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05.04.2016 - Voice of CA presents - Updates
Tuesday, April 5, 2016


I. Headlines Today    

  1. ITR 1 and ITR 4S for AY 2016-17 are now available for E-filing.
  2. New Forms 15CA, 15CB, 15CC are available for E-filing.
  3. Online filing of Appeal before Commissioner (Appeal) using newly Notified Form 35 has been enabled for taxpayers mandated to E-file their returns using DSC.
  4. Filling new income tax return forms could prove challenging  (Click for detail)
  5. Individual e filing of ITRs Likely to Begin Earlier  (Click for detail)
  6. Release of new functionality for taxpayers to secure their E-filing account  (Click for detail)
  7. BoB’s move to change concurrent auditors stirs hornet’s nest  (Click for detail)
  8. Panama Papers leak triggers tax evasion probes across the world  (Click for detail)
  9. ICAI: Announcement - Responding to Tenders  (Click for detail)
II.  Direct Taxes Case Laws: 

1.  CIT Vs. M/s Kotak Securities Ltd., Civil Appeal No. 3141 of 2016, Date of Decision: 29.03.2016, Supreme Court of India

Whether transaction charges paid by a member of the Bombay Stock Exchange for sale and purchase of shares amounts to payment of a fee for technical services?


Brief Facts:
In the present case, the High Court of Bombay has held that the transaction charges paid by a member of the Bombay Stock Exchange to transact business of sale and purchase of shares amounts to payment of a fee for 'technical services' rendered by the BSE, thus, deducting the TDS u/s 194J of the Income Tax Act, 1961. The said deductions not having been made by the assessee, the entire amount paid to the BSE on account of transaction charges was not deducted u/s 40(a)(ia) of the Act in computing the income under “profits and gains of business or profession” AY 2005-06. Notwithstanding the above, the Bombay High Court held with regard to the liability to deduct TDS on transaction charges paid to the BSE right from the year 1995 i.e. coming into effect of Section 194J till the AY in question, benefit, in the facts of the case, should be granted to the assessee and the disallowance made by the AO u/s 40(a)(ia) of the Act must be held to be not correct.

The Hon’ble Supreme Court held that there is no exclusivity to the services rendered by the Stock Exchange and each and every member has to necessarily avail of such services in the normal course of trading in securities in the Stock Exchange. Such services, therefore, would undoubtedly be appropriate to be termed as facilities provided by the Stock Exchange on payment and does not amount to “technical services” provided by the Stock Exchange, not being services specifically sought for by the user or the consumer. It is the aforesaid latter feature of a service rendered which is the essential hallmark of the expression “technical services” as appearing in Explanation 2 to Section 9(1)(vii) of the Act. The view taken by the Bombay High court that the transaction charges paid to the BSE by its members are for technical services rendered is not an appropriate. Thus, No TDS on such payments would be deductible u/s 194J of the Act.

(Please click here for judgment)

2.  Nirmal Kumar Jain Vs. ITO, I.T.A. Nos. 6696 & 6645/Del/2014, Date of Order: 02/03/2016, ITAT - Delhi

Whether provisions of Section 271B & 271(1)(c) of the Income Tax Act, 1961 can be invoked in case where assesse does not maintain books of accounts?


Brief Facts:
The assessee is an individual who filed return declaring total income inclusive of salary and interest from two partnership firms. The AO called for information u/s 133(6) from four bank accounts in which deposits were made by the assessee totaling to Rs.1.43 crore. When AO asked for the books of account, the assessee stated that no such books were maintained so, he estimated the assessee’s sales outside books of account at Rs.1.50 crore. By applying estimated profit rate of 5% on such sales, he made an addition of Rs.7.50 lac. Thereafter, the AO imposed penalty u/s 271B and also u/s 271(1)(c) of the Act.

It was held that penalty u/s 271B ought not to have been levied. Hon’ble ITAT held that penalty u/s 271B should be deleted on the basis of judgment of Hon’ble Gauhati High Court in Suraj Mal Parasuram Todi vs.CIT (1996) 222 ITR 691 (Gau.), that where no books of account are maintained, penalty should be imposed for non-maintenance of books of account u/s 271A and no penalty can be imposed u/s 271B for violation of section 44AB requiring audit of accounts.

As for the imposition of penalty u/s 271(1)(c), ITAT follow the decision of Hon’ble Delhi high court in case of CITvs. Aero Traders P. Ltd. (2010) 322 ITR 316 (Del) and held that the addition has resulted on estimation of income and cannot be considered as concealment, so, there is no basis for imposition of penalty. Therefore, ITAT ordered for deletion of penalties.

(Please click here for judgment)

III. Useful Article:

1.  Union Budget 2016: Important changes in Excise & Customs effective from April 1, 2016

(Please click here for detail)

(Contribution by CA. Bimal Jain and contributor is available at eMail-id:


 Golden Rules:

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


  Thanks & Regards


Voice of CA 

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