*INCOME TAX REPORTS (ITR) HIGHLIGHTS* *ISSUE DATED 3-5-2010** *
*Volume 323 : Part 1*** * * * * *SUPREME COURT JUDGMENTS** *** >> Writing of bad debts : Whether to close individual account of each debtor in accounts : *Vijaya Bank v. CIT p. 166* *HIGH COURT JUDGMENTS** *** >> Interest on deposits of Non-SLR funds entitled to deduction u/s 80P(2)(a)(i) : *CIT v. H. P. State Co-operative Bank Ltd. (HP) p. 1* >> Where assessee not maintaining books of account reassessment after four years not barred by limitation : *CIT v. Mangalam Publications (Ker) p. 6* >> Tribunal finding no capital asset created out of new project expenses : Finding of fact : *CIT v. Escorts Auto Components Ltd. (P&H) p. 11* >> Assessee entitled to depreciation and investment allowance where closure for reasons beyond control of assessee : *CIT v. Blend Well Bottles P. Ltd. (Karn) p. 18* >> Addition as undisclosed income justified where no proper explanation regarding amount : *Sudhakar T. Pendse v. ITO (Bom) p. 22* >> Whether income from letting out of kalyana mandapam on licence is business or property income : Matter remanded : *Director of Income-tax (Exemptions) v. AVM Charities (Mad) p. 27* >> Another application for rectification not maintainable where dismissal of application on merits : *CIT v. Panchu Arunachalam (Mad) p. 31* >> Reassessment after four years not barred by limitation where firm furnishing balance-sheet to bank disclosing massive credit balances in accounts of partners but not maintaining accounts : *CIT v. Biju Varghese (Ker) p. 36* >> Agreement between assessee and firm for sale of whole property and subsequent act of assessee in executing power of attorney and sale deeds executed by power holder would not alter status of parties to agreement for applicability of doctrine of part performance : *Smt. D. Kasturi v. CIT (Mad) p. 40* >> No scope for VDIS 1997 beyond period mentioned under Scheme : *Tiruvengadam Investments P. Ltd. v. CIT (Mad) p. 44* >> Block assessment proceedings not valid where Tribunal finding procedure laid down by CPC for service by affixture not followed : *CIT v. Naveen Chander (P&H) p. 49* >> Tribunal allowing pre-commencement expenses as revenue expenditure : No interference in view of low tax effect : *CIT v. Info Vergix Technologies Ltd. (Delhi) p. 52* >> Reassessment proceedings within four years to disallow claim not valid : *Rallis India Ltd. v. Asst. CIT (Bom) p. 54* >> Depreciation not allowable on stock exchange membership card acquired by an assessee on or after April 1, 1998 : *CIT v. Techno Shares and Stocks Ltd. (Bom) p. 69* >> Rejection of exemption u/s 10(23C)(vi) not valid where assessee-society not for educational purposes : *Scientific Educational Advancement Society v. UOI (P&H) p. 84* >> Increase in liability to repay loan taken for purchase of machinery or plant must be taken into account for purpose of depreciation and investment allowance : *Century Enka Ltd. v. Asst. CIT (Cal) p. 86* >> Interest paid by bank to NRIs on deposits in Indian currency exempt u/s 10(15)(iv)(fa) : Not subject to TDS : *CIT v. Manager, SBI (Raj) p. 93* >> Intercorporate dividends : Reassessment on ground of failure to pay tax u/s 115-O not permissible : *Godrej Agrovet Ltd. v. Deputy CIT (Bom) p. 97* >> Amount deposited under CDS includible in net wealth : *Smt. Smitaben N. Ambani v. CWT (Bom) p. 104* >> Tribunal disallowing assessee's claim without referring to that order or decision of High Court confirming it : No mistake apparent from record : *Visvas Promoters P. Ltd. v. ITAT (Mad) p. 114* >> Mobilisation and demobilisation costs reimbursed to non-resident not taxable in India : *Van Oord ACZ India (P.) Ltd. v. CIT (Delhi) p. 130* >> Disallowance of deduction of bad debts on basis of debit of provision to profit and loss account and not written of in books of account : Remand to reconsider matter on basis of facts stated and material furnished by assessee : Proper : *CIT v. Wipro Infotech Ltd. (Karn) p. 151* >> Deduction u/s 80-O cannot be granted where failure to furnish details of expenses incurred for earning gross income : *CIT v. Wipro Infotech Ltd. (Karn) p. 151* >> Mere debit entries in profit and loss account and credit entries in bad debt reserve account not sufficient to write off debts : *CIT v. Vijaya Bank (Karn) p. 163* Assessee entitled to deduction where designs prepared by assessee used outside India and received convertible foreign in India : *CIT v. Charles M. Correa (Bom) p. 174* *AUTHORITY FOR ADVANCE RULINGS** *** >> Department not entitled to raise objection as to maintainability when matter posted for hearing on merits : *Umicore Finance, In re p. 25* *JOURNAL** *** >> Search and seizure provisions--Issues settled and unsettled (*T. N. Pandey, Retd. Chairman, CBDT*) *p. 1* *NEWS-BRIEF** *** *>> Parliament panel wants attention drawn to corporate tax sops* A key parliamentary panel has said that the exemptions and deductions provided under the current tax laws were loaded in favour of corporates and big taxpayers, have outlived their purpose and it would be just and equitous to put in place a policy on exemptions. India's direct tax regime provides a large number of exemptions and deductions because of which the incidence of tax on corporates is lot lower than the nominal rate of 30.9%, including the education cess. The direct taxes code, a draft of which is being debated in the Government, has proposed a flat 25% tax on corporates but suggested removing all profit-based exemptions. The code is expected to be adopted from the next fiscal. The code has also suggested the same regime for special economic zones. The Commerce Ministry has been arguing that the current regime for SEZs continue. The committee has asked the Government to set up a study group to review the desirability of tax and duty exemptions to SEZs to bring out the costs of tax exemptions vis-a-vis' the benefits. The panel made it clear that the policy on exemptions should not just reduce the percentage of tax foregone but at the same time encourage household savings, foster social security and generally favour small taxpayers. In fact, if the aggregate exemptions in both direct and indirect taxes is taken into account, it works out to a massive Rs. 