TIOL-DDT 2018
07.01.2013
Monday

THE first NLS-TIOL Moot Court 2013 organised by the NLSIU Bangalore's Moot Court Society in association with Taxindiaonline.com concluded yesterday in Bangalore's Taj Vivanta Hotel. Prominent legal luminaries like former High Court Judge Justice Jayasimha Babu, Justice N. Kumar (Karnataka High Court), Shri Mohan Parasaran(Additional Solicitor General of India) Shri Nishith Desai (Mumbai), and Shri Uday Holla, former Advocate General, Karnataka constituted the Bench for the finals.

More than 20 teams from different reputed law colleges participated in the event. The audience was thoroughly impressed by the presentations by the students before the Bench during the arguments bearing intense grilling by judges and many felt they were of far better standard than in the real Courts. The team from Hidayatullah National Law University, Raipur walked away with the Winner's trophy followed by the National Law University, New Delhi.

The NLS-TIOL Tax Law Conference preceded the final round of the Moot. The panel comprised eminent persons from the legal and financial fields and discussed the developments since the proposed introduction of GAAR and how the Shome Committee has attempted to clarify the confusion surrounding the entire issue.

TIOL's Chief Editor (I) and Senior Editor Raghavendra Rao attended the function and presented some of the trophies. TIOL also presented a special cash price of Rs. 5000 to the best speaker of the Moot - Rahil Pereira - from HN Law University, Raipur.

Service Tax - Axis Bank Appeal restored by CESTAT

WE have been closely following this ST case of Axis Bank Ltd. for the past few months.

A quick re-cap: THE short facts were that the applicant had availed the services of Non-Resident service providers, who did not have offices in India and they had paid certain fees/charges to such non-resident service providers for facilitating issue of Global Depository Shares (GDS). Revenue took a view that the service is taxable and classifiable under the category of Banking and Other Financial Services as Merchant Banking Services and the person liable for payment of service tax is the person receiving the taxable service in India. The Show Cause Notice demanding Service Tax of Rs.1.67 Crores dt. 13.1.2009 was confirmed by the CST, Mumbai-I along with equivalent penalty and interest.

The CESTAT had while deciding the Stay petition (2012-TIOL-1513-CESTAT-MUM) adverted to the decision in Jubilant Life Sciences Ltd. (2012-TIOL-199-CESTAT-DEL) and directed the applicant to deposit an amount of Rs. 50,00,000/- (Rupees fifty lakhs only) within a period of eight weeks and report compliance on 3rd December, 2012."

The case was called for hearing on 3rd December, 2012 by the CESTAT, WZB at Mumbai.

Since there was no compliance reported by the appellant, the Bench dismissed the appeal.

Incidentally, an early hearing application was moved by the appellant on the ground that the ST demand involved is more than Rs.1 Crore and this application came up for hearing on 11.12.2012.

On this day, the Bench perused the records and found that the appeal itself had been dismissed for non-compliance of the Stay order.

At this point the Consultant for the appellant informed the Bench that they had made the pre-deposit of Rs.50 lakhs on 26.10.2012, well before the compliance date.

Noting that there was an error in the order dismissing the appeal, the Bench recalled its order dated 03.12.2012 (2012-TIOL-1878-CESTAT-MUM) and after restoring the appeal to its original number fixed the case for final hearing on 12.03.2013.

(See 2013-TIOL-41-CESTAT-MUM)

Love all - Sania Mirza escapes penalty

THE assessee, a renowned professional international tennis player filed her IT return for the assessment year 2004-05 declaring a total income of Rs. 94,605/. Along with her return of income, she filed a statement of affairs wherein she disclosed that she had received Rs.30,63,310/- as awards from the Government and from other institutions and which amount was not offered to tax.

The assessing officer accepted this return but later on this assessment was opened and at this time, the tennis player voluntarily offered this amount of Rs.30,63,310/- for tax. It was submitted by the tennis player's Chartered Accountant that the amount was shown in the capital account and was not shown as a capital receipt. However, since the issue had arisen, it was being offered as taxable income.

The said offer was accepted but the AO decided to impose penalty of Rs.10,14,582/- on the ground that the assessee had furnished inaccurate particulars of her income and concealed her income.

This view was upheld by the CIT(A) but the Tribunal observed that there was no mala fide on the part of the tennis player and as there was no concealment of income, set aside the penalty.

The Revenue is aggrieved by this order and is before the AP High Court.

The High Court held that it was an error committed by the assessee inasmuch as this amount was not shown as capital receipt and when the same was pointed out the amount was surrendered to tax.

Holding that it was not a fit case for imposition of penalty, the Revenue appeal was dismissed.

