bangalore branch of sirc of icai newsletter for the month of august 2012

(Set up by an Act of Parliament)

The Institute of Chartered Accountants of India

BangaloreN e w s l e t t e rBranch of SIRC

Volume 01 | Issue 01 | August, 2012 | Pages : 20 ` 5/- per copyFor Private Circulation only

ENHANCE VALUES, INSPIRE TRUST

44th Regional Conference of SIRC of ICAI 18 19 AUGUST 2012&TRIPURAVASINI

Bangalore Palace Grounds,

Bangalore

12Hrs.

CPE

Major Programmes in August

VISHWAS

Case Studies on

44th Regional Conference of SIRC of ICAI

International Taxation

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Listen to, what Dharma is in its entirety;

after understanding, meticulously practice it;

what is detrimental to us,

should never be implemented on others

SOURCE: Pancha Tantra

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CPE

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ugust 2

012

27

Happy Independence Day15th August

English Monthly

Enhance Values, Inspire Trust

2

Inauguration Inauguration

Inauguration

50th Annual General Meeting

CA.S.Ramasubramanian CA.H.PadamchandKhincha

CA.K.K.Chythanya Chief GuestCA.K.S.Ravishankar

CA. ChidanandaUrs

CA. Vivek Mallya Shri. GauthamGururaj

Speakers at Study Circle Meetings

Mr. B. C. Prabhakar

107th Batch of GMCS Inauguration

Seminar - Discussion on Amendmentsin Income Tax by Finance Act 2012 Workshop on FEMA

103rd Batch of GMCS Inauguration 104th Batch of GMCS Inauguration

6th Corporate Accountants Meet

Flag Hoisting Chief Guest Dr. N. Prabhudev,Vice Chanvellor,

Bangalore University

CA Day Celebrations on 1st July 2012

CA. G. Lakshminarayan CA. L. Vittal Rao CA. Amit Raj A. N. Mr. Sudarshan RaghunathCA. Krishna Prasad Mr. Vijay S. Tambad

Guest of HonourCA. Ranganath M. S.

Past Chairman, SIRC of ICAI

Guest of HonourCA. T. S. Sadasivaiah,

Sr. FCA, Tiptur

CA. Chetal DalalCA. V. BalakrishnanCA. RajkumarAdukia

Participants of 103rd Batch GMCS Participants of 104th Batch GMCSChief GuestCA. M. Ram

Participants of 107th Batch GMCSCA. B.P. Rao

Career Counselling at Chikkaballapura

Workshop on ITNational Conference on

Cloud Computing

Contd. on next page

CA. K. Raghu CA. AmarjitChopra

CA. K. Raghu

Commencement of 9th Batch of IFRS Interactive Session with CPC Officials

Mr. K. Krishna Rao,CIT, CPC

Mr. R. K. Mishra,CIT, CPCAddl.

Ms. Amrita Rajan,Addl. CIT, CPC

CA. Ravishankar P.,AVP, Infosys BPO

man, to the peasants and workers of India; to fight and end poverty

and ignorance and disease; to build up a prosperous, democratic

and progressive nation, and to create social, economic and

political institutions which will ensure justice and fullness of life

to every man and woman”

- Pandit Jawaharlal Nehru

.

Friends, over 65 years of post Independence, our great country

has grown tremendously in the fields of Literacy, Health,

Economic Development (Poverty), Life Expectancy, Natural

Resources, Infrastructure, and also Politically and Economically.

On the brink of midnight of the 14th of August 1947

Chairman's Communique . . .Chairman's Communique . . .Dear Professional Colleagues,

Hearty greetings to all of you

I hope the members and the family are in good

health, we are in independence day month

and I wish you all ,

in advance.

Happy Independence Day

“The future beckons to us. Whither do we go

and what shall be our endeavour? To bring

freedom and opportunity to the common

3 August2012

Bangalore Branch of SIRCof the Institute of Chartered Accountants of India

Contd. from previous page

With warm regards,

CA. Nithin MahadevappaChairman

This is the contribution of our previous generation over thelast six decades, and this is in line with the statement madeby our first Prime Minister Pandit Jawaharlal Nehru, Nowthe mantle is in our hands to carry the glory of this country tothe world and make this country proud and bestow a healthy,peaceful and prosperous Nation to our next generation.44th Regional Conference of SIRC of ICAI-VISHWASFriends, all of you are aware that the Bangalore Branch is thehost for the 44th Regional Conference of SIRC of ICAI. Thismega event is happening in Bangalore after 5 years. Theconference is witnessing the participation of speakers ofNational and International repute. I request all the membersto register for this conference well in advance and make thismega conference a grand successful event.Job and Career Fair at ChikkaballapurThe exemplary initiative, of the Honorable Union Ministerfor Corporate Law Affairs, Dr. Veerappa Moili, ‘Job andCareer Fair’ at Chikkaballapur, got a huge response; over16,500 youths in and around Chikkaballapur participated inthe Fair and over 5,000 participants got gainful employment;many thousands got valuable career counseling. This programwas held on 14th and 15th, July 2012. The Bangalore branchsupported this initiative whole-heartedly. The ManagingCommittee members along with 20 Chartered Accountantsand 15 CA Students voluntarily conducted orientationprogram on ‘how to face interview and accounts relatedinformation’ to hundreds of candidates from commerce andaccounting background along with the background material.This was conducted a week before the Fair in 9 differentlocations of Chikkaballapur District. All the participants werehappy and appreciated the initiative of ICAI, Bangalorebranch and even the Honorable Minister visited our stall andspecifically appreciated the initiative of Bangalore branchfor reaching out to the grass roots of the society andvoluntarily assuming the social responsibility. I on behalf ofthe Bangalore branch thank the members and students whosupported this initiative.Meeting with VC Bangalore UniversityOn 25th July 2012 we met Bangalore University VCDr. N. Prabhudev along with the members of Board of Studiesof Bangalore University and representatives from variouscolleges (under Bangalore University). We have submitted aproposal to conduct joint-programs for the students; and alsorequested them to provide us an opportunity to conductCA awareness programs and CA coaching at BangaloreUniversity Colleges. We have also requested in the proposal1) to grant exemption for those common subjects studied inCA and B’Com/BBM/M’Com courses for those CAs who

wants to pursue B’Com/BBM/M’Com; 2) consideration ofCA as an eligible Post Graduation course for PHD Courses.The matter is with the Bangalore University and the samewill be decided in their future meetings.July 2012 activitiesDuring July 2012, Bangalore branch has conducted thefollowing programs for its members, students and generalpublic at large:• CA Day Celebration; • Annual General Meeting;• ISA Meet; • 6th Corporate Accountants Meet; • Interactionwith CPC officials; • Workshop on FEMA; • Workshop onInformation Technology - KYC-Know Your Computer;• Seminar - Discussion on Amendments in Income Tax byFinance Act 2012; • CPE Teleconferences; • Study CircleMeets; • Impact SeminarsAll the programs were well appreciated by our members byway of attending in good numbers. Bangalore Branch hascontinued its initiative of web casting of all the programsduring the month. All the programs of Bangalore branchare recorded and hosted at branch website (ICAI TUBE).I request the members/students to make use this serviceat www.bangaloreicai.org/resources/icai-tube.On behalf of Bangalore Branch, I thank all the speakers,resource persons, coordinators, professional colleagues andemployees of Bangalore branch for supporting all the eventsand programs for the month. I also thank all the participantsfor making the events successful.August 2012 activitiesMembers: • Independence Day Celebration; • ‘Vishwas’44th Regional Conference of SIRC of ICAI; • Workshop onInternational Taxation; • CPE Teleconferences; • Study CircleMeets; • Impact Seminars; • Cricket TournamentCA Students: • Cricket Tournament • Coaching classesGeneral Public and other students: • Career CounselingProgram at RC College and other Colleges.Reading RoomsBoard of Studies (BOS) of The Institute of CharteredAccountants of India intends to start reading room facilitiesacross Bangalore in Association with Schools, Colleges andLibraries, etc. for CA students. BOS will assist by way of grantsfor Furniture, Air-conditioning, etc. required for such facility.I request the members in association with such institutions cancontact Bangalore branch to facilitate the initiative.

