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Monday, December 31, 2012

ICAI-SIRC Elections 2012


ICAI-SIRC Elections 2012


Regional Council - Southern Region - Elected Members - Contact Number - CONGRATULATIONS

Posted: 27 Dec 2012 10:46 PM PST


Name of the Elected SIRC MemberPLACE StateMobile
ADUSUMILLI VENKATESWARA RAO HYDERABAD AP9246539869
ARULOLI P R CHENNAITN9884061348
GOPAL KRISHNA RAJU CHENNAITN9840063269
JOMON K GEORGE KOCHIKL9847031343
JOSE V X KOCHIKL9447043816
NARESH CHANDRA GELLI V HYDERABADAP9849165491
NITHIN M BANGALOREKA9945682356
PHALGUNA KUMAR E TIRUPATIAP9441886303
PRASANNA KUMAR D VISAKHAPATNAMAP9848192636
RAJARAJESWARAN P V MADURAITN9843036311
SEKKIZHAR B HYDERABADAP 9949358838
SRINIVAS C S BANGALOREKA9845063387
SRIPRIYA K Ms. CHENNAITN9841026973
SURESH P R BANGALORE KA9845058988

Central Council - Southern Region - Elected Members - Contact Number - Congratulations

Posted: 27 Dec 2012 10:38 PM PST


NamePLACEStateMobile
BABU ABRAHAM KALLIVAYALIL KOCHIKL9446066600
DEVARAJA REDDY M HYDERABADAP9399935799
MURALI V CHENNAI TN9841040010
RAGHU K BANGALOREKA9341219091
SANTHANA KRISHNAN S CHENNAITN9841073008
SEKAR G CHENNAI TN9282104800
VENKATESWARLU J HYDERABADAP9392017738
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ICAI-SIRC Elections 2012 FINAL RESULTS


ICAI-SIRC Elections 2012


Final Tally of SIRC Elected Candidates - Rankwise

Posted: 30 Dec 2012 07:48 AM PST


S.NoName of the CandidatePLACE StateCOUNTRANKReachedMobile
27SRIPRIYA K Ms. CHENNAITN12051QUOTA9841026973
20 PRASANNA KUMAR D VISAKHAPATNAMAP12052QUOTA9848192636
10JOMON K GEORGE KOCHIKL12053QUOTA 9847031343
31SURESH P R BANGALOREKA12054QUOTA9845058988
18NITHIN M BANGALOREKA1205 5QUOTA9945682356
4ARULOLI P R CHENNAITN12056QUOTA9884061348
19PHALGUNA KUMAR E TIRUPATI AP12057QUOTA9441886303
26SRINIVAS C S BANGALOREKA12058QUOTA9845063387
17 NARESH CHANDRA GELLI V HYDERABADAP12059QUOTA9849165491
7GOPAL KRISHNA RAJU CHENNAITN120510QUOTA9840063269
1ADUSUMILLI VENKATESWARA RAOHYDERABADAP120511QUOTA9246539869
21RAJARAJESWARAN P V MADURAITN1205 12QUOTA9843036311
11JOSE V X KOCHIKL107113 9447043816
23SEKKIZHAR B HYDERABAD AP102114 9949358838

Each Second is a precious gift, Each year is a priceless treasure ------ Happy New Year 

With Warm Regards,

GOPAL KRISHNA RAJU


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Thursday, December 27, 2012

ITR VOL 349 PART 6 AND ITR (TRIB) VOL 20 PART 6


 

INCOME TAX REPORTS (ITR)

Volume 349 Part 6 (Issue dated 24-12-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

HIGH COURTS

Amortisation of preliminary expenses --Scope of section 35D--Proposal to expand capacity of production--Expenditure on issue of shares--Expenditure to be amortised--Income-tax Act, 1961, s. 35D-- CIT v . Ashok Leyland Ltd . (Mad) . . . 663

Association of persons or individuals --Co-owners inheriting property from their ancestors--No evidence to show that they acted as an association of persons--Plinths rental income--Assessable in status of individual--Section 167B not applicable--Income-tax Act, 1961, s. 167B-- Sudhir Nagpal v. ITO (P&H) . . . 636

Business expenditure --Provision for post-sale customer service--Whether deductible--Matter remanded--Tribunal directed to apply principles laid down by the Supreme Court in Rotork Controls India P. Ltd . v. CIT [2009] 314 ITR 62--Income-tax Act, 1961, s. 37-- CIT v . Infosys Technologies Ltd. (No. 5 ) (Karn) . . . 610

