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12-11-2010 - Recent Updates as on 12.11.2010
Friday, November 12, 2010

1.   COMMISSIONER OF INCOME TAX Vs. M/S BATA STEELS PVT. LTD., ITA NO. 474 OF 2010, DATE OF DECISION: 1.11.2010, PUNJAB AND HARYANA HIGH COURT.

It is not necessary for the assessee to establish the debt already become irrecoverable, if the assessee takes a bonafide decision that it was necessary to write off the bad debts, the writing off may be justified. In any case, for levy of penalty, it has to be shown that the assessee had made concealment or had given wrong information to evade tax.

(Please click here for judgment)

 

2.   COMMISSIONER OF INCOME TAX Vs. M/S KHANDELWAL CABLES LTD. INCOME TAX APPEAL NO. -  619 OF 2007, DATED 1.10.2010, ALLAHABAD HIGH COURT.

It appears that during the year under consideration the Company has paid a sum of Rs.60,00,000/- as fixed royalty and further 8% royalty on the turnover to its Managing Director . A sum of Rs.60,00,000/- has been disallowed by the assessing authority on the ground that it was the expenditure relating to the earlier years and not for the year under consideration and, further 8% royalty has been disallowed on the ground that it was excessive. 

Being aggrieved by the order, the respondent filed an appeal before the Commissioner of Income Tax (Appeal). The Commissioner of Income Tax (Appeal) on perusal of the agreement entered into between the Company and M.D., found that there is nothing on record to show that the payment of Rs.60,00,000/- was relating to the earlier years and accordingly allowed the expenditure. The Commissioner of Income Tax (Appeal) has held that the payment of 8% royalty was not excessive. This view of the Commissioner of Income Tax (Appeal) has been upheld by the Tribunal. 

Both the authorities have recorded the findings that the payment of Rs.60,00,000/- was not relating to the earlier years and payment of 8% royalty is not excessive. The finding of the Tribunal is finding of fact. No substantial question of law arises from the order of the Tribunal. The appeal has no merit and is dismissed.  

(Please click here for  judgment)

  

3.   COMMISSIONER OF INCOME TAX, GHAZIABAD AND OTHERS Vs. SH. SURENDRA SINGH KHURANA, PROP. M/S JAI BHARAT MOTOR TRANSPORT COL, 76-A/1 RAM NAGAR, GHAZIABAD, ITA NO. 634 OF 2007, dated 05/10/2010, ALLAHABAD HIGH COURT.

The assessee has taken loan of Rs. 2,66,700/- in cash. Since the amount has been found deposited in cash in the books of account, the assessing authority was of the view that section 269 SS of the Act was flouted and accordingly penalty under section 271D of the Act has been levied to the extent of Rs. 2,66,700/-. The case of the assessee was that the persons from whom the loan were taken were agriculturist and in emergency the amount has been taken in cash. The assessing authority has not made any addition under section 68 of the Act and accordingly the Tribunal confirmed the order of the CIT (Appeals) for deleting the impugned penalty. The finding recorded by the Tribunal is finding of fact. Under section 273 B of the Act in case it is established that there was the reasonable cause in accepting the deposit in cash. The penalty is not leviable. 

(Click here to see the judgment) 

  

 What's New 

a.   IFRS Update  (Click for detail)

b.  Company Law- Form 8 filing guidelines  (Click for detail) 

c.  CBEC issues show-cause notices to Citibank & Kingfisher Airlines on service tax payments  (Click for detail)

      

    
"Put your heart, mind, intellect and soul even to your smallest acts. This is the secret of success"
    
Thanks for your valuable time 

"Voice of CA"

CA. Sanjay Kumar Agarwal, Founder - Voice of CA
Member  Central Council - ICAI
Former Chairman - NIRC
Mob : 9811080342,
agarwal.s.ca@gmail.com 
   
   
CA. Kapil Goel, Moderator-Direct Taxes
Mob:9910272806,
kapilnkgoelandco@gmail.com

 
CA. Sidharth Jain, Co-Moderator
sidhjasso@yahoo.com 
  
CA. Mukesh K Bansal, Co-Moderator-FEMA
Mob:9540022533,
mukbansal80@gmail.com 

 

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