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30.12.2013 - Voice of CA presents - Updates
Monday, December 30, 2013

  I. Today's Headlines:    


  1. FinMin warns of stern action against service tax evaders from Jan 1  (Click for detail)
  2. Govt may delay exporters' duty refunds to maximise revenue, control fiscal deficit  (Click for detail)
  3. Companies selling non-core assets to reduce debt burden  (Click for detail)
  4. CSR rules to be finalized by first week of January: Sachin Pilot  (Click for detail)
  5. Inflation a hurdle for easy money policy: RBI  (Click for detail)
  6. General elections, a "source of uncertainty" RBI  (Click for detail)
  7. Arvind Kejriwal inherits sound fiscal, liabilities limited  (Click for detail)
  8.  

II.  Direct Tax Case laws:

1.  Cairn UK Holdings Ltd. Vs. DIT, WP(c)No. 6752/2012, Date of Decision: 07.10.2013, Delhi High Court

Benefit of proviso to section 112(1)-Whether available to non-residents

Held Yes

Cairn India Limited to Petronas International Corporation Limited, Malaysia for consideration of US$ 241,426,379. This transaction dated 12th October, 2009, pursuant to an agreement dated 14th October, 2009, was an off market transaction i.e. not through a stock exchange. The transaction resulted in long-term capital gain of US$ 85,584,251 in the hands of the petitioner, after applying the benefit under first proviso to Section 48 of the Income Tax Act, 1961 (Act, for short). The question raised relates to the rate of tax applicable/payable on the long term capital gains earned. Held that A non-resident assessee is entitled to take benefit of proviso to section 112(1).

(Please click here for judgment)


2.  ACIT Vs. M/s. Jayesh Finance, ITA No. 2691 & 2692/Ahd/2009, Date of Decision: 31.10.2013, ITAT – Ahmedabad

Whether cash availability on the basis of cash flow prepared by the assessee after the conclusion of the search in absence of books of account should be accepted.

Held Yes

It is an established way of computation of income where ever there is recycling of cash in a financial business to work out the peak credit. The department then makes an addition on the basis of the peak credit, as appearing in the cashflow- statement, if there is recycling of cash. That peak credit is thus treated as an unexplained income of the assessee. But that working ought not to be final. As far as the assessee is concerned, the undisputed fact is that on the basis of the seized material a cash flow statement was prepared which was supplied to the AO. After the search, the working of the said cash flow statement was, therefore, required to be examined by the AO, that too after due verification from the seized material. We are of the view that a cash flow statement which was prepared on the basis of the seized material must not be ignored. Once the assessee is in the business of finance then the assessee is required to furnish the cash flow statement, so as to arrive at the figure of the incremental book credit, as per the prevalent practice. We are taking this view on the basis of decision of Hon’ble Gujarat High Court pronounced in the case of Pipush Kumar O. Desai, 247 ITR 568 (Guj.).

(Please click here for judgment)


 

 Golden Rule:

"Always have a unique character like salt..
Its presence may not felt,
but its absence makes every thing tasteless"

 

  Thanks & Regards

Team

Voice of CA

 

 


 

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