Connect us       New User?     Subscribe Now
Confirm your Email ID for Updates
08.07.2015 - Voice of CA presents - Updates
Wednesday, July 8, 2015

  I. Headlines Today:    

  1. Justice AP Shah panel to submit report on MAT levying by month end  (Click for detail)
  2. India likely to sign US tax compliance law FATCA on Thursday  (Click for detail)
  3. New tax rules will boost compliance and help curb black money generation  (Click for detail)
  4. US-Stamped IT Pros Need to Declare All  (Click for detail)
  5. Insurers can raise up to $12bn after higher FDI cap  (Click for detail)
  6. Minimum Daily Wage Raised to Rs 160  (Click for detail)
  7. New category of NBFCs to help cross-sell financial products  (Click for detail)


II.  Direct Taxes Case Laws:

1.  Oil & Natural Gas Corporation Ltd. Vs. Commissioner of Income Tax, Civil Appeal No. 731 of 2007, Date of Order: 01.07.2015, Supreme Court of India

Whether the amounts paid by the ONGC to the non-resident assessees/foreign companies for providing various services in connection with prospecting, extraction or production of mineral oil is chargeable to tax as "fees for technical services" under Section 44D read with Explanation 2 to Section 9(1)(vii) of the Income Tax Act or will such payments be taxable on a presumptive basis under Section 44BB of the Act?

It is the proximity of the works contemplated under an agreement, executed with a non-resident assessee or a foreign company, with mining activity or mining operations that would be crucial for the determination of the question whether the payments made under such an agreement to the non-resident assessee or the foreign company is to be assessed under Section 44BB or Section 44D of the Act. The test of pith and substance of the agreement commends to us as reasonable for acceptance. Equally important is the fact that the CBDT had accepted the said test and had in fact issued a circular as far back as 22.10.1990 to the effect that mining operations and the expressions “mining projects” or “like projects” occurring in Explanation 2 to Section 9(1) of the Act would cover rendering of service like imparting of training and carrying out drilling operations for exploration of and extraction of oil and natural gas and hence payments made under such agreement to a non-resident/foreign company would be chargeable to tax under the provisions of Section 44BB and not Section 44D of the Act. Keeping in mind the above provision, we have looked into each of the contracts involved in the present group of cases and find that the brief description of the works covered under each of the said contracts as culled out by the appellants and placed before the Court is correct. Since the pith and substance of each of the contracts/agreements is inextricably connected with prospecting, extraction or production of mineral oil. The dominant purpose of each of such agreement is for prospecting, extraction or production of mineral oils though there may be certain ancillary works contemplated thereunder. If that be so, we will have no hesitation in holding that the payments made by ONGC and received by the non-resident assessees or foreign companies under the said contracts is more appropriately assessable under the provisions of Section 44BB and not Section 44D of the Act.

(Please click here for judgment)

2.  ITO Vs. M/s Saraswati Educational Charitable Trust, I.T.A. No. 776/LKW/2014, Date of Order: 17.06.2015, ITAT - Lucknow

Is there involve any violation of S.115BBC to call for addition u/s 68, where assessee furnished complete record of identity indicating the name and address of the contributor along with PANs, copy of ITRs, copy of bank statements their confirmations, financial statements, computation of income etc.

Held No.

Section 115 BBC of the Act were not violated by the trust and the donations received from the nine donors cannot be categorized as anonymous donations. To be excluded from the definition of expression “anonymous donation” the person receiving the voluntary contributions referred to in section 2(24) (iia) is required to maintain a record of identity indicating the name and address of the contributor and such other particulars as may be prescribed. Since no other particulars have been prescribed under the provisions the person receiving the donation is under obligation to maintain the identity of donors indicating the name and address only.

On perusal of the details furnished by the trust it is seen that the trust has not only furnished the names and addresses of the donors but also furnished a number of other details in respect of such donors viz. their PANs, copy of ITRs, copy of bank statements their confirmations, financial statements, computation of income etc. In view of the above it is held that the trust has established the identity of donors as provided u/s 115BBC of the Act and the donations cannot be categorized as anonymous donations and subjected to tax as per provisions of section 115BBC of the Act.

(Please click here for judgment)


III.  Indirect Taxes Case Law:

1.  M/s Designing Cell Vs. Commissioner of Central Excise Bhopal, Appeal No. ST/199/2009-CU(DB), Date of Decision: 25.09.2014, CESTAT - New Delhi

Whether a person wrongfully representing himself as architect can be made liable to service tax under the head of ‘Architect's Services’?

Held: No

The assessee was a proprietary firm and was a sculptor/artist with no formal training as an architect. He was wrongly misrepresenting him as an ‘Architect’ to obtain the work. SCN was raised upon the appellant proposing to recover service tax along with interest and penalties. On adjudication, the Deputy Commissioner of Central Excise, Bhopal vide his O-I-O, dropped the proceedings against the appellants and vacated the SCN by holding that the appellant is not covered under the definition of architect services, inasmuch as he has no degree of architect and his name is not entered in the register of architect maintained under the Architects Act. To this, Revenue filed an appeal before the Commissioner (Appeals), who reversed the said order of the original adjudicating authority and confirmed the demand.

On the matter before CESTAT, the Hon’ble CESTAT perused the definition of ‘architect’ as given under the act and held that the appellant is neither an architect nor is he registered under the Architects Act. Proprietary firm and proprietor are one and same person; hence, if proprietor is not an architect, his proprietary firm cannot be considered to be an architect and therefore, no service tax can be demanded.

(Please click here for judgment)


IV.  Company Law & Other Matters:

1.  Inder Mehta Vs. Pushpa Builders Ltd., UTPE No. 203 of 1998, Date of Order: 18.05.2015 Competition Appellate Tribunal - New Delhi

Section 36A of the Monopolies And Restrictive Trade Practices Act, 1969/Section 4 of the Competition Act, 2002 - Unfair trade practice - Tribunal could not issue direction to respondent to deliver possession because that would tentamount to specific performance of agreement.

(Please click here for judgment)     


V.  Reported Cases:

Direct Taxes Segment:

1.   For Condonation of delay before ITAT for admission of appeal, delay should be explained on day to day basis.
2.  Whether DIT (E) has rightly withdrawn registration u/s 12A from assessee society, where it did not fulfil the minimum criteria of providing concessional/free treatment to patients from EWS category, as per the criteria notified by the Delhi High Court to be implemented by the health department of Delhi – Held Yes.  
(Please click here for detail)


 Golden Rules:

  "Patience is a great quality.
We should learn it from the sun and the moon.
Both patiently wait for their turn and
each one gets its chance to shine fully"


  Thanks & Regards


Voice of CA

« Back
Online Poll
Connect Us       New User?     Subscribe Now