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30.06.2015 - Voice of CA presents - Updates
Tuesday, June 30, 2015

  I. Headlines Today:    

  1. E-filing: Income Tax department to send 24-hour valid password to taxpayers  (Click for detail)
  2. India to become first country to make non-financial audit mandatory for companies  (Click for detail)
  3. Delhi govt might increase VAT on petrol, fizzy drinks, liquor  (Click for detail)
  4. Companies wary of new secretarial standards  (Click for detail)
  5. How to file income tax returns for six years & claim refund  (Click for detail)
  6. Trade Notice No. 6: Release of Mobile Application for DGFT related services  (Click for detail)


II.  Direct Taxes Case Laws:

1.  DCIT Vs. Vodafone Essar Gujarat Ltd., Special Civil Application No. 5014 of 2015, Date of Judgment: 12.06.2015, High Court of Gujarat

Whether ITAT can extend stay of demand beyond 365 days

Held Yes, on being satisfied that the delay in disposing of the appeal within a period of 365 days from the date of grant of initial stay is not on account of assessee.

The learned Appellate Tribunal can extend the stay granted earlier beyond the period of 365 days from the date of grant of initial stay, however, on being subjectively satisfied by the learned Appellate Tribunal and on an application made by the assessee / appellant to extend stay and on being satisfied that the delay in disposing of the appeal within a period of 365 days from the date of grant of initial stay, is not attributable to the appellant / assessee and that the assessee is not at fault / and/or whether the assessee / appellant in whose favour stay has been granted, has cooperated in early disposal of the appeal or not and/or whether there is any delay tactics by such appellant / assessee in whose favour stay has been granted and/or whether such appellant is trying to get any undue advantage of stay in his favour or not.

Therefore, while passing such order of extension of stay, learned Appellate Tribunal is required to pass a speaking order on each application and after giving an opportunity to the representative of the revenue – Department and record its satisfaction as stated hereinabove. Therefore, ultimately if the revenue – department is aggrieved by such extension in a particular case having of the view that in a particular case the assessee has not cooperated and/or has  tried to take undue advantage of stay and despite the same the learned Appellate Tribunal has extended stay order, revenue can challenge the same before the higher forum / High Court.

(Please click here for judgment)

2.  CIT Vs. Continental Warehousing Corporation, I.T.A. No. 523 of 2013, Date of Order: 21.04.2015, High Court of Bombay

Whether addition can be made in respect of an unabated final assessment.

Held No.

On initiation of the proceedings under Section 153A, it is only the assessment / reassessment proceedings that are pending on the date of conducting search under Section 132 or making requisition under Section 132A of the Act stand abated and not the assessments/reassessments already finalised for those assessment years covered under Section 153A of the Act. By a circular No. 8 of 2003 dated 18-9-2003 (See 263 ITR (St) 61 at 107) the CBDT has clarified that on initiation of proceedings under Section 153A, the proceedings pending in appeal, revision or rectification proceedings against finalised assessment/reassessment shall not abate. It is only because, the finalised assessments/reassessments do not abate, the appeal revision or rectification pending against finalised assessment/reassessments would not abate.

Therefore, the argument of the revenue, that on initiation of proceedings under Section 153A, the assessments/reassessments finalised for the assessment years covered under Section 153A of the Income-tax Act stand abated cannot be accepted. Once it is held that the assessment has attained finality, then the AO while passing the independent assessment order under Section 153A read with Section 143 (3) of the I.T. Act could not have disturbed the assessment / reassessment order which has attained finality, unless the materials gathered in the course of the proceedings under Section 153A of the Income-tax Act establish that the reliefs granted under the finalised assessment/ reassessment were contrary to the facts unearthed during the course of 153A proceedings.

(Please click here for judgment)


III.  Indirect Taxes Case Law:

1.  M/s Steel Strips Wheels Ltd. Vs. C.C.E., Chandigarh, Appeal No: ST/1281/2011-Cus., Date of Order: 17.06.2015, CESTAT - New Delhi

Whether CENVAT credit can be availed on financial services taken for the purpose of raising capital?

Held: Yes

The appellant were engaged in the manufacture of Automotive Wheels. The appellant availed the services of an advisory company for private placement of shares of the company as the appellant were in need of finance. On the amount paid to advisory company for their services the appellant took input credit of Rs. 2,60,280/- paid to advisory company as service tax. The department contended that the same is not allowed under the definition of ‘input service’ as it do not relates to manufacturing of goods. The adjudicating authority held against the appellant and so was confirmed by Commissioner (Appeals).

On appeal before CESTAT, the Hon’ble CESTAT held that the definition of "input service" is not restricted being limited to services which are directly linked to the manufacturing activity.  But the definition has a wide ambit and covers services which are relating to business activities of manufacture. Therefore the service of private placement of shares for raising capital is an input service and credit on the service is to be allowed.

(Please click here for judgment)


IV.  Reported Cases:

Direct Taxes Segment:

1.   The interest under sections 234B and 234C is chargeable on MAT, in the event of failure to pay advance tax in respect of tax payable under section 115JB.
2.  Whether assessee can sought exemption both under sections 54B and 54F – Held Yes.  
(Please click here for detail)


 Golden Rules:

  "The senses say, “Myself first.”
Ethics say, “I must hold myself last.”
.....Swami Vivekanand"


  Thanks & Regards


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