Capital or revenue expenditure --Amount spent by assessee for acquisition of membership of clubs--Sum paid by assessee for obtaining ISO-9001 certificate--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Infosys Technologies Ltd. (No. 1 ) (Karn) . . . 582

----Amount spent towards acquiring membership of club--Expenses towards repairs and renovation of leased premises to house office of assessee--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v. Infosys Technologies Ltd. (No. 2 ) (Karn) . . . 588

----Amounts paid by assessee to clubs for obtaining membership--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Infosys Technologies Ltd. (No. 3 ) (Karn) . . . 598

----Company--Expenditure on acquiring membership of club--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Infosys Technologies Ltd. (No. 5 ) (Karn) . . . 610

----Expenditure on obtaining corporate membership in clubs, obtaining ISO certificate and repair and maintenance of leased premises--Revenue expenditure--Income-tax Act, 1961, s. 37-- CIT v . Infosys Technologies Ltd. (No. 4 ) (Karn) . . . 606

Depreciation --Additional depreciation--Effect of clause (iia) of section 32(1)--Assets acquired after 30-9-2004--Statutory stipulation that restriction to 50 per cent. of amount allowable under section 32(1)(iia)--Assessing Officer restricting depreciation to 50 per cent.--Proper--Income-tax Act, 1961, s. 32(1)(iia)-- M. M. Forgings Ltd. v. Addl. CIT (Mad) . . . 673

Exemption --Export--Software technology park--Sale of software--Entitled to exemption--Income-tax Act, 1961, s. 10A-- CIT v . Infosys Technologies Ltd. (No. 3 ) (Karn) . . . 598

Export --Special deduction under section 80HHE--Computation of special deduction--Gains on exchange rate variation--Includible in total turnover and export turnover--Income-tax Act, 1961, s. 80HHE-- CIT v . Infosys Technologies Ltd. (No. 5 )
(Karn) . . . 610

Export of computer software --Special deduction--Computation of profits--Expenses pertaining to technical services outside India--Excludible from turnover--Income-tax Act, 1961, s. 80HHE-- CIT v. Infosys Technologies Ltd. (No. 2 ) (Karn) . . . 588

----Special deduction--Computation of profits--Foreign exchange expenditure--Excludible from turnover--Income-tax Act, 1961, s. 80HHE-- CIT v . Infosys Technologies Ltd. (No. 3 ) (Karn) . . . 598

Income --Computation of income--Disallowance of expenditure incurred in earning non-taxable income--Difference between exemption and special deduction--Section 14A not applicable in cases of special deductions given under Chapter VI-A--Income-tax Act, 1961, s. 14A, Chapters III, VI-A-- CIT v . Kribhco (Delhi) . . . 618

Income from other sources --Company exporting software--Gains due to fluctuations in rate of exchange--Not assessable as income from other sources--Income-tax Act, 1961, s. 56-- CIT v. Infosys Technologies Ltd. (No. 4 ) (Karn) . . . 606

----Rent received from letting out plinths--Not house property--Assessable as income from other sources--Income-tax Act, 1961, ss. 26, 56-- Sudhir Nagpal v . ITO (P&H) . . . 636

Industrial undertaking --Special deduction--Computation of profits--Export incentives earned from DEPB scheme--Assessee not entitled to deduction--Income-tax Act, 1961, s. 80-IA-- M. M. Forgings Ltd . v . Addl. CIT (Mad) . . . 673

New industrial undertaking --Special deduction--Tribunal allowing deduction by considering gross income from two units of assessee--Subsequent Supreme Court decision interpreting section--Matter remanded to Tribunal for fresh hearing in the light of Supreme Court decision--Income-tax Act, 1961, ss. 80HH, 80-I-- CIT v . Itarsi Oils and Flours Mills Ltd . (Chhattisgarh) . . . 654

Precedent --Effect of decision of Supreme Court in Rotork Controls India P. Ltd . v. CIT [2009] 314 ITR 62-- CIT v . Infosys Technologies Ltd. (No. 5 ) (Karn) . . . 610

Reassessment --Notice--Validity--Discovery in subsequent assessment year that cash credits could not be proved--Notice valid--Income-tax Act, 1961, ss. 147, 148--Constitution of India art. 226-- Dewas Soya Ltd . v. Addl. CIT (MP) . . . 676

----Notice--Validity--Reassessment after four years--No allegation of failure to disclose material facts necessary for assessment--Notice based on subsequent decision of court and legislative amendment--Notice not valid--Income-tax Act, 1961, ss. 147, 148-- Voltas Ltd . v . Asst. CIT (Bom) . . . 656

