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04.06.2015 - Voice of CA presents - Updates
Thursday, June 4, 2015

  I. Headlines Today:    

  1. Service Tax: Penalty norms encouraging voluntary compliance  (Click for detail)
  2. Finance ministry: Effective Service Tax rate on AC restaurant bills 5.6%  (Click for detail)
  3. Keep foreign info strictly secret, CBDT tells I-T  (Click for detail)
  4. Remaking of Companies Act, 2013  (Click for detail)
  5. Will the gold for cash scheme pay off  (Click for detail)
  6. Press Note: Review of Foreign Direct Investment (FDI) policy on Insurance amendment to “ Consolidated FDI Policy Circular of 2014”  (Click for detail)  
  7. Here are nine incomes you need not pay tax on  (Click for detail)
  8. IRDA Cir.: Handling of the unclaimed amounts pertaining to the policyholders  (Click for detail)
  9. IRDA Cir.: Revised Guidelines on Insurance Repositories and electronic issuance of Insurance Policies  (Click for detail)


II.  Useful Article:

1.  [ Contribution by CA. Puneet Goyal; and contributor is available at ]

Analysis of Reverse Charge Mechanism in respect of Manpower Supply Services or Security Services

(Please click here for detail)


III.  Direct Taxes Case Laws:

1.   CIT Vs. Anil Arora, I.T.A. No. 340/2015 & C.M. No. 9241/2015, Date of Order: 22.05.2015, High Court of Delhi

Whether reference to DVO for estimation of market value of property is justifiable where no corresponding documents found during search which may remotely reflect that consideration was over and above to what was shown to be paid in the registered sale deed

Held No

It is fairly conceded (at bar) by the counsel for the Revenue that the reference to DVO for estimation of the market value of the property in Punjabi Bagh was not based on any material discovered or seized during the search operations. The counsel, however, referred to the case of another property in District Baddi (Himachal Pradesh), in respect of which documentary evidence indicated unaccounted consideration paid by the assessee. At the same time, learned counsel also conceded that no addition to the tax liability of the assessee on account of the said other property has been made. There is no nexus between the property in Baddi (Himachal Pradesh) and the property in Punjabi Bagh (West). There is undoubtedly no material available to even remotely reflect that consideration over and above what was shown to be paid in the registered sale deed of the West Punjabi Bagh property was made over to the seller. In these circumstances, it was not fair in the first place to refer the said property for estimation of its market value by DVO. The assessment of the value by DVO cannot hold primacy over the consideration for which the property was actually acquired.

(Please click here to for judgment)

2.  CIT Vs. Shyam Biri Works, I.T.A. No. 172 of 2004, Date of Order: 06.05.205, Agra high Court

Monetary limits for filing revenues appeals as per the latest instructions u/s 268A shall apply not only to prospective appeals but also to pending appeals.

The CBDT while issuing Instruction No.3 of 2011 had not kept in mind the object and intention sought to be achieved by the National Litigation Policy and, in order to bring harmony with the National Litigation Policy, the Instruction No.3 of 2011 would also apply to pending appeals in various Courts or Tribunals unless it is pointed out by the department that the appeal would have a cascading effect in other assessment years of the assessee or that it is within the exception provided in the instructions that was issued at the time when the appeal was presented.

(Please click here to for judgment)

IV.  Indirect Taxes Case Law:

1.   Jayakrishna Flour Mills (P.) Ltd. Vs. Commissioner of Central Excise, Appeal No.: ST/147/2012, Date of Judgment: 17.07.2014, CESTAT – Chennai Bench

Whether the process of Grinding  of wheat into wheat products like Maida, Atta, Suji amounts to manufacture or is liable to service tax

The issue on the above ground has come up before the Hon’ble Chennai – CESTAT in the case of M/s Jayakrishna Flours Mills (P) Ltd vs. Commissioner of Central Excise, Madurai [2015] 57 125. In the said case the department has raised the service tax demand over the appellants considering that the process of Grinding of wheat into wheat products like Maida, Atta, Suji is liable to be taxed under the head of ‘Business Auxiliary Services’. Hon’ble CESTAT noted that CBEC vide their letter F. No. 11/01/2012-CX.1, dated 9-7-2013 has already clarified the matter by stating that the said process amounts to manufacturing and so service tax can be levied. Hence, no service tax is leviable. The decision was given in the favor of appellant.

(Please click here for judgment)


V.  Reported Cases:

Direct Taxes Segment:

1.   Initiation of proceedings under section 201 against assessee after 4 years from end of relevant financial year is time barred.

2.  Whether the loss suffered by assessee in a unit entitled for exemption under section 10B, can be set off against income from any other unit (i.e. not eligible for exemption). – Held, No.
(Please click here for detail)


 Golden Rules:

  "Though no one can go back and make a brand new start,
anyone can start from now and make a brand new ending"


  Thanks & Regards


Voice of CA

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