Wednesday, February 23, 2011

Fwd: TaxGuru.in : Legal & Tax Updates



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From: LEGAL & FINANCIAL UPDATES FROM TAX GURU <info@taxguru.in>
Date: Wed, Feb 23, 2011 at 9:37 AM
Subject: TaxGuru.in : Legal & Tax Updates
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TaxGuru.in : Legal & Tax Updates

Link to LEGAL & FINANCIAL  UPDATES FROM TAX GURU

Scope of appeal under section 248 can never be beyond scope of examination of nature of obligation under section 195(2) cast on a resident payer

Posted: 20 Feb 2011 09:06 PM PST


In an appeal under section 248 the dispute relating to the chargability alone can be subject matter and not a possibility of assessing the income of the non-resident in the hands of the resident payer.

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Indo-UAE Tax Treaty- Aggregation of time spent on different projects can only arise for `connected' projects

Posted: 20 Feb 2011 07:41 PM PST


The word `connected' is not defined anywhere in the India-UAE Tax Treaty but, contextual meaning of that term would include connection in terms of the nature of work carried out; the connection would not arise only because these are carried out at...

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Proceedings u/s 163 are only intended to ensure that a person can be regarded as a representative assessee only on existence of certain conditions

Posted: 20 Feb 2011 07:39 PM PST


The fact that the Agent has deducted tax under section 195 will not be a bar to proceed and pass an order under section 163 against the agent.

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Every claim made against an insurance company in respect of a loss, would be a claim within purview of claims "requiring to be paid or settled" under section 64UM(2) of Insurance Act

Posted: 20 Feb 2011 07:23 PM PST


Under the proviso to sub-section (2) of section 64UM it is not open to the Insurance company to repudiate the claim once it has appointed the surveyors and the surveyors have given an assessment of the loss.

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There is no provision in section 148(1) stating that after objection is received, a detailed order of rejection has to be passed before passing final order of reassessment

Posted: 20 Feb 2011 07:19 PM PST


Even if there is any lacuna in the procedure followed by the Assessing Authority while rejecting the objections raised by the assessee against the notices issued under sections 147 and 148(1), it is not as if the assessee is left in lurch and...

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Section 127 mandates that assessee must be given a reasonable opportunity of being heard while exercising power to transfer cases

Posted: 20 Feb 2011 07:16 PM PST


Where the assessee was not provided with any opportunity of being heard in the matter, the reasons assigned in the order which was "administrative convenience and for co-ordinating effective investigation" also could not be said to be the reasons as...

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Cenvat Credit – To avail credit lawfully, raw material, on which same is sought to be availed, must be utilized in manufacture of final dutiable product and credit earned thereon should also be utilized for payment of duty on final product

Posted: 20 Feb 2011 07:14 PM PST


Till and until both the credit earned and the product on which the credit is earned are lawfully utilized, it cannot be said that the credit has been lawfully and completely utilized; of course, the utilization of credit and utilization of input may...

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Making a wrong claim is not at par with concealment or giving of inaccurate information, which may call for levy of penalty under section 271(1)(c)

Posted: 20 Feb 2011 07:08 PM PST


In order to apply the provisions of section 271(1)(c), there has to be concealment of particulars of the income of the assessee; the assessee must have furnished inaccurate particulars of his income.

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India-Singapore DTAA- Technical services provided offshore do not require any deduction of tax at source

Posted: 20 Feb 2011 07:05 PM PST


Rendering of services and utilization should be both in India and Explanation to section 9(2) does not dilute such requirements.

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Even if MOA of an trust contains varied objects, so long as record demonstrates that assessee only conducts educational institutions, it must be regarded as existing solely for purpose of education

Posted: 20 Feb 2011 07:03 PM PST


The fact that a surplus may incidentally arise from the activities of the trust, after meeting the expenditure incurred for conducting educational activities, would not disentitle the trust of the benefit of the provisions of Section 10(23C).

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FERA- Where interest received by revenue was relatable to seized amounts from petitioners, which were invested in fixed deposits by revenue, petitioners would be entitled to accrued interest on such seized amounts

Posted: 20 Feb 2011 06:59 PM PST


There is no justification on the part of the revenue in retaining the amount of interest earned on the seized amount especially, on the touchstone of the doctrine of accretion.

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Appellate Forums while reversing orders of AO are legally bound to dwell upon specific reasons assigned by AO for not accepting explanation of assessee that statement made by him u/s 132(4) was obtained under coercion and duress

Posted: 20 Feb 2011 06:56 PM PST


Where the AO has assigned cogent reasons for not accepting the retraction of the statement under section 132(4) by the assessee, but the Appellate Forums, without meeting the reasoning of the AO for not accepting the explanation of the assessee,...

