<DIRECT TAX LAWS>

n Double Taxation Agreement with Iceland - Notification No. 19/2008, dated 5-2-2008

n Business expenditure - Where assessee had borrowed foreign currency loan from IDBI which in turn was refinanced by foreign company and assessee paid commitment charges and finance charges to said foreign company, commitment charges and finance charges were deductible under section 37(1) - Deputy Commissioner of Income-tax v.Gujarat Alkalies & Chemicals Ltd. [Civil Appeal Nos. 3957 & 3958 of 2002]

n Interest on borrowed capital - Legislature has made no distinction in section 36(1)(iii) between 'capital borrowed for a revenue purpose' and 'capital borrowed for a capital purpose' and an assessee is entitled to claim interest paid on borrowed capital provided that capital is used for business purpose irrespective of what may be result of using such borrowed capital - Deputy Commissioner of Income-tax v. Core Health Care Ltd. [Civil Appeal Nos. 3952 to 3955 of 2002]

n Income from house property - If owner of a house has no intention to let out house and does not occupy same for large part of a particular year or for years together, such houses, although not in actual physical possession of owner, would be deemed to be under self-occupation of owner and their annual letting value (ALV) would be determined as per clause (a) of section 23(1) - Smt. Poonam Sawhney v. Assessing Officer [IT Appeal No. 4885 (Delhi) of 2005]

 - Such category of houses which are maintained by owner with an intention for letting out, rent received or receivable in such case, being in excess of reasonable sum assessable under clause (a) of section 23(1), would be liable to be assessed and their ALV would be determined as per clause (b) of sub-section (1) of section 23  - Smt. Poonam Sawhney v. Assessing Officer [IT Appeal No. 4885 (Delhi) of 2005]

 - Where owner of property with intention to earn rent has let out property but for reasons beyond control of owner or for some other good reasons, property (whole or in part) remains vacant during whole or any part of previous year, and actual rent received or receivable is less than ALV referred to in clause (a), then such houses would be assessed under clause (c) of section 23(1)  - Smt. Poonam Sawhney v. Assessing Officer [IT Appeal No. 4885 (Delhi) of 2005]

n Salaries - Tax paid by employer in respect of salaries paid to employees is salary in terms of rule 3 - Mitsubishi Corpn. v. Deputy Commissioner of Income-tax [IT APPEAL NOS. 5074, 5075 AND 5076 (DELHI) OF 2004]

n Capital gains - Sections 50 and 32(1)(iii) deals with different types of situations on transfer of capital assets of assessee - Mukand Global Finance Ltd. v. Deputy Commissioner of Income-tax [IT APPEAL NO. 4078/M/2004]

 - Section 50 deals with those cases where profit accrues to assessee on transfer of any block of assets, whereas section 32(1)(iii) deals with those cases where assessee suffers a loss on sale of any building, machinery, plant, furniture, etc.- Mukand Global Finance Ltd. v. Deputy Commissioner of Income-tax [IT APPEAL NO. 4078/M/2004]

<SERVICE TAX>

n Supreme Court on VAT and Service Tax - Payments of service tax as also VAT are mutually exclusive; therefore, they should be held to be applicable having regard to respective parameters of service tax and sales tax as envisaged in a composite contract as contradistinguished from an indivisible contract; it may consist of different elements providing for attracting different nature of levy - Imagic Creative (P.) Ltd. v. Commissioner of Commercial Taxes [CIVIL APPEAL NO. 252 OF 2008]

n Refund of Cenvat credit - Refund claims could not be rejected even after substitution of rule 5 w.e.f 14-3-2006 - WNS Global Services (P.) Ltd. v. Commissioner of Central Excise [Appeal no. ST/47, 48 & 142 of 2007 (Mum.)]