4August2012

DISCLAIMER: The Bangalore Branch of ICAI is not in anyway responsible for the result of any action taken on the basis of the advertisement publishedin the newsletter. The members, however, bear in mind the provision of the code of ethics while responding to the advertisements. The views and opinionsexpressed or implied in the Branch Newsletter are those of the authors and do not necessarily reflect that of Bangalore Branch of ICAI.

Note : High Tea at 5.30 pm for programmes at 6.00 pm at Branch Premises.

Advertisement Tariff for the Branch NewsletterColour full pageOutside back ` 30,000/-Inside back ` 24,000/-

Advt. material should reach us before 22nd of previous month.

Inside Black & WhiteFull page ` 15,000/-Half page ` 8,000/-Quarter page ` 4,000/-

Editor : CA. Nithin MahadevappaSub Editors : CA. Ravindranath. S.N

CA. Prasad. S.RCA. Shivakumar. H

Cover Page SubhashitaTranslation by : CA. Allama Prabhu M.S.

CALENDAR OF EVENTS - August & September 2012Date/Day Topic /Speaker Venue/Time CPE Credit

01.08.12 Revised schedule VI & XBRL Taxonomy Branch PremisesWednesday CA. S. Hariharan 06.00pm to 08.00pm

08.08.12 Enterprise Risk Management - Quantitative Risk Model Branch PremisesWednesday CA. Raghuraman R. 06.00pm to 08.00pm

15.08.12 Independence Day Flag Hoisting & Celebrations Branch Premises --Wednesday Felicitation to Rank Holders 09.30am

18.08.12 Vishwas - Enhance Values, Inspire Trust Tripuravasini,Saturday & 44th Regional Conference of SIRC of ICAI Palace Grounds,19.08.12 BangaloreSunday For details refer page no: 18

22.08.12 Issues in Tax Audit Branch PremisesWednesday CA. Prashanth G. S. 05.30pm to 08.30pm

25.08.12 Case Studies on International Taxation Hotel Le- MeridianSaturday CA. H. Padamchand Khincha & CA. K.K. Chythanya Bangalore

For details refer page no: 17 09.30am to 05.00pm

29.08.12 Leveraging the Law of Karma to Achieve your Goals! Branch PremisesWednesday CA. Darshan G. Parwani 06.00pm to 08.00pm

05.09.12 Works Contract Service under Service Tax Branch PremisesWednesday CA. Chandrahasa K. 06.00pm to 08.00pm

07.09.12 Seminar on Service Tax under Negative Taxation Scheme Branch PremisesFriday & 10.00am to 05.30pm08.09.12Saturday For details refer page no: 17

2 hrs

3 hrs

12hrs

Live TV & ICAI TubeAll the programmes of Bangalore branch are live telecasted to watch the programme please visit :

www.bangaloreicai.org / resources/livetv.‘ICAI TUBE’ Bangalore branch’s initiative of archiving and streaming of programs

in the form of videos was well appreciated by the members. All the recorded programs ofBangalore branch are hosted in the Bangalore branch website, to watch these videos please visit

www.bangaloreicai.org/resources/icai-tube for the benefit of the members.We welcome your suggestion & feedback to serve you better.

2 hrs

6 hrs

2 hrs

2 hrs

12hrs

5 August2012


TAX UPDATES JUNE 2012CA. Chythanya K.K., B.Com, FCA, LL.B., Advocate

VAT, CST, ENTRY TAX,PROFESSIONAL TAXPARTS DIGESTED:a) 50 VST – Part 5b) 51 VST – Part 1 to 4c) 14 GSTR – Part 4 & 7d) 15 GSTR – Part 2e) 17 KCTJ – Part 3

Reference / Description[2012] 51 VST 1 (Bom. – HC):Mahalaxmi Cotton Ginning Pressingand Oil Industries v. State ofMaharashtra and others - In theinstant case, the Petitioner hadchallenged the constitutional validity ofSection 48(5) of the MVAT Act. ThePetitioner in the alternative sought thatif the validity was upheld, the words“actually paid” should be read down tomean “ought to have been paid”.In view of the above, the Bombay HighCourt held that the expression“actually paid” used under Section48(5) of the MVAT Act must receivetheir ordinary and natural meaning. Aset-off under Section 48(5) would beallowable only to the extent of tax, ifany that has been actually paid into thetreasury in respect of the purchase taxpaid on the same goods. The use of theword “actually” in conjuncture with theword “paid” leaves no manner of doubtabout the legislative intent. In otherwords, the Court held that a set-off isavailable where tax has been depositedin the treasury, and to the extent of thetax deposited. Where no tax has beendeposited in the treasury, there is no taxactually paid in respect of which a set-off can be granted.Therefore, the Court held that thewords “actually paid” cannot be readdown to mean “ought to have beenpaid”.

It is unfortunate that if the sellingdealer does not pay the tax collected,the buying dealer is denied the benefitof input tax credit. The buying dealerhas no control over the conduct of theselling dealer and it is the State thathas necessary wherewithal to enforcerecovery from the selling dealer.[2012] 52 VST 29 (Kar. – HC): ACCLtd. v. State of Karnataka - In theinstant case, the Karnataka High Courtheld that the sale transaction of readymix concrete was completed onlywhen it was delivered at the pointwhere it was finally put to use. If suchdelivery included the service ofpumping, the pumping charges werealso included in the pre-sale expensesand hence, formed part of the taxableturnover.[2012] 52 VST 204 (Kar. – HC): Stateof Karnataka v. Khoday Eshwarsaand Sons - In the instant case, thedealer was the flagship company of agroup which operated three separatedivisions, a distillery for manufactureand sale of liquor, a sugar factory anda division for execution of workscontract. In the year 1994-95, it ran intoserious financial difficulties,whereupon, in order to raise funds itentered into agreements with fivefinancing companies on whom it raisedinvoices for sale-cum-lease back ofoakwood barrels and vats for valueaggregating to Rs. 17,00,34,809/-. TheAssessing Authority acting on theinvoices, held that the goods were soldfor a sum of Rs. 17,00,34,809/- andassessed the amount to tax, surchargeand turnover tax under the KST Act.The Karnataka High Court observedthat the goods sold were oakwood vatsand barrels, which were of no use to

the financier or the group company towhom they were sold and which werenot in the business of liquor. The valueof the goods which were worth merelya few lakhs of rupees when comparedto the consideration purported to havebeen paid under the document, Rs. 17crores and odd and the fact that, thevery properties were taken back onlease, there was no handing over of thegoods and receiving back the goodsunder the lease deed.In light of the above observation theCourt held that it was a financialarrangement entered into between thedealer and financier and anothergroup company to raise the requisitefunds for carrying on the business andtherefore, the Court held there was nosale of any goods.The Court also dealt with the aspectof tax payable on the works contractand held that the liability to payconcession tax arises only after tax isliable to be paid under Section 5B. Notax is liable to be paid under Section5B on the works contract, when thereis no sale of goods. Further, the Courtheld that the contention of the Revenuethat even though there is no sale ofgoods when the assessee opt forconcession of tax, the tax payable evenon the labour works contract isunsustainable in law.This is a very important decisionparticularly after an earlier decisionin the case of T.H.Venkate Gowda vs.The Commissioner of CommercialTaxes in Karnataka, Bangalore(Karnataka-HC) (2006) 61 Kar.L.J.289. This decision makes it amplyclear that just because a dealer hasopted for composition, he cannot bemade liable to vat in respect of purelabour contracts.2012-13 (17) KCTJ 45: Indus TowersLtd. v. DCCT - In the instant case theKarnataka High Court had an occasion

