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27.05.2015 - Voice of CA presents - Updates
Wednesday, May 27, 2015

I. Headlines Today:    

  1. FIIs put on the MAT again, get dispute panel notices  (Click for detail)
  2. Service tax at 14% and TDS on RDs effective from 1 June  (Click for detail)
  3. 1% tax above GST may hurt Make in India  (Click for detail)
  4. I-T department exploring ways to seed PAN with Aadhaar  (Click for detail)
  5. I-T Department should adopt taxpayer-centric regime, says Revenue Secretary  (Click for detail)
  6. India, Japan to resolve transfer pricing disputes  (Click for detail)
  7. Press Release: RBI Clarification on FDI Inflows  (Click for detail)


II.  Direct Tax Case Laws:

1.  CIT Vs. Mis Bharti Teletech Ltd, I.T.A. No. 496/Delhi/2014, Date of Order: 15.04.2015, High Court of  Delhi

The act of A.O of disallowing depreciation claimed on commercial right merely considering the accounting treatment in books, where the same was allowed in earlier years, is not justified.


In brief, the assessee acquired share of a company (STL) at consideration which included the sum for the marketing, customer support, distribution & associate set up. The Ld. AO disallowed the depreciation by holding that what has been acquired is not the ownership right but an arrangement for use of such network. In view of this, no depreciation can be allowed on such payment which has euphemistically been termed as goodwill. On a different note, it can always be said that goodwill never depreciates; on the contrary, it only appreciates.

The claim which the Court would necessarily have to consider is whether the item claimed to be eligible for depreciation confirms to “other business or commercial rights of similar nature”. In this case, the consideration was a specific value but for which the network would not have been transferred which constitutes that it is a commercial right similar to intangible asset and hence claimed depreciation. The Hon’ble High Court has held that “in the present case, though termed as goodwill, what was actually parted with by STL was a commercial right, i.e., exclusivity to the network which would not have been otherwise available but for the terms of the arrangement.”

No substantial question of law arises; the appeal is consequently dismissed.

(Please click here for judgment)

2.  ITO Vs. M/s Staunch Marketing Pvt. Ltd., I.T.A. No. 1643/DEL/2008, Date of Order: 12.05.2015, ITAT - Delhi

Re-assessment proceedings concluded us/ 147 of Income Tax Act, 1961 are invalid if the notice u/s 143(2) is not issued.

Held- Yes

In brief, the A.O initiate re-assessment proceedings vide issuing notice u/s 148. Further, a notice u/s 142(1) was issued to the assessee company. However, the Ld. A.O. has failed to issue notice u/s 1432) of the Act and completed assessment ex-party.

The Hon’ble Supreme Court has held in case of ACIT & Anr. V. Hotel Blue Moon (2010) 321 ITR 362 in which it was held that "It is mandatory for the AO to issue notice u/s 143 (2). The issuance and service of notice u/s 143 (2) is mandatory and not procedural. If the notice is not served within the prescribed period, the assessment order is Invalid”. Therefore, the ITAT allowed the asessee’s cross objection and held that in the absence of notice u/s 143(2) the reassessment order is not sustainable.

(Please click here for judgment)  

III.  SEBI Matters:

1.  Rakan Steels Ltd. Vs. Securities and Exchange Board of India, Misc. Application No.: 124 of 2015, Date of Decision: 10.04.2015, Securities Appellate Tribunal  Mumbai

As per Securities Appellate Tribunal  Mumbai, Violation of Sec 15C would constitute if there is a failure to obtain scores Login ID and password for redressing investor grievances within the time stipulated by SEBI.

(Please click here for judgment)    

IV.  Company Law Matter:

1.  Maheshwary Ispat Ltd. Vs. Tata Capital Financial Services Ltd., C.P. No. 560 of 2011, Date of Judgment: 17.04.2015,  High Court of Calcutta

Company Court and High court Division’s Bench is competent U/s 483 to reschedule payment of sums due in winding up petition.

(Please click here for judgment)


 Golden Rules:

  "Third person never creates misunderstandings between two people,
but misunderstandings between two people creates space for a third person


  Thanks & Regards


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