I.  Today's Topline News : 

1. Income Tax Notification No. 54 - Agreement between the Government of the Republic of India and Government of the British Virgin Islands for the exchange of information relating to taxes  (Click for detail)

2. XBRL Filing Manual  (Click for detail)

3. SC- Directors not vicariously liable for crime of company  (Click for detail)
    

II.  Recent Updates:

1.   HARISH P. MASHRUWALA, MUMBAI Vs. THE ASSISTANT COMMISSIONER   OF INCOME TAX, INCOME TAX APPEAL NO. 5195 of 2010,  Date : 22nd SEPTEMBER 2011, HIGH COURT AT BOMBAY

The penalty is imposed not because the amount offered by the assessee has been assessed under a heading other than the heading declared by the assessee, but the penalty has been levied on account of the fact that the declaration made by the assessee regarding the source from which the income and Rs.17,00,000/has been earned has been found to be incorrect. In this view of the matter, once the declaration made in the return of income itself is found to be incorrect, it would obviously amount to furnishing inaccurate particulars of income and consequently the provisions of Section 271(1)(c) of the Act would be attracted.

(Please click here for judgment)

  

2.  M/S TALLY SOLUTIONS PVT. LTD. Vs. THE DEPUTY COMMISSIONER OF INCOME TAX, ITA NO. 1235/BANG/2010, (ASSESSMENT YEAR 2006-07), Date : 26th SEPTEMBER 2011,  ITAT – BANGLORE

There is nothing in s.92CA that requires the AO to first form a “considered opinion” before making a reference to the TPO. It is sufficient if he forms a prima facie opinion that it is necessary and expedient to make such a reference. The making of the reference is a step in the collection of material for making the assessment and does not visit the assessee with civil consequences. There is a safeguard of seeking prior approval of the CIT. Moreover, by virtue of CBDT’s Instruction No.3 of 2003 dated 20.5.2003 it is mandatory for the AO to refer cases with aggregate value of international transactions more than Rs.5 crores to the TPO (Sony India 288 ITR 52 (Del) & Ranbaxy Laboratories 299 ITR 175 (AT) (Del) followed);

(ii) The argument that the “Excess Earning Method” adopted by the TPO is not a prescribed method is not acceptable. A sale of IPR is not a routine transaction involving regular purchase and sale. There are no comparables available. The “Excess Earning Method” is an established method of valuation which is upheld by the U.S Courts in the context of software products. The “Excess Earning Method” method supplements the CUP method and is used to arrive at the CUP price i.e. the price at which the assessee would have sold in an uncontrolled condition (method explained, Intel Asia Electronics Inc followed);

(iii) On merits, the “Excess Earning Method” has to be applied using the projected sales (and not actual sales) because when an intangible is sold, the risk of future income potential lies with the buyer. However, in determining the projected sales and profits, the TPO committed several errors such as not excluding the sales-returns (detailed directions given on how to apply the EEM).

(Please click here for judgment) 

  

III.  Today's Bottomline News : 

1. Circular No. 32-11-Liberalised Remittance Scheme for Resident Individuals-Revised Application cum Declaration form  (Click for detail)

2. ICAI wants RBI to name PSU bank auditors  (Click for detail)

3. President looks forward to greater flow of tax information after DTAA  (Click for detail)
    

IV.  Today's Tenders Info. :

1. Punjab Water Resources Management Development Corporation
   CHANDIGARH
   (CLICK FOR DETAIL)
    
2. CENTRAL ELCTRONICS LIMITED
   SAHIBABAD - UTTAR PRADESH
   (CLICK FOR DETAIL)

Key of Success :

"Sometimes we feel all doors are closed in our life..
But, all the closed doors may not be locked..
They may be waiting for our knock...."

  

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"Voice of CA"  

  
CA. Sanjay Kumar Agarwal
Founder - Voice of CA 
Mob : 9811080342, agarwal.s.ca@gmail.com      
   
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mukbansal80@gmail.com