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12.01.2016 - Voice of CA presents - Updates
Tuesday, January 12, 2016


I.  A Useful Video: 

A Video on “GST - Overview, RNR, Open Issues by CA Bimal Jain 



Please click here for the Video


II. Headlines Today    

  1. Budget 2016: Tax analytics to help Centre in catching truants and under payers  (Click for detail)
  2. Professional tax for South Delhi  (Click for detail)
  3. Transfer pricing rules with wider ambit soon  (Click for detail)
  4. Sebi tightens debt investing norms for mutual funds  (Click for detail)
  5. RBI raises provisions for ‘yet to fail’ CDR accounts  (Click for detail)
  6. Time for tax paperwork  (Click for detail)
  7. Your money: A little care can save you from paying multiple bank charges  (Click for detail)
III.  Direct Taxes Case Laws: 

1.  DCIT Vs. D.R.S. Warehousing (North) I.T.A. No. 4354/DEL/2012 Date of Pronouncement: 16.12.2015, ITAT-Delhi

Whether the act of the AO of treating the warehousing receipts as rental income where assessee is in business of constructed warehouses for warehousing purposes, justified. 


The assessee is engaged in business of warehousing and treated warehousing charges received as business receipts. Whereas, the Ld. AO has contended that warehousing receipts are “Income from house property”.  The CIT (A) has held that since the income was earned by exploitation of commercial assets in form of warehouse treated as business income.

The Hon’ble Supreme Court has held “circumstances of the case in respect of letting of the properties has to be determined first” (Chennai Properties & Investments Ltd. vs. CIT Civil Appeal No. 4494 of 2004). In the case of assessee the ITAT by following principle arising out of the above judicial pronouncement, held that since leasing of warehouses is the primary business of the assessee, it has rightly treated the warehousing receipts as business receipts.

(Please click here for judgment)


2.  OSRAM India Pvt. Ltd. Vs. DCIT, I.T.A. No. 4052/Del./2015 Date of Pronouncement: 29.12.2015, ITAT-Delhi

Whether education cess can be levied in respect of tax liability computed at rate specified under DTAA entered by India with Germany, China and USA.


In brief, the assessee deducted TDS @ 10% on payment made to non-resident. Whereas, the AO has raised the demand @ 10.30% by contending that education cess @ 3% in addition to tax rates prescribed in DTAA entered by India with Germany, China and the United States of America (USA) should be treated as liability. The Ld. CIT (A) also upheld the same.

Hon’ble ITAT has placed reliance on DIC Asia Pacific Pte Ltd. v. Asstt. DIT (IT) [2012] 52 SOT 447 (Kol.) in which it was held that as per Article 2(1) of the applicable tax treaty provides that the taxes covered shall include tax and surcharge thereon and concluded that education cess is nothing but an additional surcharge,  it is only thereto induction that the education cess will also be covered by the scope of Article 2, more over the provisions of Article 11 and 12 must find precedence over the provisions of the IT Act and restrict the taxability, whether in respect of income tax or surcharge or additional surcharge-whatever name called, at the rates specified in the respective article. In the result appeal of the assessee is allowed.

Case referred:

(Please click here for judgment)

 Golden Rules:

  "Education is a better safeguard of liberty than a standing army"


  Thanks & Regards


Voice of CA 

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