----Notice after four years--Amendment in section 80HHC with retrospective effect--No failure on part of assessee to disclose fully and truly all material facts relevant for purpose of assessment--Reassessments not valid--Income-tax Act, 1961, ss. 80HHC, 147, 148-- CIT v . K. Mohan and Co. (Exports) (Regd.) (Bom) . . . 653

----Specific information received that income escaped assessment--Tribunal finding Assessing Officer recorded reasons for reopening assessment--Finding of fact--Income-tax Act, 1961, ss. 68, 147, 148-- Contel Medicare Systems P. Ltd . v . CIT (Delhi) . . . 649

Salary --Perquisite--Valuation of perquisite--Rental accommodation provided by employer--Effect of rule 3--Actual amount of rent or 10 per cent. of salary, whichever is lower--Valuation cannot be on notional basis--Interest-free advance given by employer--Notional interest cannot be taken into consideration--Income-tax Act, 1961--Income-tax Rules, 1962, r. 3-- CIT v . Shankar Krishnan (Bom) . . . 685

 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 20 : Part 6 (Issue dated : 24-12-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Appeal --Appealable orders--Appeal to Commissioner (Appeals)--Assessing Officer finalising draft order subsequent to dismissal of assessee’s application before Dispute Resolution Panel--Dispute Resolution Panel dismissing assessee’s application as invalid without giving any directions to Assessing Officer--Assessment not made pursuant to Dispute Resolution Panel’s order--Assessment order appealable before Commissioner (Appeals)--Income-tax Act, 1961, ss. 143(3), 144C-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

Business expenditure --Expenditure must be incurred with sole object of furthering trade or business interest of assessee unmixed with other consideration--Expenditure for purpose which is illegal--Sums paid to Municipal Corporation to compound violations of municipal and environmental laws--Main purpose of expenditure to avoid sealing of premises in which business carried on--Expenditure not exclusively as trader but also as owner of asset--Not allowable--Income-tax Act, 1961, s. 37(1), Expln. -- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

----Expenditure on cars and telephones--Disallowance of one-fifth for personal use--Reasonable--Income-tax Act, 1961, s. 38(2)-- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

Deduction of tax at source --Non-resident--Royalty--Payment received by foreign company for granting licence for live terrestrial television rights to assessee--Not royalty--Assessee need not deduct tax at source--Income-tax Act, 1961, ss. 9, 195(2)-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

----Payments to contractors--Aggregate payments to transporter exceeding prescribed limit--Absence of contract irrelevant--Assessee liable to deduct tax--Income-tax Act, 1961, s. 194C-- ITO v. Navjivan Synthetics (Ahmedabad) . . . 712

Exemption --Export--Method of computation--Communication charges to be excluded from export turnover as well as total turnover--Income-tax Act, 1961, s. 10A-- Assistant CIT v. Ckar Systems P. Ltd. (Hyderabad) . . . 817

Income from undisclosed sources --Purchases by assessee not shown in accounts of seller--Evidence of purchase furnished--No addition can be made to income of assessee--Income-tax Act, 1961-- ITO v. Navjivan Synthetics (Ahmedabad) . . . 712

Interest on borrowed capital --Onus on assessee to establish that borrowings used for business purposes--Loans and advances to relatives--No material to suggest assessee discharged onus--No findings of Commissioner (Appeals) on these aspects--Order set aside and matter remanded for decision afresh--Income-tax Act, 1961, s. 36(1)(iii)-- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

International transactions --Determination of arm’s length price--Assessee wholly owned subsidiary of the U. S. A. company--Assessee facilitating sourcing of apparel merchandise from India--Transactional net margin method with cost plus 15 per cent. remuneration most appropriate method--Income-tax Act, 1961, s. 92CA-- GAP International Sourcing (India) P. Ltd. v. Assistant CIT (Delhi) . . . 779

----Determination of arm’s length price--International transaction of subsidiary company with parent company--Details of agreement submitted--Rate charged by assessee comparable to rate of uncontrolled parties--Adoption of comparable uncontrolled price--Justified--Income-tax Act, 1961, s. 92CA-- Assistant CIT v. Ckar Systems P. Ltd. (Hyderabad) . . . 817

----Transfer pricing--Determination of arm’s length price--Dispute Resolution Panel--Objections to draft order in Form 35A--Can be filed by assessee or its agent--Section 140 not applicable to Form 35A--No requirement that Form 35A filed by assessee to be signed by its managing director or director--Income-tax Act, 1961, s. 140--Income-tax (Dispute Resolution Panel) Rules, 2009, r. 4-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

Non-resident --Income deemed to accrue or arise in India--Business connection--Foreign company granting licence for live terrestrial television rights in India to assessee--Not having business connection in India--Income therefrom not deemed to have accrued or arose in India--Income-tax Act, 1961, s. 9--Double Taxation Avoidance Agreement between India and Singapore, art. 12(3)-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