(See 2013-TIOL-18-HC-AP-IT)

Sex orgies, contraceptives, tomato ketchup, blow dryer & Tax Evasion

READ further -

“It is brought on record that to wreak havoc upon me and to intimidate others into silence lest the illicit sexual intimacies between Sri xxx and Ms Y and Sri xxx and Ms X in organized prostitution where in Sri xxxx and Ms Y is practicing the illegal trade of prostitution is objected to and punished as per law, Sri xxxx and his accomplices have fraudulently and incorrectly fabricated fake, forged, false and counterfeit records to allege that criminal cases are pending against me and hence promotion should be denied to me. To cover up such fraud and forgeries, Directorate of Income Tax (HRD) and Sri xxxx, DIT (HRD) and Sri xxxx DGIT (HRD) are wilfully not handing over these records and are tampering with and manipulating those records.…

Both these women, i.e., Ms X and Ms Y apart from being in extra-marital sexual intimacies with Sri xxxx and a large number of other male colleagues are also involved in organized prostitution and are prostitutes in terms of clause (f) of Section 2 of the Immoral Traffic Prevention Act,1956. Besides, they nurse animus against me for having inspected their work while working as Addl. DIT(IT) and detected and reported theft and embezzlement of public money and public revenue in excess of Rs 10,000 crores like case of xxxxx where Ms X embezzled Rs.1,46,82,836/- by passing an illegal order u/s 143(1)(a) in A.Y. 2004-05 after initiation of proceedings u/s 143(2) on 28.3.2005 and issuing illegal refund from public exchequer and in lieu thereof accepting bribe and illegal gratification like all expenses paid free pleasure trip to Europe for self and family involving an estimated expenditure of about Rs.1,00,00,000/- in April, 2005 where of she left the country on 12.04.2005 by British Airways Flight No. 142 and returned back by British Airways flight no. 143 on 20.04.2005. Ms X has actively connived and conspired with M/s xxxx. In laundering the black money of M/s xxxx. worth more than Rs. 2000 crores through M/s xxxx and five of its subsidiaries. Likewise, Ms Y because of her illicit sexual intimacies with some rogue touts operating in Income Tax Department has caused theft of more than Rs.100 crores by passing illegal orders u/s 154 making substantive additions u/s 154 on serious Audit objections to get those additions knocked down in appeal...

Ms Y, JDIT garishly painted and gaudily attired befitting a prostitute of her calibre, is visiting various places including premises of Ld.CAT, Principle (sic Principal) Bench, Delhi acting in most suggestive and provocative manner offering immoral gratification if person up on whom she is working agreed to conspire with her against me. Log record of operational vehicle assigned to Ms Y would reveal her nocturnal trips to various places and people to canvass up port against me through illicit and extra-marital sexual favours...

Likewise, Ms X in lieu of illicit extra- marital sex which she had with Sri xxx and his customers in Bangalore in Suite No.10 of Income Tax Guest House, Infantry Road, Bangalore during November,2005 got the vigilance cases against here in the matter of her having received bribe from M/s...Ltd. Hushed up...

In 2009 Ms X by providing illicit extra-marital sex to Sri xxxx got her posted in Delhi after her promotions as JCIT when CBDT has asserted before Hon'ble Delhi High court that transfer out of station on promotion is rule in CBDT, however because of illicit extra-marital sex which Ms X had with Sri xxxx, she was retained in Delhi even after her promotion to the rank of JCIT.

By offering her body to ingratiate the debauched male lust and freely having illicit extra-marital sex with her benefactors being a full blown serving prostitute involved in the prostitution racket of Sri xxxx along with Ms R. And Ms Y; Ms X, JCIT has been subverting the rule of law and due process of law with impunity and has so far got away with the consequences of her illegal acts because of liberally provided illicit extra-marital sex on demand to her male benefactors..."

By offering her body to ingratiate the debauched male lust and freely having illicit extra-marital sex with her benefactors being a full blown serving serial prostitute involved in prostitution racket of Sri P.K. Misra with Ms. R. And Ms Y, Ms X, JCIT has been subverting the rule of law and due process of law with impunity and has so far got away with consequences of her illegal acts because of liberally provided illicit extra-marital sex on demand to her male benefactors... having entered into illicit extra-marital sexual relations with Sri xx, Sri xx, xx, Sri xx, Sri xx, Sri xxx and providing illicit extra-marital sex on demand to those officers to escape vigilance inquiries in the matter having received bribe and illegal gratification from M/s ...Ltd. And facilitated theft of public revenue and embezzlement of govt. money by M/s ...Ltd.(specific instance being admitted and self-declared sex Mrs X had with Sri xxxx and his customers apart from providing group sex, unnatural sex, oral sex and sexual orgies in Suite No. 10 of Income Tax Guest House on Infantry Road, Bangalore during November 16th2005 to November 21st2005 and where from about 20 used and several packets of unused male contraceptives and strips of female birth control pills were found and removed), Ms X alongwith Ms Y joined the prostitution racket of Sri xxx as serial prostitute, serving clients and customers of Sri xxx and pimps like xx, Sri xx, Sri xx etc.

