OFFICE BEARERS FOR THE YEAR 2015-2016 CA. SRINIVAS AGNIHOTRAM Chairman (O) 2439872, Cell: 94409 43129 E-mail: [email protected]CA. K. SIVA RAMA KUMAR Vice Chairman (O) 08672-222373, Cell : 9959699597 E-mail: [email protected]CA. SREENIVASA RAO GODAVARTHI Secretary (O) 2473164, Cell : 9346222567 E-mail : [email protected]CA. V. RAMA MOHAN REDDY Treasurer (O) 2487600, Cell : 9848483691 E-mail : [email protected]CA. K.V.N. POORNA CHANDRA RAO Chairman, SICASA (O) 2437887, Cell : 9849090111 E-mail: [email protected]CA. B. SHIVAJI PRASAD Managing Committee Member (O) 2473393, Cell: 98482 90289 E-mail: [email protected]CA. K.V. RAMESH BABU Managing Committee Member (O) 2491365, Cell : 9849194000 E-mail: [email protected]CA. S. AKKAIAH NAIDU Managing Committee Member (O) 2578801, 2578802, Cell: 94414 94415 E-mail: [email protected]CA. E.PHALGUNA KUMAR Secretary, SIRC of ICAI & Ex-Officio of Vijayawada Branch Cell : 9441886303 E-mail : [email protected]For Private Circulation Only The Institute of Chartered Accountants of India (Set up by an Act of Parliament) EDITORIAL BOARD Editor : CA. SRINIVAS AGNIHOTRAM Members : CA. K. SIVA RAMA KUMAR, CA. V. RAMA MOHAN REDDY website: www.vijayawada-icai.org E-mail: [email protected][email protected]Phone: 0866 - 2576666, 2575505, 2575506 April, 2015 VOL - II Dear Members, I think all the professional colleagues have completed their hectic work of filing time bar Tax returns, attending for scrutiny assessments for the year 2012-13 and I hope all of you got your Bank Statutory audit appointments by this time . During the month of March we have conducted CPE Seminar on Union Budet-2015 at Branch and also at Vijayawada Club for which I thank CA E Phalguna Kumar garu, Secretary SIRC and CA R.Bhupathy garu Past President, ICAI for their support. I also thank CA Ramana Murthy Garu, President Vijayawda Club for hosting our Program. We know there are several changes in Company Law and for updating members we conducted CPE program Practical Issues Under Companies Act,2013 for which CA T.Venkta Ramana garu, Past Chairman of Vijayawada Branch was the resource person and 84 members have attended the seminar. I thank CA T.VEnkata Ramana garu for updating members. As this is the season of Bank Audits we have conducted two programs on Bank Audits One full Day Seminar dealing with Branch Audit under Core Banking Environment LAFR-reporting,and IRAC Norms half day seminar on Using Excel as Audit tool in Banking Enviornment for this four resource persons came all the way from Chennai, I thank Sri CA Ramesh, CA Sundararajan, Sri G.V.Subba Rao, CA K.Sripriya SIRC Member for sparing their valuable time in the midst of their busy schedules and sharing their valuable experiences with a record number of participats,180 members.
I think all the professional colleagues have completed their hecticwork of filing time bar Tax returns, attending for scrutiny assessmentsfor the year 2012-13 and I hope all of you got your Bank Statutoryaudit appointments by this time .
During the month of March we have conducted CPE Seminar on UnionBudet-2015 at Branch and also at Vijayawada Club for which I thankCA E Phalguna Kumar garu, Secretary SIRC and CA R.Bhupathy garuPast President, ICAI for their support. I also thank CA Ramana MurthyGaru, President Vijayawda Club for hosting our Program.
We know there are several changes in Company Law and for updatingmembers we conducted CPE program Practical Issues Under CompaniesAct,2013 for which CA T.Venkta Ramana garu, Past Chairman ofVijayawada Branch was the resource person and 84 members haveattended the seminar. I thank CA T.VEnkata Ramana garu for updatingmembers.
