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08.08.2018 - Voice of CA presents - Latest Updates
Wednesday, August 8, 2018

  I. Headlines Today:   

  1. Modi govt introduces four Bills in the Lok Sabha to simplify GST returns  (Click for detail)
  2. Modi govt raises import duties on 328 textile products up to 20%  (Click for detail)
  3. CBDT notifies ‘Central Economic Intelligence Bureau’ for furnishing specified information u/s 138  (Click for detail)
  4. Over 200,000 'non-filers' filed ITR in FY18, paid Rs 64-bn tax  (Click for detail)
  5. Action on those Converting Black Money into White during Demonetization  (Click for detail)
  6. Govt issues notices to 272 firms for non-compliance with CSR norms  (Click for detail)
  7. Government appoints S Gurumurthy, Satish Marathe as part-time directors on RBI board  (Click for detail)
  8. Govt. may clip wings of wilful defaulters soon  (Click for detail)
  9. Govt. may bring next draft of e-commerce policy in 10 days  (Click for detail)
  10. IMF says India's economy is an elephant that's starting to run, flags risks  (Click for detail)

II. A Useful Presentation:

1.  Recent Amendments  in Form 3CD
     Applicable for A.Y. 2018-19 w.e.f. 20-08-2018
     [Notification No. 33/2018 dated 20/07/2018]

     (Please click here)

(Contribution by CA. Sanjay K. Agarwal, Founder - Voice of CA; and contributor is available at Email-id: )

  III. Direct Taxes Case Law: 

1.  Omkara Impex & Merchandise P. Ltd. Vs. ITO, I.T.A. No. 984/Ahd/2015, Date of Pronouncement: 20.06.2018, ITAT - Ahemdabad

Whether bill discounting charges paid can be considered as “Interest paid” for the purpose ofdeduction of tax at source u/s 194Aof Income Tax Act’1961.

Held: No.

Brief Facts:
The assessee is a limited company engaged in the business of trading of construction materials. The assessee in its P/L A/c has claimed an expense under the head “Interest on finance” for Rs. 21,62,634/- as discounting charges paid to L&T Finance Co. The Ld.AO treated the expense as “Interest paid” and consequently disallowed the expense on account of non-deduction of tax u/s 194A. On appeal, the assessee put forth the fact that L&T has already paid the tax thereon on said income and assessee can’t be termed as "assessee in default",however, Ld.CIT(A) rejected the same stating that 2ndProviso to Sec 40(a)(ia) is prospective in nature and not applicable for the year under consideration. Being aggrieved, the assessee has filed an appeal before the Hon’ble ITAT.

The Hon’ble ITAT by placing reliance on judgement of Hon’ble Delhi High Court in the case of PCIT vs. M. Sons Gems N. Jewellery Pvt. Ltd. held that “discounting charges” are outside the purview of definition of “Interest” as contemplated in Sec 2(28A) of the Act, therefore question of making any dis-allowance on account of such “discounting charges” doesn’t arise. Moreover,a clarification was given by Hon’ble ITAT stating that 2nd Proviso to Sec 40(a)(ia) though introduced as being prospective in nature was held to be “retrospective” in operation on the basis of recent decision of Hon’ble Delhi High Court in case of CIT Vs CIT v. Ansal Land Mark Township (P) Ltd.
Therefore, the appeal was held in favour of assessee and against the revenue.
Cases Referred:-
1.    CIT v. Ansal Land Mark Township (P) Ltd. (2015) 61 45(Delhi High Court).
2.    PCIT vs. M. Sons Gems N. Jewellery Pvt. Ltd 69 373 (Delhi High Court).

(Please click here for judgment)

Golden Rules:

  "Negative thoughts and tensions are like birds.
We can't stop them from flying  around us
but we can certainly stop them from making a nest in our mind" 


Thanks & Regards


Voice of CA 

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