Connect us       New User?     Subscribe Now
Confirm your Email ID for Updates
13.08.2015 - Voice of CA presents - Updates
Thursday, August 13, 2015

  I. Headlines Today:    

  1. AMCs burdened with service tax liability  (Click for detail)
  2. After CAG rap, CBDT asks its audit wing to plug holes  (Click for detail)
  3. M&A Deals May Hit Speed Bump With New Accounting Standards  (Click for detail)
  4. Ministry of Finance: Increase In Indirect Tax Revenue (Provisional) Collections  (Click for detail)
  5. Special session of Parliament likely to pass GST constitutional amendment bill  (Click for detail)
  6. Pay I T dues in advance at RBI or bank branches  (Click for detail)
II.  Series of Synopsis on SA:

1.  Having regard to the usefulness of the Standards on Auditing in our day-to-day functioning, the Voice of CA has initiated an exercise to compile a sort of Synopsis on Standards on Auditing issued by the ICAI.  The VoCA will endeavour to compile such Synopsis on each Standard and share the same as a series.  Today, that series gets going with the following LINKS: 
(1)    a 'Brief' that outlines the variety of Standards, their applicability etc., and
(2)    a 'Synopsis on the Standard on Quality Control 1' – Quality Control for Firms that Perform Audits and Reviews of Historical Financial Information, and Other Assurance and Related Services Engagements  

The endeavour, without doubt, will be found useful. Your inputs will, however, help us bring in required further improvement.


III.  Direct Taxes Case Laws:

1.   CIT Vs. Ovira Logistics Pvt. Ltd., I.T.A. No. 1023/2013, Date of Order: 17.04.2015, high Court of Bombay

Section 43B of Income Tax Act, 1961, does not contemplate liability to pay the service tax before actual receipt of the funds in the account of the assessee.

During the assessment proceedings, the Ld. AO disallowed service tax u/s 43B on the basis that same was not deposited into the treasury. Assessee contained that service tax was not payable as amount has not been credited in assessee’s account. Hon’ble Tribunal observed that assessee was following mercantile system of accounting, it has not debited such amount in P & L nor has claimed deduction for it, and therefore question of disallowance does not arise.

Dismissing the appeal, the Hon’ble High Court held that “section 43B does not contemplate liability to pay the service tax before actual receipt of the funds in the account of the assessee. Liability to pay service tax into the treasury will arise only upon the assessee receiving the funds and not otherwise. Accordingly, when services are rendered, the liability to pay the service tax in respect of the consideration payable will arise only upon the receipt of such consideration and not otherwise.”

(Please click here for judgment)


2.  Malineni Babulu (HUF) Vs. ITO, I.T.A. No. 1326/Hyd/2014, Date of Order: 07.08.2015, ITAT - Hyderabad

Disallowance made u/s 40(a)(ia) of Income Tax Act, 1961 for non filing of declaration in Form 15G/15H is unwarranted, provision of section 272A(2)(f) could apply in such case.

In appellant proceeding before CIT a notice was issued upon assessee u/s 263 of the act for disallowing interest expenditure u/s 40(a)(ia) for non deducting of TDS. Assessee submitted that he had obtained Form 15H from the respective parties and same was filed before the CIT and a copy was also filed before AO, hence provision of Section 40(a)(ia) are not applicable. The Ld.CIT brushing aside the explanation offered by the appellant and passed an order U/s. 263 holding that the assessment order was erroneous and prejudicial the interest of Revenue in as much as the above issues were not considered and added by the AO in the assessment order.

Hon’ble ITAT held that assessee failed to produced proof in support of dispatch of Form 15H to the CIT, however a copy of Form 15H was filed before the AO. This fact has not been disputed by the Revenue. It is only technical breach of law and the act provides for separate penal provisions for such default. Therefore, no disallowance can be made to the provisions of Section 40(a)(ia) of the Act. In this regard, ITAT placed reliance on the decision of Hon’ble Delhi Bench of ITAT in the case of Vijaya Bank Vs. ITO [2014] [49 533 (Delhi-Trib) where it was held that “that if the assessee bank was not liable to deduct tax at the time of payment of interest, then section 40(a)(ia) of the Act is not attracted and the assessee cannot be held liable to pay tax as the assessee in default and interest thereon. At this juncture, it is pertinent to mention that for non-filing of Forms 15G and 15H within the prescribed time, there is a provision of penalty under section 272A(2)(f) of the Act”.

(Please click here for judgment)  

IV.  Company Law & Other Matters:

1.  M. Ramakrishna Vs. Chrompet Saswatha Nidhi Ltd., CA No. 1 of 2014, Date of Order: 23.04.2015, Company Law Board - Chennai

IN THE MATTER OF RBI ACT 1934, SECTION 45QA(2) In case the company fails to repay the amount deposited after the maturity. The company needs to give suitable reason for that failure as well as they will give monthly installments along with the interest levied by Board.

(Please click here for judgment)


V.  Reported Cases:

Direct Taxes Segment:

1.  The words total turnover indicate the aggregate price of the commodities received by an assessee during the course of his trading or business activities. It does not differentiate between commodities sold under the head speculative business/normal business, and therefore levy of penalty valid for not getting the books audited u/s 44AB.
2.  Turnover from distributorship to be included in total turnover for the purpose to qualify for 44AB.  
(Please click here for detail)


 Golden Rules:

  "It is impossible to fail completely and
it is impossible to succeed perfectly.
But it is always possible to perform dedicatedly"


  Thanks & Regards


Voice of CA

« Back
Online Poll
Connect Us       New User?     Subscribe Now