As this is the season of Bank Audits we have conducted two programs onBank Audits One full Day Seminar dealing with Branch Audit underCore Banking Environment LAFR-reporting,and IRAC Norms half dayseminar on Using Excel as Audit tool in Banking Enviornment for thisfour resource persons came all the way from Chennai, I thank Sri CARamesh, CA Sundararajan, Sri G.V.Subba Rao, CA K.Sripriya SIRCMember for sparing their valuable time in the midst of their busy schedulesand sharing their valuable experiences with a record number ofparticipats,180 members.
During the month of March we have conducted Bank Audit seminar for the students for two days and I thank CACh.Amar Sudheer and CA P. Lakshmana Rao Past Chairmen of the Branch and CA CA K.Sripriya SIRC Memberwho made the sessions very lively by initiating more participation from the floor and clearing all the doubts raisedby the students for successful completion of Bank Audits.
In addition to the regular CPE seminars, this month we have conducted ISA Course for 12 days at branch and 28members registered for this.
I wish to inform to the members that during the month of April regular Orientation and GMCS batches will not bethere at Branch due to forth coming exams in the month of May,2015, as we are providing two rooms with 150capacity as reading halls for the students and I request all the members to intimate the same to their articletrainees who will benefit in their preparation.
From this issue of News Letter along with Tax updates, we will provide the important due dates Calendar and onecontinued article on Arthasasthra and some health tips. Members are requested to actively participate in sendingarticles for publishing in the News letter which will be circulated among 750 members and also sent to all thebranches across SIRC Region.
With this I sign off for this month, waiting to see you all in the said future programs.
With best regards
04-04-2015 CA. Srinivas AgnihotramVijayawada Chairman
GLIMPSES OF “UNION BUDGET - 2015” ON 5th MARCH, 2015
GLIMPSES OF “UNION BUDGET - 2015” JOINT PROGRAMME WITH VIJAYAWADA CLUBON 5th MARCH, 2015
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
3All love is expansion, all selfishness is contraction. Love is therefore the only law of life. He who loves lives,he who is selfish is dying. Therefore love for love’s sake, because it is law of life, just as you breathe to live.
CHANAKYA NITI SHASTRAChanakya, also known as Kautilya or Vishnugupta, was born in Pataliputra, Magadha (modern Bihar, India), and latermoved to Taxila, in Gandhara province (now in Pakistan). He was a professor (acharya) of political science at the TakshashilaUniversity and later the Prime Minister of the Emperor Chandragupta Maurya. He is regarded as one of the earliest knownpolitical thinkers, economists and king-makers. He was the man to envision the first Indian empire by unification of the thennumerous kingdoms in the Indian sub-continent and provide the impetus for fights against the Greek conqueror Alexander.Chanakya is perhaps less well known outside India compared to other social and political philosophers of the world likeConfucius and Machiavelli. His foresight and wide knowledge coupled with politics of expediency helped found the mightyMauryan Empire in India. He compiled his political ideas into the Arthashastra, one of the world’s earliest treatises onpolitical thought and social order. His ideas remain popular to this day in India. In Jawaharlal Nehru’s Discovery of India,Chanakya has been called the Indian Machiavelli, although he lived and died long before Machiavelli’s time. SRI CHANAKYANITI SHASTRA
Chapter - 1
1. Humbly bowing down before the almighty Lord Sri Vishnu, the Lord of the three worlds, I recite maxims of the scienceof politics & Political ethics ( Niti ) selected from the various shastra.
2. That man who by the study of these maxims from the satras acquires a knowledge of the most celebrated principlesof duty, and understands what ought and what ought not to be followed, and what is good and what is bad, is mostexcellent.
3. Therefore with an eye to the public good, I shall speak that which, when understood, will lead to an understanding ofthings in their proper perspective.
4. Even a pandit comes to grief by giving instruction to a foolish disciple, by maintaining a wicked wife, and by excessivefamiliarity with the miserable.
5. A wicked wife, a false friend, a saucy servant and living in a house with a serpent in it are nothing but death.
6. One should save his money against hard times, save his wife at the sacrifice of his riches, but invariably one shouldsave his soul even at the sacrifice of his wife and riches.
