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02.07.2012 - Voice of CA Presents - Updates
Monday, July 2, 2012

Free Webinar : XBRL Reporting at MCA : Lessons Learnt & Challenges Ahead
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I.  Today's News:   

  1. VAT Circular No. 5 – Online submission of information regarding Central Declaration form  (Click for detail) 

  2. VAT Circular No. 4 – All registered dealers who filed half yearly or yearly returns till last year will be required to file quarterly returns  (Click for detail)

  3. Central Excise Noti. No. 28 - Power Projects-, in the ANNEXURE, in Condition No. 42 & 43, for the words “Fixed Deposit Receipt”, the words “Fixed Deposit Receipt or Bank Guarantee” substituted  (Click for detail)

  4. E-filing of I-T returns expected to double this fiscal  (Click for detail)

  5. RBI Circular No. 137 - Foreign Investment in India -Sector Specific conditions  (Click for detail)

  6. Stamp Paper Discontinued  (Click for detail)

  7. Ethical Standards Board of ICAI has Launched its Website  (Click for detail)


II.  Master Circulars on:   

  1. Import of Goods and Services  (Click for detail)

  2. Compounding of Contraventions under FEMA, 1999  (Click for detail)

  3. Establishment of Liaison / Branch / Project Offices in India by Foreign Entities  (Click for detail)

  4. Acquisition and Transfer of Immovable Property in India by NRIs/PIOs/Foreign Nationals of Non-Indian Origin  (Click for detail)

  5. Remittance Facilities for Non-Resident Indians / Persons of Indian Origin / Foreign Nationals (Click for detail)


III.  Useful Case laws:

1.    DIC Asia Pacific Pte Ltd Vs. ADIT, ITA No. 1458/Kol/2011, Date of pronouncing the order: 20/06/2012, ITAT- Kolkata


Whether the levy of ‘education cess’ and ‘higher education cess’ at the rates of 2% and 1% respectively, in addition to the tax rates prescribed in the India Singapore Double Taxation Avoidance Agreement is valid ?

Held that Article 2(1) of the applicable tax treaty provides that the taxes covered shall include tax and surcharge thereon. Once we come to the conclusion that education cess is nothing but an additional surcharge, it is only corollary thereto that the education cess will also be covered by the scope of Article 2. Accordingly, the provisions of Article 11 and 12 must find precedence over the provisions of the Income Tax Act and restrict the taxability, whether in respect of income tax or surcharge or additional surcharge – whatever name called, at the rates specified in the respective article. In view of the specific provisions to the effect that the scope of Article 2 shall also cover “any identical or substantially similar taxes which are imposed by either Contracting State after the date of signature of the present Agreement in addition to, or in place of, the taxes referred to in paragraph 1”, and in view of the fact that education cess is essentially of the same nature as surcharge, being an additional surcharge, the scope of article 2 also extends to the education cess. For the reasons set out above, we are of the considered view that the education cess cannot indeed be levied in respect of tax liability of the appellant company.

(Please click here for judgment)


2.  Avshesh Mercantile P. Ltd Vs. DCIT, ITA No. 5779/Mum/2006, Date of Pronouncement: 13/06/2012, ITAT- Mumbai

Whether premium paid on fully convertible notes was expenditure incurred in respect of tax-free income and deduction could not be allowed u/s 14A.

Though the proceeds of the premium notes on which the redemption premium was paid had been invested in the shares/debentures of RUPL and although the dividend income and LTCG from the said investment was exempt u/s 10(23G), the premium cannot be regarded as expenditure incurred exclusively in relation to earning of exempt income so as to invoke s. 14A because the said investment had the potential of generating taxable income in the form of STCG etc; Further, as no taxable income was actually earned by the assessee, disallowance u/s 14A was not sustainable. 

(Please click here for judgment)


Key of Success :

"Forgiveness is an example of great revenge,
tolerance is an example of great power 
and politeness is an example of great heart


Thanks for your valuable time


"Voice of CA"  

CA. Sanjay 'Voice of CA' Agarwal
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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