Section. 143(3) assessment void if case picked up contrary to CBDT’s Scrutiny Guidelines

Crystal Phosphates Ltd vs. ACIT (ITAT Delhi)

S. 143(3) assessment void if case picked up contrary to CBDT's Scrutiny Guidelines

 

For AY 2006-07, the assessee filed a ROI declaring income of Rs. 3.97 crore. The case was selected for scrutiny under clause 2(v)(b) of the Scrutiny Guidelines issued by the CBDT. The said clause of the Scrutiny Guidelines provided that a case had to be selected for compulsory scrutiny if an addition/ disallowance of Rs. 5 lacs or more was pending in appeal before the CIT(A) and such identical issue also originated in the year under consideration. The assessee claimed that as this condition stipulated in the Scrutiny Guidelines was not satisfied, the AO had no jurisdiction to select the case for scrutiny. The AO & CIT(A) rejected the claim. On appeal by the assessee to the Tribunal, HELD allowing the appeal:

 

The CBDT's instructions for assumption of jurisdiction for selection of cases of corporate assesses for scrutiny and assessment are issued u/s 119 and are binding on the AO and have to be followed by him in letter and spirit. The burden lies on the authority assuming jurisdiction to show and establish that such instructions have duly been complied and satisfied in letter and spirit. On facts, as there was no disallowance of Rs. 5 lacs or more in the earlier years and as no identical issue had arisen in the present year, the notice issued u/s 143(2) was not in terms of the CBDT's Scrutiny Guidelines and consequently the assumption of jurisdiction was illegal and the entire assessment proceedings were invalid (Nayana P. Dedhia 270 ITR 572 (AP) followed).

 

 

In Joginder Pal Gulati vs. OSD (Del) it was held that the return scrutiny guidelines have to be made public

--
warm regards,
CA. Rahul Bajaj

Section. 271(1)(c) Penalty For S. 50C Addition

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

CIT vs. Madan Theatres (Calcutta High Court)

No s. 271(1)(c) penalty for not offering capital gains on s. 50C stamp duty value

 

The assessee sold property for a consideration of Rs. 2.50 crore. However, for the purpose of stamp duty, the property was valued at Rs. 5.19 crore and stamp duty was paid on that value. The assessee offered capital gains on the basis that the sale consideration was Rs. 2.50 crore. The AO invoked s. 50C and held that the sale consideration had to be taken at Rs. 5.19 crore and capital gains computed on that basis. The AO imposed penalty u/s 271(1)(c) which was deleted by the CIT(A) and the by relying on Renu Hingorani. On appeal by the department to the High Court, HELD dismissing the appeal:

 

Though the assessee could have disputed the valuation on the basis of the deemed value and chose not to do so, the fact remains that the actual amount received was offered for taxation. It is only on the basis of the deemed consideration that the proceedings u/s 271(1)(c) started. The revenue has failed to produce any iota of evidence that the assessee actually received one paise more than the amount shown to have been received by him. As such, there is no scope to admit the appeal

 

Constitution Of The Bombay High Court’s Tax Bench w.e.f. 10.06.2013

Dear Subscriber,

Constitution Of The Bombay High Court's Tax Bench w.e.f. 10.06.2013

The Constitution of the Tax Bench in the Bombay High Court w.e.f. 10.06.2013 has been announced.

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Editor,

 

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CIT vs. Madan Theatres (Calcutta High Court)

No s. 271(1)(c) penalty for not offering capital gains on s. 50C stamp duty value

Improper Affidavit For Condonation Of Delay Is A 'Waste Paper': ITAT Mumbai

 

Dear Subscriber,

 

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

Kunal Surana vs. ITO (ITAT Mumbai)

Requirements of a valid affidavit in support of delay condonation application set out

 

The assessee filed an appeal before the CIT(A) which was delayed by 4 months. The delay was explained to have been caused by the fact that the assistant of the Authorized Representative kept the papers in a drawer and overlooked them till a penalty notice was received. The CIT(A) declined to condone the delay and dismissed the appeal. The assessee filed an appeal before the Tribunal and also filed an affidavit of the Authorized Representative in support of the application for condonation of delay. HELD by the Tribunal dismissing the application and the appeal:

 

The affidavit produced by the AR is not a valid affidavit because there is no verification appended on it and there is no mention as to which of the paras are true to the knowledge of the deponent and which of the paras of the affidavit are true to his belief. The affidavit is also not a duly sworn affidavit as required under Rule 10 of the ITAT Rules 1963 because it has not been properly endorsed by the notary regarding the oath of affirmation before him by the executant of the affidavit. The notary has put his signatures under his name seal but there is no mention whether the oath was administered to the signatory or if done so, when and where it was administered. Even words "Sworn before me" are missing. If the affidavit does not certify or endorse the fact that oath has been administered, it remains a waste paper. On merits, the case is one of gross negligence and inaction on the part of the assessee and the AR. The explanation that the AR's assistant kept the papers in his drawer and failed to take necessary action is vague and evasive and not sufficient cause for condonation. There is also no general principle saving the party from all mistakes of its counsel. There is also total inaction and gross negligence on the part of the assessee for not inquiring the status of the appeal from the AR. Though courts adopt liberal view while condoning delay on the principle that technicalities should not prevail over the cause of justice, litigants should not take the courts for granted.

 

Contrast with the approach in Bombay Mercantile Coop Bank 332 ITR 87 (Bom) & Ujagar Singh (SC)

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Editor,

 

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Latest:

Constitution Of The Bombay High Court's Tax Bench w.e.f. 10.06.2013

ITAT Declines To Follow AAR Ruling On Taxing Shares Profits As STCG vs. Biz Profits

 

Dear Subscriber,

 

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

Platinum Investment Management Ltd vs. DDIT (ITAT Mumbai)

S. 115AD: FII's securities transactions' profits not assessable as "business profits'

 

The assessee, a Foreign Institutional Investor ("FII"), suffered a loss of Rs. 41 crore on account of derivative transactions. The AO & CIT(A) relied on the AAR Ruling in Royal Bank of Canada 323 ITR 380 and held that as the said loss arose out speculative transactions, it had to be treated as a business loss and could not be set-off against STCG. On appeal by the assessee to the Tribunal HELD allowing the appeal:

 

Under the policy of the Central Government and the SEBI (FII) Regulations, 1995 a FII can only "invest" in securities and cannot do "business" in securities. S. 115AD also provides that all income arising to a FII from securities, whether from their retention or from their transfer, is taxable as a capital gain. This is also the view expressed in Press Note F. No. 5(13)SE/91-FIV dated 24.03.1994 issued by the Ministry of Finance. If the Revenue is permitted to make a distinction between the securities held by a FII by classifying them as a capital asset or as stock in trade, s. 115AD will become otiose. The result is that all income arising to a FII, including from dealings in derivatives has to be assessed as capital gains. The contrary view of the AAR in Royal Bank of Canada cannot be followed (LG Asian Plus Ltd 46 SOT 159 followed)

