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19.02.2020 - Voice of CA presents - Useful Updates
Wednesday, February 19, 2020

  I. Headlines Today:   

  1. Finance Bill, 2020 - Provisions relating to Direct Taxes  (Click for detail)
  2. MCA: Filing of forms in the Registry by the Interim Resolution Professional (IRP) or Resolution Professional (RP) or Liquidator appointed under IBC, 2016  (Click for detail)
  3. CBDT revises definition of ‘Unauthorised Colony’ for the purpose exemption u/s 56(2)(x)  (Click for detail)
  4. Income Tax department issues notices to directors of defaulting firms  (Click for detail)
  5. CBDT notifies Form No. 10 IC & 10 ID for Companies who want to opt for lower tax regime u/s 115BAA & 115BAB  (Click for detail)
  6. Discussion Paper on amendment to Insolvency & Bankruptcy Board of India Regulation, 2016  (Click for detail)
  7. GST returns can now be filed in a staggered manner  (Click for detail)
  8. How investing in NPS can help you save tax  (Click for detail)

II. Direct Taxes Case Law: 

1.   PCIT Vs. Rishabhdev Tachnocable Ltd., I.T.A. No. 1330 of 2017, Date of order: 10.2.2020, Bombay High Court


Whether ITAT was justified in making addition to the tune of profit element in respect of bogus purchase?

Held: Yes


Assessee being a manufacturer of power controlling instrument cables and related items, filed its return of income for AY 2010-11. The case of assessee was selected for scrutiny. During the scrutiny proceedings Ld. AO received some information regarding bogus hawala entries and bogus purchase. Ld. AO noticed that assessee was one of the beneficiaries who received bogus purchase bills. Therefore Ld. AO considered the purchases made by assessee as bogus and disallow the entire purchases while completing the assessment u/s 144 of the Act. The assessee preferred an appeal before CIT(A) against the order of Ld. AO. CIT(A) held that AO has accepted the sales and GP declared in ROI, then the entire corresponding purchase could not be disallowed only the profit element embedded in the purchases would be subject to tax.


The hon’ble High Court placed reliance on the judgement of CIT Vs. Bholanath Polyfab Limited (355 ITR 290) and held that “that whether the purchases were bogus or whether the parties from whom such purchases were allegedly made were bogus was essentially a question of fact. When the Tribunal had concluded that the assessee did make the purchase, as a natural corollary not the entire amount covered by such purchase but the profit element embedded therein would be subject to tax.”
Appeal of revenue is dismissed

(Please click here for judgment)


III. Useful Articles:

1.  Madras HC: GST Interest on Net Tax Liability

     (Please click here)  

2.  Rajasthan HC allows bail application of a CA upon furnishing of personal bond

     (Please click here)  

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


Golden Rules:

  "Knowing is not enough;
we must apply!" 


Thanks & Regards


Voice of CA 

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