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02.02.2011 - Recent Updates as on 02.02.2011
Wednesday, February 2, 2011

1.   THE COMMISSIONER OF INCOME TAX Vs. SPLENDER CONSTRUCTION, ITA No.1977 OF 2010, JUDGMENT RESERVED ON 09.12.2010, THE HIGH COURT OF DELHI AT NEW DELHI 

Whether the treatment given by the assessee company to the short terms capital asset as a long term capital asset is not a colorable device used by the assessee company to pay lower rate of tax on the gain accruing from the sale of immovable property under the garb of ‘Long Terms Capital Gain’ which was actually the short terms capital gain attracting normal rate of tax? 

It was a case where the land in question was purchased in the financial year 1998-99. Thereafter, it was shown in the balance sheet as „stock in trade. However, during the financial year in question when the land was sold, the same have been converted by the assessee from „stock in trade to “investment”. Obviously, this change in the books of accounts, just before the sale of the property, was made to avoid payment of full taxes by changing the complexion of the earnings made on the sale of the property. The Assessing Officer, however, still allowed the change but then was right in holding that the period of holding the asset was reckoned from the date when it was converted as investment from stock in trade and not from the date when the land was purchased. Therefore, the gain was to be treated as short term capital gain. The assessee, under the garb “long term capital gain” wanted to pay lesser tax. It had thus clearly furnished inaccurate particulars of income. 

(Please click here for judgment)

   

2.   COMMISSIONER OF INCOME TAX, DELHI - 1, Vs. BHARTI TELEVENTURE LIMITED, INCOME TAX APPEAL NO. 1337, 1339 AND 1340 OF 2010, DATE OF ORDER : 03.01.2011, HIGH COURT OF DELHI

The facts of the case clearly indicate that the disallowance has been made without establishing nexus between borrowed funds and specific advances to subsidiaries. The appellant company had adequate non-interest bearing funds by way of Share Capital and Reserves. In the result the disallowance cannot be sustained as prima facie the advances were made out of appellants own capital.

(Please click here for judgment)

   

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  • RBI Released - Annual Report of Banking Ombudsman Scheme 2009-10  (Click for detail)

  • RBI/2010-11/395 - Recognition of permanent diminution in the value of investments in banks’ subsidiaries/joint ventures  (Click for detail)

  • RBI seeks comments on Report of Working Group on Information Security, Electronic Banking Technology, Risk Management and Cyber frauds  (Click for detail)

  • Circular No.13 - Import of inputs under Advance Authorisation (AA) and Duty Free Import Authorisation (DFIA) issued SIONs E-1 & E-5  (Click for detail)

  • Notification No. 7 - Tariff Value for import of Poppy seeds is 3317  (Click for detail)

  • Credit Card Transaction Via Cell-phone will Require One-time Password from Today  (Click for detail)

  • Self-Assessment for Customs Duty Coming  (Click for detail)

  • Date of filing of audit report (e704) for the period 01.04.2009 to 31.03.2010 is extended upto 15.02.2011   {Source:http://www.mahavat.gov.in/Mahavat/index.jsp}

         

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CA. Sanjay Kumar Agarwal, Founder - Voice of CA
Member  Central Council - ICAI
Former Chairman - NIRC
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agarwal.s.ca@gmail.com  
    
   
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