7. Save your wealth against future calamity. Do not say, “What fear has a rich man, of calamity?” When riches begin toforsake one even the accumulated stock dwindles away.
8. Do not inhabit a country where you are not respected, cannot earn your livelihood, have no friends, or cannot acquireknowledge.
9. Do not stay for a single day where there are not these five persons: a wealthy man, a brahmin well versed in Vediclore, a king, a river and a physician
10. Wise men should never go into a country where there are no means of earning one’s livelihood, where the people haveno dread of anybody, have no sense of shame, no intelligence, or a charitable disposition.
11. Test a servant while in the discharge of his duty, a relative in difficulty, a friend in adversity, and a wife in misfortune.
12. He is a true friend who does not forsake us in time of need, misfortune, famine, or war, in a king’s court, or at thecrematorium (smasana).
13. He who gives up what is imperishable for that which is perishable, loses that which is imperishable; and doubtlesslyloses that which is perishable also.
14. A wise man should marry a virgin of a respectable family even if she is deformed. He should not marry one of a low-class family, through beauty. Marriage in a family of equal status is preferable.
15. Do not put your trust in rivers, men who carry weapons, beasts with claws or horns, women, and members of a royalfamily
16. Even from poison extract nectar, wash and take back gold if it has fallen in filth, receive the highest knowledge (Krsnaconsciousness) from a low born person; so also a girl possessing virtuous qualities (stri-ratna) even if she were bornin a disreputable family.
17. Women have hunger two-fold, shyness four-fold, daring six-fold, and lust eight-fold as compared to men
to be continued .....
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
4The great secret of true success, of true happiness, is this: the man or woman who asks for no return,the perfectly unselfish person, is the most successful.
CASE LAWS1. MADRAS HIGH COURT - Income Tax
M/s. Prasad Productions P. Ltd. Versus The Deputy Commissioner of Income Tax
Entitlement to deduction u/s 80IA in respect of the windmill unit denied - Held that:- As all the business undertakingsare wind mills and they have claimed the benefit of deduction under Section 80IA of the Income Tax Act for theassessment years in question and for the subsequent years as well. Having exercised their option and their losseshave been set off already against other income of the business enterprise, the assessee in this appeal falls within theparameters of Section 80IA of the Income Tax Act. In the decision reported in Velayudhaswamy Spinning Mills V. Asst.CIT (2010 (3) TMI 860 - Madras High Court) there appears to be no distinction on facts.
Loss in the year earlier to the initial assessment year already absorbed against the profit of other business cannot benotionally brought forward and set off against the profits of the eligible business as no such mandate is provided insection 80-IA(5). - Decided in favour of assessee.
2. 2015 (3) TMI 157 - ALLAHABAD HIGH COURT - Income Tax
Commissioner of Income Tax Versus Union of India And Others
Settlement Commission order - immunity to the assessee from prosecution and penalty under the Act and directingpayment of tax alongwith interest within 35 days - CIT(A) challenging order on the ground that without any hearing,without looking to the record and giving opportunity to parties, the Settlement Commission, under the garb of complianceof this Court’s order, has passed orders of settlement without following the procedure prescribed in the statute - Heldthat:- The mere fact that the orders impugned in these writ petitions have been complied with since there was nointerim order, would not validate a patently illegal and bad order, which has been passed in flagrant violation of statutoryprovision. It is not a case, where things cannot be restored or where restitution is impossible. This Court while entertainingthe writ petition did not grant any interim order to petitioner. For that reason alone petitioner cannot be made to suffer.It is well established that actus curae neminem gravabit.
Therefore, the mere fact that impugned orders have been given effect to would make no difference as the said orders arepatently illegal for the reason as the entire procedure as contemplated in Section 245-D(4) of Act, 1961 has beencompletely overlooked by Settlement Commission, as is evident from their own order and, therefore, the impugnedorders are patently illegal and nullity in the eyes of law. The manner in which impugned orders have been passed byrespondent no. 2 clearly show lack of complete sensibility on its part. It has forced an otherwise avoidable litigation.W.P. allowed.
