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28.03.2013 - Voice of CA Presents - Updates
Thursday, March 28, 2013

 I.  Today's Headlines:

  1. Income Tax Instruction: Online TMS facility extended to processing of returns to handle PAN migration & restoration issues  (Click for detail) 
  2. FinMin: Tax dept will continue sending letters to non-filers  (Click for detail)  
  3. Tax officials told to crack down harder on black money  (Click for detail)
  4. Service tax evasion runs up to Rs. 188 crore  (Click for detail)
  5. Current account deficit may hit record high of 6.4% in Q3  (Click for detail)
  6. BRICS (Brazil, Russia, India, China and South Africa) agrees to form development bank (Click for detail)
  7. Announcement regarding Expert Panel for Addressing Bank Branch Audit Related Queries for the Financial Year 2012-13  (Click for detail)

II.  Useful Contrubitions:

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

1.  An Analysis - "Write off of unrealised export bills ‐ RBI Circular"

(Click here for detail)


2.  An Important Update: Service Tax Return (ST-3) for July-September, 2012 now available in modified format for e-filing on ACES

(Click here for detail)   


III.  Direct Tax Caselaw: 

1.   Commissioner of Income Tax-I, Ludhiana Vs. M/s Abhishek Industries ltd., I.T.A. No. 60 & 61 of 2012 (O&M), Date of decision: 06.02.2013, High Court of Punjab and Haryana at  Chandigarh

“Sales tax subsidy & discount earned from the early payments are not eligible for deduction from “profits of business” for the purpose of computing deduction u/s 80HHC of the Act.

Clause (1) of Explanation (baa) permits deduction of profit by 90% for the purposes of Section 80HHC if the profits relates to receipts by way of brokerage, commission, interest, rent, charges or any other receipt of similar nature. The sales tax subsidy cannot be said to be either brokerage, commission, interest, rent or charges. Nor it is anyway similar to such expression. Therefore, neither the sales tax subsidy nor the profits from discounts on early payments is of similar nature to brokerage, commission, interest, rent or charges, which may allow the revenue to deduct profit to the extent of the 90% of such sum for the purposes of Section 80HHC.

(Please click here for judgment)

2.  The CIT - II, Amritsar Vs. Vidya Sagar Saini, I.T.A. No. 80 of 2012, date of decision: 13.02.2013, Punjab & Haryana High Court

In best judgment assessment there is always a certain degree of guess work. In the present case after rejecting the books of accounts, the Assessing Officer assessed the net profit at the rate of 13%, which the Commissioner of Income Tax (Appeals) reduced to 8%. Such rate of profit has been affirmed by the Tribunal. It would be a pure finding of fact that what should be net rate of profit from the work of a civil contract. Therefore applying 8% as net profit rate is not so arbitrary or perverse, so as to warrant any interference in the facts of the present case.

(Please click here for judgment)


3.  CBDT Directive Regarding Adjustment of Refunds Against Demand

The Directorate of Income-tax (Systems) has issued a letter dated 21.03.2013 drawing attention to the judgement of the Delhi High Court in Court on Its Own Motion vs. CIT where directions were issued that the department has to follow the procedure prescribed in s. 245 before making any adjustment of refund payable by the CPC. As the Court has held that the assessee must be given an opportunity to file a response before any adjustment of refund is made, the Assessing Officers have been directed to comply with the High Court’s order and communicate their findings on adjustable demand to the CPC which will then process the refund and adjust the demand.

(Please click here for detail) 


 Golden Rules:

"Calmness under stress and courtesy under provocation
are not the signs of weakness 
but rarest of human qualities


  Thanks & Regards


Voice of CA    



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