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30.12.2015 - Voice of CA presents - Updates
Wednesday, December 30, 2015

  I. Headlines Today    

  1. CBDT Circular No. 23: TDS u/s 194A of the Act on interest on fixed deposit made on directions of Courts  (Click for detail)
  2. CBDT Inst: Issuing Questionnaire in cases selected for scrutiny  (Click for detail)
  3. CBDT Inst: Scrutiny Assessments-some important issues & scope of scrutiny in cases seleced through Computer Aided Scrutiny Selection (CASS)  (Click for detail)
  4. Government seeks ideas from public for Budget 2016-17  (Click for detail)
  5. Govt. to amend patent rules  (Click for detail)
  6. Sebi eyes e-tail for mutual funds  (Click for detail)
  7. IRDAI extends deadline for micro insurance products till March 31  (Click for detail)
  8. Saudi Arabia stocks fall sharply on tax rises  (Click for detail)
II.  Direct Taxes Case Laws: 

1.  PR. CIT Vs. Bharti Overseas Pvt. Ltd., I.T.A. No. 802/2015, Date of Order: 17.12.2015, Delhi High Court

For purpose of disallowance u/s 14A of the Income Tax Act, 1961 r.w. Rule 8D(2)(ii), the amount of interest not attributable to the earning of any particular item of income, i.e., ‘common interest expenses’ would have to exclude both expenditures, i.e., interest attributable to tax exempt income as well as that attributable to taxable income.

Hon’ble High Court held that the object behind Section 14A is to disallow only such expense which is relatable to tax exempt income. Where the entire interest expenditure was incurred for earning either taxable income or exempt income, there was no interest amount which was not directly attributable to either the tax exempt or taxable income. Thus, in such case, no portion of interest really survives for allocation under Rule 8D (2)(ii).

(Please click here for judgment)


2.  Bridal Jewellery Mfg. Co. Vs. ITO, I.T.A. No. 4954/Del/2011, Date of Pronouncement: 18.12.2015, ITAT - Delhi

Whether exemption u/s 10A of the Income Tax Act, 1961 is available on undisclosed income surrendered during the survey proceeding u/s 133A of the Act?


The assessee, located in Noida Special Economic Zone (NSEZ), is engaged in manufacturing & export of Gold Jewellery and claims exemption u/s 10A of the Act. A survey u/s 133A of the Act was carried out consequent to which income was surrendered on account of excess gold found and some loose papers. During the assessment proceedings, assessee submitted that excess gold found was on account of wastage recovery and that is erroneously omitted to be entered in books. Hence income generated from such sale is eligible for exemption u/s 10A of the Act. However the AO denied the exemption on said income.

Hon’ble ITAT held that where the said income was directly related to the export business of the assessee, the same is entitled for deduction u/s 10A of the Act on the additions.

(Please click here for judgment)         

 Golden Rules:

  "If everyone is happy with you,
then surely you have made many compromises in your life.
And if you are happy with everyone,
then surely you have ignored many faults of others"


  Thanks & Regards


Voice of CA 

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