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04.07.2015 - Voice of CA presents - Updates
Saturday, July 4, 2015

  I. Headlines Today:    

  1. Govt. notifies black money rules releases 7 forms including form 6 for declaration of undisclosed foreign assets  (Click for detail)
  2. Govt. explains substance of provisions relating to declaration of undisclosed foreign income and assets  (Click for detail)
  3. Compliance window for black money will draw 60% tax penalty  (Click for detail)
  4. Land Bill GST crucial for development Jaitley  (Click for detail)
  5. CBDT, BNP Paribas Sign APA to Steer Clear of Tax Issues  (Click for detail)
  6. CBEC Noti.: Rate of exchange of conversion of the foreign currency with effect from 3rd July, 2015  (Click for detail)
  7. RBI: Kisan Vikas Patra, 2014 and Sukanya Samriddhi Account - Expeditious implementation of said schemes  (Click for detail)


II.  Direct Taxes Case Laws:

1.  SPS Steel & Power Ltd. Vs. Asst. Commissioner of Income-tax, I.T.A Nos. 1391 & 1414/Kol/2011, Date of Order: 30.06.2015, ITAT - Kolkata

Whether the penalty u/s 271AAA shall operate under circumstances, where the assessee for one reason or the other agrees or surrenders certain amounts for assessment.

Held No.

ITAT Jabalpur Bench in the case of ACIT v. Satyapal Wassan 295 ITR (AT) 352 held that:-

“A charge can be levied on the basis of document only when the document is a speaking one. The document should speak either out of itself or in the company of other material found on investigation and/or in the search. The document should be clear and unambiguous in respect of all the four components of the charge of tax. If it is not so, the document is only a dumb document. No charge can be levied on the basis of a dumb document.
A document found during the course of a search must be a speaking one and without any second interpretation, must reflect all the details about the transaction of the assessee in the relevant assessment year. Any gap in the various components for the charge of tax must be filled up by the Assessing Officer through investigations and correlations with other material found either during the course of the search or on investigations".

Penalty cannot be levied merely on the admission of the assessee and there must be some conclusive evidence before the AO that entry made in the seized documents, represents undisclosed income of the assessee. Where there is no evidence which proves that the entries recorded in the documents found during the course of search is over and above the income as declared by the assessee as undisclosed income and accepted by Revenue, no penalty u/s 271AAA could be levied.

(Please click here for judgment)

2.  DCIT Vs. M/s. Ohm Developers, I.T.A No. 314/Ahd/2002, Date of Order: 08.05.2015, ITAT - Ahemdabad

Whether ‘On-Money’ received by a builder on sale of flats held as stock-in-trade is taxable in the year of offer.

Held No.

The undisputed facts emerged from the discussion is that the assessee is engaged in the business of construction. The assessee has been showing the flats in question as stock-in-trade, therefore in view of the decision of the Coordinate Bench rendered in the case of ITO vs. Shri Siddharth S.Patel in ITA Nos.1852 & 1853/Ahd/2003(supra). The provisions of section 2(47) would not be applicable. The assessee has disclosed the ‘on money’ in the return of income in the year in which the sale-deed was executed. The Revenue has not rebutted this contention. Therefore, in the light of the judgement of Hon’ble Gujarat High Court rendered in the case of CIT vs. Motilal C.Patel and Co. reported at 173 ITR 666 (Guj.), such amount can be subjected to tax when sale-deed is actually executed.

(Please click here for judgment)

III.  Indirect Taxes Case Law:

1.  M/s Mukand Ltd. Vs. Commissioner of Central Excise, Appeal No. E/1473/2011-MUM, Date of Order: 29.10.2014, CESTAT - Mumbai

Whether input credit required to be reversed if the quantity of material sent to job worker is more than the quantity received from job worker and the short fall is on account of waste / scrap of material?

Held: No

The appellant, M/s. Mukand Ltd., is engaged in manufacture of excisable goods. The appellant was sending semi-processed inputs different job workers. The semi-processed inputs after being processed for job work were returned back to appellant. The department observed that the processed inputs were in lesser quantity than the quantity sent for job work. It appeared that the appellant was not reversing Cenvat credit attributable to inputs contained in the material not received back (waste and scraps). Based on above the department proposed demand of Rs. 1,67,854/- was confirmed along with interest and also equal amount of penalty was imposed under Rule 15 of Central Excise Rules, 2004.

On the matter before CESTAT, the Hon’ble CESTAT held that waste and scrap are not manufactured goods whether they are generated at the premises of the principal manufacturer or at the premises of job-worker and accordingly, the legislature have consciously not made any provisions for reversal of any credit taken on duty paid inputs in case of clearance of waste and scrap and/or, there non-return from the job worker's premises under the Central Excise Rules, 2002 read with Cenvat Credit Rules, 2002/2004. Hence, the impugned order was set aside and the appeal was decided in favour of appellant.

(Please click here for judgment)


IV.  Company Law & Other Matters:

1.  Harshad J. Bakshi Vs. M/s Choksi Tube Co. Ltd., Co. Petition No. 01 of 2014, Date of Judgment: 22.01.2015, Company Law Board - Mumbai

As per section 167 of Companies Act 1956' challenge as to validity of AGMs does not falls within purview of provisions contained in section 167.

(Please click here for judgment)    


 Golden Rules:

  "We are all inventors, each sailing out on a voyage of discovery,
guided each by a private chart, of which there is no duplicate.
The world is all gates, all opportunities


  Thanks & Regards


Voice of CA

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