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23.07.2015 - Voice of CA presents - Updates
Thursday, July 23, 2015

  I. Headlines Today:    

  1. Rajya Sabha panel for standard GST rate up to 20%  (Click for detail)
  2. Regulators, agencies cast wider net to curb tax manipulation  (Click for detail)
  3. CBEC Instructions for conducting detailed scrutiny of Excise Returns  (Click for detail)
  4. Govt. explains reasons for amending exemption notification with non-Cenvat conditions  (Click for detail)
  5. SEBI busts billion-dollar ‘tax evasion shops’  (Click for detail)
  6. Equity fund inflows near record as retail investors return  (Click for detail)


II.  Direct Taxes Case Laws:

1.  M/s Beacon Projects Pvt Ltd. Vs. CIT, I.T.A. No. 258 of 2014, Date of Order: 23.06.2015, High Court of Kerela

Whether the amount refunded by builder, to the extent, was in excess of what he received upon cancellation of agreement to sale, has to be treated as interest paid on deposit liable for TDS under section 194A of the Act?

Held No

The purchaser had paid certain amounts to the appellant. At a later point of time, the purchaser opted out of the agreement and the appellant entered into fresh agreements with new buyers for prices that are higher than what was agreed with the purchasers. Out of the receipts from the new buyers, the appellant refunded to the purchasers the amount paid by them and a portion of the excess amount received. The amount thus refunded to the purchasers represents the consideration the purchasers paid towards the undivided shares in the property agreed to be purchased and also the cost of construction of the apartment, which work was entrusted to the appellant, being the builder. Such a relationship does not spell out a debtor-creditor relationship nor is the payment made by the appellant to the purchaser one in discharge of any pre-existing obligation to be termed as interest as defined in section 2(28A).

(Please click here for judgment)

2.  Shri K.P. Madhvan Nair Vs. ITO, I.T.A. No. 19 of 2015, Date of Order: 03.06.2015, High Court of Kerela

Whether addition can be made upon the basis, not only, not disclosed to assessee during assessment proceedings but also not disclosed in the assessment order.

Held No.

Not only that the details which were allegedly in the possession of the Assessing Officer and which is mentioned in  the assessment order were not disclosed to the assessee, but alsothe Assessing Officer also has not disclosed any such details in the assessment order. This contention has also not been considered by the first appellate authority and the Tribunal. In such circumstances, we are unable to sustain the inclusion of Rs.15,14,200/- in the income of the assessee for the assessment year 2006-2007, allegedly towards investment made by him in the property. Therefore, we set aside the finding of the Assessing Officer that the assessee has made investment in the property at Rs.15,14,200/- in the assessment year in question and direct the Assessing Officer to re-consider the matter with notice to the assessee. Documents that are relied on by the Assessing Officer on this issue shall be disclosed to the assessee and he shall be given an opportunity to explain the matter as well.

(Please click here for judgment)


III.  Useful Contribution:

1.  The Extension of due date for filing of DVAT return by the persons engaged in the business of e-commerce
The DVAT department has extended the date of filing the DVAT return in form EC – II & EC - III for the persons engaged in the business of e-commerce. The original date was 20th day of month following the quarter to which the return pertains. The extended date is now 30th September, 2015. The said return is subject to following condition –
•    All such persons engaged in the business of e-commerce shall have to enroll themselves by logging on to the web-site of the department ( at first by clicking on the relevant link in the Menu. Basic information has to be filed online in Form EC-I. A unique ID would be generated after successful submission. This ID should be used for filing the said return. Password for logging on to the site would be communicated on email provided by the person.

•    Return should be filed on quarterly basis in Form EC-II & EC-11 by 20th day of the month following the quarter to which the return pertains. To begin with, return for the first quarter of current financial year 2015-16 may be filed by due date. (This date is extended to 30th September 2015 vide circular no. 15 dated 21-07-2015).

•    The return should be uploaded on the above said portal of the department in off-line / online mode by digitally signing the same.

•    Net sale turnover of a dealer, reducing there from the turnover of the sold goods returned which have been sold during the same quarter.

•    The return of a quarter can be revised by the end of next quarter for making corrections for the goods sold in that quarter but returned in subsequent quarter.

•    Non-compliance of the notification by the eligible persons referred above would be treated as violation of the provisions of Delhi Value Added Tax Act, 2004 and would be proceeded accordingly.

•    Suppression of information relating to any dealer engaged in supplying goods directly or indirectly through the portal of e-commerce entity would also be treated as violation of the provision of Delhi Value Added Tax Act, 2004 / Central Sales Tax Act, 1956. Such turnover would be deemed as sale made by the e-commerce entity.

Further, forms EC – II & EC – III are presently not available on the department’s website


IV.  Company Law & Other Matters:

1.  M/s Sibco Investment Pvt. Ltd. Vs. Small Industries Development Bank of India, CS No. 79 of 2006, Date of Judgment: 13.03.2015, High Court of Calcutta

Section 328 of the Companies Act, 2013/Section 531 of the Companies Act, 1956, if bonds were transferred much before winding-up it couldn't be treated as fraudulent preference.

(Please click here for judgment)


V.  Reported Cases:

Direct Taxes Segment:

1.   Benefit under article 8 of DTAA between India and USA is not available in respect of income derived by the assessee by booking of seat/space under code sharing agreement with other third party airlines for carriage of cargo and passengers from India.
2.  Whether Assessing Officer of one ward can himself transfer jurisdiction of case to Assessing Officer at other ward, without having any transfer order passed by Chief Commissioner or Commissioner – Held No.  
(Please click here for detail)


 Golden Rules:

  "A seed grows with no sound,
but a tree falls with huge noise.
Destruction has noise, but creation is quiet.
This is the power of silence"


  Thanks & Regards


Voice of CA

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