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Doctrine of mutuality does not apply in case business activities of an assessee-firm is not restricted to partners only

Posted: 20 Feb 2011 06:53 PM PST


Where an Association or Company trades with its members only and the surplus out of the common fund is distributable among the members, there is mutuality and the surplus is not assessable to tax as profit.

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Cenvat credit – Conditions for availing benefit under Notification No. 8/2003-CE dated 1-3-2003

Posted: 20 Feb 2011 06:50 PM PST


Cenvat credit : Manufacturers are not debarred from availing benefit under Notification No. 8/2003-CE dated 1-3-2003 in relation to goods other than goods which are excluded from benefit of said notification while simultaneously seeking to avail...

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Canvat Credit – Valuation of goods transferred by manufacturer to its sister concerns without any invoice

Posted: 20 Feb 2011 06:46 PM PST


The Explanation given by the CBEC vide its Circular No. 643/34/2002-CX dated 1-7-2002 cannot apply in the cases where the transaction value of the concerned goods is available on record; to ignore such value on the record and to take resort to the...

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Court should provide its own grounds and reasons for rejecting claim/prayer of a party

Posted: 20 Feb 2011 06:43 PM PST


Recording of reasons: Despite heavy quantum of cases in Courts, it would neither be permissible nor possible to state as a principle of law, that while exercising power of judicial review on administrative action and more particularly judgment of...

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On invocation of action under section 13 of Securitisation Act by secured creditor, reference before BIFR would abate by virtue of third proviso to section 15(1) of SICA

Posted: 20 Feb 2011 06:38 PM PST


The third proviso under section 15(1) of the SICA relieves the specified strength of secured creditors from shackle of taking consent of the BIFR and permits them to pursue their remedy under the provisions of Securitisation Act, which have been...

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Special Auditor, to whom work is assigned, is very much at liberty, to insist upon payment of such fee/remuneration as he may deem adequate for work assigned to him

Posted: 20 Feb 2011 06:34 PM PST


If the remuneration demanded by the person proposed to be appointed as Special Auditor is not acceptable to the Chief Commissioner or the Commissioner, as the case may be, he may not assign the work to him; but, it would be difficult to accept that...

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Imposition of penalty-If claim made by assessee besides being incorrect in law is mala fide, Explanation 1 to section 271(1)(c) would come into play and work to his disadvantage

Posted: 20 Feb 2011 06:31 PM PST


If the assessee makes a claim which is not only incorrect in law but is also wholly without any basis and the explanation furnished by him for making such a claim is not found to be bona fide, it would be difficult to say that he would still not be...

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Rectification of computational error- A simple computational error can be resolved by rectifying an order of assessment under Section 154(1)

Posted: 20 Feb 2011 08:08 AM PST


It would be entirely arbitrary for the Assessing Officer to reopen the entire assessment under Section 147 to rectify an error or mistake which can be rectified under Section 154; an arbitrary exercise of power is certainly not a consequence which...

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A low rate of gross profit, in absence of any material pointing towards falsehood of accounts books, cannot by itself be a ground to reject account books under section 145(3)

Posted: 20 Feb 2011 08:05 AM PST


If the rate of gross profit declared by the assessee in a particular period is lower as compared to the gross profit declared by him in the preceding year, that may alert the Assessing Officer and serve as a warning to him, to look into the accounts...

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Space-selling service- Any services provided by any person to any other person in relation to sale of space would be taxable from 1-5-2006 and not prior to that date

Posted: 20 Feb 2011 08:02 AM PST


After specific category is introduced as a taxable service in the statute from a specified date, the said activity cannot be a taxable entity or technical entry in any other services prior to that date.

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Before invoking provisions of section 153A it would be necessary to comply with provisions contained under section 132(1

Posted: 20 Feb 2011 07:58 AM PST


The mere issue of warrant of authorization without there being search of the premises mentioned in the warrant of authorization would be meaningless and would not serve the purpose of section 132; therefore, actual search shall have to be carried...

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Income from other sources- Investment or expenditure made in a company where there is no hope of earning profit shall not be covered by section 57(iii)

Posted: 20 Feb 2011 07:56 AM PST


The question cropped up as to whether the amount invested by the assessee in sisters concerned running in loss since several years may be treated as investment made exclusively for the purpose of making or earning such income. Section 57(iii) of the...

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Assessee not entitled to depreciation on a plant which is not in operation since its capitalization

Posted: 20 Feb 2011 07:50 AM PST


Even after introduction of concept of block assets, identity of the individual assets are not lost and the Assessing Officer can restrict the depreciation having regard to the usage of a plant.

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