In January, 2007, when Ms xxxx, Chairman, CBDT did not agree to proposals of Sri xxx to place me under suspension on the charges of alleged sexual harassment, sexual assault, molestation and rape of Ms X and Y, Ms X for had illicit sex with Sri xxx and Sri xxxx, Members of the CBDT and then along with Ms R and Ms Y, other prostitutes from prostitution racket of Sri … went around alleging sexual harassment, sexual assault and rape by me and forced them on Ms …, Chairman, CBDT, where Ms R. Ms X and Ms Y, serial prostitutes selling their bodies to debauched clients for sex on demand, enacted their sob drama and displayed their undergarments by smearing tomato ketchup and blow- drying that as proof of my bestiality and because of such drama by those serial prostitutes from the ranks of IRS, I was placed under suspension and inquires into illegal and unlawful activities of M/s …. came to an end…..

Sri xxxx, in lieu of bribe and sexual favours provided by Ms Y ( as admitted by her that she escorted Sri xxxx to various places for providing illicit sexual favours to him under incorrect names and introduced her as Ms Y or Ms Y Nele, being the fifth wife of Sri xxx, hushed up illegal losses caused by Ms Y to placate Sri xxx, her alleged husband and her pimp in her prostitution in excess of Rs.1,00,00,00,000/- which she deliberately caused to enable Sri xxxx to procure bribe, etc. Petitioner refers to specific cases where in lieu of huge bribe and illegal gratification obtained by Sri xxxx, Ms Y caused illegal losses to public exchequer and got the matter hushed up by providing illegal sexual favours to Sri xxx and others and by joining the prostitution racket of Sri xxx as a prostitute:”

What you just read above are extracts from complaints by an Additional Commissioner of Income Tax mainly against two of his lady colleagues who are Joint Commissioners. He calls them serial prostitutes and some of his bosses as pimps. The other dramatis personae are senior officers of the Income Tax Department like Chief Commissioners, Members and Chairman of the CBDT.

This man is obviously frustrated that he did not get his promotion as Commissioner.

Now what does he get? For the present, the Delhi High Court has asked him to cool his heels in prison for fifteen days.

See 2013-TIOL-17-HC-DEL-CONTEMPT

CBI Arrests Service Tax Supdt

THE Central Bureau of Investigation arrested a Superintendent and an Inspector of Service Tax, CGO Complex, Lodhi Road, New Delhi for demanding and accepting a bribe of Rs.One Lakh from the Complainant.

The Complainant had alleged that the Superintendent and the Inspector of Service Tax Department were demanding an illegal gratification of Rs. One Lakh for favourable settlement of his service tax liabilities. After registering a case, CBI laid a trap and both the accused persons were caught red handed while demanding & accepting a bribe of Rs.One Lakh from the Complainant.

Jurisprudentiol - Tuesday's cases

Central Excise:

Manufacture u/s 2(f)(iii) - there is no evidence to show that applicants undertook any activity which amounts to manufacture after clearance from Customs - Demand of CE duty of Rs.58 crores stayed by Bench - Revenue seeking modification of order - since retail price affixed before clearance from Customs and appropriate CVD paid, no ground to modify Stay order: CESTAT

THE Revenue filed this application for modification of the Stay order dated 14.06.2012 (2012-TIOL-1117-CESTAT-MUM). The contention of the Revenue is that the importer-appellant affixed the sale price on the goods imported and affixing of retail sale price amounts to manufacture as per Chapter Note 33 of the Central Excise Tariff.

Income Tax:

Whether Katha business carried on by assessee can be said to be incidental to attainment of objects of trust for purpose of exemption u/s 11 when object of trust is to advance education, patriotism, Indian culture and dispensaries - NO: HC

THE assessee is a Charitable Trust. The trust deed set out the objects of the trust which included the establishing and maintaining of schools, colleges and study circles, etc. Clause 19 of the trust deed provided that the trust may “carry on any business for and on behalf or in the name of the trust for the sole object of applying the income and profits thereof for the purposes of objects of the trust”. The trustees were partner of firms which were themselves engaged in the business of the manufacture and sale of Katha. After the formation of the trust, a business was commenced in the name of the trust for the manufacture of Katha.

Service Tax:

ST - Renting of Immovable property - In relation to immovable property difference between "renting" and "leasing" is blurred - The ordinary meaning of "renting" will not cover long term leasing - Developing a township according to plan which will be conducive to society at large and maintaining municipal functions in such township has to be prima facie considered as sovereign functions and not commercial activity of government - GNIDA Prima facie not liable for payment of Service Tax - Pre-deposit waived and Stay granted: CESTAT

THE appellant, Greater Noida Industrial Development Authority (GNIDA) is a body established under the Uttar Pradesh Industrial Development Act, 1976 by notification issued under section 3 of the said Act to develop certain notified areas as a planned industrial township. It functions as an arm of the State Government through its officers. Under section 6 of the said Act, one of the functions of GNIDA is to allocate and transfer whether by way of sale or lease or otherwise plots of land for industrial, commercial or residential purposes.They charge both one time lease charges at the time of initial handing over of the land and also charge annual lease charges at different rates for land given for different purposes. On such lease charges received, either one time or annual, the appellant has not been paying any service tax.

See our Columns Tuesday for the judgements

Until Tuesday with more DDT

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