6August2012

to deal with the aspect of transfer ofright to use goods under Section2(29)(d) of the Karvat Act in respectof providing cellular telephonenetworking towers to variouscompanies for their commercial use.The Court looking into the variousterms of agreement entered into by theAssessee observed that the Assesseehad not transferred any right in thepassive infrastructure to the mobileoperators, the right that was conferredon the mobile operator was apermission to have access to thepassive infrastructure, a permission tokeep the active infrastructure in the sitebelonging to the Assessee, apermission to mount the antennae onthe tower erected by the Assessee andto have the benefit of a particulartemperature so as to operate theequipments belonging to the mobileoperator.In view of the above observation theCourt held that there was no deemedsale of goods or transfer involved inthe above transaction and hence thesaid transaction does not attract levyof tax under the Karvat Act.2012-13 (17) KCTJ 58:Clarifications/Circulars issued bythe CCT1) Circular No. CLR.CR-137/11/-12/22.3.2012 - Rate of VAT on income taxdeducted at source from gross valueof contract‘Income Tax’ is deducted by thecontractee out of the amount payableto the contractor executing workscontract. It is therefore part of the totalworks contract receipts of thecontractor and hence forms part of thetotal and taxable turnover of thecontractor.2) Circular No. CLR.CR-136/11/-12/22.3.2012 - Rate of tax applicable on‘Cess’ deducted at source‘Cess’ under Building and otherconstruction Workers Welfare Cess

act, 1996 is deducted by the contracteeout of the amount payable to thecontractor executing works contract.Such cess is therefore part of the totalworks contract receipts of thecontractor and hence forms part of thetotal and taxable turnover of thecontractor.3) Circular No. CLR.CR-135/11/-12/22.3.2012 - Rate of tax applicable on‘Vat deducted at source from GrossValue of Works Contract’VAT payable under KVAT Act isdeducted by the contractee out of theamount payable to the contractorexecuting works contract. It istherefore part of the total workscontract receipts of the contractor andhence forms part of the total andtaxable turnover of the contractor.4) Circular No. CLR.CR-196/11/-12/22.3.2012 – Sale value of softwareIt is clarified that only sale value ofsoftware is liable for charge of VAT.Not vat is payable on element ofservice tax.5) Circular No. CLR.CR-141/11/-12/22.3.2012 – VAT on EMD and FSD‘EMD (Earnest Money Deposit) andFSD (Further Security Deposit)’ arededucted by the contractee out of theamount payable to the contractorexecuting works contract. They aretherefore part of the total woks contractreceipts of the contractor and henceform part of the total and taxableturnover of the contractor.6) Circular No. CLR.CR-217/11/-12/3.5.2012 – Multi option for paymentof taxesIt is clarified that the applicant mayeither opt for composition of tax as perSection 15 of the KVAT Act in respectof all the three types of works contractor pay tax under regular scheme as perSection 4 of the Act in respect of allthe three types of works contract. But,he cannot avail both the schemes fordifferent types of works contract.

INCOME TAXPARTS DIGESTED:a) 343 ITR – Part 6b) 345 ITR – Part 2c) 207 Taxman – Part 2 to 6d) 16 ITR (Trib) – Part 2 to 5e) 136 ITD – Part 6 to 9f) 38 CAPJ – Part 6g) 44-A BCAJ – Part 3h) 60 TCA – Part 12i) 6 International Taxation – Part 6

Reference / Description[2012] 345 ITR 193 (Del. - HC):Ranbaxy Laboratories Ltd. v. CIT - Inthe instant case the Delhi High Courtdealing with Section 92CA of the IT Actin respect of Circular stated thatreference must be made to TPO wherevalue exceeds Rs. 5 Crores and heldCircular is binding on Assessing Officerand failure to make reference to TPOamounts to making assessment withoutconducting proper inquiry andinvestigation. The High Court upheld therevision under section 264 of such order.With due respect, it is stated that theaforesaid decision requires a review.For, the High Court having held thatsection 92CA(1) is only a guidelineand a discretion, went on to hold thatthe AO was bound to refer theinternational transaction to the TPOwhen the value exceeded Rs.5 Crores.[2012] 345 ITR 223 (Del. - HC): CITv. SPL’s Siddhartha Ltd. - In theinstant case, the approval for issue ofnotice under Section 148 of the IT Actwas taken from the Commissioner ofIncome-tax. Therefore, the Delhi HighCourt held that under Section 151 ofthe IT Act, it was only the JointCommissioner or AdditionalCommissioner, who could grant theapproval for issue of notice underSection 148 of the IT Act.Further the Court held that as this wasnot an irregularity curable underSection 292B of the IT Act, the noticewas not valid.

7 August2012


In a welcome decision, the Hon. HighCourt held that merely because theapproval was obtained from a higherranking official, it cannot be said thatthere is compliance. When the lawrequires that a certain thing is to bedone in a certain manner, no othermanner of doing it is permissible.[2012] 345 ITR 241 (Del. - HC): CITv. EKL Appliances Ltd. - In the instantcase the Delhi High Court dealing withthe ‘transfer pricing guidelines’ laiddown by the Organization forEconomic Co-operation andDevelopment (‘OECD’) held that thesignificance of the said guidelines liesin the fact that they recognise thatbarring exception cases, the taxadministration should not disregard theactual transaction or substitute othertransactions for them and thetransaction as it has been actuallyundertaken and structured by theassociated enterprises. It is of furthersignificance that the guidelinesdiscourage restructuring of legitimatebusiness transactions. The reason forthe guidelines, is that it has thepotential to create double taxation ifthe other tax administration does notshare the same view as to how thetransaction should be structured.Further the Court held that twoexceptions have been allowed to theaforesaid principle and they are:(i) Where the economic substance of atransaction differs from its form; and(ii) Where the form and substance ofthe transaction are the same butarrangements made in relation to thetransaction, viewed in their totality,differs from those which would havebeen adopted by independententerprises behaving in acommercially rational manner.In the above decision, OECDGuidelines on TP have been given dueregard. The High Court recognised the

