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02.09.2015 - Voice of CA presents - Updates
Wednesday, September 2, 2015

I. Headlines Today:    

  1. Press Release: CBDT has extended date for E-filing returns of income to 7th September 2015 in respect of all taxpayers who were required to E-file their returns of income by 31st August 2015  (Click for detail)
  2. Finance Minister: Centre will permit state govts to amend 2013 Land Act  (Click for detail)
  3. Tax dept to soon notify changes in scrutiny process to help honest taxpayers  (Click for detail)
  4. RBI issues draft norms for marginal cost computation  (Click for detail)
  5. ICAI: Empanelment of Members to act as Observers at the Examination Centres for The Chartered Accountants Examinations November / December 2015  (Click for detail)


II.  Series of Synopsis on SA:

1.  In continuation of our mail of August 27, 2015 [Click for 27.08.2015 - Updates], with which Synopsis on SA 230, among others, was sent, attached now – 6th in the captioned Series - is the Synopsis on SA 240 The Auditor’s Responsibilities Relating to Fraud in An Audit of Financial Statements.
III.  A Useful Presentation:

Tax Audit - U/S 44AB of Income Tax Act, 1961
IV.  Direct Taxes Case Laws:

1.  CIT Vs. Edward Keventer (Successors) Pvt. Ltd., I.T.A. No. 489/2014, Date of Order: 20.08.2015, High Court of Delhi

Whether the transactions of transfer of properties resulted in capital gains or business income in the hands of the assessee, where the properties were initially purchased with the object of dairy farming and for production of milk, however the venture never took off, because the requisite permission for the same was not given by the New Delhi Municipal Council.

High Court and Tribunal both upheld the Decision of CIT(A) granted in favour of assessee, The CIT(A), after examining the case law, which was presented before him, and also facts of the case, came to the conclusion that the intention of the assessee, at the time of purchase of the property in 1952 was to establish a dairy farm in which it would produce milk. The said property was held as an asset and shown as a fixed asset in the books of the assessee from 1952 onwards. The CIT (A) also observed that no contrary fact had been brought on record by the Assessing Officer and that successive assessments from the date of purchase of the land accepted the treatment of the asset as a fixed asset in the books of the assessee. The CIT (A) also observed that there had been no sale or purchase of land by the assessee throughout all these years from 1952 except for the two transactions, which are subject matter of the present appeal. The CIT (A) held that the original intention of the assessee in purchasing the property was clear which was to hold it as a fixed asset.

Finally, the CIT (A) concluded that he had no hesitation in holding that the two residential bungalows sold on 27.05.2005 to the existing occupiers of the same by   the assessee, would result only in long term capital gain and not in any income under the head of business.

(Please click here for judgment)


2.  CIT Vs. M/s Sunder Forging, I.T.A. No. 242 of 2012, Date of Decision: 30.07.2015, High Court of Punjab and Haryana

Whether the Hon’ble ITAT was right in allowing the deduction u/s 80IB during the year under consideration i.e. 2007-08 when the assessee lost the status of Small Scale Industrial Unit in the previous year and even did not claim deduction u/s 80IB in the A.Y. 2006-07?

Held Yes

That once an assessee is entitled to a deduction under Section 80-IB, the assessee is entitled to the same for ten consecutive years. Sub-section (3) of Section 80-IB entitles the assessee to the deduction “for a period of ten consecutive assessment years …….”. The deduction is subject to the assessee’s fulfilling the conditions mentioned therein. It is not contended that the assessee has not fulfilled the conditions stipulated in clause (ii) of sub-section (3). Sub-section(3) does not provide that in the event of the assessee subsequently not being a small scale industry within the meaning of Section 80- IB(14)(g), the assessee would cease to be entitled to the deduction. There is nothing in the section that persuades us to imply such a condition even assuming we are entitled to do so. Had that been the intention, the legislature would have undoubtedly specified the same.

(Please click here for judgment)

 Golden Rules:

Golden rules for a happy life:
"Be honest when in trouble.
Be simple when in wealth.
Be polite when in authority and
be silent when in anger"


  Thanks & Regards


Voice of CA

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