 

Note: In ABC Equity Fund 250 ITR 194, Fidelity Advisor Series VII 271 ITR 1, General Electric Pension Trust 280 ITR 425, Fidelity Northstar Fund 288 ITR 641 and Royal Bank of Canada 323 ITR 380 contrasting views have been taken on the issue

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Regards,

 

Editor,

 

itatonline.org

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Latest:

Kunal Surana vs. ITO (ITAT Mumbai)

Requirements of a valid affidavit in support of delay condonation application set out

Guidelines for Appointment of Statutory Auditors in Public Sector Banks Fy 2013-14

Updates are available on http://www.rbi.org.in/Scripts/bs_viewcontent.aspx?Id=946

Based on the recommendations of a Working Group (WG) to review the norms for empanelment of statutory auditors for public sector banks and other related issues and after seeking the approval of GoI, it has been decided to revise the guidelines on appointment of statutory auditors in public sector banks with effect from the year 2013-14. The revised eligibility norms for empanelment of SCAs as prescribed by RBI in consultation with the WG have been indicated in Annex 1. The categorization/eligibility norms for empanelment of branch auditors which have been kept unchanged are indicated in Annex 2.

The guidelines/instructions relating to the selection procedure to be followed for appointment of statutory auditors in PSBs and details thereof are furnished in Annex 3

---

Annex 1

Norms of Empanelment for Statutory Central Auditors
of Public Sector Banks applicable from the year 2013-14

As on 1 January of the relative year the firm should have

(i) minimum 7 full time chartered accountants, of which at least 5 should be full time partners exclusively associated* with the firm. These partners should have minimum continuous association with the firm i.e. one each should have continuous association with the firm at least for 15 years and 10 years , two with a minimum of 5 years each and one with a minimum of one year. The remaining 2 full-time chartered accountants or partners, as the case may be, should also have a continuous association with the firm for a period of one year*. Four of the partners should be FCAs. Also at least two of the partners should have minimum 15 and 10 years experience in practice. In case the paid Chartered Accountant available with the firm without any break was admitted as a partner of the said firm at a future date, his association with the firm as a partner will be counted from the date of his joining the firm as a paid Chartered Accountant.

*Note:

1. The definition of 'exclusive association' will be based on the following criteria:

(a) The full time partner should not be a partner in other firm/s.

(b) He should not be employed full time / part time elsewhere.

(c) He should not be practicing in his own name or engaged in practice otherwise or engaged in other activity which would be deemed to be in practice under Section 2(2) of the Chartered Accountants Act, 1949.

(d) The total compensation@ of the partner from the firm should not be below the following limit:

In case the Head office of the firms located in

(i) Delhi, Mumbai, Chennai, Kolkata, Bangalore and Hyderabad

ACA partner	` 1.80 lakh in a year (` 15000/- per month)
FCA partner	` 3.00 lakh in a year (` 25000/- per month)

(ii) Other places:

ACA partner	` 1.20 lakh in a year (` 10000/- per month)
FCA partner	` 1.80 lakh in a year (` 15000/- per month)

(e) A partner whose total compensation@ from the firm is less than the following will not be treated as exclusively associated with the firm :

Firms having more than 14 partners	1%
Firms having 10 to 14 partners	3%
Firms having 5 to 9 partners	5%
Firms having less than 5 partners	8%
@Total compensation =Sum total of share of profit, remuneration and interest on capital.

2. Out of the 7 full-time chartered accountants, the remaining two chartered accountants/partners (besides the 5 exclusively associated partners) will be treated to be exclusively associated with the firm only if they are continuously associated with the firm for a period of one year as on January 1 of the relevant year. These norms will be made applicable from the financial year 2014-15 i.e. the chartered accountants/partners will have to comply with the norms as on January 1, 2014.

(ii) the number of professional staff (excluding typists, stenographers, computer operators, secretary/ies and sub-ordinate staff etc.), consisting of audit and articled clerks with the knowledge in book-keeping and accountancy and are engaged in outdoor audit should be 18.

(iii) the standing of the firm should be of at least 15 years which would be reckoned from the date of availability of one full time FCA continuously with the firm.

(iv) the firm should have minimum statutory central audit experience of 15 years of public sector banks (before or after nationalisation) and/or by way of statutory branch audit thereof or that of statutory audit experience of a private sector bank. In case any of the partner of an audit firm is nominated / elected for a period of at least 3 years or more on the Board of any public sector bank then his / her such experience for a maximum period of three years will be considered as bank audit experience, provided such experience has not been earned by him/her concurrently i.e. when his / her firm was assigned statutory audit of any PSB, select all India financial Institutions or RBI.

(v) the firm should have statutory audit experience of 5 years of the public sector undertakings (either Central or State Government undertaking). While calculating such experience, more than one assignment given to a firm during a particular year or more than one year's statutory audit (audits in arrears) assigned to the firm will be reckoned, as one year experience only, for the purpose of counting such experience.

(vi) at least two partners of the firm or its paid Chartered Accountants must possess DISA/CISA or any other equivalent qualification.

---

Annex 2

Norms for the empanelment of audit firms to be appointed as statutory branch auditors for public sector banks (2013-14)

Cate-gory	No. of CAs exclusively associated with the firm (Full time)	No. of partners exclusively associated with the firm (full time) (Out of 2)	Profe-ssional staff	Bank audit experience	Standing of the audit firm
(1)	(2)	(3)	(4)	(5)	(6)
I.	5	3	8	The firm or at least one of the partners should have a minimum of 8 years experience of branch audit of a nationalised bank and/ or of a private sector bank .	8 years
II.	3	2	6	The firm or at least one of the partners should have preferably conducted branch audit of a nationalised bank or of a private sector bank.	6 years  (for the firm or at least one partner)
III.	2	1	4	The firm or at least one of the CAs should have preferably conducted branch audit of a nationalised bank or of a private sector bank for at least 3 years	5 years  (for the firm or at least one partner)
IV.	2                        2 Even proprietorship concern without bank audit experience may be considered as hitherto. (The proprietary concerns of Chartered Accountants with 1 paid CA, 2 professional staff and not having any statutory branch audit experience of a nationalised bank or of a private sector bank will be treated at par with the partnership firm after deducting their 3 years seniority from the date of their establishment).		2	Not necessary	3 years

---

Annex 3

PROCEDURE FOR APPOINTMENT OF
STATUTORY AUDITORS IN PUBLIC SECTOR BANKS

A. Statutory Central Auditors (SCAs)

1. For the year 2013-14 and onwards, GoI have approved the revision in the norms on the number of SCAs to be appointed in PSB as under:

i) Category "A" Banks (Large Banks viz. Bank of Baroda, Bank of India, Canara Bank, Punjab National Bank, Central Bank of India and Union Bank of India) shall not have more than 6 SCAs. However, in case of SBI the number of SCAs shall not be more than 14.

ii) Category "B" Banks (Medium Banks viz. Allahabad Bank, Corporation Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Syndicate Bank and UCO Bank) shall not have more than 5 SCAs, and;

iii) Category "C" Banks (Small Banks viz. Andhra Bank, Bank of Maharashtra, Dena Bank, Punjab & Sind Bank, United Bank of India, Vijaya Bank, State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore) shall not have more than 4 SCAs.

