FM working on the New Income Tax Act.
TIOL-DDT 675
09.08.2007
Thursday
There is none in the Finance ministry who can better the FM, in drafting laws. And this time around the FM is personally involved in preparing the new Income Tax Act. He told PTI that he was working even on weekends to prepare the draft and will present it to Parliament before the year end.
The Income Tax Act 1860 survived for a century when it was replaced by the Income Tax Act, 1961. And most probably the present Act will not celebrate its golden jubilee.
The whole idea is to simplify the Income Tax law. But all our efforts to simplify have always ended up in further complication and confusion.
The FM should draft such an Act that his party President would understand easily and devise such forms that the President can file the returns without anybody's help.
Inflation catches up with corruption – CBI arrests two Central Excise inspectors with bribe of two lakhs of rupees.
The Central Bureau of Investigation arrested two Inspectors of Central Excise posted at Janakpuri, New Delhi, for demanding and accepting bribe of Rs. Two lakhs as first instalment for a total bribe of Rs. five lakhs demanded from the owner of a factory manufacturing VCD and DVDs at Mayapuri, New Delhi. On 7.8.2007, both the Inspectors demanded Rs. five lakhs bribe from the complainant and threatened him that unless their demand is met, he would be booked under the Excise Act. Finally it was agreed that Rs. Two lakhs has to be paid as first instalment. One of the Inspectors, who came to collect the first instalment of Rs. Two lakhs was caught red-handed by a CBI team and the bribe money was recovered from him. The other Inspector was subsequently arrested by CBI for his involvement in the demand of bribe. Searches were conducted at the residential premises of both the Inspectors.
CBI books Postal Superintendent
If you thought that Central Excise officers were corrupt and ignoble departments like Posts were relatively honest, the CBI registered a case against a Senior Superintendent of Post Office, South West Division, Chanakyapuri, New Delhi for possession of assets disproportionate to the known sources of his income to the tune of Rs.33.95lakh. Searches were conducted at the official and residential premises of the accused official which revealed Rs.75,000 in cash, documents pertaining to educational expenditure of his children worth about Rs.19lakh Insurance policies worth Rs.11lakh, two plots at Wazirabad and Karawal Nagar, Delhi, benami investments in monthly income schemes and KisanVikasPatras to the tune of Rs.31lakh and investment in PPF worth Rs.3lakh.
China enjoys anti-corruption game – kill and torture the corrupt and enter a corruption free Paradise
An online game in China that allows players to eradicate corrupt officials has proved so popular its website has crashed. Since its launch a few days ago, the game, "Incorruptible Fighter", is reported to have been downloaded more than 100,000 times. The game was devised by a regional government in east China to highlight the problems of corrupt officialdom.
China has been hit recently by a number of high-profile cases of corruption. The former head of the country's food and drug watchdog was executed last month after being convicted of taking bribes.
The Communist Party's former leader in Shanghai was expelled from the party, and may now face charges, after he was linked to a pensions fund scandal that has also implicated other senior officials.
President HuJintao has vowed to take action against officials found guilty of corruption, which has become rampant since market reforms opened the economy in the 1980s.
"Incorruptible Fighter" allow players to get ahead by killing and torturing corrupt officials, while assisting the upstanding ones. Along the way, they are led through a series of moral challenges before entering a corruption-free paradise.
The game appeared to have become a victim of its own success. A note on the site said it had crashed due to overwhelming demand.
Review of External Commercial Borrowings (ECB) Policy
RBI has announced modification of the ECB policy:-
(i) Henceforth, ECB more than USD 20 million per borrower company per financial year would be permitted only for foreign currency expenditure for permissible end-uses of ECB. Accordingly, borrowers raising ECB more than USD 20 million shall park the ECB proceeds overseas for use as foreign currency expenditures for permissible end-uses and shall not remit the funds to India. This modifications would be applicable to ECB exceeding USD 20 million per financial year both under the Automatic Route and under the Approval Route.
