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18.07.2015 - Voice of CA presents - Updates
Saturday, July 18, 2015

  I. Headlines Today:    

  1. CBDT: Target for 'New Taxpayers' for F.Y.2015.16 and Strategy to achieve the same  (Click for detail)
  2. Govt eases foreign investment rules, banks likely to gain most  (Click for detail)
  3. Congress isolated, most parties agree on GST Bill  (Click for detail)
  4. Cash withdrawal limit at points of sale may go up  (Click for detail)
  5. Mistakes to avoid when filing I-T returns  (Click for detail)
  6. Transfer your home loan with a top-up - But tax-exemption will depend on the purpose  (Click for detail)
  7. New norms for manual scrutiny of service tax returns from August  (Click for detail)
  8. ICAI Elections - 2015: Announcement - Option for Polling Booth  (Click for detail)


II.  Direct Taxes Case Laws:

1.  Nivi Trading Limited Vs. UOI, W.P.C. No. 2314 of 2015, Date of Order: 07.04.2015, High Court of Bombay

Verification of certain details cannot be the basis of reopening assessment u/s 147

The clear language of section 147 of the IT Act reveals that if the Assessing Officer has reason to believe that any income has escaped assessment, then, he can resort to such power. Subsection (1) of section 148 of the IT Act enables issuance of notice before the assessment, reassessment or recomputation under section 147 of the IT Act, but that is dealing with the service of the notice. The principal condition for issuance of notice is to be found in section 147 of  the IT Act and that is on the reason to belief that any income chargeable to tax has escaped assessment for any assessment year, then, the Assessing Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be.

In the present case, the Respondents do not state that any income chargeable to tax has escaped assessment. All that the Revenue desires is verification of certain details and pertaining to the gift. That is not founded on the belief that any income which is chargeable to tax has escaped assessment and hence, such verification is necessary. That belief is not recorded and which alone would enable the Assessing Officer to proceed. Thus, the reasons must be founded on the satisfaction of the Assessing Officer that income chargeable to tax has escaped assessment. Once that is not to be found, then, we are not in a position to sustain the impugned notice.

(Please click here for judgment)


2.  ACB India Limited (Formerly M/s Aryan Coal Benefications (P) Ltd.) Vs. ACIT, I.T.A. No. 615 of 2014, Date of Order: 24.03.2015, High Court of Delhi

For the purpose of S. 14A and Rule 8D the average value of investment has to be computed considering only the investments yielding non-taxable income.

The assessee reported tax exempt income of Rs. 18,26,360. The AO added back Rs. 19,96,242 under Section 14A. While doing so, the AO applied Rule 8D by taking into consideration the total quantum of interest other than that invested, under Section 14A in terms of Rule 8D, and arrived at the said figure after multiplying it with the result of the average value of investments and over average value of assets derived by him. The CIT(A) went into the record and found that the amount of investment attributable to dividend as on 31.3.2008 was Rs. 3,53,26,800, which constituted less than 1% of the total scheduled funds. He however accepted the basis of calculation applied by the AO and directed a disallowance of .05% of the amount determined to be average investment.

The ITAT to which the revenue appealed, restored the AO’s determination holding it to be a true calculation in terms of Rule 8D. On appeal by the assessee HELD by the High Court that the AO, instead of adopting the average value of investment of which income is not part of the total income i.e. the value of tax exempt investment, chose to factor in the total investment itself. Even though the CIT(Appeals) noticed the exact value of the investment which yielded taxable income, he did not correct the error but chose to apply his own equity. Given the record that had to be done so to substitute the figure of `38,61,09,287/- with the figure of `3,53,26,800/- and thereafter arrive at the exact disallowance of .05%.

(Please click here for judgment)

III.  Indirect Taxes Case Law:

1.  Commissioner of Central Excise Vs. Indian Petrochemicals Corpn. Ltd., Civil Appeal Nos. 3623 -3624 of 2005, Date of Decision: 12.05.2015, Supreme Court of India

Facts of the case

•    IPCL is engaged in the manufacture of various types of petrochemicals, falling under Chapter 27 and 29 of Central Excise Tariff Act, 1985.

•    One of the products which is manufactured by IPCL is C4 Raffinate.

•    The IPCL has been paying 8 per cent duty, as it has been claiming the benefit of Notification No. 6/2000, dated 01.03.2000.

•    The basic contention of department was that the aforesaid notification exempts liquefied petroleum gases (LPG) as well as other gaseous hydro carbons and excludes specifically natural gases, ethylene, propylene, butylene and butadiene.

•    The IPCL have argued that the words "other than" qualify only natural gases and according to him, if read in this manner, the products which would fall within the exempted category for payment of concessional rate of excise duty would be LPG, other gaseous hydro carbons excluding natural gas, ethylene, propylene, butylene and butadiene.

Hon’ble Supreme Court held

Hon’ble Supreme Court relied upon para 5.5 of CESTAT. The Hon’ble court held that in the Sl. No. 24 of Notification No. 5/2000, there is no comma after the words 'gaseous hydrocarbons'. Therefore, the expression "other than" appearing after the words "gaseous (hydro carbons" and before the words "natural gas" would qualify only the words "natural gas". In other words, the following goods are covered by the aforesaid Sl. Nos.

(i)    Liquefied petroleum gas and other gaseous hydrocarbons with exclusion of natural gas,

(ii)   Ethylene,

(iii)  Propylene,

(iv)  Butylene and

(v)   Butadiene.

Therefore, even if C-4 Raffinate is treated as Butylene Sl. No. 24 of Notification No. 6/2000-C.E., would be applicable, specification of butylenes in the said Sl. No. 24 is not for the purpose of its exclusion, but for the purpose of its specific enumeration and inclusion.

(Please click here for judgment)

IV.  Company Law & Other Matters:

1.  Mrs. Naveen Kataria Vs. M/s Jaypee Greens, Case No. 99 of 2014, Date of Order: 21.05.2015, Competition Commission of India

Order under Section 26(1) of the Competition Act, 2002

In case Commission found that conduct of the Opposite Party, emanating from its dominant position in the relevant market, prima facie amounts to imposition of unfair terms and conditions on the Informant and other buyers is anti-competitive in terms of section 4(2)(a)(i) of the Act. The Commission will appoint the Director General (DG) to cause an investigation into the matter and to complete the investigation within a period of 60 days from the receipt of this order.  DG shall also investigate the role of the officials/ persons who at the time of such contravention were in-charge of and responsible for the conduct of the business of the Opposite Party.

(Please click here for judgment)

2.  Ms. Babita Roy Vs. M/s Swadesh Developers and Colonisers , Case No. 47 of 2015, Date of Order: 02.07.2015, Competition Commission of India

Order under section 26(2) of the Competition Act, 2002

In the absence of dominance of OP-1 in the relevant market, the question of examination of abuse of dominance does not arise.  Accordingly, the matter is closed under the provisions of section 26(2) of the Act.

(Please click here for judgment)       

 Golden Rules:

  "Nothing depends on luck,
everything depends on work.
Because even luck has to work"


  Thanks & Regards


Voice of CA

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