Actual numbers of SCAs to be appointed can be decided by respective boards subject to the above limit.

2. As per the existing practice, SCAs appointed will have a tenure of three years after which they will be rested for a period of two years. The appointment of SCAs will be made on an annual basis, subject to their fulfilling the eligibility norms prescribed by RBI from time to time and also subject to their suitability.

3. From the financial year 2013-14, selection of SCAs will be done by the Selection Committee constituted by GoI and the procedure that will be followed by RBI for forwarding the list of eligible audit firms for selection of SCAs by the Selection Committee constituted by GoI is as under :

• After receipt of the list of eligible auditors / audit firms, based on the eligibility norms for empanelment of auditors / audit firms prescribed by RBI from the Office of the Comptroller and Auditor General of India (C&AG), verification of eligibility of audit firms by RBI with respect to their bank audit experience available with RBI will be done by RBI.

• List of eligible firms after excluding the firms which are to be continued, rested and denied audit during the relevant year will be prepared by RBI and forwarded to GoI for selection by the Selection Committee.

• After selection, GoI will advise bank-wise names of the selected firms to the respective banks. As per the statutory requirement, banks, in turn, are required to forward the names of the selected SCAS to RBI for its prior approval before their actual appointment.

B. Statutory Branch Auditors (SBAs)

1. The norms for selection of branches of PSBs for statutory audit from the year 2012-13 and onwards will be based on the following :

1. For the year 2012-13, statutory branch audit of PSBs may be carried out for all branches with advances of ` 20 crore & above and 1/5th of the remaining branches covering a representative cross section of rural/semi-urban/urban and metropolitan branches, predominantly including branches which are not subjected to concurrent audit, so as to cover 90% of advances of a bank. CPUs/LPUs/and other centralized hubs by whatever nomenclature called would be included in the one fifth of the remaining branches every year.

2. In respect of branches below the cut-off point, which are subject to concurrent audit by chartered accountants, henceforth, LFARs and other certifications done earlier by SBAs will now be submitted by the concurrent auditors and such branches may not generally be subject to statutory audit.

3. Going forward, in mutual discussions with GoI and SCAs, based, inter alia, on the operational efficiency and robustness of CBS, system driven identification of NPAs, and integrity of MIS, managements of individual PSBs may decide on the threshold level of advances for the purpose of selecting branches for statutory audit.

4. Progressively, the threshold level of advances may be increased so that the number of branches to be taken up for statutory audit is phased down over a period of time.

2. The following procedure will be followed for appointment statutory branch auditors (SBAs) in public sector banks (PSBs):

(i) The list of eligible auditors/audit firms will be prepared by the Institute of Chartered Accountants of India (ICAI) as per the norms prescribed by RBI.

(ii) The above list will be subjected to scrutiny by RBI for identifying the continuing and rested firms and excluding audit firms against whom adverse remarks/disciplinary proceedings are pending or who have been denied audit.

(iii) RBI will, thereafter, forward the final list of all eligible auditors/audit firms to PSBs for selection.

(iv) The PSBs will select the required number of branch auditors/audit firms. Banks will be required to clearly advise the audit firms selected for consideration of appointment that each audit firm can take up audit assignment (branch audit) in one PSB only. The audit firm should give their consent in writing for consideration of appointment in the bank concerned for the particular year and the subsequent continuing years.

(v) The consent given by an audit firm will be treated as irrevocable and request, if any, from audit firms for changing the bank, after giving its consent to the bank concerned will not be entertained.

(vi) After the selection of branch auditors, PSBs will be required to recommend the names of both continuing and selected branch auditors to RBI for seeking its prior approval before their actual appointment, as per statutory requirement.

3. SBAs will have a maximum tenure of four years. The appointment of SBAs will be made on an annual basis, subject to their fulfilling the eligibility norms prescribed by RBI from time to time and also subject to their suitability.

4. The number of eligible auditors / audit firms is more than the number of branches to be audited at the following 33 centres (viz. Mumbai, Kolhapur, Pune, Solapur, Thane, Kolkata, Chennai, Coimbatore, Delhi/ New Delhi, Ajmer, Bikaner, Jaipur, Kota, Udaipur, Ahmedabad, Vadodara, Surat, Hyderabad, Chandigarh, Raipur, Faridabad, Gurgaon, Panchkula, Panipat, Sonipat, Bangalore, Ernakulam, Indore, Nagpur, Ludhiana, Jodhpur, Bhilwara, and Ghaziabad). In such centres, the auditors/ audit firms will be put to a period of compulsory rest for two years after completion of four years of continuous branch audit. In other centres, where the number of eligible auditors / audit firms is less than the number of branches to be audited, the branch auditors on completion of four years of continuous branch audit will be subjected to the policy of rotation.

5. While allotting branches, banks are required to select auditors/audit firms which are in close proximity to their offices/branches. Banks are also required to have a suitable mix of various categories of auditors / audit firms while selecting the branch auditors keeping in view the size of the branches to be audited.

6. As regards statutory branch audit to be carried out by SCAs, banks will allot the top 20 branches(to be selected strictly in order of the level of outstanding advances) in such a manner as to cover a minimum of 15% of total gross advances of the bank by SCAs.

C. General Guidelines applicable to both SCAs and SBAs

(i) All PSBs are required to have a Board approved policy for appointment of statutory auditors and the same may be hosted on the bank's web-site. Banks are also required to ensure that the policy framed by the Board in the matter of selection of auditors/audit firms for appointment of auditors is strictly adhered to. Further, the list of firms selected for appointment as statutory branch auditors may be placed before the ACB/Board of bank before for its concurrence before it is forwarded to RBI for final approval.

(ii) The policy of one audit firm for one PSB will be continued. Accordingly an audit firm will be eligible to be appointed as a central/branch auditor of only one PSB during a particular year.

(iii) Further, an audit firm which takes up statutory central audit assignment in a PSB will not be eligible to be appointed as a statutory central auditor in a private sector/foreign bank during that particular year and vice versa. The policy has been made applicable from the year 2012-13 onwards.

