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21.12.2012 - Voice of CA Presents - Updates
Friday, December 21, 2012

I.  Headlines Today: 



  IITender Info.:

  1. Sports Authority of India
    Preparation & Compilation of Annual Accounts
    Lodhi Road, New Delhi
    (Click here for detail)
  2. MTNL
    CA firms for Review & Advice on Allocation of Overheads to Capital Expenditure
    Lodhi Road, New Delhi
    (Click here for detail)
  3. Govt. of India Ministry of Textiles
    For Study on Implications of Goods & Services Tax (GST) for Indian Textiles Sector
    Udyog Bhavan, New Delhi
    (Click here for detail)
  4. Dakshin Haryana Bijli Vitran Nigam
    Audit of Consumer Accounts of Various Sub Divisions
    Hisar, Haryana
    (Click here for detail)


III.  Useful Contrubitions:

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

An article - "Right to use of Trade Mark – Goods or Services – Whether VAT or Service Tax applicable"

(Click here for detail)


 IV.  Useful Case Laws: 

1.  CIT Vs. Maruti Suzuki India Ltd., ITA NO. 903/2011, 993/2011 & 1029/2011, Pronounced on: 14.12.2012, High Court of Delhi

Provision made for warranty in respect of such sophisticated goods would be entitled to deduction from the gross receipts U/s 37.

In view ruling of the Supreme Court in Rotork Controls India Ltd. vs. CIT 314 ITR 62 (SC) “A provision is a liability which can be measured only by using a substantial degree of estimation. A provision is recognized when: (a) an enterprise has a present obligation as a result of a past event; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) a reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision can be recognized. The principle is that if the historical trend indicates that a large number of sophisticated good were being manufactured in the past and the facts show that defects existed in some of the items manufactured and sold, then provision made for warranty in respect of such sophisticated goods would be entitled to deduction from the gross receipts under Section 37.” This question too, is therefore answered in favour of the assessee, and against the revenue.

(Please click here for Judgment)

2.  Moser Bear India Ltd., Vs. Dy. CIT, WP(C) 7677/2011, Date of Order: 06-12-2012, High Court of Delhi

For reopening of assessment U/s 147 there must be “tangible material” bearing a “live link with the formation of the belief” otherwise revising an order of assessment U/s 263.

When the assessment is completed, as in the present instance, under Section 143 (3), after the AO goes through all the necessary steps of inquiring into the same issue, the reasons for concluding that reassessment is necessary, have to be strong, compelling, and in all cases objective tangible material. This court discerns no such tangible materials which have a live link that can validate a legitimate formation of opinion, in this case. It is not enough that the AO in the previous instance followed a view which no longer finds favour, or if the latter view is suitable to the revenue; those would squarely be change in opinion. Perhaps, in given fact situations, they can be legitimate grounds for revising an order of assessment under Section 263; but not for re-opening it, under proviso to Section 147.

(Please click here for judgment)

 Golden Rules:

"You can count the number of seeds in the apple,
but no one can count the number of apples in a seed.
Future is unseen. Always hope for the best


  Thanks & Regards

  Team - Voice of CA 




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