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20.07.2012 - Voice of CA Presents - Updates
Friday, July 20, 2012


    From the Desk of the Founder
CA Sanjay 'Voice of CA' Agarwal


CA {Member Name}  


I.  Today's News:   

  • Pranab Mukherjee's parting gift stumps PMO; Rs 20,000-cr compensation to states put on hold  (Click for detail)
  • AAR exempts Mauritius firm from capital gains tax  (Click for detail)
  • Tax evasion: Swiss government agrees to share group information  (Click for detail)
  • Rajiv Gandhi Equity scheme: Finance ministry ready with draft guidelines  (Click for detail)
  • MCA Invites Views/Suggestions on the Proposed ‘Multistate Societies Registration Bill, 2012’  (Click for detail) 


II.  Useful Case laws :

1.   M/S OMAXE LTD. Vs. ACIT & ANR, W.P. (C) No. 7975/2011, Date of Decision: 13/07/2012, High Court of Delhi

ITSC has passed a final order of settlement for an assessment year under Section 245D (4), then the AO has no jurisdiction to reopen any matter relating to that assessment year under Section 148 of the Act.

An assessment order passed by an Assessing Officer can be rectified or amended under Section 154 or Section 155 or reopened under Section 148 only by him, and by no other income-tax authority. Similarly, an assessment by way of settlement of a case, which is made by the ITSC, can be reopened only by the ITSC and that too only in certain circumstances. Applying this general principle that runs through the Act, an assessment by way of a settlement order passed by the ITSC cannot be reopened by a different authority, viz., the Assessing Officer.

The fact that the ITSC has not been designated as an “income-tax authority” under Section 116 of the Act makes the position „a fortiori‟. Section 147 of the Act does not employ language that permits him to do so, nor are the powers and orders of the ITSC made subject to the provisions of Section 147. Section 147 does not appear to fit into the general scheme of Chapter XIX-A, which has been held to be a self contained code by the Supreme Court in Brij Lal and Ors. v. CIT, Jalandhar, (2010) 328 ITR 477 (SC).

(Please click here for judgment)


2.  Shankar Trading (P) Ltd. Vs. CIT, ITA 53/2000, ITA 251/2007, ITA 253/2007, ITA 257/2007 & ITA 223/2002, Judgment pronounced on: 09.07.2012, High Court of Delhi

“Whether the provision of section 40A(2) of the Income Tax Act, 1961 is applicable in respect of the lease rent paid by the Assessee to M/s Mehta Charitable Pranjnalaya Trust?”


In CIT v. Venu Suresh Sanjay Trust: (1996) 221 ITR 649 (Madras), it was held that in the case of a discretionary trust, neither the trustees nor the beneficiaries can be considered as having come together with the common purpose of earning income. It was observed that the beneficiaries have not set up the trust and the trustees derive their authorities under the terms of the trust deed. Therefore, neither the trustees nor the beneficiaries come together for a common purpose, they are merely in receipt of income. It was further held that the mere fact that the beneficiaries or the trustees, being representative-assessee, are more than one, cannot lead to the conclusion that they constitute “an association of persons”. We, therefore, hold that since Mehta Charitable Trust is not “association of persons” within the meaning of Section 40(A)(2) of Income-tax Act, the aforesaid provision is not attracted to the transaction which is the subject-matter of these appeals and consequently lease rent was allowable as revenue expenditure.

(Please click here for judgment)


III.  Tender Info.:   

  • Food Corporation of India
    CA Firms for empanelment for accounting work
    (Click for detail)

Key of Success :

"Satisfaction is better than success. 
Success is a measure decided by others,
while satisfaction is a measure decided by us


Thanks for your valuable time


"Voice of CA"  

CA. Sidharth Jain, Co-Moderator  
CA. Mukesh K Bansal, Co-Moderator-FEMA 

CA. Avinash Gupta, Co-Moderator-International Taxation 


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