n Cenvat Credit - Restriction envisaged in Notification No. 32/2004 about non-availment of Cenvat credit should be in respect of service provider of GTA services and cannot be applied to recipients of services merely because they were required to pay service tax - Commissioner of Central Excise v. Adishiv Forge (P.) Ltd. [Appeal Nos. ST/15 to 22, 24 to 32, 37, 38, 58 to 60 of 2007 & Others]

n Management, maintenance or repair - Where assessee-company was receiving rent and operations/maintenance charges separately from its tenants housed in its building complex with appurtenant common facilities - Service tax was demanded from assessee under category of 'Management, maintenance or repairs' on amount collected by it towards operation and maintenance charges of common facilities and shared areas for maintenance and repairs of those areas - Assessee contended that common facilities and shared areas could not be considered to be part of immovable property and, therefore, amount collected was not taxable - Whether since in lease deed entered into with each tenant operation and maintenance fee was charged in similar manner as lease rent, operation and maintenance fee also pertained to immovable property and, therefore, assessee was liable to pay service tax on amount so collected - Tidel Park Ltd. v. Commissioner of Service Tax  [S/PD/63/2007 in S/97 of 2007]

<INSURANCE LAWS>

n Insurance Regulatory and Development Authority (Registration of Indian Insurance Companies) (Second Amendment) Regulations, 2008, - Notification F. No. IRDA /Reg. /3/44/2008, dated 11-2-2008

<SECURITIES LAWS>

n Art Fund Covered by Collective Investment Scheme. - PR No. 44/2008, dated 13-2-2008

<DAILY CASE LAW REPORTER>

n Punjab and Haryana High Court on section 145 of Income-tax Act, 1961 - Commissioner of Income-tax v. Chandigarh Industrial & General Development Corpn. Ltd. [I.T. Reference No. 349 of 1995]

n Supreme Court on section 36(1)(iii) of Income-tax Act, 1961 - Deputy Commissioner of Income-tax v. Core Health Care Ltd. [Civil Appeal Nos. 3952 to 3955 of 2002] 

n Supreme Court on section 37(1) of Income-tax Act, 1961 - Deputy Commissioner of Income-tax v. Gujarat Alkalies & Chemicals Ltd. [Civil Appeal Nos. 3957 & 3958 of 2002]

n Bombay High Court on sections 269C, 269UC and 269UD of Income-tax Act, 1961 - Hiten Rashmikant Mehta v. Union of India [WRIT PETITION NO. 588 OF 1993]

n Delhi High Court on section 43B of Income-tax Act 1961 - Commissioner of Income-tax v. Hughes Escorts Communications Ltd. [IT APPEAL NO. 761 of 2007]

n Delhi High Court on section 154 of Income-tax Act, 1961 - Commissioner of Income Tax v. Modi Pon Ltd. [IT REFERENCE NO. 165 OF 1984]

n Mumbai ITAT on section 32 of Income-tax Act, 1961 - Skyline Caterers (P.) Ltd. v. Income-tax Officer [IT APPEAL NO. 2965 (Mum.) of 2007]

n Mumbai ITAT on section 22 of Income-tax Act, 1961 - Universal Textile Water Proof Co. (India) v. Assistant Commissioner of Income-tax [IT APPEAL NO. 4061 (MUM) OF 2003]

n Chennai CESTAT on section 80 of Finance Act, 1994 - Habasit AG v. Commissioner of Central Excise [IN APPEAL NO: S/61/2005 & S/62/2005]

n Chennai CESTAT on rule 14 of Cenvat Credit Rules, 2004 - J.K. Industries v. Commissioner of Central Excise [C/CT/396 of 2007 IN C/596 of 2000]

n Mumbai CESTAT on section 11B of Central Excise Act, 1944 - Sanjivani Business Consultants (P.) Ltd. v. Commissioner of Central Excise [APPEAL NO. ST/32 OF 2007 - MUM]

n Mumbai CESTAT on rule 5 of Cenvat Credit Rules, 2004 - WNS Global Services (P.) Ltd. v. Commissioner of Central Excise [Appeal no. ST/47, 48 & 142 of 2007 (Mum.)]

<NEWS>

n  'Continue I-T sops for export-oriented units'

n  Income tax reforms needed for salaried class

n  I-T for differential tax on dividends

n  Tax collection needs to be balanced: SC

n  Banking Cash Transaction Tax likely to be reviewed in Budget

n  New ISD cos dial Trai, say they pay tax twice

n  Norms for starting housing mortgage guarantee business laid

n  Packaged drinking water industry demands lower tax

n  Sops likely for urban cooperative banks

<A PREVIEW OF LATEST ISSUES OF TAXMANN'S JOURNALS>