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10.07.2015 - Voice of CA presents - Updates
Friday, July 10, 2015

I. Headlines Today:    

  1. I-T Dept Eyes Rs 2,56,000 cr Tax Mopup from Mumbai  (Click for detail)
  2. End capital gains tax exemption to curb money laundering: BSE  (Click for detail)
  3. India signs FATCA with US to tackle offshore Tax Evasion  (Click for detail)
  4. Government will propose fixed deposit scheme during Rakshabandhan to deepen financial inclusion  (Click for detail)
  5. CBDT orders mass reshuffle in transfer pricing department  (Click for detail)
  6. CBDT upset with frivolous filing of appeals by officials; reiterates its stance of filing appeals in deserving cases  (Click for detail)
  7. CBEC: Detailed Manual Scrutiny of Servie Tax Returns  (Click for detail)
  8. Trade Notice No. 07: Operationalisation of online payments through debit / credit cards  (Click for detail)
  9. RBI mulls stricter norms for chronic stressed assets  (Click for detail)


II.  Useful Contribution By Team - Voice of CA:

The ICDSs, that were notified by the CBDT, are the present day talk.  As we all know, the ICDSs are broadly based on the Accounting Standards of the ICAI.  We, at VoCA, have made an attempt to compare ASs vis-à-vis ICDSs and to study any differences between them.  The enclosed tabulation is a result of such attempt.  The same is forwarded as, we believe, that it would find use at your end.

Since such a study is a pioneer one at our end, it is possible that the said tabulation carries any error that may have crept in.  If any such error is noticed, please inform us accordingly to enable necessary correction.  Besides, we would be thankful to receive your inputs with regard to the study carried out as above-stated. We also welcome your suggestions as to how such a study could be made more useful for our fellow members.

(Please click here for detail)


III.  Direct Taxes Case Laws:

1.  CIT Vs. Sri Guru Gorakh Nath Charitable Educational Society, I.T.A. No. 336 of 2013, Date of Order: 05.05.2015, High Court of Punjab & Haryana

Whether ITAT was correct in allowing registration u/s 12AA, especially when the family run trust did not submit details of assets and properties that they possessed as well as the treatment given to the assets of an old school being taken over by them.

Held No.

The Tribunal was not justified in allowing the appeal and issuing necessary direction and should have sent the matter back to the Commissioner for fresh enquiry. Admittedly, the factum of the additional information being asked for was never denied by the respondent-Society. In appeal, the assessee had only raised the issue as to whether the order of the Commissioner is arbitrary and unjustified and whether the activities of the Society did not qualify in the nature of charity and the finding had been based on suspicion and conjectures.

The additional information being asked for, as such, was never controverted. It was not contended that the information had been supplied but was not taken into consideration. The power of the Commissioner to look into the objects of the Society and the genuineness of the same cannot be doubted when the basis is of non-supply of information. In such circumstances, it would be appropriate that the Commissioner undertakes the exercise afresh, on the basis of the application which has already been filed, keeping in view the material which can be produced by the respondent-assessee.

(Please click here for judgment)

2.  CIT Vs. Parminder Singh, I.T.A. No. 365 of 2013, Date of Order: 21.05.2015, High Court of Punjab & Haryana

Whether the ITAT, not being an authority expert in valuation of property, is right in directing the AO to make addition on estimated basis, ignoring the expert opinion of the Valuation Officer.

The question raised for consideration is not questions of law, as such, but are pure questions of fact. The Tribunal is the final forum for deciding such issues.

The Tribunal noticed that the Departmental Valuation Officer had adopted the CPWD rates rather than the PWD rates and secondly a builder was able to get material at a cheaper rate, especially when he was constructing a large number of houses on account of wholesale purchase and also expected that very little margin were given for the semi-furnished houses. Accordingly, keeping in mind that `1.05 crores was already surrendered by both the brothers, the orders were modified by making further addition of `15 lacs each towards expenditure on the undisclosed income in case of both the assessees and thus, a benefit of `40 lacs roughly was given to both the brothers. the Tribunal had rightly granted the benefit of the margin that some houses were half complete whereas the valuation had been done for the finished houses and additions were made accordingly. Thus, the questions which are sought to be raised for consideration are not questions of law, as such, but are pure questions of fact. The Tribunal being the final forum for deciding such issues, has rightly exercised this discretion by adding a sum of `15 lacs each

(Please click here for judgment)  

IV.  Indirect Taxes Case Law:

1.  Commissioner of Central Excise Vs. Surya Alloys Industries (P) Ltd., Appeal No. E/457/2006-EX(DB), Date of Decision: 15.10.2014, CESTAT - Delhi

Whether cost of mandatory inspection of goods is includible in the assessable value of goods?

Held: Yes

The revenue has filed this appeal against the order of Commissioner (Appeal). The respondent was supplying goods to railways or to other parties on behalf of railways and as per terms of the contract before supplying the goods they have to get them inspected by RITES. The respondents was paying the inspection charges to RITES and recovering the same from their customers. But the said charges were not included in the assessable value. The original adjudicating authority held that the said charges were includible in the assessable value and hence the impugned demand along with interest and penalties. The Commissioner (Appeals) set aside the said Order-in-Original holding that such charges are not includible in the assessable value.

On matter before CESTAT, the Hon’ble CESTAT held the said goods could not be sold without the said inspection by RITES and therefore cost of inspection is clearly includible in the assessable value under Section 4 of the Central Excise Act, 1944.  The CESTAT relied upon its own decision given in the case of M/s Hindustan Gas & Industries Ltd. which covers an identical issue in identical circumstances. Therefore, the cost of mandatory inspection of goods is includible in the assessable value.

(Please click here for judgment)


V.  Company Law & Other Matters:

1.  Mrs. Reba Kalyan Mitra Vs. The State of West Bengal, C.R.R. No. 159 of 2011, Date of Judgment: 18.03.2015, High Court of Calcutta

Section 482 of Cr. P.C. was barred and not maintainable in case of section revision application where Once revision against Magistrate's orders issuing process under section 630 of Companies Act, 1956 against petitioner was found unsubstantial by Sessions Judge.

(Please click here for judgment)    


VI.  Reported Cases:

Direct Taxes Segment:

1.   Penalty for concealment of income is leviable, where against basic principle of accountancy, assessee claimed capital loss on sale of fixed assets in profit and loss account and had not revised return voluntarily.
2.  The expression 'charitable purpose', as defined in section 2(15) cannot be construed literally and in absolute terms. It has to take colour and be considered in the context of section 10(23C)(iv).  
(Please click here for detail)


 Golden Rules:

  "A paper is flying in the air due to luck.
But a kite flying in the air is due to efforts.
So don't worry, if luck doesn't support efforts are always yours"


  Thanks & Regards


Voice of CA

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