Dear {Member Name}

 

A Useful Announcement for CA Students

Provision of 15-minutes reading and planning time allowance to the candidates of Chartered Accountants Examinations

(Effective from May-2011 CA Examinations)

(Click here for detail)

Recent Updates:

1.  M/s LOK HOUSING AND CONSTRUCTIONS LTD Vs. ADDL. COMMISSIONER OF INCOME TAX, ITA No. 5224 & 5225 /Mum/ 2009 IN THE INCOME TAX APPELLATE TRIBUNAL – MUMBAI, Assessment Years: 2007-08 & 2008-2009, Date of Pronouncement: 11/03/2011

Whether the defence of the assessee that due to the financial crunch it was not possible for the assessee to make the payment of taxes is good and reasonable cause.

It is true that the assessee has shown substantial sales in both the assessment years. as per the copy of the Balance-sheet filed on record for the year ending 31.3.2007, the cash in hand as on 31.3.2007 was declared at Rs 1,60,71,286/- in addition to the balances in the bank plus F. Ds at Rs 2,44,55,643/- and Rs 3,06,47,176/- respectively. Hence, so far the financial year 2006-07 relevant to the A.Y. 2007-08 is concerned, in our opinion, the assessee has sufficient liquidity to pay the tax. So far as financial year 2007-08, as per the copy of the Balance-sheet as on 31.3.2008 relevant to the A.Y. 2008-09 the assessee has shown the cash in hand at Rs 2,36,48,223/- and balance with the Bank as well as fixed deposits are to the extent of Rs 1,34,76,101/- and Rs 4,05,37,644/- respectively. This shows that the assessee has sufficient cash liquidity in the financial year 2006-07 (A.Y. 2007-08) as well as in F. Y. 2007-08 (A.Y. 2008-09). As per evidences on record it is seen that assessee had sufficient cash in hand and also bank balances and hence, it can not be said that assessee was having financial crunch to pay some tax.

(Please click here for judgment)

  

2.  Nagindas P. Sheth (HUF) Vs. ACIT 21 (3), ITA. No. 961/Mum/2010, A.Y. -  2006-2007, Date of Pronouncement : 05/04/2011,  ITAT - Mumbai

The assessee HUF offered income from sale of shares as short-term capital gains (STCG). The AO held the income to be business profits on the ground that (i) the assessee had 158 share transactions in the year which showed the intention to trade, (ii) The regularity and frequency of transactions showed no intention to hold shares to earn dividend and (iii) Instead of one or two demat accounts, the assessee had adopted a professional approach and transacted through several brokers. On appeal, the CIT (A) held that profit on sale of shares held for less than 30 days was business profits while other profits was STCG. On appeal by the assessee and department, HELD deciding in favour of the assessee.

The fact that the assessee has transacted in 158 shares should not be the sole criterion to come to the conclusion that assessee is a trader in shares. The gains earned by the assessee deserve to be assessed as capital gains because:

(a) the assessee was holding the shares in its books as an investor;

(b) the assessee did not have any office or administration set up;

(c) the shares were acquired out of own funds and family funds and not through borrowings;

(d) there was not a single instance where the assessee had squared-up transactions on the same day without taking delivery of the shares;

(e) In the previous and subsequent assessment years, the AO had vide scrutiny assessments treated the assessee as an investor.

(Please click here for judgment)

     

What's New

1. ITAX-20-11- IT Section 80C of the Income-tax Act, 1961 - Deductions - In respect of insurance premium, etc.  (Click for detail)

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2. RBI/2010-11/481 - Scheme of 1% interest subvention on housing loans upto Rs. 10 lakh – Guidelines  (Click for detail)

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3. Circular No. 17/2011 - COLAW-Doc. delivery by electronic mode-A instead of UPC - relief through the Green Initiative  (Click for detail)

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4. Cos Taking LLP Route to Escape Tax Liability  (Click for detail)

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5. Sebi Modifies Norms to Appoint Internal Auditor  (Click for detail)

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 "A retired husband is often a wife's full time job"

   

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