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03.05.2013 - Voice of CA Presents - Updates
Friday, May 3, 2013

 I.  Today's Headlines:

  1. RBI Governor's Press Statement -  Monetary Policy for 2013-14  (Click for detail)
  2. Full Monetary Policy Statement 2013-14  (Click for detail)
  3. RBI cuts repo rate by 25 bps, CRR unchanged at 4%  (Click for detail)
  4. CCEA paves way for IKEA's Rs 10,500-crore investment plan in India  (Click for detail)
  5. CCEA powerless to facilitate out-of-court settlement to Vodafone tax dispute: Law Ministry  (Click for detail)
  6. P. Chidambaram threatens tax evaders, says crackdown looming  (Click for detail)
  7. GST panel rejects Odisha's demand for green tax  (Click for detail)
  8. Ekta Kapoor's Balaji Telefilms guilty of 30 crores' tax evasion  (Click for detail)

II.  Direct Tax Case laws:

1.   CIT Vs. Ashok Mittal, ITA No. 26/2013, Date of Decision: 07.02.2013, Delhi High Court

Decision : In favor of assesse, Assessment Year : 2000- 01, Section : 73 of I.T. Act, 1961

Cases referred:

1.    CIT v. New India Investment Corpn. Ltd. [1994] 205 ITR 618 (Cal.) (para 6)
2.    CIT v. Pradeep Kumar Todi [2009] 181 Taxman 29 (Cal.) (para 6)
3.    Navnitlal Ambalal v. CIT [1976] 105 ITR 735 (para 6)
4.    Navnit Lal C. Zaveri v. K.K. Sen, Appellate Asstt. CIT [1965] 56 ITR 198 (SC) (para 8).

Whether the assessee is correct in adjusting the brought forward speculation losses from the current year speculation profits before adjusting current year’s losses?

Held- Yes.

The assessee adjusted the brought forward speculation losses as against current year speculation profits by relying on the Circular No. 23D, dated 12-9-1960 issued by CBDT (not withdrawn by CBDT), which is binding on the AO, which conceded that the brought forward speculation losses may first be set off against the CY speculation profits before adjusting any other profits. The ITAT affirmed the decision of CIT (A). The appeal was dismissed by the Hon’ble High Court.

(Please click here for judgment)


2.   CIT Vs M/S Groz Beckert  Asia Ltd., ITA No.366 of 2008, Date of Decision: 24.01.2013 (P & H High Court)

Decision: In favor of Assessee

Section: 37(1) of Income Tax Act 1961

Cases Referred: 

1)    OTIS Elevator Company (India) Limited Vs. Commissioner of Income Tax (1992)195 ITR 682
2)    Assam Bengal Cement Co. Ltd. Vs. Commissioner of Income Tax, West Bengal (1955) 27 ITR 34
3)    Empire Jute Co. Ltd. Vs. Commissioner of Income Tax 124 ITR 1

Whether on the facts and in the circumstances of the case, the ITAT was right in law in not sustaining the addition ofRs.616945/- on account of corporate membership fee paid to Golf club as a capital expenditure?

The corporate membership was obtained for running the business with a view to produce profit. Such membership does not bring into existence an asset or an advantage for the enduring benefit of the business. It is expenditure incurred for the period of membership and is not long lasting. By subscribing to the membership of a club, no capital asset is created or comes into existence. By such membership, a privilege to use facilities of a club alone, are conferred on the assessee and that too for a limited period. Such expenses are for running the business with a view to produce the benefits to the assessee. Consequently, it cannot be treated as capital asset as such club membership is an advantage in the commercial sense and not in nature of capital field. The High Court held the decision in favor of assessee and thus the case got dismissed.

(Please click here for judgment)


 Golden Rules:

"No one can go back 
and change a bad beginning;
But anyone can start now
and create a successful ending"


  Thanks & Regards


Voice of CA    




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