(iv) In order to protect the independence of the auditors/audit firms, banks will have to make the appointments of SCA/branch auditors for a continuous period of three and four years respectively subject to the firms satisfying the eligibility norms each year. Banks cannot remove the audit firms during the above period without the prior approval of the Reserve Bank of India.

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

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ITR Vol 354 Part 1

Volume 354 Part 1 (Issue dated 27-5-2013)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

SUPREME COURT

Appeal to High Court --Substantial question of law--Export--Special deduction--RBI permitting hedging of future realisation or payments--Whether gain on forward currency contract includible in profits for deduction--Substantial question of law--High Court to consider--Income-tax Act, 1961, ss. 80HHC, 260A-- CIT v . Mitsu Pvt. Ltd . 
. . . 89

Deduction of tax at source --Motor accident--Compensation on account of death--Quantification--Victim a salaried person--Presumption that employer paid salary after deduction of tax at source--Notional sum not to be deducted for income-tax--Income-tax Act, 1961, s. 192-- Vimal Kanwar v. Kishore Dan . . . 95

HIGH COURTS

Appeal to Appellate Tribunal --Appeal from revision by Commissioner--Tribunal cannot affirm order on grounds other than those mentioned by Commissioner--Commissioner finding Assessing Officer applied his mind but came to an erroneous conclusion--Tribunal finding assessment order passed without any application of mind on part of Assessing Officer--Not permissible--Income-tax Act, 1961, ss. 254, 263--Spectra Shares and Scrips Pvt. Ltd. v . CIT (AP) . . . 35

----Finding of Tribunal--Procedure--Tribunal concurring with view of Commissioner (Appeals)--Tribunal need not repeat reasoning of Commissioner (Appeals)--Income-tax Act, 1961-- CIT v . Global Vantedge P. Ltd . (Delhi) . . . 21

Appeal to High Court --Competency of appeal--Subject-matter less than ten lakhs of rupees in value--Appeal not maintainable--Income-tax Act, 1961, s. 260A-- CIT (International Taxation) v . Igate Global Solutions Ltd . (Karn) . . . 1

Bad debt --Assessee taking all assets and liabilities of two web portals from its holding company as going concerns--Effect--Debts due to holding company--Assessee entitled to write off--Bad debt allowable--Income-tax Act, 1961-- CIT v . Times Business Solution Ltd. (Delhi) . . . 25

Business expenditure --Disallowance--Excess or unreasonable payments--Whether a particular expenditure or loan was excessive and unreasonable--Question of fact--Concurrent finding that no disallowance can be made on ground of excess or unreasonable payments--Finding of fact--Income-tax Act, 1961, s. 40A(2)(b)(i)-- CIT v. Shiv Kumar (Delhi) . . . 19

Capital or revenue expenditure --Software expenses--Revenue expenditure--Income-tax Act, 1961-- CIT v . Technovate E Solutions P. Ltd. (Delhi) . . . 110

Donation to charitable institution --Special deduction under section 80G--Approval of institution for purposes of section 80G--Law applicable--Effect of amendment of section 80G and CBDT Circular Nos. 5 and 7 of 2010--Circulars granting perpetuity of approval--Approval cannot be withdrawn without having notice to institution--Income-tax Act, 1961, s. 80G--Circular Nos. 5 of 2010, dated 3-6-2010 and 7 of 2010 dated 27-10-2010-- CIT v . Shri Vishav Namdhari Sangat(P&H) . . . 33

Exemption --Export--Depreciation--100 per cent. export oriented industrial undertaking--Computation of exemption under section 10B--Unabsorbed depreciation of other undertakings cannot be set off against profits of such undertaking--Income-tax Act, 1961, s. 10B-- CITv . Cheslind Textiles Ltd . (Karn) . . . 29

----Software technology parks--Approval by a director of Software Technology Parks of India--Valid approval from a specified authority--Approval by Inter-Ministerial Standing Committee not necessary--Directors of Software Technology Parks functioning under delegated authority of Inter-Ministerial Standing Committee--Income-tax Act, 1961, s. 10A-- CIT v . Technovate E Solutions P. Ltd . (Delhi) . . . 110

Housing project --Special deduction--Ownership of a property not a mandatory condition--Transportation charges--Disallowance on ground tax not deducted at source--Disallowance would not disquality deduction--Income-tax Act, 1961, ss. 40(a)(ia), 80-IB(10)-- ITO v . Keval Construction (Guj) . . . 13

Income or capital --Waiver of loan for purposes of relocation of business--Capital receipt--Income-tax Act, 1961-- CIT v. Softworks Computers P. Ltd. 
(Bom) . . . 16

Penalty --Concealment of income or furnishing inaccurate particulars of income--Subsidy from State Government disclosed and claimed to be capital receipt--Subsidy whether capital or revenue receipt--Debatable question--No furnishing of inaccurate particulars--Penalty could not be imposed--Income-tax Act, 1961, s. 271(1)(c)-- CIT v.Gurdaspur Co-operative Sugar Mills Ltd. (P&H) . . . 27

----Loan in cash exceeding specified limit--Firm--Partner--Loan to partner by firm--Firm and partner are not two different entities--Finding that transaction was genuine--Penalty could not be imposed--Income-tax Act, 1961, ss. 269SS, 271D-- CIT v. V. Sivakumar (Mad) . . . 9

Precedent --Effect of Supreme Court decision in CIT v . K. Y. Pilliah and Sons [1967] 63 ITR 411 (SC)-- CIT v . Global Vantedge P. Ltd . (Delhi) . . . 21

Recovery of tax --Stay of demand--Adjustment of refund--Disallowance of broken period interest and amortisation of premium--Commissioner (Appeals) holding in favour of assessee in earlier year on same issue--Assessee not in default--Income from mutual funds--Assessee producing confirmations from mutual funds--Appeal filed before Tribunal against decision of Commissioner (Appeals)--Not ground for adjustment of refund--Income-tax Act, 1961-- HDFC Bank Ltd . v .Asst. CIT (Bom) . . . 77

Revision --Commissioner--Assessee, an investment company, availing of services of brokers for purposes of investment in shares--Sole instance cannot be taken to conclude nature of activity of assessee--Revision on that ground not valid--Income-tax Act, 1961, s. 263--Spectra Shares and Scrips Pvt. Ltd . v. CIT (AP) . . . 35

----Conditions precedent--Commissioner--Powers--Assessee, an investment company, carrying on business in shares for purposes of deriving dividend income--Assessing Officer accepting assessee as an investment company being with explanation and data submitted by it and taxing income under head “Capital gains†--Order of Assessing Officer not containing reasons for accepting assessee an investment company--Revision on ground Assessing Officer did not make an elaborate discussion not justified--Income-tax Act, 1961, s. 263--Spectra Shares and Scrips Pvt. Ltd. v . CIT (AP) . . . 35