----Royalty--Income deemed to accrue or arise in India--Subscription fee paid for use of information collected and compiled in field of oil and gas exploration on website under agreement--Technical information made available by non-transferable and non-inclusive licence--Payment was in nature of technical consultancy--Covered under definition of royalty--Income-tax Act, 1961, s. 9(1)(vi)--Double Taxation Avoidance Agreement between India and the U. K., art. 13(3)-- ONGC Videsh Ltd. v. ITO (International Taxation) (Delhi) . . . 767

Penalty --Concealment of income--Furnishing of inaccurate particulars--Expenditure incurred on higher education abroad of son of managing director claimed under staff and labour training expenses--Grounds raised in appeal not raised before Commissioner (Appeals)--Matter remanded--Income-tax Act, 1961, s. 271(1)(c)-- Deputy CIT v. Inox India Ltd. (Ahemdabad) . . . 763

----Furnishing inaccurate particulars of income--Cessation of business--Claim that research and development carried out not sufficient to justify expenditure--No evidence to support claim--Case of false claim--Penalty leviable--Income-tax Act, 1961, s. 271(1)(c)-- Assistant CIT v. Harvey Heart Hospitals Ltd. (Chennai) . . . 722

Reassessment --Notice--Income escaping assessment--Information received by Assessing Officer from investigation wing regarding escapement of income--Assessing Officer recording detailed reasons--Reopening of assessment valid--Income-tax Act, 1961, ss. 147, 148-- ITO v. Contel Medicare Systems P. Ltd. (Delhi) . . . 701

Valuation of stock --Assessing Officer not considering opening stock of work-in-progress--Addition not justified--Income-tax Act, 1961, s. 145A-- ITO v. Navjivan Synthetics (Ahmedabad) . . . 712

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and Singapore :

Art. 12(3) --Non-resident--Income deemed to accrue or arise in India--Business connection--Foreign company granting licence for live terrestrial television rights in India to assessee--Not having business connection in India--Income therefrom not deemed to have accrued or arose in India-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

Double Taxation Avoidance Agreement between India and the U. K. :

Art. 13(3) --Non-resident--Royalty--Income deemed to accrue or arise in India--Subscription fee paid for use of information collected and compiled in field of oil and gas exploration on website under agreement--Technical information made available by non-transferable and non-inclusive licence--Payment was in nature of technical consultancy--Covered under definition of royalty-- ONGC Videsh Ltd. v. ITO (International Taxation) (Delhi) . . . 767

Income-tax Act, 1961 :

S. 9 --Deduction of tax at source--Non-resident--Royalty--Payment received by foreign company for granting licence for live terrestrial television rights to assessee--Not royalty--Assessee need not deduct tax at source-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

----Non-resident--Income deemed to accrue or arise in India--Business connection --Foreign company granting licence for live terrestrial television rights in India to assessee--Not having business connection in India--Income therefrom not deemed to have accrued or arose in India-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

S. 9(1)(vi) --Non-resident--Royalty--Income deemed to accrue or arise in India--Subscription fee paid for use of information collected and compiled in field of oil and gas exploration on website under agreement--Technical information made available by non-transferable and non-inclusive licence--Payment was in nature of technical consultancy--Covered under definition of royalty-- ONGC Videsh Ltd. v. ITO (International Taxation) (Delhi) . . . 767

S. 10A --Exemption--Export--Method of computation--Communication charges to be excluded from export turnover as well as total turnover-- Assistant CIT v. Ckar Systems P. Ltd. (Hyderabad) . . . 817

S. 36(1)(iii) --Interest on borrowed capital--Onus on assessee to establish that borrowings used for business purposes--Loans and advances to relatives--No material to suggest assessee discharged onus--No findings of Commissioner (Appeals) on these aspects--Order set aside and matter remanded for decision afresh-- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

S. 37(1), Expln. --Business expenditure--Expenditure must be incurred with sole object of furthering trade or business interest of assessee unmixed with other consideration--Expenditure for purpose which is illegal--Sums paid to Municipal Corporation to compound violations of municipal and environmental laws--Main purpose of expenditure to avoid sealing of premises in which business carried on--Expenditure not exclusively as trader but also as owner of asset--Not allowable-- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

S. 38(2) --Business expenditure--Expenditure on cars and telephones--Disallowance of one-fifth for personal use--Reasonable-- Arun Kumar Gupta (HUF) v. Assistant CIT (Delhi) . . . 727