3. 2015 (3) TMI 156 - DELHI HIGH COURT - Income Tax
Commissioner of Income Tax Versus Nishi Mehra, Arun Mehra, Sushil Mehra, Subhash Mehra, Surbhi Mehra,Manju Mehra
Scope, power and jurisdiction of AO in block assessment proceedings and the term “undisclosed income - AO concludeda comparison between declared value and the value determined by the DVO disclosed serious discrepancy and addedthe difference and brought them to tax in the block assessment orders - ITAT concluded that the AO could not havebrought to tax the amounts that he ultimately did merely based upon the DVO’s report in the absence of any materialpointing to under valuation - Held that:- As decided on CIT Versus. Naveen Gera [2010 (8)TMI 194 - Delhi High Court] itis settled law that in the absence of any incriminating evidence that anything has been paid over and above than thestated amount, the primary burden of proof is on the Revenue to show that there has been an understatement orconcealment of income. It is only when such burden has been discharged, would it be permissible to rely upon thevaluation given by the DVO.
As apparent from the factual narrative, the materials collected in the search operations impelled the AO to completethe block assessment in this case. Conspicuously, however, there was no material in the course of the search orcollected during the proceedings post search, pointing to under valuation of the assessees’ properties which wereultimately held to have been the subject of under valuation. Again, significantly the assessees had at relevant timewhen the actual purchases were effected disclosed the transactional value of those assets; the AO has then unreservedlyaccepted them. Wealth Tax authorities too had accepted the valuation. - Decided in favour of assessee.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
5The greatest religion is to be true to your own nature. Have faith in yourselves.
4. 2015 (3) TMI 155 - DELHI HIGH COURT - Income Tax Joint Investments Pvt Ltd Versus Commissioner of Income Tax
Disallowance under Section 14A read with Rule 8D - assessee volunteered ¹ 2,97,440/- as attributable under Section14A for the purpose of disallowance - AO on the basis of his own understanding of Rule 8D of the Income Tax Rulesdisallowed the sum of ¹ 52,56,197/- Held that:- In the present case, the AO has not firstly disclosed why the appellant/assessee’s claim for attributing ¹ 2,97,440/- as a disallowance under Section 14A had to be rejected. In Taikisha [2014(12) TMI 482 - DELHI HIGH COURT] says that the jurisdiction to proceed further and determine amounts is derivedafter examination of the accounts and rejection if any of the assessee’s claim or explanation. The second aspect isthere appears to have been no scrutiny of the accounts by the AO - an aspect which is completely unnoticed by the CIT(A) and the ITAT. The third, and in the opinion of this court, important anomaly which we cannot be unmindful is thatwhereas the entire tax exempt income is ¹ 48,90,000/-, the disallowance ultimately directed works out to nearly 110%of that sum, i.e., ¹ 52,56,197/-. By no stretch of imagination can Section 14A or Rule 8D be interpreted so as to meanthat the entire tax exempt income is to be disallowed. The window for disallowance is indicated in Section 14A, and isonly to the extent of disallowing expenditure “incurred by the assessee in relation to the tax exempt income”. Thisproportion or portion of the tax exempt income surely cannot swallow the entire amount as has happened in this case.
Thus the impugned order of the ITAT is set aside. The question of law is answered in favour of the assessee. Consequently,order of the AO is set aside. The initiation of penalty proceedings also is set aside. The matter is remitted to the AO forfresh consideration in accordance with the above directions. - Decided in favour of assessee.
5. 2015 (3) TMI 154 - MADRAS HIGH COURT - Income Tax Commissioner of Income Tax Versus M/s. Thiru Arooran Sugars Ltd.