(ii) ECB up to USD 20 million per borrowing company per financial year would be permitted for foreign currency expenditures for permissible end-uses under the Automatic Route and these funds shall be parked overseas and not be remitted to India. Borrowers proposing to avail ECB up to USD 20 million for Rupee expenditure for permissible end-uses would require prior approval of the Reserve Bank under the Approval Route. However, such funds shall be continued to be parked overseas until actual requirement in India.
(iii) All other aspects of ECB policy such as eligible borrower, USD 500 million limit per borrower company per financial year under the Automatic route, recognised lender, average maturity period, all-in-cost-ceiling, prepayment, refinancing of existing ECB and reporting arrangements remain unchanged.
(iv) These conditions will not apply to borrowers who have already entered into loan agreement and obtained loan registration numbers from the Reserve Bank. Borrowers who have taken verifiable and effective steps wherein the loan agreement has been entered into to avail of ECB under the previous dispensation, and not obtained the loan registration number, may apply to the Reserve Bank through their Authorised Dealer.
These changes will come into force with immediate effect.
CIRCULAR NO. 4/RBI., Dated: August 7, 2007
Emergency in Pakistan?
As you read this, perhaps emergency has been declared in Pakistan. One who lives by the sword will die by the sword and dictators who think that a state of national emergency will solve their problems have invariably met their waterloo, our madam not excluded. But we should salute the Pakistan Supreme Court which faced the challenge of the General and got their Chief Justice reinstated. It really required plain guts behind those black gowns to take on those gums and goons.
From our Legal Corner – tomorrow's cases
Central Excise
One Commissioner wearing two hats cannot constitute a Committee - Tribunal decision in Remi Fans is seemingly per incuriam : Tribunal
AS a rule, the best things are done by a Committee of one - E.C.Mckenzie
On 30th April we reported the Single Member Tribunal decision in Gupta Steel- 2007-TIOL-567-CESTAT-KOL- holding that a single Commissioner cannot sign at both places on a Review order & constitute a Committee, whatever be the administrative exigencies.
The next day we reported another Single Member decision of the WZB in the case of Remi Fans Pvt. Ltd. -2007-TIOL-573-CESTAT-MUM - wherein the Tribunal held that even if there is a single Commissioner who signs in a dual capacity as a Committee, there is no infirmity as he is holding additional charge of the other Commissionerate too.
We had suggested that such unpleasant situations can be avoided by constituting the Committee with any two Commissioners who can be nominated by the Chief Commissioner or the Chief Commissioner can himself/herself sit in the Committee in the absence of a Commissioner. More importantly, the signatures on the Review order should be of two different individuals, if that suffices the purpose.
Probably, Board is not interested in any of these solutions and feels that once the jurisdictional Commissioner has decided to review the Commissioner(Appeals)'s order, the second Committee Member has to only sign on the dotted line, whatever be his view.
Removal of inputs for job work - recorded in books - non-compliance with prescribed procedure - no duty can be demanded - no intent to evade and so no penalty : CESTAT
Does the Law permit delayed demand in a revenue neutral case?
The Tribunal examined this question and observed:-
1. It is well settled that demand under proviso to Section 11A could be raised only in exceptional cases.
2. Those exceptions are mentioned in the proviso itself.
3. They are fraud, wilful suppression of facts or misstatement of facts with intent to evade duty, etc.
Classification adopted by Revenue cannot be challenged by way of filing a refund claim subsequently : CESTAT
So long as the order of assessment stands, the duty would be payable as per the order of assessment. A refund claim is not an appeal proceeding. The Officer considering a refund claim cannot sit in appeal over an assessment made by a competent Officer.
Income Tax
Capital gains tax - Application of Sec 2(47) is valid only if conditions of Transfer of Property act are satisfied : Madras HC
CAN provisions of Sec 2(47)(v) of Income Tax Act be given effect to on its own or its coming into play depends on satisfaction of certain conditions? The court was faced with this question wherein it squarely held that Sec. 2(47)(v) cannot come to the aid of department unless conditions of Sec. 53A of Transfer of Property Act are satisfied i.e 2(47)(v) can only be invoked on satisfaction of 53A of TPA.
See our columns tomorrow for the judgements
Until Tomorrow with more DDT
Have a nice day.
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