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TMI Tax Updates - e-Newsletter
February 6, 2012
Case Laws in this Newsletter:
Income Tax
Service Tax
Articles
News
Notifications
Companies Law
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S.O.192 (E), - dated
30-1-2012
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Co. Law
Company Secretaries (Amendment) Act, 2011 - Central Government hereby appoints the 1st day of February, 2012 as the date on which the provision of the said Act shall come into force.
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S.O.191(E), - dated
30-1-2012
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Co. Law
Cost & Works Accountants (Amendment) Act, 2011 - Notified date from which provisions of said Act shall come into force
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S.O.190(E), - dated
30-1-2012
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Co. Law
Chartered Accountants (Amendment) Act, 2011 - Central Government hereby appoints the 1st day of February, 2012 as the date on which the provision of the said Act shall come into force.
Customs
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F.No. 437/02/2012-Cus. IV - dated
2-2-2012
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Cus (NT)
Appointment of Common Adjudicating Authority
Income Tax
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F.7/9/2008-NS.II, - dated
19-1-2012
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IT
IT : PPF Scheme, 1968/Senior Citizens Savings Scheme Rules, 2004 - Notified branches of Central Bank of India authorized to receive, with immediate effect, subscriptions under said schemes
Circulars / Instructions / Orders
Highlights / Catch Notes
Income Tax
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Section 144C of the Income-tax Act, 1961 - Dispute Resolution Panel (DRP) - Reference to - Constitution of DRP at specified places - Cir. No. 1/FT&TR/2012 Dated: January 31, 2012
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Assessment - General - Processing of returns of assessment year 2011-12 - Steps to clear backlog - Cir. No. 01/2012 Dated: February 2, 2012
DGFT
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Fixation of Standard Input-Output Norms (SION) for the export product “Articles made of Thermo Plastic Elastomer (TPE)”. - Cir. No. 95 /(RE-2010)/2009-2014 Dated: February 2, 2012
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Fixation of Standard Input Output Norms (SION) of Food Products (Product Code: ‘E’) in the Handbook of Procedures V.2 (2009-14). - Cir. No. 92 (RE-2010)/2009-2014 Dated: February 1, 2012
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Amendment of Standard Input Output Norms (SION) of Food Products (Product Code: ‘E’) in the Handbook of Procedures V.2 (2009-14). - Cir. No. 93 (RE-2010)/2009-14 Dated: February 1, 2012
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Amendment of Standard Input Output Norms (SION) of Food Products (Product Code: ‘E’) in the Handbook of Procedures V.2 (2009-14). - Cir. No. 94 (RE-2010)/2009-14 Dated: February 1, 2012
Case Laws:
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Income Tax
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2012 (2) TMI 33
Unexplained money – assessee appointed as collecting agent by a company – required to collect the sale proceeds of the aforesaid company from its customers and deposit the same in bank wherefrom it was remitted to company through DD – Revenue contending deposits in bank as unexplained money – Held that :- Assessee produced evidences regarding its appointment as Collecting agent & that deposits related to sales collected and its remittances to company through reconciliation of bank statements of assessee and company. Further, past records of assessee reveal that she had mere income of 1.25 lacs p.a. & have there is no such asset or any other business activities from which it can be said that the assessee had earned a sum of Rs.46.55 lacs from undisclosed sources. Therefore, addition made is deleted – Decided in favor of assessee.
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2012 (2) TMI 32
Jurisdiction defect u/s 158BD – undisclosed income of any other person - assessee filed return in pursunace of notice issued to him u/s 158BD on 24.08.06 after two years 8 months and 23 days of passing the order in case of group searched - Notice u/s 143(2) issued to the assessee on 24.07.08 i.e. after one year 9 months and 12 days from the date of filing of the block return by assessee – Revenue rescuing to Section 292BB – Held that:- Prior to 1.4.2008 a notice u/s 143(2) could have been given within 12 months from the end of the month in which the return is furnished. Hence, in the present appeal, the notice could have been given only upto 31.10.2007 as on 1.4.2008 the limitation period had already expired. Omission on the part of the A.O. to issue notice u/s 143(2), therefore, cannot be a procedural irregularity and the same cannot be dispensed with. Where the legislature intended to exclude certain provisions from the ambit of section 158BC(b), it has done so specifically. Thus, when section 158BC(b) specifically refers to applicability of the proviso hereto, it cannot be excluded, therefore, section 292BB cannot come to Revenue's rescue. Even otherwise, section 292BB was effective from 1.4.2008 , whereas the return u/s 158BD was filed by the assessee on 12.10.2006 and notice u/s 143(2) was issued beyond period of limitation – Decided against the Revenue.
