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19.01.2016 - Voice of CA presents - Updates
Tuesday, January 19, 2016

I.  Direct Taxes Case Laws: 

1.  M/s. Ganapathy & Co. Vs. CIT, Civil Appeal No. 1964 of 2008, Date of Pronouncement: 18.01.2016, Supreme Court of India

Whether hon’ble High Court has the jurisdiction to consider certain undisputed additional facts, already on record, not considered by hon’ble ITAT during appellate proceedings?


In the given case, the Ld. AO during the assessment proceedings recorded some undisputed facts on the basis of which the Ld. AO disallowed the claims of the assessee. The same was upheld by the Ld. CIT (A). However, the Hon’ble ITAT allowed the claim of assessee considering the order passed by them in assessee’s own case in previous assessment year where similar facts were in question. The Hon’ble High Court disallowed the claim of assessee, after considering the facts brought on record during the assessment proceedings, which are independent of the facts considered by the hon’ble ITAT.

The Hon’ble Supreme Court upheld the order of High court stating that the Tribunal is the final fact finding authority and it is beyond the power of the High Court, in the exercise of its reference jurisdiction, to reconsider such findings on a reappraisal of the evidence and materials on record unless a specific question with regard to an issue of fact being opposed to the weight of the materials on record is raised in the reference before the High Court.

The appeal was dismissed.

(Please click here for judgment)

2.  Pr. CIT Vs. Facor Power Ltd., I.T.A. No. 1011/2015, Date of Judgement: 07.01.2016, High Court of Delhi

Whether the interest earned by way of temporary investment of surplus funds inextricably linked with the setting up of a power plant, prior to commencement of business, is revenue receipt and is taxable as “Income from other sources”?


The Assessee Company was in the process of setting up a power project for which additional share capital was raised from share holders. The amount was invested in FDRs for a temporary period till the orders for machineries were placed wherefrom various payments were made to the vendors. The Ld. AO treated the interest earned on FDRs as revenue receipt and assessed the same as income from other sources.

The Hon’ble High court relying on the judgement of Indian Oil Panipat Power Consortium Limited 315 ITR 255 (Delhi High Court) held that interest income was earned in a period prior to commencement of business and the money invested in the fixed deposit was inextricably linked with the setting up of the power plant hence it is in the nature of capital receipt liable to be set off against pre-operative expenses.

The appeal was dismissed.

(Please click here for judgment)  


II. Headlines Today    

  1. Easwar panel wants higher threshold & lower rates for TDS on bank deposits  (Click for detail)
  2. Govt. lays out road map for implementation of IndAs for banks and Insurance Cos.  (Click for detail)
  3. Sebi looking to lower expense charges for mutual funds  (Click for detail)
  4. Inputs for National Risk Assessment (NRA) Exercise  (Click for detail)
  5. Suggested Arbitration Clause for various Legal Documents  (Click for detail)

 Golden Rules:

  "Though no one can go back and make a brand new start,
but, anyone can start from now and make a brand new ending"


  Thanks & Regards


Voice of CA 

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