Statutes Monday -September-21-2009

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Online PR News – 21-September-2009 – – Case laws-Corporate laws -From sc/hc

Powers of CLB, inter alia, to grant interim reliefs pertaining to matters which is/are not a part or subject matter of company petition - The CLB cannot exercise its inherent powers to pass orders without jurisdiction or in utter disregard to orders passed by the Supreme Court or the High Court; an interim order passed by the CLB without jurisdiction and without giving reasons and in utter disregard to the orders passed by the Supreme Court and the High Court cannot be sustained - Shree Ram Urban Infrastructure Ltd. v. R. K. Dhall [Company Appeal No. 45 of 2009 In Company Application No. 138 of 2009 In Company Petition No. 45/297-298/CLB/MB/2009 With Company Application No. 847 of 2009]

Direct tax laws -From aar

AAR on taxability of applicant–German company, having no PE in India, for executing a contract of Tuticorin Port Trust (TPT) through an Indian sub-contractor - It is not possible to hold that the place of manufacture of the sub-contractor situated far away from the installation site should notionally be regarded as part of the applicant’s PE; occasional or brief visit by some of the employees of the applicant right from the beginning does not give rise to inference of the existence of PE; hence, its business profits arising from the periodical payments made by TPT as a consideration for the contract cannot be subjected to tax under the Income-tax Act, 1961 in view of Article 7.1 of DTAA between India and Germany - Pintsch Bamag, In re [AAR No. 790 of 2008]

From Itat

Requirement of section 68 of IT Act, 1961 to prove identity, creditworthiness and genuineness of cash credits - When the particulars regarding income-tax assessments and bank account of creditors have been filed then initial burden has to be held to be discharged by the assessee and then the burden shifts on the Revenue to show that what is stated or explained by the assessee is not satisfactory - Kalyan Memorial & Charitable Trust v. ACIT [ITA NO. 233/Agr./2006]

From sc/hc

Allowability of depreciation on stock exchange membership card acquired by an assessee on or after 1-4-1998 - Depreciation under section 32 is intended to a limited category of intangible assets and not to a wider category thereof; therefore, the expression ‘licences’ in section 32(1)(ii) must be construed restrictively so as to apply to licences relating to acquisition/user of intellectual property rights; since BSE card does not fall in any of the categories specified in section 32(1)(ii), depreciation cannot be allowed on the same - CIT v. Techno Shares & Stocks Ltd. [ITA (L) No. 971 of 2006 & ITA No. 218 of 2007]

Service Tax -From Cestat

Allowability of rebate claim for services exported under Export of Service Rules, 2005 - Once the taxable service is exported and various input services have been utilized for providing the output service the service provider is entitled for the rebate, which is equal to the service tax paid on the input services - Dell International Services India Pvt. Ltd. v. CCE (Appeals) [Appeal Nos. ST/115/2008 & ST/145-146/2008]

Scope of business auxiliary service rendered by a CA firm for carrying out spot billing and data processing for a Power Distribution Company (APCPDCL) prior to 2006 - In terms of the Board’s clarification dated 28-2-2006, the service rendered namely outsourcing of spot billing work by APCPDCL would come within the ambit of business support service which is liable to service tax only with effect from 2006 - Gandhi & Gandhi Chartered Accountants v. CCE [Appeal No. ST/332/08]

Levy of service tax on freight forwarding services under CHA Services - The activities relating to freight forwarding cannot be brought under CHA - DHL Lemuir Logistics Pvt. Ltd. v. Commissioner of Service Tax [Service Tax Appeal No. 389/2007]

Rendering of “Technical Inspection and Certification Service” in terms of section 65(108) of Finance Act, 1994 - The word ‘process’ mentioned in the definition of ‘Technical Inspection and Certification Service’ could relate only to physical and chemical processes; it cannot be transported to the province of management relating to human beings - American Quality Assessors (India) Pvt. Ltd. v. Assistant Commissioner (Service Tax) [Appeal No. ST/73/2005]

Corporate Laws

Resolution under regulation 168 of the Company Secretaries Regulations, 1982 passed by ICSI (Council) allowing members in practice to carry out non-attestation services through the new business structure of Limited Liability Partnership -

Direct Tax Laws

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Section 35(1)(ii) of the Income-tax Act, 1961 - Scientific Research Expenditure - Approved Scientific Research Associations/Institutions - Notification No. 69, dated 15-9-2009

Securities Laws

Systems Audit of Mutual Funds - Circular No. SEBI/IMD/CIR No. 8/176988/2009, dated 16-9-2009

Applicability of Delisting Regulations - Transitional Provisions - Circular No. SEBI/CFD/DCR/DL/01/2009/14/09, dated 14-9-2009

Service Tax

Benefit of reduced penalty under provisos to Section 11AC - whether also available at appeal stage - Circular No. 898/18/09-CX., dated 15-9-2009

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