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02.04.2015 - Voice of CA presents - Updates
Thursday, April 2, 2015

I. Headlines Today:    

  1. CBDT notifies Income Computation and Disclosure Standards  (Click for detail)
  2. CBDT opens window for roll back requests for another 3 months for existing APAs or pending applications  (Click for detail)
  3. Foreign Trade Policy, 2015-2020 - Highlights  (Click for detail)
  4. Foreign Trade Policy, 2015-2020  (Click for detail)
  5. Services entitled to benefit of scrip under Service Exports from India Scheme (SEIS)  (Click for detail)
  6. List of Products entitled for Merchandise Exports from India Scheme (MEIS)  (Click for detail)
  7. MCA Cir. No. 5: Clarified that amounts received by private companies prior to 01.04.2014 shall not be treated as deposits under the Companies Act 2013  (Click for detail)
  8. MCA has amended Rules of Chapter V dated 31.03.2015 for returning share application money pending allotment by 1st June, 2015 and Companies may accept deposits without deposit insurance contract till 31.03.2016  (Click for detail)
  9. PM Narendra Modi calls on RBI for 20-year financial inclusion roadmap  (Click for detail)
II.  Direct Tax Case Laws:

1.  CIT Vs. S. M. Construction, I.T.A. No. 412 of 2013, Date of Pronouncement: 03.03.2015, Bombay High Court

Whether imposition of penalty u/s 271(1)(c) is justified, in case  there was complete disclosure of facts and the claim made, though the same was not found acceptable in law?

Held: No

As per the facts of the case, assessee filed its return of income declaring a receipt of Rs. 1.11 Crore as capital receipt as the same was received in lieu of cancellation of an agreement made in earlier years, for which assessee had paid some consideration in the year of agreement. The Ld. AO was of the contention that as the intention of the assessee was to evade tax, thus the assessee is liable to pay penalty u/s 271(1)(c). Whereas, Ld. AR contended that the assessee had made complete disclosure in its return and the claim made was bona fide, penalty may please be removed in view of decision of the Hon’ble Apex Court in the case of CIT vs. Reliance Petroproducts  Pvt.  Ltd. 322 ITR 158.

Hon’ble High Court held that making of an incorrect claim would not tantamount to furnishing inaccurate particulars of income as held by Hon’ble Supreme Court (Supra).

(Please click here for judgment)

2.  M/s. Yash Society Vs. UOI & ors., Writ Petition No. 2565/2010, Date of Pronouncement: 12.03.2015, Bombay High Court

Whether denial of exemption u/s 10(23C) is justified where institution is utilising its huge surplus from charitable activities for capital expenses not attributable to philanthropic purpose?


As per the facts of the case, assessee was a charitable institution engaged in providing hospital facilities for philanthropic purpose. The assessee society applied for exemption u/s 10(23)(via) to the CCIT. The application was denied by the Ld. CCIT after examining the facts that the quantum of increase in fixed assets, cash and bank balances of the assessee show that profit generated out of activities of the petitioner is reploughed to enhance income generation capacity thereby leading to gain in more profits and amounts spent for poor and needy patients was found to be meagre and which clearly indicated that the petitioner did not exist solely for philanthropic purposes. A plain reading of the provisions emphasis is on a twin requirement i.e. existence for a philanthropic purpose and activities should not be for profit.

Hon’ble High court held that the institution is set up for charitable purpose as stated in the Memorandum of Association cannot be enough to hold that income is necessarily applied for charitable purposes. Writ Petition is accordingly dismissed.

(Please click here for judgment)         

 Golden Rules:

  "Negative thoughts and tensions are like birds.
We can't stop them from flying around us
but we can certainly stop them from making a nest in our mind"

Happy Mahavir Jayanti to all my friends !!!"


  Thanks & Regards


 CA. Sanjay Agarwal

 Founder - Voice of CA

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