I. Today's Headlines:    

1. CBDT approves Aadhaar Card as valid identity, address proof for issuing PAN (Click here for details).

2. Notification No. 17/2013-Service Tax - Regarding Exemption under Focus Market Scheme (FMS) on Export of Meat and Meat Products, Cotton and Cotton Yarn.  (Click here for details).

II.  Direct Tax Case laws:

1. ACIT vs. M/s Eskay Designs, I.T.A.No.1951/Mds/12, Date of Order : 09.12.2013, ITAT – Chennai.

Whether the Section 40(a)(ia) applies only to those amounts ‘payable’ and not to those amounts ‘paid’.

Held Yes.

In this regrad the  judgment of the Hon’ble Allahabad High Court in the case of CIT vs M/s Vector shipping Services (P) Ltd has proceeded  in favour of the assessee. At the same time, we find that the orders of the Calcutta High Court in the case of CIT vs Md. Jakir Hossain Mondal dated 4.4.2013 in I.T.A.No. 31 of 2013 and Gujarat high court’s decision in the case of CIT vs Sikandarkhan N. Tunvar are against the assessee. In such circumstances, the rule of Judicial Precedence demands that the view favourable to the assessee must be adopted, as held by the Hon’ble Supreme Court in the case of CIT vs. Vegetable Products Ltd., 88 ITR 192. Following the above  fundamental rule declared by the Hon’ble Supreme Court, we have to  follow the judgment of the Hon’ble Allahabad High Court, which is in favour of the assessee. Accordingly, we hold that the disallowance under section 40(a)(ia) applies only to those amounts ‘payable’ and not to those amounts ‘paid’

(Please click here to view the Judgement)

2. Income Tax Officer Vs. Mrs. Maya Gupta, ITA No.3435/Del/2013, Date of Order : 13.12.2013, ITAT-Delhi.

Reopening on the basis of vague / uncertain information on Accommodation Entry not valid

In the present assessee is Maya Gupta and not Bimla Devi. In the chart from investigation wing, only the value of entry taken is mentioned but the nature of entry whether it is a bogus gift, loan or share capital money is not mentioned. Moreover, on what basis the presumption is drawn that the assessee has taken any accommodation entry is also not mentioned. No reference is made to any statement given by any accommodation entry provider or any documentary evidence found from their premises which indicated any accommodation entry being taken by the assessee. Therefore, on these facts, in our opinion, the decision of Hon’ble Jurisdictional High Court in the case of Signature Hotels P.Ltd. (supra) and Insecticides (India) Ltd. (supra) would be squarely applicable because the information on the basis of which the Assessing Officer had initiated  proceedings under Section 147 was vague and uncertain. Therefore, we are of the opinion that the learned CIT(A) rightly held that the reopening of assessment was not valid. Accordingly, the Revenue’s appeal is dismissed.

(Please click here to view the Judgement)

 

 Golden Rule:

"There is only one way to avoid criticism: do nothing, say nothing, and be nothing."

  Thanks & Regards

Team

Voice of CA