News Update

Dy CM of Talangana Mallu Bhatti Vikramarka gets key portfolio of Finance & Energy15th Finance Commission Chairman N K Singh says prevailing geopolitical challenges call for re-inventing MDBsCJI advises Have audacity to listen to others and dismantle own echo-chamberEU builds consensus on bill to regulate AII-T- Re-assessment cannot be resorted to solely on assumption that Assessee did not file ITR for relevant AYs, thus revealing non-application of mind on part of AO: ITATAmidst surging prices, Centre bans export of Onions till March 31, 2024; Wheat stock limits revised to check rising prices & to curb hoardingUS Economy adds 1.99 lakh jobs in Nov monthGovt to infuse Rs 1364 Crores to boost competitiveness in capital goods sectorRussian President Vladimir Putin affirms participation in 2024 elections in bid to retain presidencyCX - Appellant is entitled to take Cenvat credit of inputs used for construction/fabrication of capital goods, including port: CESTATGarba dance included in UNESCO’s Intangible Heritage List; Indian-Americans celebrate by putting up performance at Times SquareGovt to host mega event showcasing textiles; sustainability, resilient supply chains to also be highlightedCanada to double cost-of-living financial requirements for international students from Jan 1, 2024ST - As per settled precedent, construction service provided to Surat Municipal Corporation under Jawaharlal Nehru National Urban Renewal Mission is not taxable: CESTATIsrael resumes Gaza offensive as troops enter southern Gaza; US vetoes UN bid for ceasefireIndia selected to lead IMO's Green Voyage 2050 project; eye on cutting emissions from shipsCus - Charges of mis-declaration do not sustain, where no act of omission or commission on part of Assessee, is established - Confiscation quashed, penalties set aside: CESTATRBI makes no change in Repo rate; projects 7% growth in 2024Goyal hails Indian consumer electronics industry; urges priority for quality & domestic manufacturer collaborationsTelangana former CM KCR suffers hip injury at his farmhouseCus - Filing refund claim before finalisation of assessment, as precautionary measure, is no grounds for rejecting refund claim on limitation: CESTATIndia to host Global Partnership on Artificial Intelligence next week
DDT in Limca Book of Records - Third Time in a row



YOUR DDT  has entered the Limca Book of Records - AGAIN - in the 2014 edition as the longest running daily online column on tax matters. This is the longest running daily column by a single author on any matter in any publication. This is the third time in a row that DDT has entered the Limca Book of Records.

As the citation above shows, DDT had completed 2137 issues by June 30, 2013. That is the cut-off date for Limca Book of Records for entries for the year 2014. After that date, DDT has come out with nearly 200 issues, as today's DDT is numbered 2323.

DDT is grateful for all the support from the Netizens, the Government and colleagues, who made this possible. DDT  will continue its pursuit relentlessly, with your support - to make the records straight for you.

A BIG Thank You !

Service Tax on Builders prior to 1.7.2010 - Cochin Commissionerate starts fresh investigation

BY now, as they say, it is no more res integra that builders who construct residential flats and sell them to customers were not liable to pay Service Tax prior to 1.7.2010. Please see RF Properties Vs Commissioner of Central Excise - 2013-TIOL-971-CESTAT-DEL.

But the Cochin Central Excise Commissioner wants to start a fresh investigation. In a letter to the President of CREDAI, the Commissioner informs that they have been directed to examine the Service Tax liability of all builders/developers by verifying whether the agreements fall within the ambit of Board's Circular 108/02/2009 dated 29.01.2009 during the period from 1.10.2008 to 30.6.2010. CREDAI was asked to furnish the details of their members and also to direct their members to co-operate with the department by providing the tons of information the department requires - like month wise amount collected from each client …….

CREDAI faithfully communicated the Commissioner's missile to their Members. CREDAI tells its members that the good Commissioner is asking for information based on the recommendation of an empowerment committee consisting of the Chief Commissioners of various states and that the Department had made it clear that if the members co-operate with the enquiry proceedings, the same can be concluded without difficulty.What does this mean? Is it a threat or a promise?

