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05.08.2013 - Voice of CA Presents - Updates
Monday, August 5, 2013

 I.  Today's Headlines   


  1. Finmin wants duty drawback rates to be lowered  (Click for detail)
  2. Services PMI contracts for first time in 20 months  (Click for detail)
  3. Vodafone doesn’t want tax talks under Indian law; seeks neutral authority  (Click for detail)
  4. I-T Dept Gets More Teeth to Conduct Special Audit  (Click for detail)
  5. One-third of over 13 lakh registered firms in India inactive  (Click for detail)
  6. Seven reasons why FM is finding it difficult to turn around the economy  (Click for detail)
  7. RBI expands definition of Infrastructure Loan specified in NBFC prudential norms  (Click for detail)
  8. Announcement - Revised syllabai of selected papers of Intermediate and Final Courses  (Click for detail)
  9. Examination Application Forms of DIRM, ITL&WTO and MAC,TMC & CMC - November, 2013  (Click for detail)

 

II.  A Powerful Presentation:

 
1. [ Contribution by CA Sandeep Garg and contributor is available at casandeepgarg@gmail.com ]

Clause by clause discussion on DVAT

(Please click here)     

 

III.  Direct Tax Case laws:

1.  Ester Industries Limited Vs. Commissioner of Income Tax, Income Tax Appeal No. 702/2007, Date of decision: 29th July 2013, Delhi High Court

Whether a prima facie adjustment can be made u/s 143(1)(a) of the Income Tax Act, 1961 regarding applicability of provisions of Minimum Alternative Tax u/s 115JA of the Act.

Held No,

The assessee company filed its return of income declaring “nil” income along with a note claiming that MAT provisions u/s 115JA of the Act was not applicable. The AO by intimation u/s 143(1)(a) of the Act computed the taxable income under MAT .

It was held that the assessee had specifically claimed that that the provisions of MAT were not applicable on him. The contention may be wrong or incorrect but it has to be dealt with and examined. Further computation has to be made u/s 115JA of the Act, which is not possible without examining and considering several aspects.

Thus, following the decision in SRF Charitable Trust versus Union of India & Others, (1992) 193 ITR 95 (Del.), it was held that the adjustment made in the instant case would not be covered within the four corners and limited scope of Section 143(1)(a) and the AO should issue notice u/s 143(2) of the Act.

(Please click here for judgment)


2.   Mahindra BT Investment Co. (Mauritius) Ltd. Vs. The Director of Income Tax, Writ Petition  No. 2632 of 2013, Date of Pronouncement: 25 July 2013, Bombay High Court

Whether the Authority for Advance Ruling, after having admitted the questions can refuse to give a ruling on the question of law formulated at the final hearing without there being any change in facts or circumstances.

Held No,

The Authority for Advance Ruling admitted the petitioner's application for advance ruling u/s 245R(2) of the Act. However, the Authority during the course of final hearing of the application, suo motu raised a question whether it should at all give a ruling on the questions formulated as the transaction giving rise to the questions was in blatant circumvention of the SEBI Guidelines which has been issued in the interest of the general public. 

After considering the matter, the Authority concluded that the entire cause of action giving rise to the formulated questions is based on an illegal act committed by the petitioner. In these circumstances, the Authority held that it would not be proper for the Authority to give a ruling on the question of law posed before it, as according to the Authority, it emanates from the circumvention of SEBI Guidelines. In any event the Authority held that it has discretion to refuse to give a ruling in an appropriate case and the present case before it, is one such case.

It was held that the Authority, in an appropriate case, has discretion to refuse to give a ruling on a question of law even in respect of matters outside the proviso to Sec. 245R(2), yet this discretion of refusing to rule on a question cannot be arbitrary. The Authority can exercise its discretion not to give a ruling only in cases where fraud and/or illegality is ex facie evident or the fraud or illegality has been established in some proceedings. Such discretion is not to be exercised on a mere suspicion of illegality or fraud having taken place.

Thus, the Authority is not correct in refusing to give a ruling at the time of final hearing in the absence of any fresh material, merely on the basis of the suspicion.

(Please click here for judgment)

 

IV. A Useful Info.:

OECD have issued two drafts on Transfer Pricing

  

1. REVISED DISCUSSION DRAFT ON TRANSFER PRICING ASPECTS OF INTANGIBLES

(Please click here)

  

2. WHITE PAPER ON TRANSFER PRICING DOCUMENTATION

(Please click here)

  

You are requested to send your comments or suggestions regarding OECD drafts guidelines on Transfer Pricing Aspects of Intangibles and White Paper on Transfer Pricing Documentation to CA Avinash Gupta at caavinashgupta@gmail.com, who is volunteered by OECD for the same and their team will  compile all the comments and will send to OCED. You are also requested to mark 'CC' to voiceofca@gmail.com. The last date for sending your comments is 30th September 2013.

 

 Golden Rules:

"Often when we lose hope and think this is the end,
GOD smiles from above and says,
"Relax, sweetheart,
it's just a bend, not the end!
"

 

  Thanks & Regards

Team

Voice of CA

 

 


 

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