Statutes Monday -September-14-2009

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Online PR News – 14-September-2009 – – Case Laws-Direct Tax Laws -From Itat

Entitlement of a Primary Co-operative Credit Society to exemption under section 80P of IT Act, 1961 - A primary agricultural co-operative credit society is not a co-operative bank and therefore, not entitled to any deduction under section 80P(2)(a)(i) as a bank; but as it is a primary co-operative credit society, it may be entitled to some deductions on the income earned by it from its transactions with its members - Sridharpur Co-operative Bank v. ITO [ITA Nos. 779 & 780/Kol/08]

Determination of nature of renovation expenses incurred on a leased premises - In order to claim deduction of an expenditure as revenue which otherwise gives enduring advantage, the onus is on assessee to prove that the ownership of the property even during subsistence of lease, vests with the lessor and the assessee enjoyed the benefit of reduced license fee - The Living Room Designers v. ITO [ITA No. 996/Mum/2008]

Derivatives will also fall within meaning of ‘commodity’ used in section 43(5) of IT Act, 1961 - If it is held that the transaction in derivatives does not fall in section 43(5), it will make clause (d) and Explanation thereto below section 43(5) introduced by Finance Act, 2005 to be redundant - Shree Capital Services Ltd. v. ACIT [ITA No. 1294 (Kol) of 2008]

Transfer pricing - Where an assessee has followed one of standard methods of determining arm’s length price [ALP], such a method cannot be discarded in preference over transactional profit methods, unless revenue authorities are able to demonstrate fallacies in application of standard methods - Assistant Commissioner of Income-tax, Circle 2 v. MSS India (P.) Ltd. - [2009] 32 SOT 132 (PUNE) [IT APPEAL NO. 393 (PUNE) OF 2007]

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Service Tax-From Cestat

Security agency service - Activity of ‘bird scaring’ does not fall within purview of activities of ‘Security agency’ - Ex-servicemen Industrial Guards (P.) Ltd. v. Commissioner of Central Excise - [2009] 22 STT 13 (BANG. - CESTAT) [FINAL ORDER NO 462 OF 2009 & APPEAL NO. ST/268 OF 2008]

Levy of service tax on an institution imparting postgraduate programme in management under ‘commercial training or coaching centre’ - All institutions imparting knowledge and conducting courses at fairly higher level such as post graduate level, cannot be just termed as ‘commercial training or coaching centre’ and subjected to service tax under this category - Indian School of Business v. CCE [Appeal No. ST/194/2008]

From Sc/Hc

Applicability of DVAT Act to a transaction of hiring of cabs by assessee to a company - When the contract in question is a composite contract of sale of goods and services, it is not permissible for the State Legislature to tax composite contracts comprising of both goods and services by applying DVAT Act - Commissioner, VAT v. International Travel House Ltd. [ST. Appeal No. 10/2009]

Supreme Court Cenvat Credit - A manufacturer is entitled to Cenvat credit on eligible inputs utilized in generation of electricity to extent to which it is using produced electricity within its factory for captive consumption; clearance of excess electricity outside factory to joint ventures, vendors, grid, etc., would not be admissible for Cenvat credit, as such wheeled out electricity that was cleared for a price, would not fall within definition of ‘input’ in rule 2(g) - Maruti Suzuki Ltd. v. Commissioner of Central Excise - [2009] 22 STT 54 (SC) [CIVIL APPEAL NOS. 5554 AND 5555 OF 2009]

Corporate Laws

Section 5 of the Central Sales Tax Act, 1956 - When is a sale or purchase of goods said to take place in the course of Import or Export - Notified Designated Indian Carrier - Notification No. S.O. 2282(E), dated 8-9-2009

Companies (Central Government’s) General Rules and Forms (Fifth Amendment) Rules, 2009 - Substitution of Form Nos. 24B and 25A - Notification No. G.S.R. 649(E), dated 8-9-2009

Direct Tax Laws

Cost Inflation Index for F.Y. 2009-10 - Notification No. 67/2009, dated 9-9-2009

Section 35(1)(ii) of the Income-Tax Act, 1961 - Scientific Research Expenditure - Approved Scientific Research Associations/Institutions - Notification No. 66/2009, dated 4-9-2009

Securities Laws

Compliance with Regulation 16(8) of SEBI (Portfolio Managers) Regulations, 1993 - Circular No. IMD/DOF-1/PMS/CIR-6/2009, dated 10-9-2009

Section 4 of the Securities Contracts (Regulation) Act, 1956 - Grant of recognition to Stock Exchange - Renewal of recognition to Pune Stock Exchange Limited, Pune - Notification No. LAD-NRO/GN/2009-10/17/4947, dated 1-9-2009

Service Tax

Rescission of Notification No. 28/2009 - Service Tax, dated 31-8-2009 - Notification No. 36/2009-Service Tax, dated 9-9-2009

CENVAT Credit (Second Amendment) Rules, 2009 - Amendment in rule 3 - Notification No. 22/2009-Central Excise (N.T.), dated 7-9-2009

Section 93 of the Finance Act, 1994 - Power to grant exemption from Service tax -Amendment in Notification No. 16/2009 - Service Tax, Dated 7-7-2009 - Notification No. 35/2009-Service Tax, dated 3-9-2009