A beleaguered assessee laments, “ The Commissioner earlier had taken a stand that the builders are not liable to tax till 1/7/2010. BUT now the Chief Commissioner is reopening this closed issue. Large number of demands was dropped and amount of tax paid was refunded. The CERA had closed the DAP on the issue, and then the Commissioner issued instructions to the effect that pre 1/7/2010 cases may be closed dropping demands. It is rather unfortunate that as per whims and fancies of top bureaucrats, the assessees are being troubled .”

Will the Board act or advise other Commissioners to follow suit?

FTP - Export of River Sand to Maldives - Annual Ceiling

CENTRAL Government has permitted Export of River Sand to Maldives with the annual ceiling of 2 lakh tons in 2014-15 and 2.5 lakhs and 3 lakhs in the next two years, under Bi-lateral Trade Agreement between Government of India and Government of the Republic of Maldives.

DGFT Notification No. 75/(RE - 2013)/2009-2014, Dated: March 27, 2014

FTP - Export of Stone Aggregate to Maldives - Annual Ceiling

CENTRAL Government has permitted Export of Stone Aggregate to Maldives with the annual ceiling of 5 lakh tons in 2014-15 and 5.5 lakhs and 6 lakhs in the next two years, under Bi-lateral Trade Agreement between Government of India and Government of the Republic of Maldives.

DGFT Notification No. 76/(RE - 2013)/2009-2014, Dated: March 27, 2014

FTP - Export of Pulses to Maldives - Annual Ceiling

CENTRAL Government has permitted Export of Pulses to Maldives with the annual ceiling of 87.85 tons in 2014-15 and 96.63 lakhs and106.29 lakhs in the next two years, under Bi-lateral Trade Agreement between Government of India and Government of the Republic of Maldives.

Export of pulses had been prohibited vide Notification No. 15(RE-2006)/2004-09 dated 27.06.2006 which had initially been imposed for a period of 6 months and is presently extended till 31.03.2014 vide Notification No. 38(RE - 2012)/2009-2014 dated 25.03.2013.

Now, the above quantities of pulses is being allowed for export to the Republic of Maldives under bilateral trade agreement between Government of India and Government of Maldives during the period 2014-15 to 2016-17 which is an exception to the prohibition imposed by the above notifications:

DGFT Notification No. 77/(RE - 2013)/2009-2014, Dated: March 27, 2014

Government Issues Orders for Revised DA to Babus - to be paid before 1.4.2014

GOVERNMENT has issued orders enhancing the Dearness Allowance to Central Government employees and pensioners with effect from 1st January 2014. The existing DA of 90% is enhanced to 100%. The additional installment of Dearness Allowance payable under these orders shall be paid in cash to all Central Government employees.

(But how? These orders were issued yesterday and the Government is virtually closed for the year from tomorrow. The Pay for March 2014 is to be paid on 1.4.2014 - that means the DA has to be paid by 31st March 2014 which is a holiday in many parts of the country. They can do one thing - pay the salary for March a little later - DDT)

MoFDept of Expenditure O.M. No. No. 1/1/2014-E-II (B), Dated: March 27, 2014

CBDT promotes 18 Chief Commissioners as Principal Chief Commissioners - Cadre Review Set in Motion

THE CBDT yesterday promoted 18 Chief Commissioners as Principal Chief Commissioners in the pay scale of Rs. 80,000/-. This is perhaps the first step in implementation of cadre review. And this is the first time in history that field officers of the Income Tax Department are getting the Apex Scale.

In a message, CBDT Chairman said, “ Chairman and Members, CBDT Congratulate, all officers who have been elevated to the grade of Principal CCIT in the Apex scale of Rs.80000/-. This is a Historic day for the Income Tax Department.Best Wishes to All.”

Yes, it is a historic day for them that they have 18 posts in the field in the grade of Secretary to the Government of India.