Application for rectification under Section 254 - whether Tribunal was right in holding that the application for rectificationunder Section 254, filed well within time becomes infructuous if the Tribunal takes it up for hearing only after the lapseof four years from the date of the order sought to be rectified? - Held that:- As relying on Sree Ayyanar Spinning &Weaving Mills Ltd. Vs Commissioner of Income Tax [2008 (5) TMI 22 - SUPREME COURT] wherein held that section254(2) can be viewed in two parts. Under the first part, the Appellate Tribunal may, at any time, within four years fromthe date of the order, rectify any mistake apparent from the record and amend any order passed by it under sub-section(1). Under the second part of section 254(2), the reference is to the amendment of the order passed by the Tribunalunder sub-section (1) when the mistake is brought to its notice by the assessee or the Assessing Officer. Therefore, inshort, the first part of section 254(2) refers to the suo motu exercise of the power of rectification by the Tribunal whereasthe second part refers to rectification and amendment on an application being made by the Assessing Officer or theassessee pointing out the mistake apparent from the record. In this case, we are concerned with the second part ofsection 254(2). As stated above, the application for rectification was made within four years. The application was wellwithin four years. It is the Tribunal which took its own time to dispose of the application. Therefore, in the circumstances,the High Court had erred in holding that the application could not have been entertained by the Tribunal beyond fouryears. - Decided in favour of the Revenue by way of remand. The matter is remanded back to the Tribunal to reconsiderthe issue.
6. 2015 (3) TMI 153 - ANDHRA PRADESH HIGH COURT - Income Tax Commissioner of Income Tax-2 Versus M/s. M. Venkateswara Rao & Others
Unaccounted cash credit - contributions made by as many as 10 partners - Held that:- If there are cash credits in thebooks of a firm in the accounts of the individual partners and it is found as a fact that cash was received by the firm fromits partners, then in the absence of any material to indicate that they are the profits of the firm, they cannot beassessed in the hands of the firm, though they may be assessed in the hands of the individual partners. Cash creditsin the individual accounts of members of a joint family with third party cannot be assessed as the income of the familyunless the Department discharges the burden of proof to the contrary.Therefore, the view taken by the AssessingOfficer that the partnership firm must explain the source of income for the partners regarding the amount contributed bythem towards capital of the firm, cannot be sustained in law.
As regards the other amount i.e., unexplained credit entries, the Tribunal took the view that the amount represented thesecurity deposits made by the retail dealers, and the source thereof was properly explained. Nowhere in the order ofassessment, the Assessing Officer recorded any finding to the effect that he verified the matter from the respectiveretail dealers and that such dealers have denied of making deposits. In the field of Arrack business, it is not uncommonthat the retail dealers are required to keep security deposits with the supplier. At any rate, it is a pure question of fact.- Decided against revenue.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
6Was there ever a more horrible blasphemy than the statement that all the knowledge of God is confined to this or that
book? How dare men call God infinite, and yet try to compress Him within the covers of a little book!
7. 2015 (3) TMI 152 - DELHI HIGH COURT - Income Tax
Commissioner of Income Tax-8 (Erstwhile CIT-III) Versus M/s. Indian Iron & Steel Co. Ltd.
Reassessment proceedings - ITAT confirmed CIT(A) decision cancelling the reassessment proceedings - Held that:- Itis evident that the self same reasons which were the basis for proceedings under Sections 147/148 of the Act, werealso the foundation for an admitted rectification which, however, proved to be abortive. Not content with that move, theAO sought to issue reassessment proceedings. The basis for all these, in turn, was an audit report. Now, as to thestatus of audit reports, the law is clear. In CIT v. Simbhaoli Sugar Mills Limited ( 2011 (3) TMI 701 - DELHI HIGH COURT) the Court, after applying the ratio in Kelvinator (2010 (1) TMI 11 - SUPREME COURT OF INDIA ) also held thatinitiation of reassessment proceedings on the basis of audit report objections is impermissible. In this regard, the Courtalso notices the ruling in Transworld International Inc. v. JCIT (2004 (9) TMI 26 - DELHI High Court) and Indian andEastern Newspaper Society v. CIT (1979 (8)TMI 1 - SUPREME Court) ITR 996. This was subsequently affirmed in CITv. Lucas TVS Ltd. (2000 (12) TMI 102 - SUPREME Court).
