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22.02.2016 - Voice of CA presents - Updates
Monday, February 22, 2016

I. Headlines Today    

  1. Expect structural reforms on tax administration  (Click for detail)
  2. Revenue effort to be backed by tax reforms  (Click for detail)
  3. Time to change meaningless income tax exemptions  (Click for detail)
  4. After Vodafone notice, retrospective tax now back on government agenda  (Click for detail)
  5. Fighting black money: I-T dept to mine PAN data, trace fund flow trail  (Click for detail)
II.  Direct Taxes Case Laws: 

1.  M/s. Wipro Ltd. Vs. ITO, I.T.A. No. 1547/Bang./2013, Date of Pronouncement: 12.02.2016, ITAT -  Bangalore

The provisions of Section 206AA of the Income Tax Act, 1961 does not override the provisions of DTAA which is more beneficial to the assessee even though Section 206AA of the Act begins with “Non-Obstante Clause” overriding all other provisions of the Act.


The assessee has filed its quarterly E-TDS returns in Form No.27Q in respect of the payment to non-residents. AO found the same as incorrect on the basis that the assessee has not furnished PAN of the non-resident recipients and made an adjustment u/s. 200A  of the I.T. Act 1961 by applying the rate of tax at 20% on account of short deduction of TDS by the assessee.

Hon’ble ITAT held that in case of non-residents, tax liability in India is liable to be determined in accordance with the provisions of the Act or the relevant DTAA, whichever is more beneficial to the assessee.  Thus, there is no scope for deduction of tax at the rate of 20% as provided under the provisions of Section 206AA of the IT Act when the benefit of DTAA is available. It was further held that the question of computing the rate of 20% u/s 206AA of the Act is a debatable issue when the recipient is eligible for the benefit of provisions of DTAA and therefore the AO cannot proceed to make the adjustment while issuing the intimation under Section 200A. This is beyond the scope of the said provisions.
In the result, the appeals of the assessee are allowed.

(Please click here for judgment)

2.  CIT Vs. Sunil Aggarwal, I.T.A. No. 224 of 2003, Date of Order: 02.11.2015, Delhi High Court

Additions made on the basis of Statement recorded u/s 132(4) of the Income Tax Act, 1961 during the course of search proceedings is not justified where the Statement was retracted during the assessment proceedings and proper explanation and submissions were made to substantiate the retraction.


In the given case, search operation was conducted at various premises of the assessee. During the course of search proceedings, statement u/s 132(4) of the Act was recorded in which the assessee stated that the seized cash belongs to him and it is part of his undisclosed income. But during the course of assessment proceedings before ld. AO he retracted his statement and provided detailed explanation and submissions stating that particular amount was already disclosed in the books of account. He stated that statement was given under mental pressure and without verifying the books of account. The Ld. AO made the addition on the basis of statement recorded without appreciating the explanation offered by the assessee. On appeal before Hon’ble ITAT, claim of the assessee was allowed and additions were deleted.

The hon’ble High Court upheld the decision of hon’ble Tribunal stating that it was unsafe for the AO to make additions solely on the basis of the statement made under Section 132(4) of the Act without examining the explanation offered by the Assessee, which was subsequently retracted.

(Please click here for judgment)      

III. Useful Updates: 

1.  Some important Judgments of Central Excise

(Please click here for detail)  

2.  An Article - "No bar on admissibility of Cenvat credit either as Inputs or Capital goods at any stage of proceedings"

(Please click here for detail)  

[Contribution by CA. Bimal Jain; contributor is available at eMail-id:]


IV. A Useful Article: 

"Relief to the Exporters: Refund of Service Tax on expenses incurred beyond factory gate"

(Please click here for detail)

[Contribution by CA. Ashish Chaudhary and contributor is available at eMail-id:]


 Golden Rules:

  "If you stand for a reason,
be prepared to stand like a tree.
If you fall on the ground,
fall like a seed that grows back to fight again"


  Thanks & Regards


Voice of CA 

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