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24.03.2012 - Voice of CA Presents - Updates
Saturday, March 24, 2012


I.  Useful Article & Analysis :   

1.  [ Contribution by  CA Jatin Prashnani, and contributor is available at email-id: ]

An Article on 'Computation of SENSEX'

(Please click here for detail) 


2.  [ Contribution by  CA Puneet Goyal, and contributor is available at email-id: ]

Analysis of BUDGET – 2012

(Please click here for detail)

Service Tax Rules, 1994 & Point of Taxation Rules, 2011

(Please click here for detail)


II.  Useful Case laws:

1.   Ganesh Housing Corporation Ltd. Vs. DCIT, Special Civil Application No. 15067/2011, Date: 12/03/2012, High Court of Gujarat


Whether reopening of assessment 147, even within 4 years, on basis of retrospective amendment to section 80-IB (10) valid.


As regards the retrospective amendment, if an Explanation is added to a section for the removal of doubts, the implication is that the law was the same from the very beginning and the same is further explained by way of addition of the Explanation. It is not a case of introduction of a new provision of law by retrospective operation. 

Assessee had placed all the material before the Assessing Officer and where there was a doubt even that was clarified by the assessee in its letter dated November 8, 1995. If the Assessing Officer, while passing the original assessment order, chose not to give any finding in this regard, that cannot give him or his successor in office a reason to reopen the assessment of the assessee or to contend that because the facts were not considered in the assessment order, a full and true disclosure was not made. Since the facts were before the Assessing Officer at the time of framing the original assessment, and later a different view was taken by him or his successor on the same facts, it clearly amounts to a change of opinion. This cannot form the basis for permitting the Assessing Officer or his successor to reopen the assessment of the assessee.”

(Please click here for Judgment)


2.   Basu Distributor Pvt. Ltd. Vs. ACIT, ITA No. 56/2011, Date of Decision: 06/02/2012, High Court of Delhi

Section 40A (3): Financial crises may be “exceptional or unavoidable circumstance” for cash payment.

The assessee made payments exceeding Rs. 10,000 in cash and claimed that a disallowance u/s 40A(3) read with Rule 6DD(j) & Circular No.220 dated 31.05.1997 could not be made as a payment by cheque etc was not possible due to “exceptional or unavoidable circumstances” etc.

Section 40A (3) & Rule 6 DD (j) have been incorporated in the Act to check the incurring of bogus and fictitious expenses to non existing parties. In the present case, there is no dispute on the identity of the payee and genuineness of the transaction. The only question is whether the assessee has been able to establish “exceptional or unavoidable circumstances” why the payment made in cash. The assessee was not doing well in its business and was facing liquidity and financial crunch. The assessee’s explanation that payments were made in cash as preparation of a bank draft or issue of cheque would have resulted in a missed opportunity or failure of a good business deal with third parties is acceptable because there were earlier cases of bounced cheques and when a party is facing liquidity problem, it can get difficult as third parties are reluctant to accept cheque and insist on cash payments. Arranging funds is also a problem and not easy. Also, the cash was obtained from a known party and the AO had not made any addition on that score. Accordingly, disallowance u/s 40A (3) was not justified.

(Please click here for Judgment)


III.  Today's Topline News:   

  1. Rectification Manual - Submission of online request for rectification of section 143(1) intimation  (Click for detail)
  2. Co. Law Cir No. 06 - Constitution of a Committee to formulate a Policy Document on Corporate Governance  (Click for detail)
  3. Attention- All Unexempted Establishments Covered under EPF  (Click for detail)
  4. Cheques, drafts to be valid only for 3 months from April 01  (Click for detail)


IV.  Tenders Info.: 
    Internal Audit of Revenue Accounts for the year 2009-10
    Patiala - Punjab
    (Click here for detail)


Key of Success :

"Don't be upset if you choose wrong people sometimes
because without choosing them you will never know
The True Value of the Right Ones


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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