In the circumstances, therefore, we are of the opinion that no question of law arises; the ITAT acted within its rights inapplying the ratio of previous binding decisions and affirming the CIT (Appeals)’s order. - Decided against revenue.
8. 2015 (3) TMI 150 - ITAT DELHI - Income Tax
Louis Dreyfus Armateures SAS Versus ADIT Internatioinal Taxation,
Applicability of section 44BB denied - assessee has offered the revenues from leasing of vessels namely CGG Fohnand CGG Harmattan to M/s CGG Services for carrying out the seismic operations offshore India - AO took the view thatthe equipment rental received by the assessee are in the nature of ‘Royalty” and are taxable u/s 9(1)(vi) of the IT Act -DRP concluded since there is a DTAA in the present case, royalty shall be taxed as per the rate provided under therespective DTAA, in this case @ 10% of the gross receipt - Held that:- Assessee is in the business of supplying plant/ship on hire which is being used for prospecting for or extraction or production of mineral oils. Therefore, on the whole,it appears that the transaction falls under the second limb of sub-section (1) of sec. 44BB. The intention of theParliament to exclude construction, assembly and mining or like project from the purview of fees for technical servicesis to draw a line of distinction between business activities and mere rendering of services. On no stretch of imaginationcan we hold that the nature of receipts on account of provision of supply of vessels on hire basis can have character offees for technical services within the meaning of Expln. 2 to s. 9(1)(vii). The services required by CGG (Hirer) arerendered by the assessee by lending the vessels on hire cannot bear the character of fees for technical services. Theassessee’s income no doubt is derived from letting out the plant/ship which is used for prospecting for or extraction orproduction of mineral oil, therefore, the second limb of sec. 44BB is clearly attracted in the instant case. The non-resident assessee in our opinion satisfies the requirement stipulated by sec. 44BB and thus, qualifies its incomeearned thus to be treated and taxed as per the special provision and not otherwise as contended by the Revenue.
Also to take note of the fact that in A.Y. 2004-05, the AO accepted the claim of the assessee that the income need tobe taxed u/s 44BB and in A.Y. 2006-07 the DRP also directed that the income of the assessee to be taxed as per sec.44BB of the Act. No changes in facts or circumstances were pointed out by the ld. DRP in the instant assessmentyear. So as per the Hon’ble Supreme Court’s order in Radha Swami Satsang (1991 (11) TMI 2 - SUPREME Court) andCommissioner of Income-Tax Versus Rajeev Grinding Mills [2003 (4)TMI 7 - DELHI High Court] on the principle ofconsistency too no deviation was warranted. Therefore, the order impugned is set aside. - Decided in favour of assessee.
9. 2015 (3) TMI 147 - ITAT DELHI - Income Tax
M/s SBS Marine Ltd. Versus. Addl. Director of Income-tax
Applicability of provisions of section 44BB - income arising to the appellant from rendering of marine logistic services- DRP/AO assessing the income earned by the appellant as fees for technical services/royalty as per the provisions ofsection 9(1)(vii) - Held that:- The judgment of the Hon’ble Madras High Court in Poompuhar Shipping Corporation Ltd.vs. ITO [2013 (10) TMI 936 - MADRAS HIGH COURT] relied by revenue is not applicable since the said decision doesnot deal with the applicability or otherwise of section 44BB. The revenue’s reliance on section 9(1)(vi) to categorize the
assessee’s income for hire of vessels as ‘royalty’ is also not correct since clause (iva) of section 9(1)(vi) excludesamounts referred to in section 44BB. The other arguments, decisions relied on by the learned DR including the one on‘Base erosion profit shifting’ are also not relevant in the factual matrix of the present case and considering what we havealready held. In view of the above, we hold that the income of the assessee for the year under consideration is to becomputed in accordance with section 44BB of the Act.- Decided in favour of assessee.
TDS credit - Held that:- We direct the AO to verify this aspect and to decide about the allow-ability of the above TDScredit in accordance with law. - Decided in favour of assessee for statistical purposes.
