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31.05.2013 - Voice of CA Presents - Updates
Friday, May 31, 2013

 I.  Today's Headlines:   

  1. TDS on property purchases remains unclear  (Click for detail)
  2. DLF says new accounting policy affected profits  (Click for detail)
  3. FY13 fiscal deficit seen at 4.9%, down from budget target of 5.2%   (Click for detail)
  4. India's FY13 GDP growth hits decade low of 5%   (Click for detail)
  5. Bonus Shares: What impact on tax?  (Click for detail)
  6. RBI makes debt recast norms more stringent  (Click for detail)
  7. Exposure Draft of Excel Template of Taxonomy for Life Insurance Companies and General Insurance Companies  (Click for detail)
  8. Invitation for Part-time Project Directors/Project Managers in various Projects of the Accounting Standards Board of ICAI  (Click for detail)

II. Useful Article:

[ Contribution by CA Sanjeev Singhal and contributor is available at ]


(Please click here)  


III.  Direct Tax Case laws:

1.   CIT Vs. N.J. India Invest (P.) Ltd., Tax Appeal No. 186 of 2013, Date of decision: 01.04.2013, High Court of Gujarat at Ahmedabad

Decision: In favour of assessee

Section: 37 of Income Tax Act, 1961

Case referred: CIT vs. Asahi India Safety Glass Limited (2011) 245 CTR 529 (Del.)

Whether the expenditure incurred on maintenance, back-up and support services to existing hardware and software is revenue in nature

Held Yes, the assessee was engaged in proving maintenance and support service to its client. The services were back up and support services to existing hardware and software already installed by the client for the purpose of business. The Assessing officer contended that the expenditure on such maintenance, backups and support services to existing hardware and software is capital in nature and disallowed the same. The CIT (A) deleted the said addition and Tribunal upheld the said order.

On further appeal to high Court, the high court held that such expenditure is revenue in nature.

(Please click here for judgment)


2.   CIT Vs. Madan Teatres Ltd., ITAT No. 62 of 2013, Date of decision: 14.05.2013, Calcutta High Court

Decision: In favour of assessee

Section: 50C r.w. 271(1)(c ) of Income Tax Act, 1961

Whether penalty u/s 271(1)(c ) of the Act can be imposed on account of deeming fiction under section 50C of the Act

Held No,

Facts: The assessee sold a property at Rs. 2, 51, 50,000/- however as per section 50C the same is assessed at Rs. 5, 19, 77,000/-. During the time of assessment the AO found that the assessee has claimed Rs. 2, 51, 50,000/- as his sale consideration. The AO initiated proceedings u/s 271 (1) (c ) on the belief that the assessee has understated his income. On appeal before Tribunal, the Tribunal set aside the order imposing penalty.

On appeal before the High Court, the high court held that it is only on account of deeming provisions of section 50C, the AO has made the addition by adopting the sale consideration of Rs.5,19,77,000/-, being the value adopted for the purpose of stamp valuation. The revenue has also not shown as to how the assessee could be held to have actually received this amount which is in excess of the amount of Rs.2,51,50,000/-. In the circumstances, the appeal of the revenue is dismissed. Thus penalty cannot be imposed in absence of evidence against the assessee.

(Please click here for judgment)     


IV.  Tenders Info.:

  1. Expression of interest for conducting Technical Audit
    Directorate of Plant Protection, Quarantine & Storage
    (Click for detail)
  2. Auditing the accounts of all Projects/Schemes
    University Of Agricultural Sciences
    (Click for detail)


 Golden Rules:

"A mistake:
takes less time to rectify
than trying to justify


  Thanks & Regards


Voice of CA    




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