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08.05.2013 - Voice of CA Presents - Updates
Wednesday, May 8, 2013


I. Useful Presentation:

[Contribution by CA. Sanjay Agarwal - Founder of 'Voice of CA' and Team Voice of CA]

1.  An Overview of Accounting, Reporting and Taxation of Futures, Options and other Derivatives

(Please click here)


II.  Direct Tax Case law:

1.   Zandu Pharmaceuticals Works Ltd. Vs.  CIT, ITA No. 8 of 2007, DATE: 12.09.2012, Bombay High Court

Decision: In favor of Assessee

Section:   80IA of Income Tax Act 1961

Cases Referred: 

  •   CIT vs. Sterling Foods, (1999) 4 SCC 98 = (1999) 237 ITR 579
  •   Bush Boake Allen (India) Ltd. Vs. Asst.CIT (Mad), (2005) 273 ITR 152

Whether on the facts and in the circumstances of the case the ITAT was justified in confirming the allocation of Research and Development expenses incurred by the Head Office among the four manufacturing units on the presumption that the expenditure so incurred is for the benefit of these manufacturing units, when in fact such research conducted had no connection with the business of the said units, nor any benefit is received by them from the said research?

In the present case, the assessee is carrying on the business of manufacturing of medicines and ointments. The head office as well as the units carry on research and development activities and have their own R & D departments for research. Assessing Officer reduced the appellant claim for the said deductions u/c VI-A. CIT(A) and the tribunal upheld the assessment order. Further the tribunal held that the expenditure incurred do not pertain to manufacturing units and disallowed the expenses and it is also important to note that different units manufacture different products and carries out independent R&D work ie there must be a direct nexus between industrial undertaking and expenditure incurred.

The High Court held that an enterprise can s assign the benefit of research in favor of third party and that presumption of nexus between the R&D activities and industrial units is not well founded. The decision was given in favor of assessee and thus the case got dismissed.

(Please click here for judgment)


 III.  Today's Headlines:

  1. Proposal to limit state tax on cell phones, tablets  (Click for detail)
  2. UP slashes VAT on cigarettes to 25%  (Click for detail)
  3. Growth story intact: FinMin tells Moody's  (Click for detail)
  4. National Stock Exchange gets Sebi nod for debt trading segment  (Click for detail)
  5. HSBC fears significant penalty in NRI tax evasion probe  (Click for detail)
  6. Pension scheme an accounting mess, says valuer  (Click for detail)
  7. ICAI: Get Your Journal on Mobile  (Click for detail)

IVTenders Info.:

  1. Punjab National Bank
    Empanelment for Revenue Audit
    Rajendra Place, New Delhi
    (Click for detail)
  2. Indian Rare Earths Ltd.
    Sales Tax Audit for IREL for the year 2013-14
    Multi States - India
    (Click for detail)


 Golden Rules:

"When you move your focus from competition to contribution,
life becomes celebration.
Never try to defeat people
just win them


  Thanks & Regards


Voice of CA    



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