Levy of interest u/s 234B - Held that:- The proviso inserted into the provisions of section 209 enables the revenue to levyinterest in a case where the payer has not deducted tax at source when he makes payment to a non- residentrecipient. However, the proviso was introduced vide Finance Act, 2012 with effect from AY 2012-13 onwards and, thusnot applicable in the present case. Consequently, interest cannot be levied under section 234B - Decided in fvaour ofassessee.
10. 2015 (3) TMI 406 - MADRAS HIGH COURT - Income Tax Commissioner of Income Tax Versus K. Jayakumar
Determination of the cost of construction - whether Tribunal was right in holding that the CPWD rates cannot be appliedto the commercial-cum-residential complex constructed at Coimbatore on the ground that Coimbatore is a small town?- Tribunal directing the Assessing Officer to restrict the addition to ¹ 8 Lakhs as offered by the assessee - Held that:-It is evident that in a case of this nature, the Department should give credence to the valuation of the State P.W.D. inrelation to the value of construction either on the side of the assessee or on the side of the Department. Since we findthat there is no specific notification or circular indicating that CPWD rate alone should be adopted in arriving at the costof construction, the Tribunal is justified in adopting the valuation of the State P.W.D. rates for the purpose of determiningthe cost of construction. Tribunal was justified in partly allowing the appeal filed by the Revenue. - Decided againstrevenue.
11. 2015 (3) TMI 405 - MADRAS HIGH COURT - Income Tax M/s. Lucas TVS Ltd. Versus The Asst. Commmissioner of Income Tax
Computation of relief u/s 80HHC - Interpretation of term “Total turnover” - whether Scrap sales should be included in theTotal Turnover while computing deduction under 80HHC? - Held that:- As relying on Commissioner of Income Tax-VII VsPunjab Stainless Industries [2014 (5) TMI 238 - SUPREME COURT] wherein held that the proceeds generated from thesale of scrap would not be included in the “total turnover” - If all accountants, auditors, businessmen, manufacturers,etc., are normally interpreting the term “turnover” as sale proceeds of the commodity in which the business unit isdealing, we see no reason to take a different view than the view normally taken by the persons who are concerned withthe said term. - Decided in favour of assessee.
12. 2015 (3) TMI 404 - DELHI HIGH COURT - Income Tax RL. Traders Versus Income Tax Officer
GP rejection - ITAT rejecting the assessee’s accounts on the footing that quantitative tally of the ingredients and rawmaterials were not maintained and proceeded to arrive at an improper GP Rate as well as the turn-over figures - Heldthat:- The assessee categorically appears to have submitted that a quantitative tally of all the raw materials consumedin the making/preparation of the final marketable product was being maintained. Even though CIT(Appeals) noticed thiscontention as a matter of fact, the said authority did not render any finding. The ITAT instead went by the findings of thelower authority and merely based its conclusion on the interpretation of Section 145(2) of the Income Tax Act, 1961. Infact, there is an assumption in para 9 that the assessee did not maintain quantitative details of ingredients such asmixing gum, starch and oil.
Considering assessee’s stand that such details were forthcoming both by way of books as well as through a quantitativetally, the CIT (Appeals) should have addressed himself to the issue and rendered clear findings. Failure to have done sohas prejudiced the assessee. Consequently, the impugned order is hereby set aside. The matter is remitted back tothe CIT (Appeals) for fresh examination of the books of accounts - Decided in favour of the assessee.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
7Man is to become divine by realizing the divine. Idols or temples, or churches or books, are only thesupports, the help of his spiritual childhood.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
8Each work has to pass through these stages—ridicule, opposition, and then acceptance. Those whothink ahead of their time are sure to be misunderstood.
13. 2015 (3) TMI 402 - ALLAHABAD HIGH COURT - Income Tax Commissioner of Income Tax-II, Kanpur Versus M/s UP. State Industrial Development Corp. Ltd.
