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09.10.2012 - Voice of CA Presents - Updates
Tuesday, October 9, 2012

I.  Useful Contrubition: 

1. [Contribution by Respected CA Bimal Jain Ji and contributor is available at ]

An article: Whether Cenvat credit on capital goods for which 50% credit was availed in 1st year, can be denied in subsequent year when the final product is exempted from duty?

(Please click here) 


 I.  Whats New:

  1. CBDT may waive off interest, penalty on retrospective tax: Chidambaram  (Click for detail) 
  2. No election year extravaganza: FM  (Click for detail) 
  3. Monthly Return for those who Pay Rs 25 lakh in Service Tax  (Click for detail) 
  4. SC Overrules Decision on Cheques  (Click for detail) 
  5. Minimum Wages Hiked in Delhi  (Click for detail) 

   II.  Useful Case Laws: 

1.  Manan Corporation Vs. ACIT, Tax Appeal No. 1053 of 2011, Dated: 03/09/2012, High court of Gujarat

Section 80-IB(10)(d) ceiling on commercial area inserted w.e.f. 1.4.05 does not apply to projects approved before that date

In view of the judgment of Bombay High Court in the case of Brahma Associates v. JCIT 333 ITR 289 (Bom) that w.e.f. 1.4.2005, deduction u/s 80-IB(10) would be governed by the restriction on commercial area imposed by clause (d) does not mean that even projects approved prior to 1.4.2005 would be governed by the said restriction. Neither the assessee nor the local authority responsible to approve the construction projects are expected to contemplate future amendment in the statute and approve and/or carry out constructions maintaining the ratio of residential housing and commercial construction as provided by the amended Act. The entire object of section 80-IB(10) is to facilitate the construction of residential housing project and if at the stage of approving the project, there was no such restriction in the Act, the restriction subsequently imposed has to be necessarily construed on a prospective basis and as applying to projects approved after that date.

(Please Click here for judgment)

2. Justice Sam P Bharucha Vs. ACIT, ITA No. 3889/Mum/2011, Date of pronouncement 25th, July 2012, ITAT - Mumbai

No Disallowance u/s 14A shall be made if there is no “live nexus” between expenditure & tax-free income

For making any disallowance u/s. 14A is to, AO firstly, examine the assessee’s claim of having incurred some expenditure or no expenditure in relation to exempt income, If the AO gets satisfied with the same, then there is no need to compute disallowance as per Rule 8D. It is only when the AO is not satisfied with the correctness of the claim of the assessee in respect of such expenditure or no expenditure having been incurred in relation to exempt income, that the mandate of Rule 8D will operate. In the instant case, the authorities below have directly gone to the second stage of computing disallowance u/s. 14A as per Rule 8D without rendering any opinion on the correctness or otherwise of the assessee’s claim in this regard. We, therefore, set aside the impugned order on this issue and restore the matter to the file of AO to re-compute disallowance, if any, in accordance with our above observations after duly examining the assessee’s claim in this regard.”

(Please Click here for judgment)


  Golden Rules:

"'Time', 'Health' and 'Good Relation'. 
In teenon par kimat ka label nahin laga hota.
Par jab hum innhen kho dette haen, 
Tab innki sahi 'Kimat' ka ehsaas hota hai


  Thanks & Regards

  Team - Voice of CA 




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