Search and seizure --Retention of seized cash or asset--Cash or value of assets in excess of liability of assessee--Refund of cash--Interest payable--Delay in refund--Assessee entitled to interest from date of completion of assessment under section 153A to date of actual refund--Income-tax Act, 1961, ss. 132B, 153A-- S. K. Jain v. CIT 
(Delhi) . . . 84

Unexplained investment --Assessee acquiring assets by slump price--Addition on account of purchase--Commissioner (Appeals) and Tribunal holding that opening entries in books of assessee after slump purchase--No addition can be made--Income-tax Act, 1961, s. 69-- CITv. Aradhana Drinks and Beverages Pvt. Ltd. 
(Delhi) . . . 4

 

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Income-tax Act, 1961 :

S. 10A --Exemption--Software technology parks--Approval by a director of Software Technology Parks of India--Valid approval from a specified authority--Approval by Inter-Ministerial Standing Committee not necessary--Directors of Software Technology Parks functioning under delegated authority of Inter-Ministerial Standing Committee-- CIT v . Technovate E Solutions P. Ltd . (Delhi) . . . 110

S. 10B --Exemption--Export--Depreciation--100 per cent. export oriented industrial undertaking--Computation of exemption under section 10B--Unabsorbed depreciation of other undertakings cannot be set off against profits of such undertaking-- CIT v . Cheslind Textiles Ltd . (Karn) . . . 29

S. 40(a)(ia) --Housing project--Special deduction--Ownership of a property not a mandatory condition--Transportation charges--Disallowance on ground tax not deducted at source--Disallowance would not disquality deduction-- ITO v . Keval Construction (Guj) . . . 13

S. 40A(2)(b)(i) --Business expenditure--Disallowance--Excess or unreasonable payments--Whether a particular expenditure or loan was excessive and unreasonable--Question of fact--Concurrent finding that no disallowance can be made on ground of excess or unreasonable payments--Finding of fact-- CIT v . Shiv Kumar (Delhi) . . . 19

S. 69 --Unexplained investment--Assessee acquiring assets by slump price--Addition on account of purchase--Commissioner (Appeals) and Tribunal holding that opening entries in books of assessee after slump purchase--No addition can be made-- CIT v. Aradhana Drinks and Beverages Pvt. Ltd. (Delhi) . . . 4

S. 80G --Donation to charitable institution--Special deduction under section 80G--Approval of institution for purposes of section 80G--Law applicable--Effect of amendment of section 80G and CBDT Circular Nos. 5 and 7 of 2010--Circulars granting perpetuity of approval--Approval cannot be withdrawn without having notice to institution--Circular Nos. 5 of 2010, dated 3-6-2010 and 7 of 2010 dated 27-10-2010-- CIT v . Shri Vishav Namdhari Sangat (P&H) . . . 33

S. 80HHC --Appeal to High Court--Substantial question of law--Export--Special deduction--RBI permitting hedging of future realisation or payments--Whether gain on forward currency contract includible in profits for deduction--Substantial question of law--High Court to consider-- CIT v . Mitsu Pvt. Ltd . (SC) . . . 89

S. 80-IB(10) --Housing project--Special deduction--Ownership of a property not a mandatory condition--Transportation charges--Disallowance on ground tax not deducted at source--Disallowance would not disquality deduction-- ITO v . Keval Construction (Guj) . . . 13

S. 132B --Search and seizure--Retention of seized cash or asset--Cash or value of assets in excess of liability of assessee--Refund of cash--Interest payable--Delay in refund--Assessee entitled to interest from date of completion of assessment under section 153A to date of actual refund-- S. K. Jain v. CIT (Delhi) . . . 84

S. 153A --Search and seizure--Retention of seized cash or asset--Cash or value of assets in excess of liability of assessee--Refund of cash--Interest payable--Delay in refund--Assessee entitled to interest from date of completion of assessment under section 153A to date of actual refund-- S. K. Jain v. CIT (Delhi) . . . 84

S. 192 --Deduction of tax at source--Motor accident--Compensation on account of death--Quantification--Victim a salaried person--Presumption that employer paid salary after deduction of tax at source--Notional sum not to be deducted for income-tax-- Vimal Kanwar v. Kishore Dan (SC) . . . 95

S. 254 --Appeal to Appellate Tribunal--Appeal from revision by Commissioner--Tribunal cannot affirm order on grounds other than those mentioned by Commissioner--Commissioner finding Assessing Officer applied his mind but came to an erroneous conclusion--Tribunal finding assessment order passed without any application of mind on part of Assessing Officer--Not permissible-- Spectra Shares and Scrips Pvt. Ltd. v . CIT (AP) . . . 35

S. 260A --Appeal to High Court--Competency of appeal--Subject-matter less than ten lakhs of rupees in value--Appeal not maintainable-- CIT (International Taxation) v . Igate Global Solutions Ltd . (Karn) . . . 1

----Appeal to High Court--Substantial question of law--Export--Special deduction--RBI permitting hedging of future realisation or payments--Whether gain on forward currency contract includible in profits for deduction--Substantial question of law--High Court to consider-- CIT v. Mitsu Pvt. Ltd . (SC) . . . 89

S. 263 --Appeal to Appellate Tribunal--Appeal from revision by Commissioner--Tribunal cannot affirm order on grounds other than those mentioned by Commissioner--Commissioner finding Assessing Officer applied his mind but came to an erroneous conclusion--Tribunal finding assessment order passed without any application of mind on part of Assessing Officer--Not permissible-- Spectra Shares and Scrips Pvt. Ltd. v . CIT (AP) . . . 35

----Revision--Commissioner--Assessee, an investment company, availing of services of brokers for purposes of investment in shares--Sole instance cannot be taken to conclude nature of activity of assessee--Revision on that ground not valid-- Spectra Shares and Scrips Pvt. Ltd .v. CIT (AP) . . . 35

----Revision--Conditions precedent--Commissioner--Powers--Assessee, an investment company, carrying on business in shares for purposes of deriving dividend income--Assessing Officer accepting assessee as an investment company being with explanation and data submitted by it and taxing income under head “Capital gains†--Order of Assessing Officer not containing reasons for accepting assessee an investment company--Revision on ground Assessing Officer did not make an elaborate discussion not justified-- Spectra Shares and Scrips Pvt. Ltd. v. CIT (AP) . . . 35

S. 269SS --Penalty--Loan in cash exceeding specified limit--Firm--Partner--Loan to partner by firm--Firm and partner are not two different entities--Finding that transaction was genuine--Penalty could not be imposed-- CIT v. V. Sivakumar 
(Mad) . . . 9

S. 271(1)(c) --Penalty--Concealment of income or furnishing inaccurate particulars of income--Subsidy from State Government disclosed and claimed to be capital receipt--Subsidy whether capital or revenue receipt--Debatable question--No furnishing of inaccurate particulars--Penalty could not be imposed-- CIT v. Gurdaspur Co-operative Sugar Mills Ltd. (P&H) . . . 27

