I.  Today's Headlines:   

1. CBDT : Advance Pricing Agreement Guidance with FAQs  (Click for detail)

2. DVAT 51 : Extension of time for filing all quarters of 2011-12 upto 27.05.2013  (Click for detail)
   

3. MEA to draw a road map to attract more investments  (Click for detail)

4. Govt attacks S&P’s rating outlook, questions methodology adopted  (Click for detail)

5. CanBank to refer loan recast to RBI, post auditors’ objection  (Click for detail)
   

   
   

II. Useful Article:

[Contribution by CA Bimal Jain and contributor is available at bimaljain@hotmail.com]

An article - Every audit objection doesn't lead to invocation of extended period and levy of penalty

(Please click here) 

III.  Direct Tax Case laws:

1.   Rural Electrification Corporation Ltd. Vs. CIT (LTU) & Anr., WP (C) 7943/2011, 7944/2011, Date of decision: 23.04.2013, Delhi High Court

Decision: In favour of assessee

Assessment Year: 2004- 05

Section: 147 & 150 of Income Tax Act, 1961

Issue 1- Whether notice u/s 147 of the Act can be issued after expiry of 4 years in absence of failure on the part of assessee to fully and truly disclose all the material facts necessary for the assessment.

Held No, when there is no whisper in the purported reasons of the petitioner having failed to disclose fully and truly all the material facts necessary for its assessment, the necessary ingredients of the provisions of Section 147 are not satisfied. In view thereof, the revenue cannot also raise the ground with regard to the expenses being of a ‘capital’ nature, whereas the petitioner had claimed it as ‘revenue expenditure’.

Case referred: Haryana Acrylic Manufacturing Company v. CIT and Anr., (2009) 308 ITR 38 (Delhi)

(Please click here for judgment)

Issue 2- Whether section 150 of the Act is attracted in case of compliance with the directions given by the Tribunal when no opportunity is given to the assessee.

Held No, the deeming provision provided in Explanation 3 to Section 153 does not get attracted in the present case because an opportunity of hearing had not been given to the petitioner, the provisions of Section 150 would also not be attracted as no prejudice should be caused to anybody without that person having been heard.

Case referred:

1.    ITO Vs. Murlidhar Bhagwan Das, 52 ITR 335 (SC)
2.    A.B. Parikh vs. ITO, 203 ITR 186 (GUJ)

(Please click here for judgment)

2.  CIT Vs. Dhoomketu Builders & Development Pvt. Ltd., ITA No. 528-529/2012, Date of decision: 23.04.2013, Delhi High Court

Decision: Case dismissed

Assessment Year: 2006- 07

Section: 3 of Income Tax Act, 1961

Cases referred:

1.    Precision Electricals And ... vs Commissioner Of Income-Tax : (1989) 176 ITR 453
2.    Western India Vegetable Products Ltd. v. CIT : (1954) 26 ITR 151

Whether the failure of commencement of business would be considered as not set- up of business, resulting in not recognition of expenses/ losses during the period as Business loss?

Held No, in the instant case, the assessee is a company engaged in the business of development of real estate and also the purchase and sale of land. It was held that having regard to the business of the assessee, which is the development of real estates, the participation in the tender represents commencement of one activity which would enable the assessee to acquire the land for development. If the assessee is in a position to commence business that means the business has been set-up.

(Please click here for judgment)

IV.  Tenders Info.:

1. DENA Bank
   CA firms for conduct of concurrent audit of the branches
   Mumbai - Maharashtra
   (Click for detail)

2. Rajasthan State Road Transport Corporation
   CA Firms for audit work
   Jaipur - Rajasthan
   (Click for detail)

3. National Rural Health Mission
   CA Firm for Concurrent Audit of state health & family Welfare Soc.
   Bangalore - Karnataka
   (Click for detail)
   

 Golden Rules:

"If you want to see how rich you are,
then do not count your money,
just drop a tear and see
how many hands come to hold it" 

  Thanks & Regards

Team

Voice of CA