Revision u/s 263 - payment of gratuity - disallowance u/s 43-B - Whether there existed any figure like ¹ 7,35,787/-,which formed the basis of discussion by CIT(A) in its order passed u/s 263 which was considered in the context ofSection 43-B of Act, 1961? - Held that:- Before Tribunal the assessee specifically raised an issue that this figure of ¹7,35,787/- is not traceable and let it be known to him as to wherefrom this figure has come. When we required learnedcounsel for the appellant to show whether there existed any such figure in any of the document, he fairly admitted thatatleast from the record he had seen, he could not lay his hand on existence of such amount. He also could not disputethat there is nothing on record to show that assessee ever claimed deduction of ¹ 7,35,787/- as provident fund.
Thus it is evident that Commissioner of Income Tax while discussing the question of disallowance of ¹ 7,35,787/-,under Section 43-B of Act, 1961, has considered the matter relating to an amount which did not exist at all and beforethis Court also it could not be shown to have existed. This shows a total non-application of mind on the part ofCommissioner. The view taken by Tribunal in favour of assessee, therefore, cannot be faulted. - Decided in favour ofassessee.
14. 2015 (3) TMI 652 - DELHI HIGH COURT - Income Tax
CIT Versus Tilak Raj Anand
Cash receipt of ¹ 1 crores - deletion of the sum of ¹ 1 crores directed by the CIT(A) and upheld by the ITAT - Held that:-We are of the opinion that given the fact-intensive nature of the matter, and - as noted by the CIT(A) - the rare instancewhere cash transactions were indeed reflected in the books of one of the assessees which had an intimate connectionwith the present assessee, any further enquiry would involve more weighing of evidence rather than interpretation of law.Barring exceptional cases where the findings are based on no evidence or after overlooking material evidence, thescope of appeal under Section 260A of the Act involves examination of substantial questions of law. We see none inrespect of this transaction. - Decided against revenue.
Unexplained expenditure - unexplained loan - amounts were based upon seizure of handwritten notes containingparticulars of demands made by the assessee - CIT(A) confirmed part addition on unexplained loan and deleted onunexplained expenditure - Held that:- The CIT(A) subjected the record to close scrutiny and the ITAT thereafter wentinto the record by examining the actual entries. It is not as if the ITAT deleted the entire amount. The rationale forretaining ¹ 6.93 lakhs has been clearly mentioned, i.e. that it pertained to a specific transaction for which a date wasattributable or discernable. However, with respect to the other notings, no definitive date or period could be ascribed.Therefore, the ITAT concluded that the said amount of ¹ 44,47,500/- could not be brought to tax . No substantialquestions of law - Decided against revenue.
15. 2015 (3) TMI 651 - BOMBAY HIGH COURT - Income Tax
Commissioner of Income Tax-10 Versus M/s. Godrej Agrovet Ltd.
Computation of disallowance of interest - Tribunal rejected the computation made by the AO as per Rule 8D - Grievanceof the revenue is that in terms of decision of Godrej Boyce Mfg. Co. Ltd. (2010 (8) TMI77 - BOMBAY HIGH COURT)reasonable disallowance of expenditure in relation to exempt income has to be made even in respect of AssessmentYear prior to Assessment Year 2008-09 when Rule 8D of the Income Tax Rules, 1962 is applicable - Held that:- So faras the issue of disallowance of reasonable expenditure to earn exempt income is concerned, we find that the impugnedorder has followed its decision in case of the respondent-assessee for the Assessment Year 2005-06 [2014 (8) TMI 457- BOMBAY HIGH COURT] where disallowance was limited to 2% of the exempt income and the same was held to befair and reasonable. The revenue being aggrieved by the order of the Tribunal in case of respondent-assessee for theAssessment Year 2005-06 has preferred an appeal to this Court. However the above appeal of the revenue was dismissed.- Decided against revenue.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
9We came to enjoy; we are being enjoyed. We came to rule; we are being ruled. We came to work; weare being worked. All the time, we find that. And this comes into every detail of our life.
VIJAYAWADA BRANCH OF SIRC OF ICAI — News Letter APRIL, 2015
10All truth is eternal. Truth is nobody’s property; no race, no individual can lay any exclusive claim to it.Truth is the nature of all souls.
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VIJAYAWADA BRANCH OFSOUTHERN INDIA REGIONAL COUNCIL OFTHE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
