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27.08.2015 - Voice of CA presents - Updates
Thursday, August 27, 2015

I. Headlines Today:    

  1. Cabinet approves arbitration law amendments for expeditious case disposal, cost-effective arbitration  (Click for detail)
  2. This Watchdog may be Bitten With Service Tax  (Click for detail)
  3. Black money crackdown: Declare your foreign assets, income in your ITR  (Click for detail)
  4. Seventh pay panel's term extended till December  (Click for detail)
  5. Finance Ministry to start Budget consultations from September 4  (Click for detail)


II.  Series of Synopsis on SA:

1.  In continuation of our mail of August 24, 2015 [Click for 24.08.2015 - Updates ], with which Synopsis on SA 220, among others, was sent, attached now – 5th in the captioned Series - is the Synopsis on SA 230 Audit Documentation.
III.  A Useful Presentation:

Transparency in Foreign Bank Account vis-à-vis Tax Compliance

The idea behind the linked PRESENTATION (Click for PPT) is the need as professionals to equip and cement our understanding of the provisions that are being enacted across the countries to prevent evasion/avoidance of tax. The PRESENTATION deals briefly with the provisions of  –

FATCA - Foreign Account Tax Compliance Act, 2010 – an important legislation enacted by the USA, and the Intergovernmental Agreements since entered into by the USA with a number of countries, including with India

MoEoI - Manual on Exchange of Information pursuant to agreements with foreign countries or specified territories/associations in terms of Chapter IX of the Income-Tax Act, 1961

CDB - Code of Conduct for compliance by the Swiss Bankers Association and its member-Banks with regard to the exercise of Due Diligence [CDB 08]   

The PRESENTATION helps in better appreciating the nitty gritty of the provisions stipulated under the FATCA, MoEoI, and CDB for exchange of information by the countries inter se.
[ Contribution by CA. Sanjay Agarwal, Founder - Voice of CA ]
Endless money forms the sinews of war - Cicero
IV.  Direct Taxes Case Laws:

1.  Jagan Nath Prasad & Sons Vs. ITO, I.T.A. No. 676/Del/2015, Date of Order: 05.08.2015, ITAT – Delhi

Amount received as compensation towards the damage to the land cannot to be said to be a revenue receipt.

Facts of the case: During the year, assessee received a sum for digging of land and laying the pipe-line from M/s Indian Oil Corporation. The amount was received for granting the right to use the land for laying the pipeline and damages done to the land. The land is still owned by the assessee and there is no transfer of any asset. AO treat the said amount as revenue receipt and also causal and non-recurring nature.

Hon’ble ITAT held that the land has remained with the assessee and that the assessee in future may earn profits from the said land cannot be a ground to hold that the compensation received by the assessee in lieu of damage caused to the land was revenue receipt. Further, land is still owned by the assessee and there is no transfer of any asset. Therefore, compensation received by the assessee is not eligible for capital gain tax and cannot be said to be a revenue receipts.
Reliance was placed on the decisions of the Hon’ble Bombay High Court in the Case of Dr. (Ms) Avimay S. Hakim Vs ITO (supra)

(Please click here for judgment)


2.  Shri Ketan V. Shah Vs. ACIT, I.T.A. No. 2321/Mum/2013, Date of Order: 26.06.2015, ITAT – Mumbai

Addition cannot be made on the basis of presumption u/s 132(4) where loose paper was not found from the premises of the assessee nor was the assessee in possession of the said loose paper.

Merely by making additions of all the figures mentioned in a loose paper would not justify. The entire addition has been made on the presumption mentioned u/s. 132(4A) of the Act. The loose paper was not found at the premises of the assessee nor the assessee was in possession of the said loose paper Therefore, the provisions of Sec. 132(4A) of the Act is not applicable as the paper was not found from the possession of the assessee. AO also suggested that the addition have been made on protective basis so this is a protective assessment and same has been confirmed by first appellant authority. However, there is no reference about any case/assessee, in whose hands substantive additions have been made.

Hon’ble ITAT placed reliance on the judgment of the Hon’ble Allahabad High Court in the case of CIT Vs Smt. Durgawati Singh 234 ITR 249 where it was held that “It is settled that when there is a doubt as to which person amongst the two was liable to be assessed, parallel proceedings may be taken against both and alternative assessments may also be framed. It is also equally true that while a protective assessment is permissible, it is not open to the income-tax appellate authorities constituted under the Act to make a protective order.”

(Please click here for judgment)

 V.  A Useful Contribution:


Following GST related services free of cost on :

-          Regular GST sms updates;

-          Read updated news on GST on one page;

-          No overlapping news;

-          Read latest articles on GST;

-          See videos on GST;

-          Find/ Download government documents at one place

[ Contribution by CA. Rajat Mohan ]


VI.  Company Law & Other Matters:

1.  Raaj Kamal Film International Vs. Tamil Nadu Theatre Owners Association, Case No. 01 of 2013, Date: 16.01.2013, Competition Commission of India

Order under section 26(1) of the Competition Act, 2002 As per the fact OP was in the nature of an agreement among the members of the association and was intended to limit and control the market of exhibition of movies as well as innovative use of technical development in exhibition of feature films and thus, prima facie appeared to be in contravention of the provisions of Section 3 of the Act.

(Please click here for judgment)


 Golden Rules:

"Deep relationship is not built by forcing others to understand you,
but by giving them the confidence that you will never misunderstand them


  Thanks & Regards


Voice of CA

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