I.  Today's Headlines:    

II.  A Useful Article:

 
1. [ Contribution by CA Jayant Bothra, Team - Voice of CA and contributor is available at voiceofca@gmail.com ]

"Service tax on renting of warehouse for agricultural purpose under old regime and new regime" 

(Please click here)    

III.  A Useful Article:

 
1. [ Contribution by CA Sumit Grover and contributor is available at sumitgrover.ca@gmail.com ]

"Service Tax in Real Estate"

(Please click here)     

IV.  Direct Tax Case laws:

1.  CIT Vs. Samsung India Electronics Ltd., ITA No. 141/2010, Date of Pronouncement: 09.07.2013, Delhi High Court

Section: 115 JA of the Income Tax Act

Issue I

Whether writing off of the value of the defective stock will lead to addition in income?

Held - No

The value of stock is calculated at cost price or market price in case net realizable value is less than cost price. So, writing off of the value of stock will not lead to additional income.

Issue II

Whether value of defective stock can be adjusted while making computation under Section 115 JA of the Act on the ground that it was an unascertained liability?

Held - No

The AO adjusted the value of defective stock while making computation under Section 115JA of the act on the ground that is was an unascertained liability. On appeal before the Hon’ble High Court, the High Court held  closing stock has to be valued at cost price or market price, if it is lower than the cost price. This is not a liability in the books. Thus, it cannot be considered to be contingent or unascertained liability. The book profits cannot be enhanced/increased on the ground that a part of the closing stock has been valued at market price and not at cost price.

Issue III

Whether the training expenses will be regarded as revenue expenditure?

Held - Yes

The training expenses were incurred by the assessee after the setting up & commencement of the production. So, these expenses will be regarded as revenue expenditure.

(Please click here for judgment)

2.   Surinder Madan Vs. ACIT, ITA No. 364/ 2013 Date of Decision 22.08.2013, Delhi High Court

Section 30 of Income Tax Act, 1961

Whether the expenditure incurred on replacement of old flooring with a new different type of marble flooring be considered as “current repairs” for the purpose of claiming deduction u/s 30(a)(ii) of the Act?

Held: No

The assessee is engaged in the business of export of garments was deprived of the deduction in respect of the expenditure incurred on flooring by the AO by not considering it as eligible as current repairs. The Hon’ble High Court referring the decision pronounced in case of CIT V. Modi Industries Ltd. (2011) 339 ITR 467 (Del.) and CIT vs. Delhi Press Samachar Patra (P) Ltd. (2010) 322 ITR 590 (Del) and considering the facts of the case, stated that a new marble flooring having a distinct advantage of permanent character has occurred and accordingly to be treated as capital expenditure.

(Please click here for judgment)

 Golden Rules:

"When it rains, all birds occupy shelter
but eagle avoids the rain by flying above the clouds.
Problems are common to all
but attitude makes the difference"

  Thanks & Regards

Team

Voice of CA