The Bombay Chartered Accountants Journal
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Accountancy and Audit
Accounting Standards (GAPS IN GAAP):
What Will Constitute A Service Concession Arrangement?
From Published Accounts:
From Published Accounts
Corporate and Other Laws
Prohibition of Benami Property Transactions Act, 1988 (As Amended) – Some Important Issues [Part – II]
Corporate Law Corner:
Corporate Law Corner
Laws And Business:
WhatsApp as Evidence….. What’s that?
Right To Information:
Right to Information (r2i)
SEBI Decision in Reliance’s Case - Allegations Of Serious Violations Including Fraud & Price Manipulation
Spotlight: Part C RBI/FEMA:
Spotlight: Part D:
The Finance Act, 2017
Loan or Advance to HUF by Closely Held Company - Whether Deemed Dividend U/S. 2 (22)(e) - Part II
Payments for Use of Online Database – Whether Royalty?
Glimpses Of Supreme Court Rulings:
Glimpses of Supreme Court Rulings
In the High Courts: Part A - Reported Decisions:
7. ALP - International transaction - Sections 92 and 92C - R. 10B of I. T. Rules 1962 - A. Y. 2008-09 - Comparables accepted for earlier years excluded - Onus on Department to justify exclusion -
8. Business expenditure - Deduction on actual payment - Sections 37 and 43B - A. Y. 2007-08 - Export and import business - Misdeclaration- Evasion of customs duty - Search and arrest - Bail order by court on condition assessee’s deposit amount to be appropriated towards differential liability by custom authorities - Recovery of customs duty from amount deposited by assessee evident from order of Principal Commissioner of Customs. Allowable expenses
9. Capital gain or business income- A. Y. 2006-07 - Where assessee converted the stock-in-trade of shares into investments and sold the same at a later stage, profit arising from sale of shares shall be deemed to be capital gains and not business income -Since shares were held as long-term capital asset, profit arising from sale of share shall be exempt from tax u/s. 10(38)
10. Capital asset - Agricultural land - Sections 2(1A) and 2(14) - A. Y. 2007-08 - Where assessee sold a piece of land in view of fact that assessee had planted various fruit bearing trees on land and produce was being used for personal consumption and, moreover, assessee had not filed an application for conversion of land for non-agricultural propose, it was not a 'capital asset' u/s. 2(14) and, thus, gain arising from sale of it was exempt from tax
11. Disallowance of expenditure - Exempt income - Section 14A - A. Y. 2011-12 - Section 14A cannot be invoked where no exempt income was earned by assessee in relevant assessment year
12. Educational Institution - Exemption u/s. 10(23C)(vi) - A. Ys. 2008-09 and 2009-10 - CBDT Circular to the effect that approval granted on or after 01/12/2006 to operate in perpetuity till withdrawn - Assessee seeking exemption for A. Y. 2008-09 but withdrawing it pursuant to CBDT Circular - Order of Commissioner holding application delayed and denying exemption - Contrary to law - Assessee entitled to exemption - Directions to Commissioner to pass fresh orders
13. Income - Assessability - Land purchased for company by its director - Land shown as stock-in-trade of company - sale of land also shown in books of company and gains offered for tax - gains not assessable in hands of director
14. Penalty: Section 271(1)(c) - A. Ys. 2003-04 to 2006-07- Assessing Officer initiating penalty proceedings for furnishing of inaccurate particulars of income and imposing penalty for concealment of income- Order imposing penalty to be made only on ground on which penalty proceedings initiated and not on fresh ground of which assessee had no notice- Penalty to be deleted
In The High Courts: Part B -Unreported Decisions:
4.. Service of notice u/s. 143(2) – not served at correct address - the Assessment Order will not be saved by Section 292BB of the Act - Section 27 of the General Clauses Act
5. Section 50C is part of Chapter IV-E of the Act - only for purpose of computing the income chargeable under the head 'Capital gains' – Cannot be applied in determining income under Chapter IV-D of the Act under the head 'Profits and gains of business or profession.
