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10.06.2015 - Voice of CA presents - Updates
Wednesday, June 10, 2015

  I. Headlines Today:    

  1. Income Tax Cir.No.9: Condonation of delay in filing refund claim and claim of carry forward of losses under Section 119(2)(b) of the Income-tax Act  (Click for detail)
  2. DGFT Noti.No.8: In Foreign Trade Policy, 2015-2020 released on 1.4.2015, some amendments have been made. These amendments would be deemed to have come into force with effect from 1st April 2015  (Click for detail)
  3. Deal firmly with illegal charity: CBDT to IT dept  (Click for detail)
  4. Direct Tax Arrears Beat Yearly Mop-up  (Click for detail)
  5. Additional 1% tax against principle of GST  (Click for detail)
  6. Always respond to an I-T notice  (Click for detail)


II.  Direct Taxes Case Laws:

1.   IGL Gemstones Pvt. Ltd. Vs. DCIT, I.T.A. No. 2955/Mum/2013, Date of order: 25.05.2015, ITAT - Mumbai

Mere acceptance by the assessee of the addition does not entitles the department to levy concealment penalty

As per the provisions of section 194C r.w. definition of “work” given under its Explanation, the case of the assessee has to be accepted that assessee could be under bonafide belief for non-deduction of tax from the type of payments upon which it has been held that assessee is liable to deduct TDS. Mere acceptance by the assessee of the addition does not entitles the department to levy concealment penalty. Further, no such allegation can be imposed upon the assessee to say that did not furnish all the particulars or it has disclosed inaccurate particulars so as to say that assessee is liable for concealment penalty. Keeping in view the entirety of facts and also reasonable belief of the assessee that it is not entitled for deduction of tax on the payments made to him by it as the same were excluded from the definition of “work” by the Explanation to section 194C, we are of the opinion that levy of concealment penalty in the present case is not justified and deserves to be deleted.

Case referred: Rushi Builders & Developers vs. ACIT, ITA No.6684/Mum/12 and ITO vs. Kuber Khaini Pvt. Ltd., ITA No.155/Del/2011

(Please click here for judgment)

2.   JCIT Vs. M/s. Tirupati Plywood Industries, I.T.A No. 1592/Kol/2012, Date of Pronouncement: 30.04.2015, ITAT -  Kolkata

Whether a disallowance can be made by AO u/s 40(a)(ia) for not deducting TDS u/s 195 in the absence of PE and business connection of exporter in India.


In brief, the assessee is engaged in manufacturing of plywood where imported timber is being used and assessee has imported wood logs from outside India. There was a survey u/s 133A on assessee’s business premises. The assessee made payment to importer without deducting TDS u/s 195 of the Act as its contention was that the Exporter has neither any PE in India nor has any business connection with Indian importer except exporting of timber logs rather the Indian party i.e. the assessee imported the goods for purchase of imported goods. However, the Ld. AO contended that the assessee was liable to deduct TDS for making payment to foreign parties u/s 195 of the Act and placed reliance on the decision of Hon’ble Supreme Court in the case of A. P. Ltd. Vs. CIT (1999) 739 ITR 587 (SC). Whereas, the CIT(A) deleted the disallowance by relying on the decision of Honble Supreme Court in the case of GE India Technology Centre P. Ltd. Vs. CIT (2010) 327 ITR 456 (SC).

The Hon’ble ITAT held that the issue was squarely covered in favour of assessee and against revenue. Thus, the appeal of revenue was accordingly dismissed.

(Please click here for judgment)       

III.  Company Law & Other Matters:

1.  Jayanand Jayant Salgaonkar Vs. Jayashree Jayant Salgaonkar,Suit No. 503 of 2014, Testamentary Petition No. 457 of 2014, Date of Judgment: 31.03.2015, High Court of Bombay

Nominations under Sections 109A and 109B of the Companies Act and Bye-Law 9.11 of the Depositories Act, 1996 cannot and do not displace the law of succession, nor do they open a third line of succession. (The ruling in Harsha Nitin Kokate v.Saraswat Co-op. Bank Ltd. [2010] 101 SCL 145 (Bom) held to be per incuriam.)  

(Please click here for judgment)


IV.  Reported Cases:

Direct Taxes Segment:

1.   Section 271AAA and section 271(1)(c) operate exclusively. 

2.  Whether software used as raw material for manufacturing another software is to be treated as revenue expenditure.
(Please click here for detail)


 Golden Rules:

  "Do not wait to strike till the iron is hot;
but make it hot by striking"


  Thanks & Regards


Voice of CA

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