In the new scenario, you will have Principal Chief Commissioners on a pay of Rs. 80,000 reporting to the CBDT Members who are also on the same pay. These CBDT Members report to the CBDT Chairman who is also in the same pay. The CBDT Chairman will report to the Revenue Secretary who also is in the same pay of Rs. 80,000. And there will be some Chief Commissioners also in the pay band of Rs. 80,000.

It is rather a little too crowded at the top.

When are the CBEC Chief Commissioners becoming Principal Chief Commissioners?

As of now they are not able to promote about 150 superintendents/appraisers who are already cleared by a DPC and some of them will retire in a couple of days with that elusive promotion beyond their reach.

Annual Budget 2014-15 - CBDT invites suggestions - by next year

WHILE the politicians are busy with elections, it is business as usual for the babus. The CBDT seems to be busy with the next budget and wants suggestions from the field officers.

In a letter to the Chief Commissioners, the Board has asked them to send suggestions/recommendations of the Field Officers for the Annual Budget 2014-15 which will be presented before the Parliament shortly after the General Elections.

Board wants the suggestions latest by 20.04.2015 and cautions that it would not be possible to examine the suggestions sent after 20.04.2015.

Perhaps what they mean is 20 th April 2014. But their unbridled enthusiasm and concern for the country's fiscals made them extend the submission date well after the presentation of the Annual Budget 2014 -15, which in all probability would be in the first week of July, 2014!  This also reflects on the seriousness of the 'futile' exercise of seeking suggestions from the field.

CBDT F. No. 134/13/2014-TPL, Dated: March 21, 2014

Scheme for Collection of Taxes - RBI Instructions

THE Government of India has decided that the date of closure of Residual Transactions for the month of March 2014 be fixed as April 15, 2014 for the Financial Year 2013-14. Accordingly, RBI has issued instructions on special arrangements and Reporting and Accounting of March Transactions.

There is a whole clever exercise to show next year's revenue as this year's and for this the entire system is made to undergo a fraudulent procedure. We should stop this sometime. The Revenue received in April does not go to Pakistan - it remains with India; nothing is going to happen if it is not shown as March Revenue. The election year is the best time to put an end to this fiscal budgetary fraud.

DDT Cartoon

Jurisprudentiol - Monday's cases

Legal Corner IconCentral Excise

Valuation - buyer agreed to provide interest free advance to assessee to help him set up factory with an undertaking that assessee would supply at least 90% of their production to buyer - such 'compensation' is not includible in AV as SCN did not bring out categorically allegation that arrangement was to influence sale price - CESTAT by Majority

THE appellant was manufacturing re-treading and supplying 97% to 98% of their production to M/s Black Stone Rubber Industries Pvt. Ltd ("the buyer"). During 1996-97, the buyer paid an amount of Rs.6,84,780/- as "compensation" to the appellants in addition to the declared price of the goods. During 1997-98 the buyer paid Rs.6,50,500/- in similar manner.

The case of Revenue is that these amounts should have formed part of the assessable value of goods sold by the appellant to the buyer.

Accordingly, a SCN demanding excise duty of Rs.2,20,835/- was issued and confirmed by the adjudicating authority and also upheld by the Commissioner. However, the Commr(A) set aside the penalty of Rs.25,000/- on the appellant manufacturer and reduced the penalty on the partner to Rs.10,000/-

Aggrieved by this order, the appellant is before the CESTAT.

Income Tax

Whether assessee -Trust would lose exemption for entire income even if there is one instance of application or use of income or property of Trust directly or indirectly for benefit of any prohibited person - YES: Delhi HC

THE assessee is a Charitable Trust which was granted registration under section 12A of the Act. In respect of the assessment year 2006-07, it filed a return of income declaring Nil income. The return was processed under Section 143(1). Subsequently a scrutiny of the return was initiated and notices under Sections 142(1) and 143(2) were issued. A sum was shown by the assessee as the proceeds of the sale of assets, being land. The assessee in furtherance of its objects to open a school, entered into agreements with M/s A for purchase of land. In these agreements the assessee paid 95% of the price of the land to M/s A and simultaneously obtained possession of the plots.