right of the assessee to choose thearrangement and held that thedepartment cannot displace the saidarrangement. The only thingdepartment can do is to insist on arm’slength pricing and nothing more. Oflate, we notice a tendency where thedepartment resists genuine commercialarrangement between the AEs simplyobserving that the assessee could havemanaged without such arrangement.Such decision, holds the High Court, isbest left to the assessee.[2012] 207 Taxman 233 (Bom. -HC)21; taxmann.com 61 (Bom. -HC): CIT v. Shankar Krishnan - Inthe instant case, the Assessee was asalaried employee of a Company ‘K’.He was provided with rent freeaccommodation and the monthly rentpaid by the employer was Rs. 10,000per month. The employer had given aninterest free deposit of Rs. 30 lakhs tothe landlord of the said premises.During the relevant assessment year,the Assessee computed the perquisitevalue of the said accommodation at Rs.1,20,000 being the rent paid by theemployer to the landlord. TheAssessing Officer opined that since theemployer had given interest freedeposit of Rs. 30 lakhs to the landlord,notional interest at the rate of 12 percent on the said deposit was requiredto be taken into consideration forestimating fair rental value, andaccordingly, enhanced the perquisitevalue.The Bombay High Court, on readingRule 3 of the IT Rules, held that theperquisite value of the residentialaccommodation provided by theemployer has to be computed on actualamount of lease rental paid or payableby the employer and not on notionalbasis. Hence, the Court held that thenotional interest on the deposits paidby the employer to the landlord cannot

be taken into consideration whilecomputing the perquisite value of theresidential accommodation in view ofthe express words used in Rule 3 ofthe IT Rules as amended w.e.f01.04.2001.[2012] 207 Taxman 236 (Kar. - HC);21 taxmann.com 101 (Kar. - HC):CIT v. R. Nagaraja Rao - In the instantcase, the Karnataka High Courtfollowing its own decision in the caseof K.N. Madhusudhan (Gift TaxAppeal Nos. 1&2 of 2008 disposed ofon 06.09.2012), held that the word‘transfer’ under Section 2(47) of theIT Act does not include partition orfamily settlement.[2012] 207 Taxman 108 (Kar. -HC)(Mag.); 21 taxmann.com 501(Kar. - HC): DIT v. SonataInformation Technology Ltd. - In theinstant case, the Karnataka High Courtdealing in respect of Section 9(1)(vi)of the IT Act, held that considerationpaid by Indian customers or end usersto assessee, who is a foreign supplier,for transfer or right to use software/computer programme in respect ofcopyrights fall within mischief of‘royalty’ as defined under sub-clause(v) to Explanation 2 to Section 9(1)(vi)of the IT Act.[2012] 207 Taxman 332 (All. - HC)21;taxmann.com 447 (All. - HC): CIT v.Nitin Soni - In the instant case, theAssessee is a proprietor of ‘NFA’ andalso one of the directors of ‘NAL’. Inthe return, the Assessee disclosedincome under Section 44AE of the ITAct with allegation that he possessesonly eight trucks. Assessing Officermade certain additions in the incomeof the Assessee on the ground that theAssessee has not been able to reply asto how he has been meeting his dailyexpenses. The plea raised by theAssessee under Section 44AE of theIT Act was rejected by the Assessing

8August2012

Officer on the ground that the Assesseehas got income from other sources.TheAllahabad High Court held that thevery purpose and idea of enactment ofprovision like Section 44AE of the ITAct is to provide hassle freeproceedings. Such provisions are madejust to complete the assessmentwithout further probing provided theconditions laid down in suchenactments are fulfilled. Thepresumptive income, which may beless or more, is taxable. Such anassessee is not required to maintain anyaccount books. This being so, even if,its actual income in a given case, ismore than income calculated as persub-Section (2) of Section 44AE, thesame cannot be taxed.[2012] 16 ITR (Trib) 457 (Bang.):GMR Holdings P. Ltd. - In the instantcase, the Assessing Officer whilecompleting assessment under Section143(3) of the IT Act had treated incomefrom dividend and interest as businessincome in consonance with view takenin preceding as well as succeedingyear. Thereafter the assessment wasreopened on the basis of auditobjection.The Bangalore Tribunal held thatreopening assessment based on auditobjection without independentapplication of mind and withoutrecording that such income hadescaped assessment is not justified andhence the Tribunal set aside the re-assessment framed by the AssessingOfficer.[2012] 16 ITR (Trib) 477 (Mum.):Nimbus Communications Ltd. v.ACIT - In the instant case the MumbaiTribunal held that a continuing debitbalance per se, in the account of theassociated enterprises, does notamount to an international transactionunder Section 92B of the IT Act inrespect of which arm’s length priceadjustments could be made.

The same view has been taken by thePune Tribunal in the case PatniComputers Systems Ltd. v. DCIT[2012] 16 ITR (Trib) 533 (Pune)The aforesaid decision is sought to beundone by the Finance Act 2012 byway insertion of Explanation (i) belowsection 92B seeking to expand themeaning of the phrase ‘internationaltransaction’.[2012] 16 ITR (Trib) 565(Indore)(SB): Maral Overseas Ltd. v.ACIT; In the instant case the IndoreSpecial Bench dealing in respect ofSection 10B of the IT Act held thatamendment made for extending periodof exemption from five to ten years isalso applicable to the undertakingexisting prior to the date ofamendment.[2012] 16 ITR (Trib) 621(Ahmd.)(SB): Vishnu AnantMahajan v. ACIT - In the instant case,the Assessee, an individual, derivedincome from share of profit from a firmapart from capital gains, interest,dividend and house property. TheCommissioner (Appeals) took theview that the expenses anddepreciation allowance did not pertainto the Assessee as an individual, butto the firm in which he was a partnerand that since the share income fromthe firm was not to be included in thetotal income of the Assessee by dintof the provisions of Section 10(2A),the provisions of Section 14Aregarding “expenditure incurred inrelation to income not included in totalincome” were applicable. He,therefore, allocated the expenses to theincome not includible under Section10(2A) and taxed the business incomeby way of remuneration and interestfrom the firm in the hands of theAssessee under Section 28(v) afterallowing 24% of the expenditure,disallowing 76% of the expenditure asrelated to the income that was exempt.

The Ahmedabad Special BenchTribunal held that share income isexcluded from the Assesse’s totalincome and Section 14A would comeinto operation and any expenditureincurred in earning the share incomewould have to be disallowed. TheCommissioner (Appeals) was right indisallowing the expenditure in the ratioof income not included in the totalincome and the income received fromthe firm.The Tribunal further held that Section14A uses the words “expenditureincurred by the assessee in relation toincome”. The statutory allowance bydepreciation under Section 32 is notan expenditure and hence the same isnot covered by section 14A.[2012] 44-A BCAJ 299; [2012] 21taxmann.com 316 (Mum. – Trib.):Jatinder Kumar Madan v. ITO - Inthe instant case the Mumbai Tribunalheld that acquisition of a new flatunder development agreement inexchange old flat amounts toconstruction of a new flat. Therefore,the Tribunal held that if suchacquisition is made within the timeperiod of 3 years, the assessee will beentitled to exemption under Section 54of the IT Act.

OBITUARYWe deeply regret to informsad demise of our member

May her soul rest in peace.

