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22.01.2013 - Voice of CA Presents - Updates
Tuesday, January 22, 2013

I.  Headlines Today: 

  • Govt. raises Customs duty on gold by 2 percentage points  (Click for detail)
  • Budget 2013: Ratings agencies to keep government on toes  (Click for detail)
  • States' CST loss might dominate panel meet (Click for detail)
  • India's $100-billion low-cost IT business model 'maxed out', must invest in proprietary software: Constellation Research  (Click for detail)



II.  Useful Contrubitions:

1.  [Contribution by Respected Central Council Member CA Rajkumar S. Adukia Ji ]

A Useful Presentation on "Time Management"

(Click here for detail)


2. [Contribution by CA Amarpal and contributor is available at ] 

"Beware! Your every transaction is under surveillance Of Income Tax Department" - An Article.

(Click here for detail)  


 III.  Useful Case Laws: 

1.  M/s Bangalore Club Vs. CIT & Anr, Civil Appeal No. 124/2007, Date of Order: 14-01-2013, Supreme Court of India

Interest earned by a Club from FD placed with member banks not exempt on ‘mutuality’ ground.

For a receipt to be exempt on the principles of Mutuality, three conditions have to be satisfied. The first is that there must be a complete identity between the contributors and participators. The second is that the actions of the participators and contributors must be in furtherance of the mandate of the association. The third is that there must be no scope of profiteering by the contributors from a fund made by them which could only be expended or returned to themselves.

On facts, though the interest was earned from banks which were corporate members of the club, it was not exempt on the ground of mutuality because (i) the arrangement lacks a complete identity between the contributors and participators. With the funds of the club, member banks engaged in commercial operations with third parties outside of the mutuality, rupturing the ‘privity of mutuality’, and consequently, violating the one to one identity between the contributors and participators, (ii) the surplus funds were not used in furtherance of the object of the club but were taken out of mutuality when the member banks placed the same at the disposal of third parties, thus, initiating an independent contract between the bank and the clients of the bank, a third party, not privy to the mutuality & (iii) The Banks generated revenue by paying a lower rate of interest to the assessee-club and loaning the funds to third parties. The interest accrued on the surplus deposited by the club like in the case of any other deposit made by an account holder with the bank. A façade of a club cannot be constructed over commercial transactions to avoid liability to tax. Such setups cannot be permitted to claim double benefit of mutuality.

(Please click here for judgment)

2.  Canara Bank Vs. ITO, ITA Nos. 609 to 611/Chd/2012, Date of Order: 28-12-2012, ITAT- Chandigarh

Penalty u/s 272B is prospective & applicable from 01.06.2006

The provision of section 272B of the Act attracted where the assessee has failed to furnish the PAN number of the deductee in the statement furnished in response to tax deduction at source under various provision of the Act. In view of the insertion of sub-clause (iv) to section 139A (5B) of the Act, the duty of the deductor quoting the PAN number starts from 1-06-2006 i.e. the date of insertion of the said sub-clause by way of Finance Act, 2006. Accordingly, the assessing having furnished its e-TDS quarterly statement on 31-08-2005 cannot be held to have defaulted by non-furnishing or wrongly mentioned the PAN number of the deductee in quarterly statement filed on 31-08-2005.

However, In instant case the said income of deductee is below taxable limit, there is no requirement to apply and receive the PAN and in such circumstances, the deductor assessee for non quoting the PAN could not be held to have defaulted and hence not exigible to levy of penalty under section 272B of the Act. The assessing officer shall decide the issue after verification and in accordance with law.

(Please click here for judgment)          

 IV.  Tender Info.: 

    Hiring of consultant for Study and Review/Revision/ Updation / modification / deletion of areas in the Existing Finance & Account Manual and Internal Audit Manuals
    Faridabad, Haryana
    (Click for detail)
  • Paschimanchal Vidyut Vitran Nigam Ltd.
    CA Firms for Internal Audit of the units of PVVNL
    Meerut, U.P.
    (Click for detail)


 Golden Rules:

"If we salute our work,
we do not have to salute anybody.
If we pollute your work,
we have to salute everybody


  Thanks & Regards

  Team - Voice of CA    




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