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2012 (2) TMI 31
Unexplained credits – difference in bank balance as per books of accounts vs bank balance as per bank statement treated as unexplained credit – assessee submitted that difference is due to cheques received but not deposited in the bank on advice of cheque providers – Held that: Assessee did not at all get those cheques encashed received on the last day of the accounting year, also evidenced from Bank Statements. It was only a matter of passing entry, which was even reversed in later year. Confirmation from parties regarding issue of cheque & their advice for non-presentation in bank are available on record. Thus it fairly indicates that there is no inflow of any money with the assessee either in cash or through banking channel. Hence, there is no basis whatsoever for making any addition under these circumstances u/s.68 of the Act – Decided in favor of assessee. Similiar position is in relation to cheques issued by assessee and then advising party for non-presentatio. Aforesaid is held in this case also.
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2012 (2) TMI 30
Fringe Benefit Tax – residential accommodation provided to M.D. - Deposit of Rs 5 crore made for the licence to use & occupy the property – Revenue considering notional interest on such deposit under FBT – Held that:- The provision relating to the computation of the value of the fringe benefits is contained in section 115WC. It is a settled principle of law that where the computation provision fails, the charging section cannot be effectuated. In present case, AO has adopted 9% rate which was generally available on FDRs, one can argue that this rate may be 20% which was applicable to ICD. Therefore, it is held that though the provision of security deposit is definitely in the nature of fringe benefit under clause (a) of sub-section (1) of section 115WB, but in the absence of valuation rules, the same cannot be subjected to tax. Accordingly, order of CIT(A) is set aside and addition made is deleted – Decided in favor of assessee.
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2012 (2) TMI 29
Taxability of Cash compensation received – capital receipt vs Revenue receipt - assessee being member of a housing society received flat in new multistoreyed building, displacement compensation and cash compensation in lieu of demolishment of the old residential building owned by the housing society – Held that:- Capital receipt in principle is outside the scope of income chargeable to tax. It is not even the case of the A.O. that the compensation received by the assessee is in the revenue field, and rightly so because the residential flat owned by the assessee in society building is certainly a capital asset in the hands of the assessee and compensation is referable to the same. Further, Supreme Court in the case of CIT vs. Kamal Behari Lal Singha (1971 (8) TMI 15 - SUPREME Court) has held that in order to find out whether it is a capital receipt or revenue receipt, one has to see what it is in the hands of the receiver and not what it is in the hands of the payer. Therefore, receipt of ₹ 11,75,000 by the assessee cannot be said to be of revenue nature. However it is agreed that the same will be taken as part of cost of acquisition of new flat – Decided in favor of assessee.
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2012 (2) TMI 18
Revisionary powers of Commissioner u/s 263 - AO accepted the return of loss filed by assessee in pursuance of notice issued u/s 148 and accepted that assessee had proved the source to invest Rs.20 lacs in FDR (reason for re-opening) and accordingly no addition was made – A.O. also accepted increase in share application money and established geniuness of share application money by issuing summons u/s 131 to person on random basis and statements were recorded – Tribunal quashed the order of CIT(A) - Held that:- Order of the A.O. cannot be regarded as erroneous even if he had failed to carry out necessary verification and required enquiries in respect of the share application money, as no addition has been made on account of the reasons for reopening i.e. investment in FDR, which were recorded before issue of notice u/s 148. As the AO did not make any addition for the reasons recorded at the time of issue of notice under Section 148 of the Act. This position is not disputed and disturbed by the Commissioner of Income Tax in his order under Section 263 of the Act. Sequitur is that the Assessing Officer could not have made an addition on account of share application money in the assessment proceedings under Section 147/148. Accordingly, the assessment order is not erroneous. Thus, the Commissioner of Income Tax could not have exercised jurisdiction under Section 263 of the Act – Decided against the Revenue.
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Service Tax
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2012 (2) TMI 26
‘Accommodation service' – Section 65(105)(zzzzw) of Finance Act, 1994 - Tirumala Tirupati Devasthanams (TTD) is constituted under the Andhra Pradesh Charitable and Hindu Religious Institutions and Endowments Act, 1987, running some guest houses for pilgrims – Held that:- There is no doubt that the petitioner is running guest houses by whatever name they are called whether it is a shelter for pilgrims or any other name. There is no dispute that it has been running these guest houses for a considerable time. Under these circumstances, the petitioner is liable to have itself registered for payment of service tax. We find no error in the view taken by the respondents in this regard – Decided against the assessee.
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