6. Jurisdiction to initiate proceedings u/s. 153C of the Act - the seized document must belong to the assessee is a jurisdictional issue - non satisfaction thereof - would make the entire proceedings taken there under null and void.
Spotlight: Part A:
Tribunal News : PART A - Reported Decision:
Sections 22 and 24(a) – Where in terms of lease deed, lessee on expiry of lease term; is required to handover land and building as then standing free from any lien or encumbrance back to the lessor (assessee), then income from leasing of land with a building constructed thereon is chargeable to income tax under the head “Income from house property” and assessee is entitled to claim deduction u/s. 24(a) even if lessee demolishes old building and constructs a new building thereon.
Section 54G – Unutilised amount of capital gain deposited on or before date of filing of return u/s. 139(5) will qualify for deduction u/s. 54G.
Section 15 – Actual salary received after deduction of notice period pay, as per agreement with the employer, is taxable in the hands of the employee.
Section 54 – Deduction u/s. 54 is available even if land, which is appurtenant to residential house, is sold and it is not necessary that whole of residential house should be sold.
Tribunal News : PART B - Unreported Decisions:
Section 263 – There is a distinction between “lack of enquiry” and “inadequate enquiry”. If the totality of facts indicate that assessment was made after obtaining necessary details from the assessee and further the same were examined, then, even if the same has not been spelt elaborately in the assessment order, it cannot be said that there is a “lack of enquiry” or `prejudice’ has been caused to the Revenue.
Section 69C – Mere non-attendance of the supplier in the absence of any other corroborative evidence cannot be a basis to justify the stand of the revenue that the transaction of purchase is bogus.
Section 250 – When addition made is on account of non-furnishing of sales-purchase bills, etc, if assessee comes forward and furnishes them as additional evidences, they deserve to be examined in proper perspective as the entire addition hinges on non-furnishing of evidences and that being the case, the evidences furnished by the assessee may have a crucial bearing on the issue.
Section 2(42A) - The holding period of an asset should be computed from the date of allotment letter.
Section 37(1) – Loss on account of export proceeds realised short in subsequent year allowed as deduction in current year.
Section 14A read with Rule 8D - disallowance should be computed taking into consideration only those shares which yielded dividend income.
Section 271(1)(c) – Penalty imposed on account of omission to offer correct income and the wrongful deduction deleted on the ground that auditors also failed to report.
Should Agricultural Income Be Taxed?
From The President
From The President:
From The President
Analysis of Input Tax Credit (Revised Provisions in the Act and Draft ITC Rules)
Recent Decisions: Part A: Service Tax:
Recent Decisions: Part B: VAT:
CENVAT Credit – Third Party Services
Spotlight Part B:
Works Contract Vis-À-Vis Nature of Goods Sold In Works Contract
Section 92CE and Section 94B – Analysis and Some Issues
Tribunal News : PART C -:
Section 2(22) of the Act, Article 13 of India Mauritius DTAA – Buyback at artificially inflated price would qualify as a colorable device for avoiding tax; consideration in excess of fair market price of the shares could be deemed as dividend
Article 10 of India US DTAA – Foreign Tax credit (FTC) allowable upto lower of tax withheld or the limit prescribed in DTAA; FTC should be computed separately in respect of each item of income.
Sections 195, 90(2) of the Act, Article 13 of India-Italy DTAA – Withholding tax obligation arises only if income is taxable; as royalty is taxable under Article 13 of India-Italy DTAA only on payment/receipt, section 195 will be triggered only on payment; even if a taxpayer opts for beneficial provision under the Act, withholding tax obligation will be triggered only when income is taxable as per the DTAA.
Section 9(1)(vi),(vii) of the Act – composite consideration paid for acquiring various rights including use of marks for advertisement and promotion did not qualify as royalty or FTS since it was not for manufacture and sale of products; however, payment made solely for the use of ICC marks in manufacture and sale of licensed products qualified as royalty
News and Views
Penalties under Income Tax Act – Recent Developments
The Light Elements
The Year That Was....:
BCAS in 2016-17. Part – 2