I.  What's New of the day : 

1. First Quarter Review of Monetary Policy 2011-12  (Click for detail)

2. Circular No. 57 /2011 – CO Law-Filing of Balance Sheet and Profit and Loss Account in eXtensible Business Reporting Language (XBRL) mode  (Click for detail)

3. MCA Releases XBRL Validation Tool  (Click for detail)

4. ICAI asks govt. to amend Income Tax Act  (Click for detail)

5. Circular No. 56 /2011 – Blocking of DIN consequent to non-filing of Statement of Affairs (SOA)  (Click for detail)

6. Ministry of Corporate Affairs Releases Draft National Competition Policy for India  (Click for detail)

7. RBI/2011-2012/126 - Liquidity Adjustment Facility – Repo and Reverse Repo and Marginal Standing Facility Rates  (Click for detail)
   
    

III.  Judicial Pronouncement 

1.  COMMISSIONER OF INCOME TAX Vs. HARSH TALWAR, Dated: 23rd May 2011, ITA No. 1579 of 2010, Delhi High Court

Penalty under identical circumstances can be deleted

Whether penalty can be imposed merely on the basis that the assessee had surrendered some income during the quantum proceedings.

The assessee had merely challenged the said proceedings only on the ground that the mandatory satisfaction which is to be recorded by the AO before proceedings u/s 271 (1)(c) was not recorded and in the absence of this mandatory requirement, the penalty proceedings were void ab initio. The CIT (A) found, that the AO had not dealt with the defence put forth by the assessee and merely on the basis that the assessee had surrendered the income during the quantum proceedings, the AO jumped to the conclusion that there was concealment on the part of the assessee and rushed to impose the penalty. The CIT(A) held there was no deliberate concealment of income on the part of the assessee and therefore the imposition of penalty was not justified. The Tribunal dismissed the appeal of the Revenue and upheld the order of the CIT (A).

Delhi High Court held apart from what is recorded by the CIT (A), another additional aspect which the Tribunal has pointed out is that even in the case of the partnership firm of M/s Gallaria, wherein the assessee is a partner; similar penalty under identical circumstances imposed by the Revenue had been deleted by the ITAT. The said order in respect of the partnership firm has been accepted by the Revenue and no appeal preferred there against. For all these reasons, the question of law answered in favour of the assessee and against the Revenue.

(Please click here for judgment)

  

2.  ALL GROW FINANCE AND INVESTMENT PVT. LTD. Vs. COMMISSIONER OF INCOME TAX, ITA No. 682/2011, Dated: 3rd June 2011, Delhi High Court

Writing off the bad debt by itself was enough to claim the deduction of bad debt u/s 36(2). Section does not require that the entire money lent, which had become irrecoverable, need to be shown as income in the case of a NBFC business as the Revenue counsel submitted that the debt or part thereof was not shown as income in the previous year in which the amount of such debt or part thereof was written off and so conditions under sub–section (2) of section 36 are not fulfilled.

In the present case there is no dispute that the amounts of debts in question were advanced by the assessee in the ordinary course of money lending; the only condition laid down in second part of sub-section 2 of Section 36 is that the amount should be advanced in the ordinary course of business which by itself proves its revenue nature and no further conditions are required to be satisfied which are only applicable with regard to debt qualifying as bad debt in the first part of sub-section 2, the authorities below are not justified in holding that the amount of Rs.34,95,000/- was not allowable as bad debt u/s 36(1)(vii) r/w Sec 36(2).

(Please click here for judgment)

 

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