5,02,299 crore in 2009-10 which is almost 80 per cent. of the total revenue collections. *[Source : www.economictimes.com dated April 22, 2010]* *>> ITDMS gets award for excellence in governance and administration* The Integrated Tax Payer Data Management System (ITDMS) developed by the Income-tax Department was conferred the Prime Minister's Award for excellence in governance and administration at Vigyan Bhawan on the Civil Service Day on April 21, 2010. The software converts information in various databases into actionable intelligence. The project was initially launched as pilot for one year to customize name search engine, and later ITDMS was developed into an Enterprise Level Solution. The I-T team under the leadership of the then Director General of Income Tax (Investigation) developed this indigenous software solution to create a comprehensive database of all financial affairs of individuals and groups. The Directorates of I-T Investigation are using the information developed through ITDMS for developing intelligence and investigation purposes. The software solution helps collating transactions of any entity or group of inter-related entities for investigation in a non-intrusive manner. The Award was received by a team consisting of investigating officers. *[Source : www.pib.nic.in dated April 21, 2010]* *>> CAG pulls up Income-tax Department for deficiency in tax base* Official auditor CAG pulled up the Income-tax Department in a report tabled in Parliament for not being able to retain the existing tax base in 2008-09, particularly among corporate taxpayers. The decline was at variance from the accepted notion that simple tax laws and lower tax rates promote better tax compliance, CAG said. "It is a matter of concern that the Department which is otherwise aiming towards widening the tax base had not managed to retain the existing tax base. Evidently, the Department is not utilising the mechanisms available to widen the tax base," it said. The report also pointed out that of the 7.5 lakh companies registered with the Registrar of Companies as on March 31, 2009, only 3.3 lakh are recorded with the Income-tax department as corporate assessees, leaving a filing gap of 4.2 lakh companies. "The Board would be advised to reconcile the discrepancy for accurate assessment of filing gap," CAG said. *[Source : www.economictimes.com dated April 23, 2010]* *>> Complexity of tax evasion cases by IPL entities* The Income-tax Department has said it will take four months to build up a clear case of tax evasion by IPL entities. While the department came across the first case of evidence of unaccounted cash after six days of operations at various locations across the country, top sleuths said it is preliminary to fix responsibility for the evasion yet. It has communicated these observations to the Finance Ministry. Based on the scale of the operations, the final additional tax liability from all entities will be about Rs. 100 crore. But the Department has not been mandated to look at any corruption angle and will only uncover the tax aspects. It is therefore not planning on any arrests to launch prosecution cases. The set of information which has been sent to the Finance Ministry including on the very first day therefore includes only the details of the searches including the number of premises visited and the nature of the evidence collected, which are still known as telex messages. It has meanwhile run up against a major hurdle. India does not have tax agreements with any of the tax havens which might have been used as conduits to finance some of the IPL entities, and so will have to open channels of negotiations with all of them to get details of money laundering. The information will be vitally necessary to get a sense of whether tax was evaded by any of the entities involved in the IPL. In the survey operations the Income-tax Department has finally uncovered evidence of unaccounted cash. Department officials tracked e-mails and other records at the searches conducted at the offices of World Sports Group and a Multi Screen Media about a possible payment made to IPL to reach an out of court settlement around the telecast rights for the IPL matches. Because of the scale of the operations, the survey operations is being coordinated by the newly set up Director General (intelligence) in the Department from New Delhi. The first set of operations had been worked out by DG (investigations) Mumbai. *[Source : www.financialexpress.com dated April 22, 2010]* *>> Demand for tax holidays for power sector, port trusts not allowed* The Government rejected the demands for tax exemption on setting up power plants, State maritime boards and port trusts, saying it was inconsistent in a moderate tax regime. To a different query regarding tax holidays for setting up power plants, he said the power sector, particularly the private sector, has significantly matured, benefiting from direct tax holidays for almost two decades and there was no need for any extension. The Minister added that tax incentives like exemptions and deductions are economically inefficient, inequitable, lead to revenue loss, breed rent-seeking behaviour, increase compliance costs and enhance the administrative burden. However, in the power sector, as far as indirect taxes are concerned, all items of machinery and equipments required for initial setting up mega power projects are fully exempt from duties and customs. All such goods domestically procured for initial setting up of mega power plants awarded on an international competitive bidding basis or tariff-based bidding are also fully exempt from payment of central excise duties without any specific time limits. *[Source : www.economictimes.com dated April 23, 2010]* -- Me on net : > >>>>>>>>>>>>>>>>>>>>> http://rajkumaratthenet.blogspot.com/ http://itronline.blogspot.com/ Virus Warning: Although the I have taken reasonable precautions to ensure no viruses are present in his email, sender (I) cannot accept responsibility for any loss or damage arising from the use of this email or attachment." -- You received this message because you are subscribed to the Google Groups "Skorydov MyTaxAssistant Member Group" group. 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