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18.03.2011 - Recent Updates as on 18.03.2011
Friday, March 18, 2011

1.  COMMISSIONER OF INCOME TAX, DELHI-IV Vs. JAYPEE DSC VENTURES LTD., ITA 357/2010, DATE OF DECISION: 11TH MARCH 2011, HIGH COURT OF DELHI 

“Whether in the facts and circumstances of the case the Income Tax Appellate Tribunal was justified in deleting the addition of Rs.16,36,039/- on the ground that interest earned by the assessee on the fixed deposit receipt being capital in nature cannot be assessed as income from other sources solely on the foundation that the fixed deposit was made for submitting performance guarantee to the National Highways Authority of India.” 

The tribunal took note of the rivalized submissions and came to opine that the assessee had received interest on the FDRs and the said interest had been reduced from the project expenditure which are subject to pending allocations; that the assessee had commenced the operation of the construction of the project; that furnishing of bank guarantee was the sine qua non for initiation of the project and only on furnishing the bank guarantee, could the assessee enter into the contract for construction of the project; that it is not a case where surplus funds have been utilized to earn the interest income; and that it was not the unutilized and surplus money which was deposited by the assessee to earn interest but on the contrary, the activity of depositing money was incidental to the business of the assessee as FDRs were required to be kept to enter into the agreement for commencement of the project and, hence, FDRs with the bank were made with the definite purpose and the interest earned by the assessee on the FDRs must go to reduce the pre-production expenses.

The tribunal also opined that the interest earned by the assessee on the FDRs has intrinsic and inseggregable nexus with the work undertaken and, therefore, the interest earned by the assessee is capital in nature and shall go towards adjustment against the project expenditure and the same cannot be assessed as income from other sources. Being of this view, the tribunal allowed the appeal preferred by the assessee. The Hon’ble Delhi high court assented to the view expressed by the Income Tax Appellate Tribunal and dismissed the departmental appeal. 

(Please click here for judgment)

   

2.  COMMISSIONER OF INCOME TAX CENTRAL-II, NEW DELHI Vs. SHRI NARENDER ANAND, ITA NO. 82 OF 1999, DATE OF DECISION: 24.02.2011, HIGH COURT OF DELHI 

“Whether on the facts and circumstances of the case, the Tribunal was justified in holding that where time for filing return is extended in terms of proviso to Section 139 (1) it automatically means extension of the due date for the purpose of Section 43B of the Income Tax Act?” 

The order of the ITAT records that if the amount of sales tax stood paid within the extended period as granted by the AO, then the amount could not be disallowed for making addition. Consequently, the ITAT directed the AO to verify the payment of outstanding sales tax, and if that stood paid by the assessee within the extended period of time for filing return, not to make the addition on this account to the total income of the assessee. The Hon’ble Delhi high court assented to the view expressed by the Income Tax Appellate Tribunal and dismissed the departmental appeal. 

(Please click here for judgment) 

   

3.   [Contribution by CA. Mukesh K Bansal, Co-Moderator - FEMA]

FEMA Update on Annual Returns for Foreign Assets and Liabilities by Indian Companies and Discontinouse of Part B of Form FCGPR

(Please click here for detail)

  

4.   [Contribution by  CA. Manoj Gupta, and contributor is available on Mobile No. 9350760606 / email-id: mgupta2803@gmail.com ]

A Useful Article on "NABARD Venture Capital Fund Investment Scheme"

(Please click here for detail)

  

What's New
  • CA Notifications  (Click for detail)

  • Press Release: 2010-2011/1330 - Mid-Quarter Monetary Policy Review: March 2011  (Click for detail)

  • Companies (Name Availability) Rules, 2011  (Click for detail)

  • Finmin approves 9.5 percent interest on PF deposits for 2010-11  (Click for detail)

  • RBI/2010-11/ 426 - Exim Bank's Line of Credit of USD 50 million to the Government of the Republic of Malawi  (Click for detail)

  • Notification No. 32 – Quantity restriction of 55 lakh bales on export of cotton during Cotton Season, 2010-11- Exemption for export of 5000 bales of Assam Comilla cotton  (Click for detail)

  • Notification No. 33 – Prohibition on export of Non-basmati Rice – Amendment in Notification  No. 33/2009-14 dated 03.03.2010 relating to exemption for export to Nepal  (Click for detail)

  • Notification No. 34 - Minimum Export Price of Onions  (Click for detail)
  • GST Council to Act as Joint Forum for Center, States  (Click for detail)

  • Cabinet OKs GST Bill, May Table It This Session  (Click for detail)

 

 "Try to learn something about everything and everything about something" 

 

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

 

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