limit to file the financial statements in the XBRL 'mode without any additional fee/ penalty has been extended up to 15th December,2012 or within 30 days from the date of Annual General Meeting of the com...

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CMA in full time emplyment to sent their employment details to Institute if signing Compliance Report

The Central Government vide the following notifications, has allowed cost accountants in full time employment,in addition to certification by members in full-time practice, to certify the Compliance Report to be filed with the Central Government in compliance with the following rules, namely:-...

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Posted Under: Income Tax |

Assistant Commissioner of Central Excise & Customs Sentenced For Possession Of Disproportionate Assets

The Special Judge for CBI Cases, Saket Court, New Delhi has convicted Shri Kulwaran Singh, the then Assistant Commissioner (Imports), ICD, Customs & Central Excise and seven other persons. The Court has sentenced Shri Kulwaran Singh to undergo three years Rigorous Imprisonment with fine of Rs. One Lakh; his wife Smt. Kulwant Kaur to under...

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Posted Under: Income Tax |

FTP – Duty credit scrips issued b/w 05.06.2012 to 26.7.2012 will have validity of 24 months

Policy Circular No. 7 (RE-2012)/2009-14 (25/10/2012)

RAs have issued duty credit scrips during this period i.e. from 05.06.2012 to 26.7.2012 with a validity of 24 months. Keeping in view this situation and in order to avoid any increased transaction cost to exporters, it is clarified that duty credit scrips issued upto 26.07.2012 will continue to have validity of 24 months and duty credit ...

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Amendments to Capital Gains Accounts Scheme, 2012

Notification No. 44/2012-Income Tax (25/10/2015)

Notification No. 44/2012-Income Tax In exercise of the powers conferred by sub-section (2) of section 54, sub-section (2) of section 54B sub-section (2) of section 54D sub-section (4) of section 54F sub-section (2) of section 54G and sub-section (2) of section 54GB of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby ma...

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What is LIBOR and should it be scrapped

Libor is an average interest rate which is calculated from the interest rates given by key banks in London on a daily basis. It is controlled by the British Bankers Association in London. Libor is one of commonly used interest rate in the world for various loans & banking transactions. It is also used in derivatives transactions globally ...

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Posted Under: Income Tax | ,

Download Personal Affairs Diary in Excel Format for professionals

ABCAUS Personal Affairs Diary(PAD) is a digital record of your affairs and key information that can really help your spouse, family or any loved one you really don’t want to be struggling or at a total loss in recovering important information, papers, money etc. in case of your untimely death or incapacitation due to sudden illness. ...

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Interest paid on sales tax under amnesty scheme is allowable as business expenditure

Deepak Nitrite Ltd. Vs Deputy Commissioner of Income-tax (ITAT Ahmedabad)

The issue before us is whether the interest paid on sales tax under the amnesty scheme is an allowable deduction as business expenditure. The law is well settled that the interest paid on sales tax is not of penal in nature and is therefore allowable as business expenditure. Therefore, in our opinion the interest on sales tax is an allowa...

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Even if assessee not earns any exempt income, disallowance u/s. 14A can be made

Siva Industries & Holdings Ltd. Vs Assistant Commissioner of Income-tax, Co. Circle VI(4), Chennai (ITAT Chennai)

Assessing Officer has disallowed the interest of Rs. 72,83,21,913/- on the ground of borrowed funds were used by the assessee for making investment in shares. The contention of the assessee is that in the earlier Assessment Year 2006-07 where no dividend income was received by the assessee, the Tribunal has held that no disallowance of ex...

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Loan Disclosed under VDIS can be claimed as bad debt if same become irrecoverable

Commissioner of Income-tax Vs Garden Finance Ltd. (Gujarat High Court)

Amount written off was a loan advanced during the course of business and that the interest thereon had been taxed as business income by the Department in accordance with the assessee's declaration under VDIS. The Tribunal also recorded a finding that the certificate accepting the VDIS declaration was issued by the Commissioner after consu...

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Time-limit of section 11B not applies for claiming refund under rule 5

Contour Apparels Vs Commissioner of Customs, Bangalore (CESTAT Bangalore)

The issue whether the time-limit prescribed under Section 11B in respect of claim for refund of CENVAT credit under Rule 5 is applicable has been considered by the Tribunal in the case of Swagat Synthetics Ltd. v. CCE 2007 (220) ELT 949 (Trib. - Ahd.) and it was held that credit lying in RG23A account accumulated arising out of export is ...

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Expenditure on development of software is a revenue expenditure & not a capital expenditure

Commissioner of Income-tax, Chennai Vs Sri Renuga Textiles Mills Ltd. (Madras High Court)

ourt held that upgradation of computers by changing certain parts, thereby enhancing the configuration of the computers for improving their efficiency, was only a revenue expenditure. The said view was again followed by this Court in CIT v. Southern Roadways Ltd. [2007] 288 ITR 15. ...