The issues before the Bench are - Whether the trust would lose exemption in respect of its entire income even if there is one instance of application or use of the income or property of the trust directly or indirectly for the benefit of any prohibited person; Whether where assessee-trust pays advance to the extent of 95 per cent of cost of property purchased to prohibited person without taking possession and without concluding a proper sale deed even after one year from the date of deal and then cancelling the deal and getting the advance back without interest would amount to violation of section 13(1)(c)(ii) read with section 13(2)(a) and Whether it would amount to violation of Section 13(1)(c)(ii) read with Section 13(2) and Section 13(3) of the Act, where assessee in furtherance of its objects intended to open a university, proper formalities were completed but due to Supreme Court order the object could not be achieved in the hands of the assessee and it formed this charitable society with same objects and trustees and incurred the expenses which were shown as advance to the educational society. And the verdict partly favours it.


Vessel arrived at Marmagao port and after conducting dredging operation for more than one month it sailed - fact that nobody objected the dredging operation during that period meant that necessary documents had been submitted to Customs authorities - in this view of matter, it cannot be alleged that facts were suppressed - Revenue appeal dismissed: CESTAT

ONE vessel 'Dredger VolvoxHansa' arrived at Marmagao port on 18.08.2000 and commenced dredging operation on same day till 29.09.2000 and thereafter it sailed.

A show cause notice was issued on 09.10.2001 for proposing penalty under section 114A of the Customs Act, 1962 alleging suppression. The Commissioner held that as the activity of the respondent was in the knowledge of the department on 18.08.2000 itself, therefore, extended period of limitation cannot be invoked.

The order was reviewed by the Committee of Chief Commissioners and an appeal came to be filed before the CESTAT.

The Revenue representative submitted that the observation of the Commissioner that the copies of documents which were submitted to Port Trust have been sent to the Customs is not based on record.

See our Columns Monday for the judgements

Until Mondaywith more DDT

Have a nice weekend.

Mail your comments to

Sub: Service Tax- Builders

What is bewildering that there is an effective Notification No. 36/2010 ST which exempts receipts advance payments received for services specified in Section 76A of Finance Act 2010 wherein at clause 6(e)the definition of Services of construction of residential complex is amended to include builders services as deemed taxable for receipt of amounts before completion certificate. This goes on while the election manifestos are flying high with promises of abolition of practices of retrospective taxation. Vodafone network must be following wherever it goes.

Posted by anilmishra anilmishra
Sub: Congratulations

Hearties congratulations to DDT for this record!

Posted by Shvetal Parikh
Sub: Record Holder DDT

congrats Shri Vijay Kumar sir.

Your column has been a source of enlightenment in this otherwise confused and complicated taxation arena.

Tenth year without a stop is an incredible thing.

May the Almighty continue to give you the passion and energy to keep on penning our daily doses which is the first injection that many like me have early morning before settling down to do our daily taxation chores.

I am proud to say that I begin my day with a dose of DDT!

Posted by sachin deshmukh
Sub: Congrats

It takes unbelievable amount of perseverance and commitment to keep this going for over nine years (as per dates on the citation), not to speak of huge sense of humor which lightens even a drab subject like taxation. You have forgotten rain, shine, illness and personal life to keep this race going, a race with no finishing line. May the Lord Upstairs double your strength and qualities to keep this going.

Posted by Gururaj B N
Sub: DDT in Limca Book of Records - Third Time in a row

Indeed, DDT is a very informative and up to date piece in taxation front. They are doing a very marvellous feat and it is seamlessly being supplied in the public interest and for awareness in the taxation matter in a lucid manner, though it is supposed to be very complicated matter. Hearty Congratulation to entire DDT team and taxindiaonline pariwar. Really, Thanks a lot dear. Keep it up.

Posted by uma shanker singh
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