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26.12.2012 - Voice of CA Presents - Updates
Wednesday, December 26, 2012

I.  Headlines Today: 

  • ST Noti. No. 49 – Services of life insurance business provided under  Janashree Bima Yojana or Aam Aadmi Bima Yojana exempted from service tax  (Click for detail)
  • Co. Law Noti. - The Companies Directors Identification Number(Third Amendment) Rules 2012-DIN1  (Click for detail)
  • Co. Law Noti - Amendment in DIN Form 4 with effect from 25.12.2012  (Click for detail)
  • Co. Law Noti - With Form18 Dated 24 Dec 2012  (Click for detail)
  • FinMin to track excise, service tax defaulters through database  (Click for detail)
  • Tax investments should be part of asset allocation policy  (Click for detail)
  • Interest rates will come down in 2013, but not sharply: Experts  (Click for detail)

 II.  Useful Case Laws: 

1.  CIT Vs. M/s N.R. Portfolio Pvt. Ltd., ITA No. 134/2012, Date of order: 21-12-2012, High Court of Delhi

Addition u/s. 68 justified if applicants do not respond to summons, despite submission of PAN & bank details

This court is conscious of a view taken in some of the previous decisions that the assessee cannot be faulted if the share applicants do not respond to summons, and that the state or revenue authorities have the wherewithal to compel anyone to attend legal proceedings. However, that is merely one aspect. An assessee’s duty to establish that the amounts which the AO proposes to add back, under Section 68 are properly sourced, does not cease by merely furnishing the names, addresses and PAN particulars, or relying on entries in a Registrar of Companies website.

One must remember that in all such cases, more often than not, the company is a private one, and share applicants are known to it, since they are issued on private placement, or even request basis. If the assessee has access to the share applicant’s PAN particulars, or bank account statement, surely its relationship is closer than arm’s length. Its request to such concerns to participate in income tax proceedings, would, viewed from a pragmatic perspective, be quite strong, because the next possible step for the tax administrators could well be re-opening of such investor’s proceedings. That apart, the concept of “shifting onus” oes not mean that once certain facts are provided, the assesse’s duties are over. If on verification, or during proceedings, the AO cannot contact the share applicants, or that the information becomes unverifiable, or there are further doubts in the pursuit of such details, the onus shifts back to the assessee. At that stage, if it falters, the consequence may well be an addition under Section 68.

(Please click here for judgment)

2. CIT Vs. Sahara India Mutual Benefit Co. Ltd., ITA No. 876/2011, Date of Decision: 20-09-2012, High Court of Delhi

No penalty U/s. 271D levied for dealing in cash deposits with rural dwellers, being reasonable cause for failure.

In the present case also the revenue has not been able to bring on record any material to show that the finding of the Tribunal as to the existence of reasonable cause is perverse. In the judgments of this Court in Commissioner Of Income Tax vs Parma Nand (2004) 266 ITR 255 and CIT Vs Itocha Corporation (2004) 268 ITR 172, it has been held that whether or not there was reasonable cause for the default is a question of fact which does not give rise to a substantial question of law unless the finding is perverse or irrational. In the light of these judgments and having regard to the finding of fact entered by the Tribunal that there was reasonable cause for the defaults, we do not find any substantial question of law arising for our consideration.

(Please click here for judgment)      

 Golden Rules:

"Be close with someone who makes you happy.
But be closer with someone
who cannot be happy without you


  Thanks & Regards

  Team - Voice of CA 





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