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20.05.2015 - Voice of CA presents - Updates
Wednesday, May 20, 2015


I. Headlines Today:    

  1. Income Tax Cir. No. 8: Procedure for response to Arrear demand By Taxpayer And Verification and Correction Demand by AOs  (Click for detail)  
  2. Income Tax department issues detailed circular to address tax grievances  (Click for detail)
  3. Reasonable taxation, ease of doing business govt's priority: FM  (Click for detail)
  4. Welcome relief to closely held companies  (Click for detail)
  5. New 14% service tax from June 1  (Click for detail)
  6. Swacch Bharat Cess not yet notified-Education Cess & SHE Cess abolished w.e.f. 1st June-Other changes in Service Tax with immediate effect and changes effective from 1st June  (Click for detail)
  7. Sebi forms panel to oversee FMC merger  (Click for detail)
  8. RBI issued Guidelines on Sale of financial assets to Securitization Company (SC)/ Reconstruction Company (RC) - Reversal of excess provision on sale of NPAs to SC/RC  (Click for detail)
  9. Companies' P&L accounts to have separate CSR Expenditure head  (Click for detail)
  10. ICAI Issues: Guidance Note on Accounting for Expenditure on Corporate Social Responsibility Activities  (Click for detail)
  11. ICAI Issues: Exposure Draft on the Managerial Remuneration under the Companies Act 2013  (Click for detail)
  12. Some of the matters, in brief, discussed by the Council taken at its 342nd Council meeting  (Click for detail) 


II.  Direct Tax Case Laws:

1.   CIT Vs. M.M. Aqua Technologies Ltd., I.T.A. No. 110/2005 , Date of Pronouncement: 18.05.2015, High Court of Delhi  

Whether the funding of the interest amount by way of a term loan amounts to actual payment as contemplated by Section 43B of the Income-tax Act, 1961?

Held No

Explanation 3C, having retrospective effect with effect from 01.04.1989, would be applicable to the present case, as it relates to AY 1996-97. Explanation 3C squarely covers the issue raised in this appeal, as it negates the assessee‟s contention that interest which has been converted into a loan is deemed to be „actually paid‟. In light of the insertion of this explanation, which, as mentioned earlier, was not present at the time the impugned order was passed, the assessee cannot claim deduction under Section 43B of the Act.

(Please click here for judgment)


2.  IRCON International Ltd. Vs. DCIT, I.T.A. No. 37/2000, Date of Order: 15.05.2015,  High Court of Delhi

Whether the loss incurred on Compensation Bonds-2001 issued by GOI, governed by the provisions of the Public Debts Act, 1944 and the Public Debt Rules, 1945, was a loss and/or it was a capital loss is legally tenable.

Held No

In the present instance, the amounts as indicated earlier were payable for services provided by way of projects executed by the assessee in Iraq. The Iraqi Government‟s inability to pay due to sanctions imposed by it and the subsequent Central Government‟s negotiating an arrangement for its payment through bonds that were to mature in future – with interest did not in any way alter their character or convert them into capital assets as the assessee argues.

(Please click here for judgment)


III.  Reported Cases:

Direct Taxes Segment:

1.    Amendment made to section 143(1A) by Finance Act 1993, has retrospective effect from 1-4-1989

2.    Where a surplus made by educational institution ploughed back for educational purposes, said institution was to be held to be existed solely for Charitable purpose u/s 2(15)

3.    In case of loss in export business, deduction u/s 80HHC would be Nil

4.  An amendment was made to provisions of section 40A(3) with effect from 1-4-1996 and as such not applicable to period earlier to 01.04,1996, falling within block period for entire


(Please click here for detail)


Indirect Taxes Segment:

1.    In the case before the Hon’ble CESTAT, the CESTAT determined the significance of phrase 'inclusive of taxes' in an agreement

(Please click here for detail)


Other Segments

1.  Judgement dated 13th May, 2015 of the Hon’ble Supreme Court of India in a Disciplinary matter. 

(Please click here for detail)

 Golden Rules:

  "Half of our problems in life are because
"We execute without thinking".
Rest half is because
We keep thinking and never execute"


  Thanks & Regards


Voice of CA

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