S. 92CA --International transactions--Determination of arm’s length price--Assessee wholly owned subsidiary of the U. S. A. company--Assessee facilitating sourcing of apparel merchandise from India--Transactional net margin method with cost plus 15 per cent. remuneration most appropriate method-- GAP International Sourcing (India) P. Ltd. v. Assistant CIT (Delhi) . . . 779

----International transactions--Determination of arm’s length price--International transaction of subsidiary company with parent company--Details of agreement submitted--Rate charged by assessee comparable to rate of uncontrolled parties--Adoption of comparable uncontrolled price--Justified-- Assistant CIT v. Ckar Systems P. Ltd. (Hyderabad) . . . 817

S. 140 --International transactions--Transfer pricing--Determination of arm’s length price--Dispute Resolution Panel--Objections to draft order in Form 35A--Can be filed by assessee or its agent--Section 140 not applicable to Form 35A--No requirement that Form 35A filed by assessee to be signed by its managing director or director-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

S. 143(3) --Appeal--Appealable orders--Appeal to Commissioner (Appeals)--Assessing Officer finalising draft order subsequent to dismissal of assessee’s application before Dispute Resolution Panel--Dispute Resolution Panel dismissing assessee’s application as invalid without giving any directions to Assessing Officer--Assessment not made pursuant to Dispute Resolution Panel’s order--Assessment order appealable before Commissioner (Appeals)-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

S. 144C --Appeal--Appealable orders--Appeal to Commissioner (Appeals)--Assessing Officer finalising draft order subsequent to dismissal of assessee’s application before Dispute Resolution Panel--Dispute Resolution Panel dismissing assessee’s application as invalid without giving any directions to Assessing Officer--Assessment not made pursuant to Dispute Resolution Panel’s order--Assessment order appealable before Commissioner (Appeals)-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

S. 145A --Valuation of stock--Assessing Officer not considering opening stock of work-in-progress--Addition not justified-- ITO v. Navjivan Synthetics (Ahmedabad) . . . 712

S. 147 --Reassessment--Notice--Income escaping assessment--Information received by Assessing Officer from investigation wing regarding escapement of income--Assessing Officer recording detailed reasons--Reopening of assessment valid-- ITO v. Contel Medicare Systems P. Ltd. (Delhi) . . . 701

S. 148 --Reassessment--Notice--Income escaping assessment--Information received by Assessing Officer from investigation wing regarding escapement of income--Assessing Officer recording detailed reasons--Reopening of assessment valid-- ITO v. Contel Medicare Systems P. Ltd. (Delhi) . . . 701

S. 194C --Deduction of tax at source--Payments to contractors--Aggregate payments to transporter exceeding prescribed limit--Absence of contract irrelevant--Assessee liable to deduct tax-- ITO v. Navjivan Synthetics (Ahmedabad) . . . 712

S. 195(2) --Deduction of tax at source--Non-resident--Royalty--Payment received by foreign company for granting licence for live terrestrial television rights to assessee--Not royalty--Assessee need not deduct tax at source-- Deputy Director of Income-tax (International Taxation) v. Nimbus Communications Ltd. (Mumbai) . . . 754

S. 271(1)(c) --Penalty--Concealment of income--Furnishing of inaccurate particulars--Expenditure incurred on higher education abroad of son of managing director claimed under staff and labour training expenses--Grounds raised in appeal not raised before Commissioner (Appeals)--Matter remanded-- Deputy CIT v. Inox India Ltd. (Ahemdabad) . . . 763

----Penalty--Furnishing inaccurate particulars of income--Cessation of business--Claim that research and development carried out not sufficient to justify expenditure--No evidence to support claim--Case of false claim--Penalty leviable-- Assistant CIT v. Harvey Heart Hospitals Ltd. (Chennai) . . . 722

Income-tax (Dispute Resolution Panel) Rules, 2009 :

R. 4 --International transactions--Transfer pricing--Determination of arm’s length price--Dispute Resolution Panel--Objections to draft order in Form 35A--Can be filed by assessee or its agent--Section 140 not applicable to Form 35A--No requirement that Form 35A filed by assessee to be signed by its managing director or director-- Nomura Services India P. Ltd. v. ITO (Mumbai) . . . 745

 

 

Section 2(22)(a): Occupancy Rights To Shareholder Taxable As “Deemed Dividend”: ITAT Mumbai

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.