CA. Sheela Sathyanarayan(M. No. 210392)on 30.06.2012

9 August2012


RECENT JUDICIALPRONOUNCEMENTS ININDIRECT TAXESCA. N.R. Badrinath, Grad C.W.A., F.C.A.CA. Madhur Harlalka, B.Com., F.C.A

Central Excise:1. Appellate authority or the Court

cannot direct the assessee to pay25% penalty beyond the datestipulated in the first and thesecond proviso to Section 11AC:The facts of the case are therespondent is manufacturer ofexcisable goods who claimed theexcess CENVAT credit on purchases.Adjudicating authority vide Order-in-Original confirmed the demandwith interest under Section 11AB andlevied 100% penalty under Section11AC of Central Excise Act, 1944.Aggrieved, respondents appealedagainst the Order-in-Original beforethe Tribunal, which reduced thepenalty to 25% and directed therespondents to pay 25% penaltywithin 30 days from the date ofcommunication of the Tribunal’sorder. Tribunal placed the reliance onthe decision of Honorable DelhiHigh Court in case of K.P. Pouches(P) Ltd. V/s. Union of India reportedin (2008) 228 E.L.T. 31 (Del).Against the order of the Tribunal, theAppellants are before the HonorableHigh Court, who admitted the appealto consider the substantial questionof law that, “Whether the CESTATwas justified in directing the assesseeto pay 25% of the penalty leviedunder Section 11AC within 30 daysfrom the date of communication ofthe order passed by the Tribunal,when the first and second proviso toSection 11AC specifically providethat the benefit of reduced penalty at

25% shall be available only if theduty determined under Section11A(2), interest payable thereonunder Section 11AB and penalty at25% of the duty determined underSection 11A(2) has been paid withinthirty days from the date ofcommunication of the order of theCentral Excise Officer determiningduty payable under Section 11A(2)of the 1944 Act.”Honorable High Court turned downthe order of the Tribunal and heldthat, when the legislaturespecifically fixes the time limitwithin which the duty determinedunder Section 11A(2) with interestand penalty at 25% is to be paid foravailing the incentive, it wouldneither be open to the appellateauthority nor any other authority topermit the assessee to pay 25%penalty at any time other than thetime prescribed under Section 11ACi.e, within 30 days from the date ofcommunication of the order.Reduced penalty is the incentivemade available to the assesseesubject to fulfillment of conditionsset out in the first and the secondproviso to Section 11AC within thetime stipulated therein. If theconditions are not fulfilled, theincentive is lost and the assessee isrequired to pay penalty at 100%.The substantial question of law isanswered in favour of revenue andagainst the assessee. [CCE, MumbaiVs M/s Castrol India Ltd 2012-TIOL-464-HC-MUM-CX]

2. Assessee paying duty undercompounded levy scheme is notrequired to file ER I: The Tribunalheld that the assessee paying dutyunder Rule 3A of Central ExciseAct, 1944 under compounded levyscheme notified vide notificationNo. 17/2007-CE dated 01/03/2007is not required to file monthly excisereturn as per Rule 12 of CentralExcise Rules, 2002 in Form ER I.Rule 12 applies to the assessee, as perRule 2(c) where the assessee is aperson who is liable for payment ofduty assessed; and as per Rule 2(e)duty means the duty payable underSection 3 of Central Excise Act, 1944.Hence requirement of filing monthlyreturns under Rule 12 is applicable tothe assessee paying duty underSection 3 and not to the assesseepaying duty under Section 3A. Suchan assessee has to file the applicationon a quarterly basis giving such detailsas prescribed in the said notification.[Zaidan Metal Rolling Mills Pvt LtdVs CCE, Mumbai 2012-TIOL-801-CESTAT-MUM]

3. ER I return does not give alldetails to verify the correctness ofclaims made: In the applicationfiled for waiver of pre-deposit, thedemand against the applicants wasconfirmed on the grounds that, theapplicants filed ER I returns givingonly the details of duty payable,credit taken and duty paid. Thereturns are filed without givingspecific details and further, copiesof invoices / documents on the basisof which the appellant are availingthe credit were also not filed alongwith returns. Therefore it is heldthat, with the returns filed, no onecan make out whether credit of taxavailed is correct or not and whetherit is in respect of a dutiable productor exempted product. [MahindraSona Ltd Vs CCE, Nashik 2012-TIOL-783-CESTAT-MUM]

10August2012

4. Sale to related party – selling priceis assessable value: The facts of thecase are, appellants engaged inmanufacturing and selling of cellpacks on job work basis for aothercompany incorporated as a jointventure between appellants andJapan company (in short JVCompany). Such goods weresubsequently, by JV Company toappellants trading arm. Thecontention of revenue in such modusoperandi is, the JV Company is adummy company and is created withsole purpose of evading payment ofduty by way of gross undervaluationof goods as the selling price chargedto JV Company was adopted asassessable value.The statutory documents likememorandum and articles ofassociation, annual returns, copies ofreturns etc., submitted by theappellants in support of theircontention that the JV Company isnot dummy were found genuine.Therefore Tribunal held that, in viewof facts and documentary evidence,JV Company cannot be regarded asdummy unit. Further it is well settledlaw that for the purpose of Section4, a unit would be taken to be arelated person if there is reciprocityof interest between assessee andsuch alleged related person. Andwith respect to the grossundervaluation of goods as contendedby the revenue, Tribunal held that theassessable value of the goods sold toJV Company shall be the selling pricecharged by the appellants to JVCompany. The Tribunal followed thedecision of Honorable SupremeCourt in case of Union of India &Others Vs. Atic Industries Ltd.reported in 1984 (17) ELT 323 (S.C.)where in it is held that such saletransactions are on principal toprincipal basis and the assessable

value cannot be determined withreference to the selling price chargedby retailer to the end customer. [M/sTransasia Bio-Medicals Ltd &Others Vs CCE, Daman 2012-TIOL-782-CESTAT-AHM]

5. Validity of Rule 12AA and 12CC(now Rule 12CCC substitutedvide Notification No. 4/2012 CE(NT) dated 12-3-2012) of CentralExcise Rules, 2004: The issuebefore the Honorable High Court ina writ petition filed by the petitionerpertains to the validity of the Rule12AA and Rule 12CC of CentralExcise Rules, 2004 inserted videNotification No. 32/2006 (NT) dated20.12.2006. The facts of the case is,vide impugned order, passed byboard authorized Member (CX)invoked the restrictive provisions ofRule 12CC and Rule 12AA andwithdrew the option of monthlypayment of duty by the petitioner.Against this order, the petitionerfiled writ petition before HonorableHigh Court pleading to set aside thesaid order as the same is notsustainable in law.Petitioner pointed out that the Rule12CC and Rule 12AA as inserted byCentral Government videNotification No. 32/2006 are notlegally sustainable because therestrictive Rule making power wasgiven to Central Government byFinance Act, 2010 with effect from08.05.2010 by inserting Clause(xiiia) to sub-Section (2) to Section37 of Central Excise Act, 1944.Petitioner contended thatNotification No. 32/2006 insertingRule 12CC and Rule 12AA is ultravires the provision of Act as it suffersfrom various fundamental defectsand the Central Government did nothave authorization under CentralExcise Act, 1944 to issue suchrestrictive notifications amending

the rules, at the time when it wasissued. The Honorable High Courtallowed the petition and held that,Rule 12AA and 12CC are ultra viresthe Central Excise Act, 1944 andhence the order passed by Member(CX) is not sustainable in lawplacing reliance on the Apex Court’sdecision in various case laws viz;Laghu Udyog Bharati V. UOI AIR1999 SC 2596, B pravakar Rao V.Desari Panakala Rao and Others AIR1976 SC 1803 and High Court’sdecision in case of Goffar KassamV CST, Orissa, Cuttack (1974) 33STC 98. As far as the revenuescontention, it is held that if thelegislature had given such powerunder Section 37(1), it should nothave inserted Clause (xiiia) in sub-Section (2) to Section 37 of the Actby Finance Bill, 2010. [Aryan Ispat& Power Pvt. Ltd., Vs. UOI 2012(281) E.L.T. 15 (Ori.)]

