DRP's Power of Enhancement

The assessee, a foreign company, declared a loss of Rs. 31.22 crores in its first year of operations after claiming deduction for “Provision for future losses” of Rs. 32.86 crores. The AO passed a draft assessment order u/s 144C in which he disallowed the claim for future losses. The DRP confirmed the disallowance of future losses and also directed the AO to take 20% of the contract as having been completed during the period and to assess 8% thereof as the profit. The assessee filed an appeal claiming that the DRP had no jurisdiction to go beyond the draft assessment order and that the future losses were allowable. Hon’ble ITAT had allowed the appeal of the assessee by stating that DRP's Power of enhancement is confined to issues raised in Draft Assessment Order only.  

Dredging International vs. ADIT (ITAT Mumbai) 

Disallowance u/s 40(a)(ia) for Short Deduction of TDS

Disallowance u/s 40(a)(ia) cannot be made for short deduction of TDS.
DCIT vs. S.K. Tekriwal (ITAT Kolkata)

Coaching activity by ICAI is not Business

Coaching Activity by ICAI is not falling under the category of business and hence exexmption u/s 10(23c) can not be denied. 


DIT vs. ICAI ( Delhi High Court)

Submission of ITR acknowledgement at Bangalore : Bombay HC clarifies law

Where assessee filed return electronically and had also submitted ITR-V form by ordinary post, department could not treat return as invalid on ground that ITR-V form had not been received by CPC, Bangalore


Crawford Bayley & Co. (Bombay HC), 1st Dec 2011.

Exemption u/s 54F vis a vis Property purchased jointly with Wife

Exemption under section 54F can not be restricted to 50 per cent merely because property was purchased jointly in names of assessee and his wife.
Delhi ITAT 

No 14A Disallowance for Chapter VI-A deductions

Terms 'exempt income' and 'deduction from income' are two different propositions and, therefore, where assessee's income was not exempt under section 10 rather same was eligible for deduction under section 80P, assessee's case was not hit by provisions of section 14A.
ACIT vs. Kribhco ( Delhi ITAT)

NO 14A Disallowance on Purchase of MF from Accumulated Profit

Company purchasing mutual funds from accumulated profit, is not to subject to section 14A disallowance of interest on borrowed capital.

Bunge Agribusiness (India) (P.) Ltd. ITAT Mumbai..

Scrap sold : No TCS Applicable

Where scrap sold by assessee was derived from dismantling of constructed buildings, it was not required to collect tax at source from buyer.
Nathulal P Lavti vs. ITO (Rajkot ITAT)

Where expenditure on religious activities is more than 5 per cent of total Income, trust cannot be issued certificate of exemption under section 80G

The assessee society claimed for certificate of exemption under section 80G. The assessee society came into existence with the objects of evangelizing and edifying the body of Lord Jesus Christ so as to spread his teachings to far off villages, to publish Christian magazines, journals, etc. Besides it was also engaged in charitable activities. Subsequently, assessee introduced new objects, being establishment and running educational institutions to serve the minority Christian community by providing to them technical, medical, engineering and other humanities related education and maintenance of an orphanage and provision of relief to the lepers, aged and poor. The Commissioner noticed that the activities of the society were substantially of religious nature and not for charitable purpose. Further it was noticed that assessee-society had been undertaking substantially higher volume of religious activities as compared to its charitable activities and accordingly he rejected the grant of exemption. The assessee contended that salaries were paid to the staff, it should be considered under the head 'expenditure on charitable activities' but Commissioner had considered the salaries under the head 'expenditure for religious activities'

Tribunal Held that If the salaries to preachers is taken out from the category of expenditure for charitable activities, the expenditure on religious activities would go more than 5 per cent of the total income. Though the assessee has claimed various expenditures under the head 'charitable activities', but no evidence are placed to establish the same. He has also furnished the details of total income of the assessees but since the expenditure on religious activities is more than 5 per cent of the total income of the assessee it is hit by sub-section (5)(ii) read with sub-section (5B) of section 80G

Church of Christ Social Service Society, Amalapuram (Vishakhapatnam ITAT)

Company can follow Cash system for Tax purpose, while keeping books of accounts on accrual Basis

The assessee, a company, followed, in accordance with s. 209(3) of the Companies Act, 1956, the mercantile system of accounting according to which the profits were Rs. 7.48 crores. However, for income-tax purposes, it followed the cash system of accounting according to which the profits were Rs. 4.76 crores and offered that sum to tax. The AO rejected the claim on the ground that u/s 209(3) of the Co’s Act, a company is obliged to follow the mercantile system and that is its’ “regular method” for purposes of s. 145.
ITAT had affirmed the conduct of the assessee.