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Section 132 – Assessing Officer has no authority to seize stock-in-trade

Puspa Ranjan Sahoo Vs Assistant Director of Income-tax (INV) (Orissa High Court)

Section 132(1)(iii) empowers the authorized officer to seize any such books of account, other documents, money, bullion, jewellery or other valuable article or thing found as a result of such search which represent either wholly or partly undisclosed income or property of the person. However, the proviso carves out an exception....

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Guarantee fee not results in asset or advantage of enduring nature

Commissioner of Income-tax, Ghaziabad Vs Noida Toll Bridge Co. Ltd. (Allahabad High Court)

We are of the opinion, that the question is covered by the judgment in India Cements Ltd. (supra). In Kinetic Engg. Ltd. (supra) the Bombay High Court considered almost the same question and held that the bank guarantee commission paid by the assessee for securing timely repayment of the deferred credit facilities for buying machinery for...

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Section 10A does not contemplate any break in period of five assessment year

Expo Packaging Vs Assistant Commissioner of Income-tax (Gujarat High Court)

Sub-section (3) of section 10A either before or after its substitution does not contemplate a break in the five succeeding assessment years in relation to which an assessee is entitled to avail of benefit under section 10A of the Act. Thus, in case of an assessee who had already started availing the benefit of section 10A of the Act in an...

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Taxability of Compensation for cancellation of right issue of fully convertible debentures & allotment of shares

Commissioner of Income-tax, Kolkata Vs Vasudhara Holdings Ltd. (Supreme Court of India)

Compensation - Where compensation was given to assessee for cancellation of right issue of fully convertible debentures as well as allotment of shares made in favour of assessee, nature of compensation therefor was to be decided by considering relevant background ...

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Income once assessed in a particular year cannot be assessed in any other year

Lingtec Constructors LP Vs Income-tax Officer, (International Taxation) 1(2), Mumbai (ITAT Mumbai)

If anything is assessed in the year under consideration that cannot be again assessed in any other year and this will be applicable in either condition. If any amount is not assessed in the year under consideration then that part of income will be assessable in relevant year and if something is assessed in the year under consideration tha...

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Mere breach of contract would not entitle one to claim damages

Tower Vision India (P.) Ltd. Vs Procall (P.) Ltd. (Delhi High Court)

Consequences for breach of the contract are provided in Chapter VI of the Contract Act which contains three sections, namely, Section 73 to Section 75. As per Section 73 of the Contract Act, the party who suffers by the breach of contract is entitled to receive from the defaulting party, compensation for any loss or damage caused to him b...

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Mere change in shareholding pattern not amounts to transfer of factory

Auora Foam (P.) Ltd. Vs Commissioner of Central Excise, Chandigarh (CESTAT Delhi)

From a perusal of Rule 8 of the Cenvat Credit Rules, 2002 , it will be seen that the same is applicable in three circumstances - (1) when the manufacturer of the final products shifts his factory to another site, (2) the factory is transferred from the existing owner to the another person on account of change of ownership, and (3) the fac...

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Demand based on verification of worksheet submitted by assessee is valid

Malayalam Communications Ltd. Vs Commissioner of Central Excise and Customs (CESTAT Bangalore)

The demand has been issued based on figures taken from income tax returns where undisputedly the incomes were shown on accrual basis and not on the basis of realization of amounts. The learned advocate pointed out certain amounts were not received by the appellant company from their clients due to disputes. He also submitted that service ...

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Service Tax Not Applicable on Visa Service provided by Visa facilitators

VFS Global Services (P.) Ltd. Vs Commissioner of Service tax (CESTAT Mumbai)

Visa facilitators, merely facilitate the procurement of visa and directly assist individuals who intend to travel abroad, to complete the immigration formalities. Visa facilitators collect certain statutory charges like visa fee, certification fee, attestation fee, emigration fee, etc. from the visa applicant, which are remitted to the re...

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Place of removal in cases where duty is not payable on transaction value shall be place where duty is paid

Lafarge India (P.) Ltd. Vs Commissioner of Central Excise, Raipur (CESTAT Delhi)

In this case of specific rate of duty, prima facie, the ' place of removal' would be the ' place of removal' for the purpose of Rule 4 of Central Excise Rules, i.e. the places on removal from where the duty is liable to be paid, which in this case, is the factory gate of Sonadih factory, as the duty on clinker becomes payable at the time ...

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Media Law of India – An Overview

Communication is the procedure, which we use to exchange information by various methods and media is the medium or instrument of storing or communicating information. ‘Media’ the popular term inter-alia used as ‘Press’ denotes the print & electronic information carriers –the News Papers & Magazines, Radio, Television and current...

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December 2020