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26.06.2015 - Voice of CA presents - Updates
Friday, June 26, 2015

  I. Headlines Today:    

  1. CBDT Noti.: Sec. 197A - Deduction of Tax at Source - No deduction in certain cases - Specified payment under Sec. 197A(1F)  (Click for detail)
  2. MCA Issued clarification on repayment of deposits accepted by the companies before the commencement of the Companies Act, 2013 under section 74 of the said Act   (Click for detail)
  3. Delhi Budget - Kejriwal govt imposes tax on cable TV, DTH, entry fee on diesel trucks - Cuts VAT on cutlery, woods and timber  (Click for detail)
  4. Delhi Budget - Absence of govt hit tax collection  (Click for detail)
  5. High-level committee to look at more changes in Companies Act  (Click for detail)
  6. Election Commission, ICAI to help make political parties' financials more transparent   (Click for detail)
  7. RBI seeks comments/feedback on Draft Guidelines on Writing of Covered Options  (Click for detail)
  8. RBI extends the Date for Withdrawal of Pre-2005 Series Banknotes  (Click for detail)
  9. RBI issued Notification for providing greater flexibility in seeking access to overseas funds for  Overseas Foreign Currency Borrowings by Authorised Dealer Banks  (Click for detail)


II.  Direct Taxes Case Laws:

1.  Sita Ram Sharma Vs. Income Tax Officer, I.T.A. Nos. 722 to 726 (JP.) of 2013, Date of Order: 01.05.2015, ITAT - Jaipur

Whether land treated as not being capital asset being situated 8 Kms away from local municipal limits in respect of one of the co-owner can be treated as capital asset for making addition in the hands of assessee.

Held No. 

The land sold by all the brothers situated in village- Sanjhaia, Tehsil- Sanganer, district- Jaipur. In case of assessee's brother namely Shri Ram Sahay Sharma in A.Y. 2007-08 by the ITO ward 7(2), Jaipur order dated 25/03/2013 had not made any addition on account of long term capital gain. Further the ld CIT(A) as well as this Bench also allowed the appeal in case of Smt. Kamla Devi Sharma (supra), who also sold her land at Sanjharia village to M/s Vatika Ltd. on 16/05/2006 and held that the agricultural land sold by the assessee is not capital assets as envisaged U/s 2(14) of the Act as same was sold to Vatika Ltd. within a short span of time.  Therefore, we hold that the land sold by all the assessees are agricultural land and beyond 8 KMs from the municipal limits. Accordingly, we allow this ground of all the appeals.

(Please click here for judgment)


2.  Dhadda Exports Vs. Income Tax Officer, S.B. Civil Writ Petition No. 913 of 2015, Date of Order: 09.02.2015, High Court of Rajasthan.

Whether notice issued without sanction of Commissioner or Chief Commissioner being invalid cannot be cured by resorting to provisions of section 292B.

Held No.

Resort to section 292B cannot be made to validate an action, which has been rendered illegal due to breach of mandatory condition of the sanction on satisfaction of the Chief Commissioner or the Commissioner under proviso to sub-section (1) of section 151.This is an inherent lacunae affecting the very correctness of the notice under section 148 and is such which is not curable by recourse to section 292B.

(Please click here for judgment)

III.  Indirect Taxes Case Law:

1.  Enam Securities (P.) Ltd. Vs. Commissioner of Service Tax, Appeal No. ST/450/10, Date of Decision: 07.08.2014, CESTAT - Mumbai

Whether commission received for issuance to bonds on behalf of RBI is liable to service tax?

Held: No

The dispute pertains to the period 2002 to 2004. The appellants were engaged in sale of RBI Bonds on commission basis. From 10-09-2004 the appellants themselves paid the service tax on commission received under the head of ‘Business Auxiliary Service’. However, department contended that the appellants were liable to pay the service tax for the prior period also i.e. prior to 10-09-2004 under ‘Banking and other Financial Services’ head.

On the matter before CESTAT, the Hon’ble CESTAT held that issuance/sale of bonds by RBI on behalf of Government of India to manage Indian economy, which is its constitutional responsibility, is a sovereign function and no tax (direct tax or indirect tax) can be imposed on such functions and hence no service tax can be levied upon the appellants for giving their services to the RBI.

(Editor Note: Vide Finance Act, 2015 in section 66F (1) has been amended. In the said section an illustration was inserted from 14-05-2015 in which it was clarified that the services provided by RBI are the main services and the same are exempted from service tax and any agency services provided to RBI cannot be treated as exempted and the same are liable to service tax. Therefore, in the present scenario the commission received from RBI is liable to service tax.)

(Please click here for judgment)


IV.  Company Law & Other Matters:

1.  Builders Association of India Vs. State of Kerala Government Secretariat, Case No. 42 of 2013, Date of Order: 12.05.2015, Competition Commission of India

If in case opposite party was not in a dominant position in relevant market for provision of services for civil construction, therefore, no case of abuse of dominance was made.

(Please click here for judgment)    


V.  Reported Cases:

Direct Taxes Segment:

1.   Having other objects of society running educational institution, does not mean that it does not exist solely for educational purpose.
2.  S.234B has no application in respect of nonresident companies.  
(Please click here for detail)


 Golden Rules:

  "Lucky person will win hardly once in a life time.
But, talented person will lose hardly once in a life time"


  Thanks & Regards


Voice of CA

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