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25.09.2015 - Voice of CA presents - Updates
Friday, September 25, 2015

I. Headlines Today:    

  1. PIB: Government Decides to Amend Income Tax Act to exempt foreign firms covered by DTAAs  (Click for detail)
  2. CBDT to issue pre-filled ITR forms to ease e-filing  (Click for detail)
  3. States Seek Right to Tax B2B Transactions  (Click for detail)
  4. Stressed firms: Banks get more leeway to change ownership  (Click for detail)
  5. RBI directs concurrent auditors to submit reports directly to banks  (Click for detail)
  6. Reserve Bank restructures loan rescue rules  (Click for detail)
  7. SEBI notifies format of compliance report on corporate governance  (Click for detail)
II.  Direct Taxes Case Laws:

1.  Commissioner of Income Tax Vs. Ms. Megha Dadoo, I.T.A. No. 23 of 2011, Date of Order: 17.03.2015, High Court of Himachal Pradesh

Whether the process of cutting of stainless steel pipes of larger size with electric cutter and including painting and welding of pipes amounts to manufacture or production?

Held Yes.

The Tribunal has held that the raw material procured and the finished products produced by the assessee are not known in the market by the same name. In fact, there are different brand names and different uses/applications. Even though main component of the end product would be stainless steel pipe, however, only when other components are used in the manufacturing process, the final product, so manufactured and marketed by the assessee, is produced. Without the use  of other raw products, the finished product cannot be produced or marketed. Also, with the consumption of the raw material, the end product cannot be put back in the same original condition. Even in terms of its value, combined price of raw materials used to produce the finished product, is lower than the price of the finished product. These findings of fact, after having perused the record and heard learned counsel for the parties, we find to be in no manner perverse or erroneous, warranting interference. In fact, we are in agreement with the opinion so rendered by the Tribunal.

(Please click here for judgment)


2.  Commissioner of Income Tax Vs. Rakesh Mahajan, I.T.A. No.55 of 2009, Date of Order: 09.09.2015, High Court of Himachal Pradesh

Whether the accounts maintained by the Assessee were incorrect and incomplete in terms of section 145(3) of the Income Tax Act, when it was not possible to verify from such accounts whether any unvouched expenses relating to one business, profits from which were declared on estimate basis, have actually been debited in the accounts of another business ?

Held Yes

It cannot be disputed that what is taxable under the Act is the real accrued or arisen income and irrespective of the method of accountancy adopted by the assessee, in case a true picture of the profits and gains, that is to say, the real income is disclosed, then the same ought not to be ordinarily disturbed. In such circumstances, the Department is bound by the assessee’s choice of method regularly employed, but then in case by this method, the true income or profit of accounts cannot be arrived at, then the A.O. had every reason to invoke Section 145 of the Act in order to work out the real income and thereby deduce the profit and gain therefrom. As already observed earlier, the A.O. had given cogent reasons for not accepting the accounts. Though, these findings were set aside by the ITAT, but then even the ITAT did not conclude that the method of accountancy as employed by the assessee was in any manner correct. In absence of such findings, the order passed by the ITAT cannot be sustained.

(Please click here for judgment)  

III.  Company Law & Other Matters:

1.  Kamal Kumar Gupta Vs. Indus Marine Pvt. Ltd., C.P. No. 38 of 2013, Date of Judgment: 11.12.2013, Company Law Board - Mumbai

Under section 614 read with Section 303(2) of Companies Act 1956

As per Board the said prayer is vague in case  petitioner award a company a sum of Rs. 10 Lacs as compensation for the mental agony that he suffered on account of non-filing of E-form 32 and it does not fall within the ambit and scope of the provisions contained in section 614 of the Act. Therefore, the said prayer is liable to be rejected.

(Please click here for judgment)


2.  Dr. Pushpa Mohindra Vs. Sarvatra Road Runners Pvt Ltd., C.P. No. 122(ND)/2011, Date of Order: 23.11.2012, Company Law Board - New Delhi

In the matter of U/s 111, 397, 398, & 399 of the Companies Act 1956

Prayer for rectification is premature in case the petitioner is required to move an appropriate application before the Company and it is only on refusal by the Company that it is open to the petitioner to make such parayer U/S111.

(Please click here for judgment)  


IV.  Reported Cases:

Direct Taxes Segment:

1.  Assessing Officer was not justified in working out claim of remuneration payable to partners after excluding interest income, where assessing officer stated that a part of interest income was in nature of non-business income and taxable under head 'income from other sources' but no such adjustment had been made by him while computing income from business.
(Please click here for detail)


3rd Global Tax Summit:

1.   The Confederation of Indian Industry (CII) is organizing its day long 3rd Global Tax Summit.  This is on Thursday, 8 October 2015 at Shangri-La’s, Eros Hotel, New Delhi. The topics to be deliberated at the Summit are as follows:


·       Spillovers of the Global Tax changes-How is India keeping pace

·       Global controversy trends and emerging ADR mechanisms-The road ahead

·       Tax reforms for a competitive India Inc.-The need of the hour

·       The Indirect Tax reforms agenda-Challenges and way forward

 You may click the link given below for the detail:



 Golden Rules:

  "  Reflection Cannot Be Seen In Boiling Water.
The Same Way, Truth Cannot Be Seen In A State Of Anger.
We should 'Analyze' Before 'Finalize’  "


  Thanks & Regards


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