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12.06.2015 - Voice of CA presents - Updates
Friday, June 12, 2015

I. Headlines Today:    

  1. CBDT: Extension of due date of filing return of Income for Assessment year 2015-16  (Click for detail)
  2. CBDT Cir.: Allows filing of revised return after expiry of time limit to enable refund of WT arising due to retro exemption  (Click for detail)
  3. CBDT: Clarifications on Rollback Provisions of Advance Pricing Agreement Scheme  (Click for detail)
  4. FinMin to issue clarifications on black money Act  (Click for detail)
  5. RBI permits NRIs to invest in chit funds  (Click for detail)
  6. RBI: Utility Bills Valid Proof of Address to Open Account  (Click for detail)
  7. SEBI Order: Varun Shipping Co. Ltd. to resolve total pending investor comlaints within 30 days  (Click for detail)


II.  Direct Taxes Case Laws:

1.   Goldstar Electricals Pvt. Ltd. Vs. ACIT, I.T.A. No. 5509&5510/Mum/2013, Date of Order: 05.06.2015, ITAT - Mum

Whether penalty u/s 271D & 271E can be levied on transaction entered into through journal voucher.

Held No.

Hon’ble Bombay High Court in the case of Triumph International Finance (I) Ltd., 345 ITR 270, held that settling claims by making journal entries in the respective books is also one of the recognized modes of repaying loan or deposit. In the absence of any finding recorded in the assessment order or in the penalty order to the effect that the repayment of loan or deposit was not a bona fide transaction and was made with a view to evade tax, the cause shown by the assessee was a reasonable cause and in view of section 273B of the Act, no penalty under section 271E could be imposed for contravening the provisions of section 269T of the Act. Accordingly, we do not find any justification for imposition of penalty by assuming that amount crediting in the name of assessee’s wife by debiting assessee’s loan account, which was already there in the books of account amounts to any contravention of provisions of Section 269SS so as to impose penalty u/s.271D&271E. Debiting Directors account was treated by the AO as repayment of loan and crediting his wife’s account was treated by the AO as receipt of loan.

(Please click here for judgment)

2.  M/s Radiant Premises Pvt. Ltd. Vs. ACIT, I.T.A. No. 5494/Mum/2013,  Date of Order: 05.06.2015, ITAT - Mum

Whether the Learned Commissioner of Income Tax (Appeals) has erred in not allowing Brokerage paid for arrangement of lease, to be reduced from Rent received for Determination of Actual Rent as per Provisions of section 23(1)(b) of the Income tax Act.

Held No.

Brokerage cannot be said to be a charge that has been created in the property for enjoying the rights and at best it is only an application of income received/receivable from rent.. ITAT Delhi Bench in the case of Tube Rose Estates Pvt. Ltd. clearly bring out this distinction between the brokerage and other charges payable in respect of services provided. If such a nature of expenses like brokerage, professional fee, etc., is held to be allowable, then numerous other expenses like salary or commission to an employee/agent who collects the rent can also be held to be allowable. This is not the mandate of the law. There is distinction between maintenance charges and the brokerage paid because such a charge is given/paid for the very maintenance of the property so as to enjoy the property itself; whereas brokerage has nothing to do with the property or the rent which is given to a third party who has facilitated the landlord and the tenant on agreeable terms to rent the property. Thus, in our opinion, the payment of brokerage cannot be allowed as deduction either u/s. 23 or u/s. 24.

(Please click here for judgment)

III.  Company Law & Other Matters:

1.   Arun Kumar Goyal Vs. M/s Aar Kay Chemicals Pvt. Ltd., C.P. No . 84 (ND) of 2013, Date of Order: 11.03.2015, CLB - New Delhi

Director he would not cease to be a director under section 283(1)(g) of Companies Act, 1956 unless it is shown that director absented from three consecutive board meetings without obtaining leave of absence from board.

(Please click here for judgment)


2.  S. Krishnamoorthy Vs. Chellammal Criminal Appeal No. 1771 of 2010, Date: 31.03.2015, Supreme Court of India

Section 138 of the Negotiable Instruments Act, 1881, read with section 482 of the Code of Criminal Procedure, 1973 - Dishonour of cheque for insufficiency etc., of funds in account High Court committed grave error of law and its order was to be set aside Where in a proceeding under section 482 of CrPC High Court quashed criminal complaint filed under section 138 on basis of disputed factual defences. 

(Please click here for judgment)


IV.  Reported Cases:

Direct Taxes Segment:

1.   In view of DTAA between India and Switzerland, Whether establishment of subsidiary in India by a Swiss holding company will result in creation and establishment of PE. 

2.  Whether A coaching institute giving coaching for preparation for entrance of various competitive examinations is eligible for exemption under section 10(23C)(iiiad)- Held yes.
(Please click here for detail)


 Golden Rules:

  "Challenges are what make life interesting and
overcoming them is what makes life meaningful"


  Thanks & Regards


Voice of CA

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