Shantikumar D Majithia vs. DCIT (ITAT Mumbai)

S. 2(22)(a): Occupancy rights to shareholder taxable as "deemed dividend"

 

The assessee was the substantial shareholder of a closely held company which owned a building. The Articles of the company provided that each shareholder would have occupancy rights to a flat on the condition that an interest-free refundable deposit be paid. The occupancy rights were transferable. The AO held that the grant of occupancy rights by the company amounted to a "distribution of assets" and that the same was assessable as "deemed dividend" in the hands of the assessee u/s 2(22)(a) to the extent of the accumulated profits. On appeal, the CIT(A) held that as the occupancy rights were given against payment of a refundable deposit, there was no "distribution of assets" and so no deemed dividend. Instead, he held that the occupancy rights conferred a "benefit/perquisite" on the assessee which was assessable u/s 2(24)(iv). On cross appeals before the Tribunal, HELD:

 

(i) U/s 2(22)(a), any distribution by a company of accumulated profits, whether capitalized or not, constitutes "dividend" if such distribution entails the release by the company to its shareholders of all or any part of the assets. As the assessee received the occupancy rights to the flat in perpetuity and could transfer them, it effectively meant that he had full ownership over the flat. Accordingly, the value of the flats was assessable as deemed dividend u/s 2(22)(a);

 

(ii) However, as the said occupancy rights were given in lieu of holding shares and an interest-free refundable deposit towards proportionate land cost and development cost and were transferable, there is no "benefit or perquisite" which is assessable u/s 2(24)(iv).

 

Contrast with G. Sreevidya (ITAT Chennai) that if there is a quid pro quo, there is no "deemed dividend"


(Click Here To Read More)


Regards,


Editor,


itatonline.org
--------------------

Latest:

WNS North America Inc vs. ADIT (ITAT Mumbai)

Taxability of royalty under retrospective law & reimbursement of expenses


Section 54EC – 50 Lakhs spread over two F.Y and date of payment to be considered not the date of allotment.


On 14th December Bangalore ITAT held u/s 54EC – 50 Lakhs can be spread over two F.Y and date of payment to be considered not the date of allotment.
 
14thy December 2012
 
The assessee, in the relevant period sold property on 14.12.2007 invested a sum of Rs.50 lakhs on 3.3.2008 in bonds issued by Rural Electrification Corporation (REC Ltd) and a further sum of Rs.50 lakhs by cheque dt.4.6.2008, which got encashed on 9.6.2008, in bonds of National Highways Authority of India (NHAI).    Thus in all he has invested an amount of Rs.l Crore out of sale consideration in bonds issued by REC Ltd and NHAI. The AO relying upon the proviso to section 54EC restricted the claim of exemption  to  Rs.50   lakhs  holding  the  same  to  be  the  maximum  amount  of  exemption permissible under section 54EC of the Act.
 
On appeal CIT(A) while disposing off the appeal appeared to agreed in principle with the assessee that as per the proviso to section 54EC of the Act the limit of Rs.50 lakhs pertains to the investment that can be made in a single financial year and that the section does not prevent an assessee from availing exemption of Rs.l Crore in the event the assessee were to invest a sum of Rs.50 lakhs in a particular financial year and a further sum of Rs.50 lakhs in the immediately succeeding financial year, subject to the basic condition of section 54EC of the Act that both investments are made within a period of six months from the date of sale of the property. The learned CIT(A) however restricted the claim of deduction to Rs.50 lakhs by holding that the second investment of Rs.50 lakhs in NHAI Bonds falls outside the period of six months from the date of sale i.e. 14.12.2007, since the Bonds were allotted by NHAI only on 30.6.2008. The learned CIT(Appeals) in his order goes on to observe that inspite of the fact that the assessee had tendered the payment and the NHAI has also encashed the same before the expiry of six months from the date of sale, the assessee is not entitled to exemption under section 54EC due to the fact that NHAI have allotted the Bonds on 30.6.2008 which is after the period of six months from the date of sale of the said property on 14.12.2007.
 
Whether the proviso to section 54EC of the Act restricts the exemption to Rs.50 lakhs or does it merely restrict the investment that can be made in a single financial year to Rs.50 lakhs ? and also whether the date of allotment of Bonds is what is to be considered for reckoning the six months period ?
 
ITAT following the case reported in (2012) 6 TaxCorp (A.T.) 28058 (AHMEDABAD) and Circular no.3/2008 held that If the Legislature wanted to restrict the exemption itself to Rs.50 lakhs it could have simply dispensed with using the words "in a financial year." and hold that the assessee is entitled to total deduction under section 54EC of the Act spread over a period of two financial years @ Rs.50 lakhs each on investments made in specified instruments within a period of six months from the date of sale of the property.

ITAT bench on "date of allotment of Bonds"  hold that "what is to be reckoned here is the date of payment and not the date of allotment as the same is not in the control of the assessee".