S. 271D --Penalty--Loan in cash exceeding specified limit--Firm--Partner--Loan to partner by firm--Firm and partner are not two different entities--Finding that transaction was genuine--Penalty could not be imposed-- CIT v. V. Sivakumar (Mad) . . . 9

 

The Law And Procedure For Filing Income-tax Appeals: A Ready Referencer

 

Dear Subscriber,

The Law And Procedure For Filing Income-tax Appeals: A Ready Referencer

The Income-tax department has released a publication titled "Appeals And Procedures For Filing Appeals". The publication seeks to educate taxpayers about the legal provisions and procedures relating to filing appeals before the Commissioner of Income-tax (Appeals) and the Tribunal. The publication lists out the Forms in which the appeal has to be filed, the manner in which it has to be signed, the fees payable etc. The entire law and procedure is explained in lucid language. The guidelines laid down by the Appellate Tribunal for the guidance of the assesses and their representatives on how to conduct appeals is also included in the publication. The publication will prove useful as a ready-referencer for taxpayers and tax professionals

See also: CBDT's Advance Pricing Agreement Guidance With FAQs & Controversies In Assessment

(Click Here To Read More)

 

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Editor,

 

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Latest:

DCIT vs. Ashish Jhunjhunwala (ITAT Kolkata)

No S. 14A/ Rule 8D disallowance without showing how assessee is wrong

Transfers And Postings Of Deputy, Assistant, Addl And Joint Commissioners

 

Dear Subscriber,

Transfers And Postings Of Deputy, Assistant, Addl And Joint Commissioners

Vide Order No. 86 of 2013 dated 24.05.2013, the CBDT has ordered the transfers/ posting of several officers in the grade of Deputy/ Assistant Commissioner of Income-tax with immediate effect.

 

Vide Order No. 87 of 2013 dated 24.05.2013, the CBDT has ordered the transfers/ posting of several officers in the grade of Additional/ Joint Commissioner of Income-tax with immediate effect.

(Click Here To Read More)

 

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Latest:

The Law And Procedure Of Taxation Of Charitable Trusts

The Law And Procedure Of Taxation Of Charitable Trusts

 

Dear Subscriber,

The Law And Procedure Of Taxation Of Charitable Trusts

The Income-tax department has released a publication titled "Assessment of Charitable Trusts and Institutions". The publication explains the legal provisions and the procedural requirements for claiming exemption under the Income-tax Act, 1961 for charitable activities. Apart from explaining the concept of 'Charitable Purposes', the publication deals with the procedure for registration, assessment, denial of exemptions, incentives given to the donors of the trust etc. The publication also deals with important issues in a FAQ format. All amendments made by the Finance Act, 2012 are incorporated in the publication. The forms which have to be used by the assessees in order to avail of the benefit of various provisions are compiled as Annexures to the publication.

The publication will prove very useful for all taxpayers and tax professionals.

(Click Here To Read More)

 

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Latest:

ITO vs. LKP Securities Ltd (ITAT Mumbai)

Employees' PF/ ESI Contribution is not covered by s. 43B & is only allowable as a deduction u/s 36(1)(va) if paid by the "due date" prescribed therein

Section. 271(1)(c) Penalty For S. 50C Addition

 

Dear Subscriber,

 

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

CIT vs. Madan Theatres (Calcutta High Court)

No s. 271(1)(c) penalty for not offering capital gains on s. 50C stamp duty value

 

The assessee sold property for a consideration of Rs. 2.50 crore. However, for the purpose of stamp duty, the property was valued at Rs. 5.19 crore and stamp duty was paid on that value. The assessee offered capital gains on the basis that the sale consideration was Rs. 2.50 crore. The AO invoked s. 50C and held that the sale consideration had to be taken at Rs. 5.19 crore and capital gains computed on that basis. The AO imposed penalty u/s 271(1)(c) which was deleted by the CIT(A) and the by relying on Renu Hingorani. On appeal by the department to the High Court, HELD dismissing the appeal:

 

Though the assessee could have disputed the valuation on the basis of the deemed value and chose not to do so, the fact remains that the actual amount received was offered for taxation. It is only on the basis of the deemed consideration that the proceedings u/s 271(1)(c) started. The revenue has failed to produce any iota of evidence that the assessee actually received one paise more than the amount shown to have been received by him. As such, there is no scope to admit the appeal

 

Apart from Renu Hingorani (ITAT Mumbai), the same view is taken in Chimanlal Manilal Patel (ITAT Ahmedabad)

(Click Here To Read More)

 

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Editor,

 

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Latest:

Transfers And Postings Of Deputy, Assistant, Addl And Joint Commissioners

Section 43B: ITAT Declines To Follow High Court Verdict

Dear Subscriber,

 

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

ITO vs. LKP Securities Ltd (ITAT Mumbai)

Employees' PF/ ESI Contribution is not covered by s. 43B & is only allowable as a deduction u/s 36(1)(va) if paid by the "due date" prescribed therein

 

In AY 2008-09 the assessee collected employees' contribution to the Provident Fund and ESIC but did not pay it within the due date prescribed by the relevant legislation. The amount was, however, paid before the due date of filing the ROI. The AO assessed the said amounts as income u/s 2(24)(x) but declined to grant a deduction u/s 36(1)(va) as the amount had been paid after the due date. The CIT(A), relying on Alom Extrusions 319 ITR 306 (SC) and AIMIL 321 ITR 508 (Del) held that the amounts had to be allowed as a deduction u/s 43B as they had been paid before filing the ROI. On appeal by the department to the Tribunal, HELD reversing the CIT(A):

 

S. 43B covers only the sums payable by way of contribution by the assessee as an employer, i.e., the employer's contribution to the PF and ESI funds. It does not cover the employees contribution. While the employer's contribution is allowable u/s 37(1), the employees' contribution collected by the employer is deemed to be his income u/s 2(24)(x) and is allowable as a deduction u/s 36(1)(va) only if it is paid to the relevant fund by the due date as prescribed in the relevant legislation. Even if one assumes that s. 43B(b) applies to s. 36(1)(va) payments, a deduction would not be admissible because the s. 36(1)(va) payments are not 'otherwise allowable' if they are paid beyond the "due date". The decisions in Vinay Cement 213 CTR (SC) 268 & Alom Extrusions 319 ITR 306 (SC) are not an authority on the point that employees' contributions are also covered by s. 43B. Though in AIMIL 321 ITR 508 (Del) it was held that employees' contribution to EPF and ESI funds are covered by s. 43B, it cannot be followed because (i) the Court moved on the premise that employees' contribution is subject to clause (b) of s. 43B and did not notice the condition in s. 36(1)(va), (ii) the decision by the tribunal, which was approved by the High Court in AIMIL was rendered without considering the decision of the Special Bench in ITC Ltd & (iii) it is inconsistent with Godaveri (Mannar) Sahakari 298 ITR 149 (Bom). Accordingly, AIMIL cannot be followed and the deductibility of employees' contribution has to be seen only with reference to s. 36(1)(va) (together with grace period) (Bengal Chemicals & Pharmaceuticals (included in file) & ITC Ltd 112 ITD 57 (Kol)(SB) followed)

