I.  Today's Headlines:

 II.  Useful Contribution:

[Contribution by CA Bimal Jain and contributor is available at bimaljain@hotmail.com]

A useful Update - "Excise paid on Inputs and ST on Input services used in construction sector can be utilized for discharging ST liability on renting of immovable property"

(Please click here )

III.  Direct Tax Case laws:

  1.  CIT vs. Times Business Solution Ltd., ITA No. 209/2013, Date of Decision 09.04.2013, Delhi High Court

Whether the assessee consequent upon a scheme of demerger eligible for writing of the bad debts related to earlier years before the take over from the holding company?

The assessee company consequent upon a scheme of demerger as per the provisions of The Companies Act took over entire business (web portal) owned by the holding company. The assessee has written off the bad debts related to the previous years before the takeover of the business from the holding company. Appellate Tribunal confirmed the decision of CIT (A) by relying on the case supra which stated that when the original owner is entitled to write off the bad debts, the successor (assessee) too is entitled to write off the debts in the same manner and after the amendment effective from 01.04.1989, it is not required to prove the authenticity of debts becoming bad by the assessee and, therefore, got in favor of the assessee. The Hon’ble High Court dismissed the appeal by stating that no question of law arises.

(Please click here for judgment )

2.  CIT vs Aradhana Drinks and Beverages Pvt. Ltd., ITA No. 607/2012, Date of Decision 01.04.2013, Delhi High Court

Whether the amount of liabilities taken over in case of slump purchase are to be considered for reaching at the amount of assets taken over for the value of purchase consideration ?

Yes, the Hon’ble Tribunal has decided on facts, by giving a factual finding that the amount of liabilities taken over in case of slump purchase are to be considered for reaching at the amount of assets taken over for the value of purchase consideration. In the instant case, the assessee had made a slump purchase and acquired a certain amount of liabilities along with the specific leased assets. The AO by not considering the amount of liabilities taken over mentioned the said assets as unexplained investments as per section 69 of the Income Tax Act, 1961. On appeal by department before Delhi High Court, the Hon’ble Delhi High Court has dismissed the appeal considering the fact as no question of law arises in the given case.

(Please click here for judgment )

 IV.  Indirect Tax Case laws:

1.  Delhi Chit Fund Association v. Union of India, W.P. (C) 4512/2012, Date of Decision 23.04.2013, Delhi High Court

In the writ petition filed by the petitioner, the petitioner prayed that the levying of Service Tax in ultra-virus the section 65B (44). The petitioner contended that the chit business is “merely a transaction in money or actionable claim” and hence it is specifically excluded from the definition of service. Therefore chit business is not liable to service tax.

The Court held that Chit fund business is not “merely a transaction in money or actionable claim”. Hence it his liable to service tax. But there is statutory provisions are not clear for the levying of service tax on chit fund.
In such a case the high court, held its decision in the favor of assessee and held that due to non clear statutory provision it is not liable to service tax.

(Please click here for judgment )

 Golden Rules:

"Changing the Face can change nothing.
But "Facing the Change" can change everything" 

  Thanks & Regards

Team

Voice of CA