--
"Knowledge is power, Information is liberating, Education is the premise of progress, in every society, in every family."


Section 54EC: ITAT Takes Liberal View On Investment Limit & Period

Dear Subscriber,

 


The following important judgement is available for download at itatonline.org.

Vivek Jairazbhoy vs. DCIT (ITAT Bangalore)

S. 54EC limit of Rs. 50L does not apply to the transaction but financial year. Cheque has to be issued within 6 months. Encashment of Cheque & Allottment of Bonds beyond 6 months is irrelevant

 

In AY 2008-09, the assessee sold land on 14.12.2007 and computed capital gains of Rs. 1.57 crores. He invested Rs.50 lakhs on 3.3.2008 (FY 2007-08) in REC Bonds and Rs. 50 lakhs on 4.6.2008 (FY 2008-09) in NHAI Bonds and claimed a deduction of Rs. 1 crore u/s 54EC. The NHAI Bonds were allotted on 30.6.2008. The AO & CIT(A) restricted the assessee's claim to Rs. 50 lakhs on the ground that (i) the Proviso to s. 54EC imposed a ceiling of Rs. 50 lakhs for the investment and (ii) the allotment of the NHAI Bonds was made beyond 6 months of the date of transfer. On appeal by the assessee, HELD allowing the appeal:

 

(i) In Aspi Ginwala (ITAT Ahmedabad) it was held that the Proviso to s. 54EC merely restricted the investment that can be made in one FY to Rs. 50 Lkahs but it did not restrict the exemption to Rs.50 lakhs. However, a contrary view was taken in Raj Kumar Jain & Sons (ITAT Jaipur) that the exemption u/s 54EC had to be restricted to Rs.50 lakhs. However, Circular no.3/2008 dated 12.3.2008 issued by the CBDT makes it clear that the Proviso only intended to restrict the investment in a particular financial year and did not intend to restrict the maximum amount of exemption permissible u/s 54EC. The fact that the Proviso uses the words "in a financial year" fortifies this interpretation. Accordingly, it has to be held that the assessee is entitled to total deduction of Rs. 1 crores in respect of the investment of Rs. 50 lakhs made in each financial year;

 

(ii) The cheque was issued to NHAI before the expiry of 6 months from the date of transfer. The fact that the allotment of the Bonds was made after 6 months is irrelevant. A payment by cheque which is encashed subsequently relates back to the date of receipt of the cheque. The date of payment is the date of delivery of the cheque and not the date of its encashment (Kumarpal Amrutlal Doshi (ITAT Mumbai) followed).

 


Section 68 Cash Credits: High Court Takes Strict View On Share Application Moneys

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

S. 68: Despite PAN & Bank details, addition of share allotment money valid if applicants do not respond to summons

 

The assessee, a company, received Rs. 35 lakhs towards share allotment. As the shareholders did not respond to summons, the AO assessed the said sum as an unexplained credit u/s 68. On appeal, the CIT(A) and Tribunal relied on Lovely Exports 216 CTR 195 (Del) & Divine Leasing 299 ITR 268 (SC) held that as the assessee had furnished the PAN, bank details and other particulars of the share applicants, it had discharged the onus of proving the identity and credit-worthiness of the investors and that the transactions were not bogus. It was also held that the AO ought to have made enquiries to establish that the investors had given accommodation entries to the assessee and that the money received from them was the assessee's own undisclosed income. On appeal by the department to the High Court, HELD reversing the CIT(A) & Tribunal:

 

Though in previous decisions (Lovely Exports) it was held that the assessee cannot be faulted if the share applicants do not respond to summons and that the Revenue authorities have the wherewithal to compel anyone to attend legal proceedings, this is merely one aspect. An assessee's duty to establish the source of the funds does not cease by merely furnishing the names, addresses and PAN particulars, or relying on entries in the Registrar of Companies website. The company is usually a private one and the share applicants are known to it since the shares are issued on private placement basis. If the assessee has access to the share applicant's PAN or bank account statement, the relationship is closer than arm's length. Its request to such concerns to participate in income tax proceedings, would, from a pragmatic perspective, be quite strong. Also, the concept of "shifting onus" does not mean that once certain facts are provided, the assessee's duties are over. If on verification, the AO cannot contact the share applicants, or the information becomes unverifiable, the onus shifts back to the assessee. At that stage, if it falters, the consequence may well be an addition u/s 68 (A. Govindarajulu Mudaliar 34 ITR 807 followed).