CENVAT Credit:6. CENVAT Credit of service tax

paid on rental charges for thepremises unregistered with theCentral excise department cannotbe availed: The Tribunal ordered forthe pre-deposit on finding merit onthe Revenue’s contention that thepremises on which the rent has beenpaid is not registered with CentralExcise Department as amanufacturing unit and hence creditin respect of service tax paid on rentalcharges cannot be availed. [M/s VakoSeals Pvt Ltd Vs. CCE Mumbai-V,2012-TIOL-796-CESTAT-MUM]

7. No requirement in the CENVATCredit Rules, 2004 that the invoicenumber should be printed on theinvoice: The order of loweradjudicating authorities confirmingthe demand by denying the inputcredit on the grounds that the invoicenumber is handwritten or rubberstamped but not printed is set aside

11 August2012


by the Tribunal. It is held that thereis no requirement in the rules thatthe invoice number should beprinted on the invoice. As per Rule11 of CENVAT Credit Rules, 2004the only requirement is that, invoiceshould be serially numbered. Rule9 states that the CENVAT credit shallbe taken by the manufacturer on thebasis of the invoice issued by themanufacturer for clearance of inputs/capital goods from the factory.Hence the appeal is allowed.[Pepsico India Holding P Ltd VsCCE, Mumbai-II 2012-TIOL-787-CESTAT-MUM]

8. CENVAT credit can be claimed onservices like landscaping offactory garden, medical &personal insurance and cateringservices: The revenue is before theHonorable High Court against theorder passed by the Tribunal holdingthat assessee is eligible to claimCENVAT credit on service tax paidon landscaping services of factorygarden and other services likemedical & personal accidentpolicies, insurance, personal vehicleservices and catering services.Tribunal, by order held that theabove services utilized by theassessee falls within the phrase“activities relating to business”within the meaning / definition of‘input services’ and thereforeassessee is entitled to the benefit ofCENVAT credit. Honorable HighCourt decided and upheld thedecision of Tribunal by placingreliance on CCE, Mumbai Vs. GTCIndustries Ltd., 2008 TIOL 1634CESTAT (Mumbai). The definitionof input services is broader andcovers activities relating to business.Therefore medical and insurancebenefits extended to employeeswould be a part of salary. As far aslandscaping of factory garden is

concerned it would fall within theconcept of modernization,renovation, repair etc., of the officepremises. Credit rating of anindustry depends upon how thefactory is maintained. Further themaintenance of factory can be fordischarge of statutory obligation asper environmental laws andcorporate social responsibility.Hence the service tax paid on suchservices is eligible for claimingCENVAT credit. [CCE, Bangalore-II Vs. Millipore India Pvt. Ltd., 2012(26) S.T.R. 514 (Kar.)]

9. CENVAT credit is not reversibleon capital goods destroyed in fire:Honorable High Court admitted theappeal filed by Revenue against thedecision of Tribunal which turneddown the Revenue’s demand. Theassessee received compensationfrom insurance company againstcapital goods destroyed in fire whichwere insured. The substantialquestion of law framed by the courtfor adjudication are, whether theassessee can claim CENVAT crediton inputs which otherwise goes intomanufacture of final product andincase if it can be claimed, then doesit amounts to unjust enrichment inthe hands of an assessee oncompensation received frominsurance company as a result ofdestruction of such goods.Honorable High Court upheld thedecision of Tribunal placing relianceon Apex Court’s decision in case ofCollector of Central Excise, PuneVs. Dai Ichi Karkaria Ltd., reportedin 1999 (112) E.L.T. 353 (S.C.)where in it is held that, there is noprovision in CENVAT Credit Rules,2004 which provides for a reversalof the credit by the excise authoritiesexcept where it has been illegally orirregularly claimed. Merely becausethe assessee is compensated by

insurance company in case ofdestruction of insured goods, itwould not render the availement ofCENVAT credit as wrong orirregular. [CCE, Bangalore Vs. TataAdvanced Materials Ltd., 2012 (26)S.T.R. 600 (Kar.)]

10.Service tax paid on import ofservices is eligible for claimingCENVAT credit: The appellantsfiled the appeal before HonorableHigh Court against the decision ofTribunal that service tax paid onimport of services is eligible forclaiming CENVAT Credit. Therespondents received commissionagent services from outside Indiaand paid services tax on suchservices under reverse chargemechanism. The Departmentcontended that, the overseascommission agent services likecanvassing and procuring orders arepost removal services which do notfall under the ambit of the definitionof “input service” and are noteligible for claiming CENVATcredit. As per Revenue, the servicesused in or in relation to themanufacture or clearance of finalproducts from the place of removalare input services.The Honorable High Courtdismissed the appeal upholding thedecision of Tribunal thatcommission agent services likecanvassing and procuring orders arein relation to sales promotion. Hencethese activities fall within the thedefinition of input services and theassessee was entitled to benefit ofCENVAT credit of service tax. Inview of the above the courtdismissed the appeal as nosubstantial question of law arises forconsideration. [CCE, Ludhiana Vs.Ambika Overseas, [2012] 35 STT623/22 taxmann.com 83 (Punjab &Haryana)]

12August2012

11.Input service distributed by letteris valid: The appellant is before theTribunal against the impugned orderpassed by the lower adjudicatingauthority confirming the demand ofduty, interest and penalty in denialof CENVAT credit transferred byhead office to units on the groundsthat, CENVAT credit is transferredby issuing letters and not documentsas prescribed under Rule 9 ofCENVAT Credit Rules, 2004. TheTribunal set aside the impugnedorder and held that the letters issuedby the head office contains all thedetails which are required to bementioned in the invoices/challansissued by input service distributorand the matter is remanded tocommissioner for de novoadjudication. [Shriram Pistons &Rings Ltd., Vs. CCE, Ghaziabad2012 (281) E.L.T. 90 (Tri.)]

12.Goods Transport Agency:Revenue denied the CENVAT creditof the service tax paid ontransportation of empty containersfrom yard to factory for stuffing ofgoods and thereafter from factory tothe port for export.The Tribunal held that, service taxpaid on freight for empty containerscalled for export of the goods isadmissible placing reliance on thedecision of Tribunal in case of CCE,Jaipur Vs. Nitin Spinners Ltd., 2009(16) S.T.R. 323 (Tri. – Del.). Theappellants can even claim CENVATcredit of service tax, if paid ontransportation of export goodsinstead of claiming exemption ontransportation charges for export ofgoods under Notification No. 18/2009 – ST, dated 07.07.2009. Hencethe order in favour of appellants.[Century Rayon Vs. CCE, Thane-I2012 (280) E.L.T. 561 (Tri. –Mumbai)]

Service Tax:13.Deputation of staffs to

subsidiaries/associate cannot beconsidered as services under ‘manpower recruitment or supplyagency’: The Tribunal by order andwaived off the pre-deposit of amountdemanded. The contention of theRevenue was that the applicantrunning hotel industry and theactivity of deputing the employeesto hotels run by subsidiaries/associate companies on deputationfor consideration on cost recoverybasis tantamounts to provision oftaxable services under the head ‘manpower recruitment or supplyagency’. It was held that taxableservice means any service providedto any client, by a manpowerrecruitment or supply agency inrelation to the recruitment or supplyof manpower and hence theapplicants are not running anymanpower recruitment or supplyagency. Therefore applicants havemade out a strong case for waiverof pre-deposit of the dues. [ITC LtdVs CST, New Delhi 2012-TIOL-855-CESTAT-DEL]

