I.  What's New of the day : 

1. A Handbook on "The Process of E-filing of Income Tax Returns"  (Click for detail)

2. Service Tax Notification No. 42/2011 - Exemption-Club or Association - Dyeing Units  (Click for detail) 

3. Service Tax clarification - Leviability of service tax under Business Auxiliary Service on computer embroidery work carried out on job work  (Click for detail)

4. Circular No. 04/RBI - Exim Bank's Line of Credit of USD 20 million to the Govt. of the Republic of Mozambique  (Click for detail)

5. A checklist to make filing IT returns easy  (Click for detail)

6. All About Form No. 16  (Click for detail)

7. Benami Transactions Law gets Cabinet Green Signal  (Click for detail)
   
    

II.  Judicial Pronouncement 

1.  Ashok Chaddha Vs. Income Tax Officer, ITA no. 274/2011, Judgment Delivered On: 5th July 2011, Delhi High Court

During the course of search, jewellery weighing 906.900 grams of the value amounting to ` 6,93,582/- was found. The appellant’s explanation was that he was married about 25 years back and the jewellery comprised “stree dhan” of Smt. Jyoti Chadha, his wife and other small items jewellery subsequently purchased and accumulated over the years.

Held that the assessee was married for more than 25-30 years. The jewellery in question is not very substantial. The learned counsel for the appellant/assessee is correct in her submission that it is a normal custom for woman to receive jewellery in the form of “stree dhan” or on other occasions such as birth of a child etc. Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal. Furthermore, there was no valid and/or proper yardstick adopted by the Assessing Officer to treat only 400 grams as “reasonable allowance” and treat the other as “unexplained”. Matter would have been different if the quantum and value of the jewellery found was substantial.

(Please click here for judgment)

  

2.  The Director of Income Tax (International Taxation) II, Mumbai, Vs. Gartner Ireland Limited, Mumbai, INCOME TAX APPEAL (L) NO. 368 OF 2011, DATE : 20th July 2011, Bombay High Court

The assessee filed return of income and claimed refund of tax on the ground that the amount of royalty received by the assessee was covered under Article 7 of the Double Taxation Avoidance Agreement between India and Ireland. The Assessing Officer disagreed with the contention of the assessee and taxed the royalty income at Rs.62.21 lakhs and levied penalty under Section 271(1)(c) of the Income Tax Act, 1961. Counsel for the Revenue informs the Court that the Revenue has filed an appeal against the decision of the Tribunal deleting the quantum addition in the present case and the same is pending. In our opinion, the fact that the appeal against the deletion of the quantum addition is pending before this Court, cannot be a ground to sustain the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961 because the quantum addition itself was made on the basis of the return filed by the assessee which is found to be correct. Merely because the assessee's contention that the royalty income is exempt was not acceptable to the Assessing Officer cannot be a ground to impose penalty under Section 271(1)(c) of the Income Tax Act, 1961.

(Please click here for judgment) 

 

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All bad things start from the mind
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