 

Note: In Bharati Shipyard 132 ITD 53 (SB)(Mum), Desh Rakshak Aushdhalaya 313 ITR 140 (Utt), Lakhani India 324 ITR 73 (P&H) & Lakhani Rubber Works 326 ITR 415 (P&H) it has been held that employees' contribution is also covered by s. 43B

(Click Here To Read More)

 

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Latest:

The Law And Procedure For Filing Income-tax Appeals: A Ready Referencer

LBT Rate Schedule

,

The LBT Nashik Rate Schedule is hosted at http://nashikcorporation.gov.in/pagedetail.aspx?type=article&id=92

Better to maintain separate tally ledger as per applicable rate of LBT.

Regards,
-------
CA.C.V.PAWAR

0253-2319641. M-9423961209

Section 14A/ Rule 8D Disallowance Without Showing How Assessee Is Wrong: ITAT Kolkata

 

Dear Subscriber,

 

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

DCIT vs. Ashish Jhunjhunwala (ITAT Kolkata)

No S. 14A/ Rule 8D disallowance without showing how assessee is wrong

 

In AY 2009-10, the assessee earned tax-free dividend of Rs. 32 lakhs on investments that had been made in earlier years. The assessee claimed that as he had not incurred any expenditure to earn the dividend income, no disallowance u/s 14A was permissible. The AO rejected the claim and made a disallowance by applying Rule 8D. The CIT(A) deleted the disallowance on the ground that the AO had mechanically applied Rule 8D to compute the disallowance. On appeal by the department to the Tribunal, HELD dismissing the appeal:

 

The AO has not brought on record anything which proves that there is any expenditure incurred towards earning of dividend income. The AO has not examined the accounts of the assessee and there is no satisfaction recorded by the AO about the correctness of the claim of the assessee and without the same he invoked Rule 8D. While rejecting the claim of the assessee with regard to expenditure or no expenditure, as the case may be, in relation to exempted income, the AO has to indicate cogent reasons for the same. The AO has not considered the claim of the assessee and straight away embarked upon computing disallowance under Rule 8D of the Rules on presuming the average value of investment at ½% of the total value. This is not permissible (J. K. Investors (Bombay) followed)

 

Click here For more on the law on s. 14A and Rule 8D

(Click Here To Read More)

 

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Latest:

Dear Law Minister, Please Spare A Moment For The Welfare Of The Tribunal

Expl 37(1): Scam Commission Payment Is Allowable Deduction: Kol High Court

CIT vs. Rajarani Exports Pvt. Ltd (Calcutta High Court)

Fact that payment is used for 'illegal' purpose does not attract Expl to s. 37(1)

 

The assessee exported tea to Iraq under the 'Oil for Food Program', as sanctioned by the United Nations. It paid commission of Rs 1.28 crores to one Alia Transportation, a Jordanian company. The Volcker Committee, which was set up to expose the 'Oil for Food scam' found that this company was a front company for the Iraqi regime, meant to receive illegal kickbacks, and did not render any services. The AO, acting on the report, held that the commission paid by the assessee was "illegal" and not allowable under the Explanation to s. 37(1). This was reversed by the CIT (A). On appeal by the department, the Tribunal (72 DTR 425) upheld the stand of the assessee on the ground that even if the amounts paid to Alia were actually kickbacks to Iraqi regime, that fact per se would not attract Explanation to s. 37(1). It was pointed out that while the transactions between Alia and the Iraqi regime may be contrary to the UN sanctions, the transactions between the assessee and Alia were not hit by the UN sanctions and that there was no specific violation of law by the assessee. It was emphasized that what the recipient of the payment does is not important because the assessee has no control over the matter. The onus of demonstrating that the assessee was aware that the payments were intended for kickbacks is on the AO which has not been discharged. It was held that the "purpose" of the expenditure has to be seen and if the payment is for bonafide business purposes, the fact that they end up being used as illegal kickbacks, will not attract Explanation to s. 37(1). On appeal by the department to the High Court, HELD dismissing the appeal:

 

The department could not satisfy us as to why were the findings recorded by the CIT(A) and the Tribunal are incorrect either on fact or in law. There is, as such, no reason why the appeal should be entertained. The appeal is, therefore, dismissed.

 

 

itatonline.org

--
-With Regards,
  

Fwd: Very Important Points to be noted in relation to LBT and implemented urgenetly

Dear All,

1. Visit website of nashik municipal corporate and get your LBT number else call us.

2. Prepare stamp of your LBT number and put on Sales Invoice; and also insist your supplier to  mention his LBT number on ur purchase bill( this very important)

3. Prepare stamp of your following declaration  and put on your Sales Invoice; and also insist your supplier to put such declaration on  on ur purchase bill( this very important)

"I/we hereby certify that my/our registration certificate under Local Body Tax rules

is in force on the date on which the sale of the goods specified in this bill /invoice/cash memorandum, is made by me/us and that the transaction of sale covered by this bill/invoice/cash memorandum, has been effected by me/us in the course of my/our business."

4. Create separate  separate Leger in Tally for purchase from within Nashik dealer in out side Nashik Dealer. Preferably also mention the LBT rate applicable to each purchase in narration or create cost center as per LBT rate applicable or seperate ledger as per LBT applicable.

5. LBT not payable in case of purchases from within city dealer.

6. LBT refundable if you sale the purchased product in same form to dealer in other City.

7. Keep the transport receipt of all purchases and sales. and attach the same with purchase and sales invoice. This would save you latter from inspector from NMC.

8. In case of any doubt call us.  

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

LBT NASHIK

USE FOLLOWING LINK FOR VARIOUS DETAILS ON LBT NASHIK

All details are hosted on website of Nashik Municipal Corporation;

1. LBT -NASHIK REGISTRATION FORM : http://nashikcorporation.gov.in/doc/7_LBT_APL_FORM_3.pdf

2. LBT RULE: http://nashikcorporation.gov.in/doc/14_LBT_Rules_and_forms1.pdf

3. LBT -NASHIK NOTIFICATION : http://nashikcorporation.gov.in/doc/11_NMC_LBT_NOTIFICATION.pdf

4. LIST OF DEEMED REGISTER DEALER UNDER LBT: http://nashikcorporation.gov.in/doc/10_LBT_NO.pdf

Even the deemed registered dealer shall submit the application form.

