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27.01.2012 - Voice of CA Presents - Updates
Friday, January 27, 2012


I.  Today's Topline News : 
  1. VAT Cir No. 16 - Last Date for online Filing Returns of returns for the Tax Period Dec’ 2011 & Third Quarter 2011-12 is extended upto 10.02.2012 and filing of hard copy of returns also extended upto 13.02.12  (Click for detail)

  2. CO. LAW - Section 233B of the Companies Act, 1956 – Audit of Cost accounts in certain cases – order under section 233B(1)  (Click for detail)

  3. IRFC tax free bonds issue to open on Jan 27  (Click for detail)

  4. RBI - External Commercial Borrowings – Simplification of procedure  (Click for detail)

  5. RBI - UCBs – Cash Reserve Ratio (CRR)  reduced  (Click for detail)

  6. RBI - Deregulation of Savings Bank Deposit Interest Rate – Guidelines  (Click for detail)

  7. Announcement for Campus Placement Programme for Newly Qualified Chartered Accountants   February-March, 2012  (Click for detail)

II.  Useful Updates:

1.   M/s Radials International Vs.  Asstt. Commissioner of Income-tax, I. T. Appeal No. 1368 (Del) of 2010, Date of Judgment: 16 December 2011 (ITAT Delhi)

Long-term & short-term gains from PMS transactions taxable as business profits

The assessee offered LTCG & STCG on sale of shares which had arisen through a Portfolio Management Scheme of Kotak and Reliance. The investments were shown under the head “investments” in the accounts and were made out of surplus funds. Delivery of the shares was taken. The ITAT held that as the transactions by the PMS Manager were frequent and the holding period was short, the LTCG & STCG were assessable as business profits.

The intention of the assessee was to maximize the profit. As the purchase and sale of shares under PMS is not in the control of the assessee at all, it cannot be said that the assessee had invested money under PMS with intention to hold shares as investment. The portfolio manager carried out trading in shares on behalf of his clients to maximize the profits. Therefore, it cannot be said that shares were held by the assessee as investment. The fact that the transactions were frequent and its volume was high indicated that the portfolio manager had done trading on behalf of the assessee.

(Please click here for judgment)


2.  COMMISSIONER OF INCOME TAX Vs. RADHE DEVELOPERS, I.T.A No. 546 of 2008, Date of Judgment: Date: 13/12/2011, HIGH COURT OF GUJARAT

The assessee entered into a ‘development agreement’ with the owner of the land pursuant to which it agreed to develop the land. Deduction u/s 80-IB(10) in respect of the profits arising from the said activity was claimed on the ground that it was “derived from the business of undertaking developing and building housing project approved by the local authority”.

The High Court HELD:

Section 80IB(10) allows deduction to an undertaking engaged in the business of developing and constructing housing projects. There is no requirement that the land must be owned by the assessee seeking the deduction. Under the development agreement, the assessee had undertaken the development of housing project at its own risk and cost. The land owner had accepted the full price of the land and had no responsibility. The entire risk of investment and expenditure was that of the assessee. Resultantly, profit and loss also accrued to the assessee alone. The assessee had total and complete control over the land and could put the land to the agreed use. It had full authority and responsibility to develop the housing project by not only putting up the construction but by carrying out various other activities including enrolling members, accepting members, carrying out modifications engaging professional agencies and so on. The risk element was entirely that of the assessee. The Explanation to s. 80IB inserted w.r.e.f 1.4.2001 has no application as the project is not a “works contract”. Further, as the assessee was, in part performance of the agreement to sell the land, given possession and had also carried out the construction work for development of the housing project, it had to be deemed to be the “owner” u/s 2(47)(v) r.w.s. 53A of the TOP Act even though formal title had not passed.

(Please click here for judgment)


3.  [ Contribution by  CA Puneet Goyal, and contributor is available at email-id: ]

An Article - Analysis of Short Term Accommodation Service Introduced by Finance Act, 2011

(Please click here for detail)



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Jitna najuk utna hi mazboot hota hai,
Utha lete hai jo kanto ko haatho me,
Phool bhi unhi ko naseeb hota hai


Thanks for your valuable time


"Voice of CA"  

CA. Sanjay Kumar Agarwal
Founder - Voice of CA 
Mob : 9811080342,      
CA. Sidharth Jain, Co-Moderator 
CA. Mukesh K Bansal, Co-Moderator-FEMA    


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