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29.05.2015 - Voice of CA presents - Updates
Friday, May 29, 2015

  I. Headlines Today:    

  1. Notification: Foreign Exchange Management (Current Account Transactions) Amendment Rules, 2015  (Click for detail)
  2. Major Initiatives and Achievements of the Ministry of Corporate Affairs in the Last One Year  (Click for detail)
  3. Delhi HC refuses to stay levy of 14% service tax on liquor makers  (Click for detail)
  4. Govt Approval Not Needed for Share Transfer to FDI-listed Co  (Click for detail)
  5. RBI releases Draft Guidelines on Net Stable Funding Ratio for Banks  (Click for detail)
  6. RBI introduces new category of prepaid payment instruments for mobility cards - Rationale behind introduction of these cards is to reduce the cash transactions in the system  (Click for detail)


II.  Direct Tax Case Laws:

1.  Ferrous Infrastructure Pvt. Ltd. Vs. DCIT, W.P. (C) 5229/2014 & CM No. 10401 /2014, Date of Order: 21.05.2015, High Court of Delhi

Reasons for initiating assessment u/s 147 should be recorded prior to issuance to notice u/s 148 and not later to that.

In the matter under consideration the the notice u/s 148 was issued on 30.08.2012 and the reasons shows to be recorded on 18.09.2013. The ld AO submitted an impression that the date mentioned as 18.09.2013 was incorrectly recorded. The learned counsel for the Revenue was asked to produce the relevant file where in the reasons recorded bears the date 19.09.2012. The said date is printed. It is, first of all, inconceivable that when a document is being typed on or before 30.08.2012 (the date on which the notice under Section 148 was issued) that a future date of 19.09.2012 would be typed. Secondly, what is even more shocking is the fact that the printed date 19.09.2012 has been corrected in hand to read 18.09.2012.

In other words, if there was a mistake in the printing of the date, the same has been corrected to read 18.09.2012. Therefore, it cannot be said that the date mentioned in the reasons, i.e., 18.09.2012 was an inadvertent mistake. It is evident that the notice was issued prior to the recording of the reasons. We have seen from the provisions of Section 148(2) as also the decisions of this Court in Haryana Acrylic, and that of the Karnataka High Court in Baldwin Boys High School, that the reasons have to be recorded prior to the issuance of notice under Section 148. If they are not so recorded, then the notice under Section 148 and proceedings pursuant thereto are without authority of law.

(Please click here for judgment)


2.  CIT Vs. Shri Suresh Nanda, I.T.A. No. 715/2014, C.M. No. 19243/2014, Date of Order: 27.05.2015, High Court of Delhi

Whether the ITAT was correct in taking the view that the period for which the assessee was in India involuntarily on account of his passport having been impounded is not to be counted for purposes of Section 6(1)(a) of the Income Tax Act so as to hold him entitled to be a non-resident.

Held Yes

The conclusion reached by us on the facts and in the circumstances of the case at hand cannot be treated as a thumb rule to the effect that each period of involuntary stay must invariably be excluded from computation for purposes of Section 6(1)(a) of Income Tax Act. The view taken by us in the case of assessee here is in the peculiar facts and circumstances wherein he was inhibited from travelling out of India on account of such action of the law enforcement agencies as was found to be wholly unjustified. Here, it is important to notice that the passport impounding order was invalidated as without authority of law. The finding on whether in a given case an assessee’s claim to extended stay being involuntary, has to be fact dependent. For purposes of Section 6(1)(a), each case will have to be examined on its own merits in the light of facts and circumstances leading to “involuntary” stay, if any, in India. His involuntary stay during the period that followed till the passport was restored under Court’s directive, thus, must be excluded for calculating the period under Section 6(1)(a) of Income Tax Act.

(Please click here for judgment)  

III.  Company Law Matter:

1.  CSC Forum Vs. CSC e-governance Services India Ltd. New Delhi, Case No.: 93 of 2014, 24.03. 2015, Competition Commission of India

Section 4, read with section 3 of the Competition Act, 2002 - Prohibition of abuse of dominant position. Where opposite party was not dominant in relevant market for provision of e-services through CSC network in India, proceeding against it for contravention of section 4 were to be closed.

(Please click here for judgment)


IV.  Reported Cases:

Direct Taxes Segment:

1.    Whether provisional booking of immovable property amounts to acquisition of capital asset, whether deduction is available u/s 54 for both cost of investment and cost of improvement – Held Yes.
2.    Whether payments made for software embedded in hardware amounts to ‘royalty’ u/s 9(1)(iv) – Held No. 
(Please click here for detail)

Other Segment:

1.    Assessment Order under sub-section (3) of section 396 of the Companies Act, 1956 read with rule 12-A of the Companies(Central Government's) General Rules and Forms,1956 in the matter of proposed amalgamation of National Spot Exchange Limited(dissolved company) with its holding company, Financial Technologies (India) Limited(transferee company).

2.    All the Non Banking Financial Institutions/Companies registered with MCA are requested to comply with the requirement of section 45-IA of the RBI Act, 1934, if applicable to them. kindly visit the link to the RBI website  and follow all necessary procedures therein..

 Golden Rules:

  "If everyone is happy with you,
then surely you have made many compromises in your life.
And if you are happy with everyone,
then surely you have ignored many faults of others


  Thanks & Regards


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