 


Section 153C Search Assessment Is Void If AO’s Satisfaction Not Recorded: ITAT Mumbai

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Ingram Micro (India) Exports Pvt. Ltd vs. DDIT (ITAT Mumbai)

S. 153C search assessment is void if AO's satisfaction not recorded

 

A search & seizure action u/s 132(1) was carried out in the case of Ingram Micro India Pvt. Ltd. As certain documents were found which allegedly showed that the assessee (a Singapore compnay) was not paying tax in India though it had a PE, an assessment u/s 153C was made to bring such profits to tax. The assessee challenged the s. 153C assessment on the ground that the AO who had conducted the search had not recorded satisfaction that any income belonged to the assessee. HELD by the Tribunal:

 

U/s 153A & 153C, proceedings can be initiated only after the AO comes to the satisfaction that the seized material pertains to a person other than the searched party and comes to the conclusion that proceedings are required to be initiated in the other party's case. In Manish Maheshwari 289 ITR 341 (SC), it was held in the context of s. 158 BD that the recording of satisfaction by the AO that any undisclosed income belongs to any person, other than the person searched, is a "condition precedent" and that a notice issued without recording satisfaction and application of mind was a nullity. This principle has been applied to s. 153C in SSP Aviation 207 Taxman 260 (Delhi) & P. Satyanarayana (ITAT Chennai). On facts, as the Department was not able to produce any material to show that the AO assessing the searched party had reached the satisfaction that any income belonged to the assessee, the assessment had to be annulled.

 

See also ACIT vs. M/s. Global Estate (ITAT Agra) & the cases referred to there


(Click Here To Read More)


Regards,


Editor,


itatonline.org

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Latest:

CIT vs. N. R. Portfolio Pvt. Ltd (Delhi High Court)

S. 68: Despite PAN & Bank details, addition of share allotment money valid if applicants do not respond to summons



Wednesday, December 26, 2012

Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs)

---------- Forwarded message ----------
From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Wed, Dec 26, 2012 at 2:52 PM
Subject: Message from EGroup of SolapurCAs Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs)
To: editor@itatonline.org


 

Dear Subscriber,

Frequently Asked Tax Questions by Qualified Foreign Investors (QFIs)

The CBDT has issued a Press release dated 26-12-2012 in which it has answered several questions relating to foreign investors in an easy-to-understand format. The questions raised pertain to the requirement to obtain PAN, how to compute capital gains, how to offer income to tax, the applicability of treaty benefits, the obligation to deduct TDS, set-off of losses, rate of tax etc. The FAQs are very important for all tax practitioners.


(Click Here To Read More)


Regards,


Editor,


itatonline.org

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Latest:

Minutes Of Meeting Held With Hon'ble President Of The Tribunal On 14.12.2012


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From the bottom of my hearts ! Thank you friends!

Dear Friends, 

Unfortunately, I could not make out this time. However, you can always count on me. I will continue to serve to the profession, try to resolve the problems of members and students.

I'm thankful from the bottom of my heart and deep appreciation for my friends, supports, well-wishers who have taken lot of pains and efforts during the ICAI elections.

Thank you very much. :) 

Regards,
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CA.C.V.PAWAR
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INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

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Tuesday, December 25, 2012

Candidates elected to 21st Regional Council (WIRC)

Candidates elected to 21st Regional Council (WIRC)

NAME OF CANDIDATE - WIRC(REGIONAL)
1
Agarwal Vishnu Kumar-Mumbai
2
Apte Dilip Moreshwar-Mumbai
5
Bhandari Anil Satyanarayan-Mumbai
8
Chitale Sushrut Mukund-Mumbai
16
Jain Sandeep Kailashchand-Mumbai
17
Joshi Sarvesh Nandlal-Pune
20
Kedia Subodhkumar Bajranglal -Ahmedabad
22
Khandelwal Dhiraj Kumar-Mumbai
23
Kinare Mangesh Pandurang-Mumbai
24
Kulkarni Girish Ramchandra-Aurangabad
26
Madkholkar Mahesh Keshav -Thane
28
Majithia Neel Pankaj-Mumbai
32
Mundada Satyanarayan Goverdhanlal-Pune
33
Nagori Abhishek-Vadodara
37
Patodia Sunil Kumar-Mumbai
40
Raval Parag Rajnikant-Ahmedabad
43
Savla Priti Paras -Thane
44
Shah Hardik Pravinkumar-Surat
45
Shah Julfesh Madhusudan-Nagpur
46
Shah Priyam Rameshbhai-Ahmedabad
47
Shah Shardul Dilip-Mumbai
48
Shah Shruti Jayesh -Mumba

Hearty Congratulations! 

Regards,
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CA.C.V.PAWAR
0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

For latest Updates visit Blogspot : http://canews1.blogspot.com