You have to pay Rs.100 fees with LBT registration form.

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

DOCUMENTS REQUIRED FOR REGISTRATION UNDER LBT

self attested photo copies of the following documents (if applicable) Documents marked as (*) are mandatory.

* Income Tax PAN Card

* Shop Act Registration Certificate

* Two passport size photographs of applicant

One passport size photo of each partner(s) / director(s) etc. (if applicable)

Registration Certificate under Maharashtra Value Added Tax [VAT/TIN]

Property Tax Demand Notice / latest tax paid receipt (Nashik Municipal Corporation)

Partnership Deed (Applicable for Partnership Firms Only)

HUF Declaration in affidavit format (if applicable)

Company Registration Certificate – For Ltd./Pvt Limited Companies

(Incorporation Certificate, MoA & Article of Association)

List of Board of Directors (If attached separately)

List of Partners (If attached separately)

Registration Certificate issued by Charitable Trust (Applicable for Trust)

Intimation of Nomination / Declaration of Name of Manager

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

LBT at Nashik from 22.05.2013

LBT will applicable wef 22.05.2013 at Nashik Municipal Corporation. List and LBT nos. of deemed registered dealers, notification, LBT rules, Regn. Form are hosted at
http://nashikcorporation.gov.in/pagedetail.aspx?type=article&id=92.

-Regards
CA.C.V.PAWAR
M-9423961209
Sent from my Nokia E6

Nashik Municipal Corporation notifies traders about LBT implementation from May 22

Civic chief Sanjay Khandare has appealed to the traders and others to collect the prescribed forms from NMC's divisional and other offices and register their establishments.

Nashik Municipal Corporation (NMC) has issued notices to the traders, professionals and organisations informing them that the the new system of Local Body Tax (LBT) will be implemented from May 22.

"The municipal body will cease collecting present ongoing octroi-tax system at midnight of may 21, 2013We are enforcing local body tax following state government's notification dated June 1, 2012 and Bombay High Court directives dated march 26,2013," NMC commissioner Sanjay Khandare said.

He has appealed to the traders and others to collect the prescribed forms from NMC's divisional and other offices and register their establishments.

Regards,
-------
CA.C.V.PAWAR
PATIL DAWARE GIRASE PAWAR & ASSOCIATES

CHARTERED ACCOUNTANTS

0253-2319641. M-9423961209

INDIAN CA - NURTURED IN INDIA, GROOMED FOR THE WORLD

Transfer Pricing: CBDT’s Advance Pricing Agreement Guidance With FAQs

Dear Subscriber,

Transfer Pricing: CBDT's Advance Pricing Agreement Guidance With FAQs

The CBDT has issued a publication titled "Advance Pricing Agreement Guidance With FAQs". The publication seeks to increase the awareness of the taxpayers about the "Advance Pricing Agreement Scheme" which was notified on 30.08.2012 and its implementation. The publication explains the procedure to be followed by a taxpayer and the tax authorities before a taxpayer can enter into an APA. It also provides guidance on types of APAs, advantages of APAs etc.

The Publication is a must-read for all professionals engaged in transfer pricing practice.

(Click Here To Read More)

 

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Latest:

Spare Vodafone – Save Thousands of Jobs: Ex-Chief Justice Kapadia

Dear Law Minister, Please Spare A Moment For The Welfare Of The Tribunal

Dear Subscriber,

Dear Law Minister, Please Spare A Moment For The Welfare Of The Tribunal

The author, an eminent advocate, who is at the forefront of the crusade to resolve the core problems faced by the Tribunal, sees a ray of hope that the attitude of utter indifference shown so far by the Government towards the welfare of the Tribunal will change after the appointment of Shri. Kapil Sibal as the Law Minister. The author makes a fervent request to the Hon'ble Law Minster that he should spare time to immediately address those problems

(Click Here To Read More)

 

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Latest:

Transfer Pricing: CBDT's Advance Pricing Agreement Guidance With FAQs

__._,_.___

Spare Vodafone – Save Thousands of Jobs: Ex-Chief Justice Kapadia

Dear Subscriber,

Spare Vodafone – Save Thousands of Jobs: Ex-Chief Justice Kapadia

Ex-Chief Justice of India S. H. Kapadia is a man of immense wisdom and learning and is not afraid of speaking his mind. He comes clear on the Vodafone amnesty controversy, GAAR and the problems plaguing the Indian tax administration today and offers valuable suggestions on how to resolve them

(Click Here To Read More)

 

Regards,

 

Editor,

Fwd: Message from EGroup of SolapurCAs ITAT Explains Scope Of S. 153A Search Assessment In S. 143(1) Cases

 

Dear Subscriber,

 

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

Gurinder Singh Bawa vs. DCIT (ITAT Mumbai)

S. 153A: After expiry of s. 143(2) time limit, s. 143(1) assessment is final & addition u/s 153A can be made only if incriminating material is found in search

 

For AY 2005-06, the AO passed an intimation u/s 143(1) accepting the return as filed. Subsequently, there was a search u/s 132. The AO noticed that an amount of Rs. 93 lakhs received by the assessee as a loan in earlier years had been treated as a gift and credited to the capital account. He passed an assessment order u/s 153A in which he held that the said amount was assessable as a cash credit u/s 68. The CIT(A) partly confirmed the addition. Before the Tribunal, the assessee argued that as no incriminating material was found during the search, the addition could not be made u/s 153A. HELD by the Tribunal upholding the plea:

 

In All Cargo Global Logistics 137 ITD 287 (Mum)(SB), the Special Bench held that in a case where the assessment has abated the AO can make additions in the assessment, even if no incriminating material has been found. However, in a case where the assessment has not abated, an assessment u/s 153A can be made only on the basis of incriminating material (i.e. books of account & other documents found in the course of search but not produced in the course of original assessment and undisclosed income or property disclosed during the course of search). On facts, as the assessment was completed u/s 143(1) and the time limit for issue of s. 143(2) notice had expired on the date of search, there was no assessment pending and there was no question of abatement. Therefore, the addition could be made only on the basis of incriminating material found during search. As the addition u/s 153A was made on the information/material available in the return of income (i.e. the information regarding the gift was available in the return of income as capital account had been credited by the assessee by the amount of gift) and not on the basis of any incriminating material found during the search, the AO had no jurisdiction to make the addition u/s 153A.

 

See also Anil Kumar Bhatia 80 DTR 169 (Del), Pratibha Industries 141 ITD 151 (Mum), Article 1 & Article 2

(Click Here To Read More)

 

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Latest:

CIT vs. Crescent Export Syndicate (Calcutta High Court)

S. 40(a)(ia) TDS: Special Bench verdict in Merilyn Shipping is not good law