DCIT vs. Stup Consultants (Mumbai ITAT)

While Kidnaping is an offence, paying ransom is not and hence Allowable as Business Expenditure.

The Assessee, engaged in manufacturing and sale of bidis, send its director to a forest area for purchasig tendu leaves. There the directors was kidnapped by dacoits and assessee pays Ransom for secure his release.  Assessee had claimed the Ransom money as business expenditure u/s 37(1), which was disputed by department. High Court had allowed the appeal in favour of asssessee.
M/s Khemchand Motilal Jain ( Madhya Pradesh High Court)

Case Study - CA Final - Indirect taxes - Nov 2011

Friends, You can download Case Study for CA Final Indirect taxes for Nov 2011 Term from the given link:
http://www.caclubindia.com/share_files/case-study-ca-final-indirect-taxes-nov-2011-41806.asp

In case of any difficulty in downloading, please feel free to mail me at bikashbogi@yahoo.co.in

Case Study - CA FINAL - Direct Taxes - NOV 2011

Friends

You can Download the Selected Case Decisions specially applicable for NOV 2011 CA FINAL Direct Taxes from the following link :

http://www.caclubindia.com/share_files/case-study-ca-final-direct-taxes-nov-2011-40501.asp

In case of difficulty in Downloading, feel free to mail me at bikashbogi@yahoo.co.in

CA Final Results Analysis May 2011 : Passing Trends

Exam	Group I			Group II			Both Group
	Appeared	Passed	Pass %	Appear	Passed	Pass  %	Appear.	Passed	Pass %
May-11	48,548	17,641	36.34	53,766	14,338	26.67	32,419	6,649	20.51
Nov-10	41,302	9,911	24.00	45,955	7,034	15.31	28,430	2,802	9.86
Jun-10	28,889	4,063	14.06	35,187	3,235	9.09	20,666	945	4.57
Nov-09	25,224	5,011	19.87	30,641	3,099	10.11	18,502	1,454	7.86
Jun-09	25,848	8,379	32.42	27,840	4,185	15.03	18,625	2,579	13.85
Nov-08	21,176	5,892	27.82	23,856	5,762	24.15	14,614	2,926	20.27
May-08	17,552	6,444	36.71	18,685	5,290	28.31	10,580	2,645	25.00
Nov-07	16,137	6,353	39.37	16,493	5,005	30.35	8,654	2,446	28.26
May-07	15,083	2,289	15.18	15,874	2,777	17.49	7,467	1,023	13.70
Nov-06	14,587	5,505	37.74	16,947	6,555	38.68	6,830	1,830	26.79
May-06	15,355	5,832	37.98	17,952	5,718	31.85	7,053	1,608	22.80
Nov-05	15,902	5,039	31.68	20,085	5,772	28.74	7,620	1,348	17.69
May-05	18,211	5,748	31.56	20,513	3,520	17.16	8,650	1,243	14.37
Nov-04	16,645	4,089	24.57	20,448	4,484	21.93	7,666	939	12.25
May-04	20,724	7,011	33.83	21,364	3,354	15.70	9,770	1,490	15.25
Nov-03	19,501	4,450	22.82	20,377	4,381	21.50	8,597	1,076	12.52
May-03	20,290	4,469	22.03	18,692	2,203	11.79	7,943	802	10.10

HUF is a Relative for Gift Exemption

HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii).