14.One cannot provide services tohimself: Facts of the case are, theapplicants by agreement, have takenover the business of running hotelfrom another party. As per theagreement the applicants have tocarry on developing, conducting,operating, managing, renovating,modernization and all otheractivities incidental and ancillary tothe business of hotels and share theprofit on the basis of grossoperational profits. The departmentwas of the view that, the activityundertaken by the applicant fallsunder the category of ‘managementconsultancy service’ and the demandof service tax from such activitieswas confirmed. The applicants made

an application for waiver of pre-deposit of service tax before theTribunal. Tribunal held that, as perthe definition of ‘managementconsultancy service’, a personshould provide the services ofmanaging the day to day affairs ofthe organization to another personand does not cover the personhimself engaged in managing theaffairs of the organization. Tribunalplaced reliance on its own decisionin case of Basti Sugar Mills Co. Ltd.vs. CCE, Allahabad reported in2007(7)STR 431(T) which wasfurther affirmed by Honorable ApexCourt reported in 2012 (25) STRJ154 (SC). Hence, the requirementof pre-deposit of duty, interest andvarious penalties is waived off andrecovery is stayed during thependency of the appeal. [The IndianHotels Co Ltd Vs CST, Mumbai-II2012-TIOL-781-CESTAT-MUM]

15.Interpretation of the word‘residential complex’: Theapplication for stay filed byappellant is before the Tribunal. Theissue pertains to the interpretation ofthe expression ‘residential complex’.The facts of the case are that theappellants are engaged inconstruction of residentialquarters distributed in differentbuildings in the same compound.None of the buildings had more than12 flats. Revenue is of the view thatthe word ‘complex’ has to beinterpreted to mean the entirecompound and if the entirecompound is considered as onecomplex, there were 17 flatsconstructed in the complex andtherefore, service tax under thecategory of “construction ofcomplexes” has to be paid.The Tribunal by order granted thestay upon analyzing the definitionof residential complex under Section

13 August2012


65(91a). As per the definition onlybuilding having more than 12residential units will be considereda residential complex. Reliance wasplaced on the decision of Tribunalin case of Macro Marvel Projects LtdVs CST Chennai 2008 (12) STR 603(Trib-Chennai) which wassubsequently affirmed by HonorableSupreme Court on an appeal filed bythe revenue vide 2012 (25) STR A-154. [M/s Arihant Construction Vs.CCE, Jaipur-II 2012-TIOL-767-CESTAT-Del]

Customs:16.Refund against finalization of

provisional assessment is notrequired to meet the test of unjustenrichment: The Tribunal held that,upon finalization of provisionalassessment resulting in refund to theassessee, the refund need not meetthe test of unjust enrichment. Thereis no specific denial provision underCustoms Act, 1962 and hence, thereis no scope to deny refund flowingfrom final assessment againstprovisional assessment. Reliance wasplaced on Kolkata Tribunal’s decisionin case of Timken India Ltd. vs. CC,Kolkata reported in 2007 (217) ELT197 (Tri-Kolkatta). As the import wasfor captive consumption andappellant has not been unjustlyenriched, the appeal is allowed. [M/sABB Ltd Vs Commissioner ofCustoms, New Delhi 2012-TIOL-811-CESTAT-DEL]

17.Issues on which appeal cannot befiled before High Court: The issuebefore the Honorable High Court,filed by the revenue against the orderof Tribunal pertains to thedetermination of rate of duty. TheHigh Court rejected the appeal andheld that the question pertaining tothe determination of rate of duty hasto be adjudicated by the Apex Courtunder Section 130(c) of the Customs

Act, 1962 as it does not fall withinthe purview of Section 129 of theAct. Reliance placed on its owndecision in case of Commissioner ofCustoms Vs. M/s Motorola Ltd., 2012(275) E.L.T. 53 (Kar.). [JagadishBajaj Vs. C. Cus, Bangalore 2012(281) E.L.T. 71 (Kar.)]

Others:18.Race Course License Fee is a fee

and not a tax: The question of lawbefore the Supreme Court pertainsto whether license fee under Rule 6of the Delhi Race Course LicensingRules, 1985 is actually a fee or tax.The facts are, The Commissioner ofExcise, Entertainment & Luxury Taxraised a demand letter on thegrounds that they have short remittedthe licence fee for the year 2001-02and 2002-03. The notice wasquestioned by way of writ petitionbefore Honorable Delhi High Court.High Court admitted the appeal toconsider whether the license feeunder Rule 6 is a fee or tax. HighCourt decided that the license fee isin the nature of regulatory fee andnot a compensatory fee and thereforeit would not require any quid pro quoin the form of any social service.Aggrieved appellants are beforeHonorable Supreme Court. TheSupreme Court placed emphasis onits own decision in case of TheCommissioner, Hindu ReligiousEndowments, Madras Vs. SriLakshmindra Thirtha Swamiar of SriShirur Mutt AIR 1954 SC 282 which is consistently being followedas locus classicus in subsequentdecisions dealing with the conceptof ‘fee’ and ‘tax’. The decision inShirur mutt case was pronouncedfollowing the definition of tax andthe distinction of tax and fee as givenby Latham, C.J., in Matthews v.Chicory Marketing Board (1938) 60C.L.R. 263 where in, ‘a tax’ is

defined as “a compulsory exactionof money by public authority forpublic purposes enforceable by law,and is not payment for servicesrendered”. Fee and tax aredistinguished as “a tax is imposedfor public purposes and is not, andneed not, be supported by anyconsideration of service rendered inreturn where as, a fee is leviedessentially for services rendered andas such there is an element of quidpro quo between the person whopays the fee and the public authoritywhich imposes it”. The license feeis collected and the licenses areissued subject to compliance ofcertain conditions, to regulate,monitor, control and encourage thesport of horse-racing. Districtofficers/ entertainment tax officersare entrusted with the duty ofinspection to ensure compliances.Further regulation is necessary inpublic interest to control the act ofbetting and wagering as well as topromote the sport in the Indiancontext. Licensees should alsocomply with maintenance ofaccounts and furnishing ofperiodical returns, amount of stakeswhich may be allotted for differentkinds of horses, the measures to betaken for the training of the personsto become jockeys, to encourageIndian bred horses and IndianJockeys, the inclusion andassociation of such persons as thegovernment may nominate asstewards or members in the conductand management of the horse-racing. Hence Supreme Court heldthat the levy collected under Rule 6of the Delhi Race Course LicensingRules, 1985 is a fee and not tax.[Delhi Race Club Ltd Vs Union ofIndia, 2012-TIOL-51-SC-MISC]

14August2012

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15 August2012


ANNOUNCEMENT

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CongratulationsKarnataka State

Chartered Accountants Association®Executive Committee Members 2012-2013

Name DesignationMaddanaswamy B.V PresidentDhavalgi C.R. Vice PresidentRaveendra S. Kore SecretaryMalleshappa B. Hullatti Joint SecretaryVirupakshappa Tuppad TreasurerDharma Prasad G MemberKamalaksha M.K. MemberNagappa B. Nesur MemberNarendra K.V. MemberRamakrishna Kamath MemberRamesh Sharma MemberRavindranath K MemberSuresh Kumar D MemberAnant Mutalik Immediate Past President

