Monday, April 19, 2010


ISSUE DATED 19-4-2010

Volume 2 : Part 7




> Where valid data supported by appropriated documentation furnished for the project regarding administrative expenses, deletion of addition justified
: ITO v. B. Nagi Reddy (Chennai) p. 730


> Deduction of premium on secured premium notes allowable u/s. 36(1)(iii) : Jt. CIT v. Bombay Dyeing Mfg. Co. Ltd. (Mumbai) p. 733


> AO has no jurisdiction to reopen case for AY 1998-99 under proviso to s. 14A : Jt. CIT v. Bombay Dyeing Mfg. Co. Ltd. (Mumbai) p. 733


> Advances adjusted against professional fees, in absence of contract for any film, not assessable as income : R.S. Suriya v. Dy. CIT (Chennai) p. 746


> Where TDS prior to due date u/s. 139(1) deduction of payment by actor to organisation for managing call sheets allowable u/s. 40(a)(ia)(A) : R.S. Suriya v. Dy. CIT (Chennai) p. 746


> Higher rate of depreciation allowable on wind mill as requirement of second proviso to r. 5(1A) fulfilled : K. Ravi v. Asst. CIT (Chennai) p. 752


F Immovable property devolving on assessee and her children, children

relinquishing share in favour of assessee cannot be deemed gift for purposes of computing cost of acquisition : M. Suseela v. ITO (Vishakhapatnam) p. 760


> Loss on account of transactions in shares and transactions of future options is speculative loss : Renaissance Asset Management Co. P. Ltd. v. AO (Delhi) p.765


> Appeal filed after ten years without reasonable cause : delay cannot be condoned : Foramer France v. Dy. CIT (Delhi) p. 773


> Payment of incentive to Dock Labour Board workers disallowed u/s.37 : Sical Logistics Ltd. v. Dy. CIT (Chennai) p. 786


> Assessee claiming deduction u/s 80-O for interest income is liable to penalty u/s. 271(1)(c) : Asst. CIT v. Surinder Lal Chopra (Delhi) p. 790



Finmin work in haste to give final shape to direct taxes code

The Finance Ministry has set up a task force to draft the Bill, by almost doubling the strength of its revenue officials working on the Direct Taxes Code, as it is running against time to present it in the monsoon session of Parliament. The Government has posted seven Commissioners and Joint Commissioners of income-tax as Officers on Special Duty (OSD) in Tax Policy Legislation (TPL), a division of the Central Board of Direct Taxes (CBDT).

With the addition of seven officials in two rounds (three in first round and four in the second), it has now 17 officials to finalise the architecture of the code. The newly deputed officials are busy giving shape to the Direct Tax Bill.

The Finance Minister has assured the industry that the Government is open to re-examining the proposals relating to the Minimum Alternate Tax (MAT), capital gains tax, Double Taxation Avoidance Agreement (DTAA), general anti-avoidance rule, taxation of charitable organisations and foreign companies in India, exempt-exempt-tax regime, deductions in case of retirement benefits and income from house property. Apart from the nine areas identified by the Finance Minister, the taskforce was looking at various parts of the draft code.

The Government is planning to implement the Direct Taxes Code in April 2011. It will replace the Income-tax Act, 1961. The Finance Ministry will have to get the Bill vetted by the Law Ministry before it takes it to Parliament. [Source : dated April 9, 2010]



> Aayakar Sewa Kendra Pune receives ISO certification

The nodal agency for implementation of Sevottam scheme, and the Aayakar Sewa Kendra (ASK) unit at Pune has received certification under IS 15700 : 2005 from the Bureau of Indian Standards for excellence in public delivery system after audit of the Directorate of Organisation and Management Services (DOMS) along with the Central Board of Direct Taxes (CBDT) and the Income-tax Department.

ASK is a one stop computerized center for the taxpayers to obtain services promised by the Department in its Citizens' Charter in a time bound manner. ASK provides a front office backed by re-engineered processes and a new outlook of the officials to quickly redress grievances of taxpayers and also to prevent grievances. The first ASK was inaugurated in Pune on May 18, 2009, followed by two more ASKs at Kochi and Chandigarh.

IS 15700 : 2005 requires a public service organization to demonstrate its ability to consistently provide effective and efficient service that meets customer and applicable legal, statutory and regulatory requirements. It aims to enhance customer satisfaction and to continually improve its service and service delivery process. [Source : dated April 6, 2010]


> CBDT move to early resolution of tax case disputes

The Central Board of Direct Taxes (CBDT) has brought all the dispute resolution panels (DRP) under the supervision of the Director-General of Income-tax (International Taxation).

Budget 2009-10 had introduced the concept of DRPs to provide an alternate dispute resolution mechanism to facilitate expeditious resolution of disputes on a fast track basis. This facility was made available only to foreign companies.

Official sources said that the latest move to "subordinate" the 10 DRPs (Delhi-2, Mumbai-2, one each in Pune, Hyderabad, Chennai, Kolkata, Bangalore and Ahmedabad) to the Director-General of Income-tax (International Taxation) should be seen as a step for administrative purposes only.

The larger objective of independence and functioning of the panel as a dispute resolution body need to be subserved. The day-to-day functioning of the panel should not be subordinated to a meticulous scrutiny of an administrative authority, said a partner in tax services. [Source : dated April 8, 2010]


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