Vineetkumar Raghavji Balodia vs. ITO (Rajkot ITAT)

Remission of Liability u/s 41

Non-encashment of cheques within validity period would not mean that debt had been extinguished and section 41 would apply. (KOL) 

Reopening u/s 147 : Enhanced Scope

In course of income escaping assessment initiated under section 147 for bringing to tax an item of escaped income, Assessing Officer has authority to bring to tax any other income that also escaped assessment in original assessment.

CIT vs. Best Wood Industries & Saw Mill (Kerala HC)(2011)  

Case Study - CA FINAL - MAY 2011 - Indirect Taxes

Friends .....You can download the latest case decision applicable for May 2011 term from the following link

http://www.caclubindia.com/share_files/case-study-ca-final-may-2011-indirect-taxes-37244.asp

In case of any difficulty, please mail me on bikashbogi@yahoo.co.in. Please go through the full facts of the decision before applying in practical situations of your clients.

CASE STUDY - CA FINAL - DIRECT TAXES - MAY 2011

Friends

You can download the latest case decision applicable for May 2011 term from the following link

http://www.caclubindia.com/share_files/case-study-ca-final-may-2011-direct-taxes-34622.asp

In case of any difficulty, please feel free to mail me on bikashbogi@yahoo.co.in

AMENDMENTS - DIRECT TAXES - CA FINAL - MAY 2011

Friends

you can download the amendments of Direct Taxes applicable for CA FINAL May 2011 in the given link

http://caclubindia.com/share_files/amendments-ca-final-direct-taxes-may-2011-36488.asp 

In case of any query or having problem in download, feel free to mail me on bikashbogi@yahoo.co.in

BUDGET 2011 : EXCISE / CUSTOMS

EXCISE / CUSTOMS

EXCISE:

Ø  Merit rate of CENVAT for non-petroleum goods has been increased from 4% to 5%. This would impact items such as medical equipment, drugs and food products.

Ø  Excise duty exemption on 130 items withdrawn and 1% excise imposed subject to non-availment of CENVAT credit.

Ø  Full exemption from duty withdrawn on IT products such as micro processors for computers etc. The products will now be subject to 5% excise duty.

Ø  Duty rates on cement changed from specific rate to ad valorem.

Ø  Full exemption granted to equipment (air-conditioning/conveyer belt) for used for cold storage.

Ø  Excise duty on packaged software to be levied on media value, where not governed by MRP provisions.

CUSTOMS:

v  Self-assessment in the Customs Act, 1962 both for imported goods and exported goods.

v  Definition of ‘Completely Knocked Down’ added for concessional customs duty under project imports.

v  CVD on packaged software to be levied on media value, where not governed by MRP provisions.

v  BCD @2.5% levied on import of aircraft by non scheduled operators.

v  Exemption from BCD, SAD and CVD @5% on specified parts of hybrid vehicles.

v  All clearances (manufactured or traded) from SEZ to DTA exempt from SAD provided VAT/CST is not exempt.

v  Exemption from full customs duty on parts, component and accessories for manufacture of PC connectivity cables/ battery chargers/hands free headphones of mobile handsets.

v  Time limit for filing of refund claim/ issuance of show cause notice extended from 6 months to 1 year.

CENVAT CREDIT:

ü  Definition of inputs and input services has been amended to exclude inputs/ input services used for construction of building/civil structure, laying of foundation, etc.

ü  Definition of inputs to include goods cleared for free warranty.

ü  Definition of input services amended to exclude trading activity.

ü  Inputs and inputs services primarily used for personal use or consumption of

employees excluded.

ü  Input services such as outdoor catering, health insurance, life insurance, etc. Has been specifically excluded.

ü  Credit required be reversing when inputs or capital goods have been partially or fully writing off in the books of accounts.

ü  Definition of inputs and input services has been amended to exclude inputs/ input services used for construction of building/civil structure, laying of foundation, etc.

ü  Rule 6 (5) of the Credit rules has been omitted. Now the manufacturer or service provider is eligible to claim proportionate credit on all services attributable to taxable activity in terms of Rule 6(3A).

ü  The amount payable on exempted services (when credit on common inputs/input services has been claimed) has been reduced from 6% to 5%.

ü  The restriction on credit under Rule 6 is not applicable in case the taxable services are provided without payment of service tax to SEZ unit/zone/ developer.