16August2012

Announcement forCampus Placement Programme

August, 2012Dear Professional Colleagues,The Committee for Members in Industry is organising Campusplacements in the month of August 2012 for the newly qualifiedCAs. The details are as below :Schedule for Campus Interview August, 2012The CMII provides opportunity to the employers to interact withnewly qualified Chartered Accountants and makes allarrangements at its centres, thereby providing a cost effectivemode of recruiting newly qualified Chartered Accountants. Anorganisation and firms of Chartered Accountants can participatein one or more centres.Start Date for filling up initial details for validation of data:1st July, 2012 to 28th July, 2012(For Candidate who have qualified in (i) November 2011(ii) May 2011 or (iii) whose results were declared in revaluation/re verification after 5th March, 2012 and all covered in (i), (ii)and (iii) completing their articleship and GMCS between31st March, 2012 and 30th September, 2012Date of candidate registration (submission of form) for May,2012 CA Final qualified (and others as mentioned above):24th July 2012 to 31st July, 2012.2nd Round Registration of candidates:27th August, 2012 (Upto 11:00 night).(Candidates who have missed the registration in First round andalso resubmission and editing of selected portion of online formby the candidates who have opted one bigger and one smallercentre before merger with the centre of their second choice (itsmandatory for inclusion of data with smaller centre).Opening of database for Companies at S No. 1, 2 and 3:30th July, 2012Opening of database for Companies at S No. 4:28th August, 2012Campus Interview DatesNo. Centre Dates1. Chennai Hyderabad 13th,14th,16th,

and Kolkata 17th August, 20122. Jaipur and Pune 16th,17th,18th August, 20123. Mumbai and 22nd , 23rd, 24th , 25th and

New Delhi 27th August, 20124. Ahmedabad 23rd, 24th and 25th August, 20125. Bangalore 23rd, 24th , 25th and 27th August,'126. Baroda, Bhubaneswar, Chandigarh, 4th-5th

Coimbatore, Ernakulam, Indore, September, 2012Kanpur Nagpur and Vapi

CA K Raghu, Chief Coordinator – Bangalore CentreMember, CMII of ICAI

RANK HOLDERS- BANGALORE BRANCH OF SIRC OF ICAI

FINAL MAY 2012 EXAM

GIREESHA.T.LRank : 48

Reg.no: SRO0256262Roll.no : 107569

SHRUTI SODHANIRank : 3

Reg.no: WRO0286612Roll.no : 107305

IMPORTANT DATES TO REMEMBERDURING THE MONTH OF AUGUST 2012

5th August 2012Payment of Excise Duty for July 2012Payment of Service Tax for July 2012 by Corporates6th August 2012E-Payment of Excise duty for July 2012E-Payment of Service Tax for July 2012 for corporates7th August 2012Deposit of TDS/TCS Collected during July 2012STPI Monthly Returns10th August 2012Monthly Returns for Production and Removal of Goods andCENVAT Credit for July 2012Monthly Return of excisable Goods Manufactured & Receiptof Inputs & Capital Goods by Units in EOU,STP,HTP for July2012Monthly Returns of Information relating to Principal Inputsfor July 2012 by Manufacturer of Specified Goods who PaidDuty of Rs.1 Crore or More during Financial Year 2011-12 ByPLA/CENVAT/Both15th August 2012Payment of EPF Contribution for July 2012Return of Employees Qualifying to EPF during July 201220th August 2012Monthly Return and Payment of Profession Tax CollectedDuring July 2012Monthly Return and Payment of CST and VAT Collected DuringJuly 201221st August 2012Deposit of ESI Contributions and Collections for July 201225th August 2012Consolidated Statements of Dues and Remittances Under EPFand EDLI for the July 2012Monthly Returns of Employees Joined the organisation duringJuly 2012Monthly Return of Employees left the organisation during July2012

17 August2012


on Friday, 7th & Saturday, 8th September 2012at Branch Premises

7th September 2012Timing Topics Speakers10.00 A.M to 11.15 A.M - Overview of Indirect Tax structure in India CA. K.S. Ravishankar

- Importance of service tax in Indian Economy.- What is service in the new regime?

11.15 A.M to 11.30 A.M Tea/Coffee break11.30 A.M to 1.15 P.M - Declared Services; CA. V. Raghuraman

- Negative list and exempted services1.15 P.M to 1.45 P.M Lunch1.45 P.M to 3.30 P.M Classification and Valuation of Taxable services CA. Rajesh Kumar3.30 P.M to 3.45 P.M Tea/Coffee break3.45 P.M to 5.30 P.M - Point of taxation CA. Naveen Rajpurohit8th September 201210.00 A.M to 11.30 A.M Place of Provision of Service Rules CA. G. Shivdas

(import/export of service rules)11.30 A.M to 11.45 A.M Tea/Coffee break11.45 A.M to 1.15 P.M - Reverse charge mechanism & Joint Charge Mechanism CA. Raghavendra

- Service Tax Procedure1.15 P.M to 1.45 P.M Lunch1.45 P.M to 3.15 P.M Cenvat Credit Rules under Negative Taxation Scheme CA. N.Anand3.15 P.M to 3.30 P.M Tea/Coffee break3.30 P.M to 5.30 P.M Practical aspects of Departmental interaction

– replies to Department and Appellate procedures CA. Anirudh NayakDelegate fee: for Members: Rs.1,000 /- Non Members: Rs.2,000/- Students: Rs.500/-

Restricted to 200 delegates on First Come First Serve basis.Cash/cheque in favour of “Bangalore Branch of SIRC of ICAI”

For further details please contact: Ms.Geetanjali D, Tel: 080-30563500/513, E-mail: [email protected]

Two Day Seminar onService Tax under Negative Taxation Scheme

12 hrsCPE

on 25th August 2012 at Hotel Le MeridienTime 9.30 am to 5.00 pm

Group Discussion followed by AnalysisCA.Padamchand Khincha & CA.K.K. Chythanya

Tea : 11.30.am to 11.45 am Lunch:1.30.pm to 2.pm.

Delegate fee: for Members: Rs.1,500 /- Non Members: Rs.3,000/-Restricted to 150 delegates on First Come First Serve basis.

Cash/cheque in favour of “Bangalore Branch of SIRC of ICAI”For further details please contact: Ms.Geetanjali D, Tel: 080-30563500/513, E-mail: [email protected]

Case Studies on International Taxation6 hrsCPE

18August2012

20

BANGALORE BRANCH OF SIRC NEWS LETTER - English Monthly

No. MAG(3) / NPP / 155/ 2012 -13 : KARENG04331

Bangalore Branch of SIRC News LetterBangalore Branch of SIRC of ICAI

EDITOR: CA. Nithin Mahadevappa

English Monthly Printed & Published & Edited by CA. Nithin Mahadevappa, Chairman, on behalf of., No.16/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

Printed at:Published at: ,

Tel : 080 - 3056 3500, Fax : 080 - 3056 3542, www.bangaloreicai.org e-mail : [email protected] Mudranalaya Pvt. Ltd., 44/1, K.R. Road, Basavanagudi, Bangalore-560 004, Ph : 080-26617243, e-mail : [email protected]

No.16/O, 'ICAI Bhawan', Millers Tank Bed Area, Vasantnagar, Bangalore-560052, Karnataka

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