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21.03.2012 - Voice of CA Presents - Updates
Wednesday, March 21, 2012


I.  Useful Case laws:

1.   Union of India Vs. Vodafone International Holding (Supreme Court), Review Petition (C) NO. 458 of 2012 in Civil Appeal No. 733 of 2012, Date of Order: 20.03.2012

In consequent of dismissing the review petition in the Vodafone's tax case by Supreme Court Law, the government will have to refund money (about Rs 2,500 crore and interest) to the firm.

The curative petition is the last judicial remedy available with the government.

The Government, meanwhile, has proposed amendment in the Income Tax Act, under which such overseas mergers and acquisition would be taxed retrospectively from 1962.

Under the proposed amendment to the I-T Act, whether resident or non-residents having business connection in India will be required to deduct tax at source and pay it to the government even if the transaction is executed on a foreign soil.

"We should not confuse Finance Bill with this (dismissal of review petition). Finance Bill has independent existence. It is retrospective. It stands on own merit and when Finance Bill be passed will create a new situation," the Law Minister (Salman Khurshid) said.

(Please click here for judgment)


2.   Shri Shreyas S. Morakhia Vs. CIT, I.T.A No. 89/2011, Date of Judgment: 28/02/2012, High Court of Bombay


Whether share broker, is entitled to deduction by way of bad debts under Section 36(1)(vii) read with Section 36(2) of the Income Tax Act, 1961 in respect of the amount which could not be recovered from its clients in respect of transactions effected by him on behalf of his clients apart from the commission earned by him.


Section 36(2)(i) provides that a deduction on account of a bad debt can be allowed only where such debt or part thereof has been taken into account in computing the income of the assessee.

The brokerage having been credited to the profit and loss account of the assessee, it is evident that a part of the debt is taken into account in computing the income of the assessee. The fact that the liability to pay the brokerage may arise, as contended by the Revenue, at a point in time anterior to the liability to pay the value of the shares transacted would not make any material difference to the position. Both constitute a part of the debt which arises from the very same transaction involving the sale or as the case may be purchase of shares. Since both form a component part of the debt, the requirements of Section 36(2)(i) are fulfilled where a part thereof is taken into account in computing the income of the assessee.

(Please click here for Judgment)


3.  M/s. Catholic Relief Services Vs. ACIT, ITA No. 2742 to 2744/Del /2011, Date of pronouncement 13/01/2012, ITAT- DELHI

The AO passed an order dated 27.4.2010 u/s 201(1) / 201(1A) for FYs 2002-03, 2003-04 and 2004-05 in respect of TDS on salary & perquisites of expatriate employees. Assessee argued that as the order was passed after 4 years from the end of the FY, it was barred by limitation. On appeal by the department, HELD dismissing the appeal.

Section 201(3) inserted by the FA 2009 w.e.f. 1.4.2010 imposes a time limit for the passing of section 201 orders. The Proviso to section 201(3) provides that an order for a financial year commencing on or before 1.4.2007 may be passed at any time on or before 31.3.2011. In the present case, the proceedings were initiated after the search on 16.11.2009. On this date, the amended provisions of section 201 (3) had not come into force. The section 201 order was consequently beyond limitation. 

(Please click  here for Judgment)


 4.   Vodafone Not Liable Under Retrospective Law

A useful article by Shri. S. E. Dastur, eminent Senior Advocate

(Click here for detail)


I.  Today's Topline News :   

  1. Central Excise Noti. No. 19 - Pan Masala Packing Machines (Capacity Determination and Collection of Duty) Second Amendment Rules, 2012  (Click for detail)
  2. Central Excise Noti. No. 20 Amended-Exemption to Articles of jewellery & Articles of goldsmiths’ or silversmiths’ wares of precious metal  (Click for detail)
  3. FEMA : Investment in Venture Funds by Foreign Venture Capital Investors  (Click for detail)
  4. FEMA : Prior Intimation to RBI for raising Limits for Investments by FII's & NRI's  (Click for detail)
  5. RBI - Special Clearing on March 31, 2012, dated 20.03.2012  (Click for detail)


III.  Tenders Info. : 
  1. Punjab State Co-operative Milk Producer Fedration Ltd.
    CA firm for Carrying out System and Internal Audit
    (Click for detail)

  2. DR S. Radhakrishnan Shiksha Samiti
    Engagement of CA Firm as Internal Auditor
    Bhiwani - Haryana
    (Click for detail)


Key of Success :

"Your pain may give laugh to somebody
but keep it in your mind that your laugh
should not give pain to anybody


Thanks for your valuable time


"Voice of CA"  

CA. Sanjay Kumar Agarwal
Founder - Voice of CA 
Mob : 9811080342,      
CA. Sidharth Jain, Co-Moderator 
CA. Mukesh K Bansal, Co-Moderator-FEMA 

CA. Avinash Gupta, Co-Moderator-International Taxation 


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