1. ST Noti. No.15: SEZ Unit or the Developer shall furnish to the jurisdictional Superintendent of Central Excise a quarterly statement, in Form A-3, furnishing the details of specified services received by it without payment of service tax  (Click for detail)
   

2. Trusts Run by Cos Abuse Income Tax Breaks: CAG Report  (Click for detail)

3. Tax reforms panel keen to improve dispute resolution mechanism  (Click for detail)
   

4. Why hedge funds still manage to seduce investors  (Click for detail)
   

5. FinMin admits fiscal slippage in first half  (Click for detail)
   

6. RBI extends bank's special forex window till December 31  (Click for detail)
   

7. RBI to shut down dollar swap window on November 30  (Click for detail)    
   

1.  ACIT Vs. Shri A.N. Annamalaisamy (HUF), ITA No. 1634/Mds/2012, A.Y. 2009-10, Dated: 05.02.2013, ITAT - Chennai

Whether in case where assessee admitted lower value of jewellery in original return and admitted higher in search but during assessment offered entire value in revised return and paid tax along with interest, penalty u/s 271AAA could not be sustained.

Held: Yes

There was a search conducted u/s 132, in the course of search, on the basis of materials found therein, the assessee had admitted an additional income pertaining to jewellery. While filing the original return, the assessee admitted lower income. But in the course of assessment proceedings, before the completion of assessment, the assessee filed a revised return offering the entire value of jewellery.  The AO levied penalty under sec.271AAA for the reason that the assessee has not acted according to the statement made under sec. 132(4) in the course of search, wherein undisclosed income was admitted.

Held_that since assessee had filed a revised return before completing assessment, first return filed by assessee was non est and only valid return was revised return filed by assessee. The assessee has duly offered the amount admitted at time of search for taxation and paid tax with interest and also explained about business and stated that jewellery was acquired over a period of time. There was no ground to levy penalty u/s 271AAA.

(Please click here for judgment)

2.  London Star Diamond Company (I) P. Ltd. Vs. DCIT, ITA No. 6169/M/2012, A.Y. 2009-2010, Order Dated 11.10.2013, ITAT- Mumbai

Whether Forward Exchange Loss incurred due to fluctuation in foreign exchange against export receivables is a business loss or a speculative loss.

The assessee being an exporter, made export of diamonds and outstanding receivable in foreign currency and entered into forward contracts with the Banks to hedge the exchange loss. The assessee has incurred a loss on account of said forward contracts but the AO & CIT(A) held that the forward contracts constituted a “speculative transaction” u/s 43(5) and that the loss suffered thereon was a “speculation loss” which could not be set-off against the other income.

The Tribunal held that:

As per the provisions of Sec. 43(5) of the I.T. Act, a forward contract for purchase or sale of foreign currency is a “speculation transaction” as it is settled otherwise than by the actual delivery or transfer of the commodity. A forward contract, entered into with banks for hedging losses due to foreign exchange fluctuations on the export receivables, is in the nature of a “hedging contract” and is essential or incidental to the export business of the assessee. Thus, the loss is a business loss.

Further, in case of loss on account of premature cancellation of the forward contracts, the assessee requires to explain the reason for the premature cancellation.

(Please click here for judgment)