FW: [GlobalIndianCAs] IT : Provisions of section 154 can be invoked for rectifying mistake of non-levy

Provisions of section 154 can be invoked for rectifying mistake of non-levy of interest under sections 234A, 234B and 234C in original assessment

Income-tax : When provisions of sections 234A, 234B and 234C themselves specifically provide for levy, Assessing Officer would be right in invoking provisions of section 154 for rectifying mistake of non-levy of interest under sections 234A, 234B and 234C in the original assessment [Section 154 of the income tax Act, 1961 - Rectification of mistake - Apparent from records] - [2011] 10 taxmann.com 141 (Chennai - ITAT)

Once provision is made for diminution in value of any asset, same has to be

Once provision is made for diminution in value of any asset, same has to be added to net profit for computing book profit u/s 115JB

Income-tax : If amount set aside as provision for diminution in value of any asset, appears on debit side of profit and loss account, which implies that amount of net profit as per profit and loss account is after amount of such provision, then such amount will be added back to net profit for computing `book profit' as per Explanation 1 to section 115JB(2); there is no other requirement in language of section for addition or non-addition of amount of provision for diminution in value of any asset to amount of net profit as shown in profit and loss account, depending on way in which such provision has been shown in balance sheet [Section 115JB of the Income-tax Act, 1961 - Minimum Alternate Tax]

l There is not even a remotest hint in the language of clause (i) of Explanation 1 to section 115JB that some value of the asset must remain after diminution, as a precondition for adding it to the net profit - [2011] 10 taxmann 144 (Mum. - ITAT)

Hyderabad Stock Exchange is not entitled to exemption u/s 11 even though it

Hyderabad Stock Exchange is not entitled to exemption u/s 11 even though its dominant purpose is general public utility

Income-tax : If the assessee - Stock exchange is having uncontrolled powers to carry out any object which is to benefit its members, employees or ex-employees, then exemption under section 11 should not be available to the assessee though at the same time primary dominant purpose of the assessee is of the nature of 'general public utility' [Section 2(15) of the Income-tax Act, 1961 - Charitable or religions trust - Charitable purpose - [2011] 10 taxmann.com 132 (Hyd. - ITAT)

There is no absolute ban on disclosure of IT returns under RTI Act

There is no absolute ban on disclosure of IT returns under RTI Act

Income-tax : RTI : The right forum for seeking the IT Returns of an assessee by a third person is either the Chief Commissioner, Income-tax or the Concerned Court, if the matter is sub-judice.

After the repealing of section 137 of the Income-tax Act, 1961 by Finance Act, 1964 the Court in a sub-judice matter can direct the IT authorities to furnish the information pertaining to IT Returns of an assessee for inspection by the Court - [2011] 10 taxmann 149 (CIC)

Character of an expenditure shall not change merely because

Character of an expenditure shall not change merely because it was spent out of a subsidy amount received from State Government

Income-tax : Expenditure incurred out of capital subsidy sanctioned in favour of assessee by Govt, of A.P on rectification and improvement of power lines damaged due to cyclone is allowable as a revenue expenditure, source of fund being quite immaterial, shall not change nature of expenditure incurred by assessee [Section 37(1) of the Income-tax Act, 1961 - Business expenditure - Allowability of] - [2011] 10 taxmann.com 152 (Hyd. - ITAT)(TM)

Merely because transaction is with an AE can't be a ground to reject it as

Merely because transaction is with an AE can't be a ground to reject it as a comparable when transaction is at arm's length

Income-tax : For transfer pricing adjustments, it will be most appropriate to compare the transactions for the same year for which the figures are available in respect of comparables which have already been accepted by the department [Section 92C of the Income-tax Act, 1961 - Transfer Pricing]

l Where both the comparables selected by the assessee and those by AO were not suitable for comparison due to difference in nature of business, transactions in assessee's own case for a particular year which was found to be at arm's length in that year should be adopted as basis as the business being same, it would give better results - [2011] 10 taxmann.com 140 (Mum. - ITAT)

Identity of share applicants would be established where assessee had furnis

Identity of share applicants would be established where assessee had furnished copies of their applications for allotment of share PAN details and company details downloaded from MCA site - [2011] 10 taxmann 137 (Delhi)

Where during search in case no evidence found, no addition

Where during search and seizure operation in assessee's case no evidence was found indicating that assessee had any undisclosed income, no addition could be made in block assessment proceedings - [2011] 10 taxmann.com 138 (Delhi )

Adjustment of Modvat Credit towards central excise liability amounts to act

Adjustment of Modvat Credit towards central excise liability amounts to actual payment u/s 43B

Income-tax : When unexpired MODVAT credit is set off against excise duty payable and thereby liability is extinguished or reduced setting off of MODVAT credit is as good as duty paid and it amounts to actual payment [Section 43B of the Income-tax Act, 1961 - Business disallowance - Certain deductions to be allowed only on actual payment] - [2011] 10 taxmann.com 133 (Delhi - ITAT)

Direct Tax Laws Sept 2011

DGIT's order to the effect that CA Institute holding coaching classes is a business is narrow and myopic - [2011] 13 taxmann 175 (DELHI)

Process of converting raw gherkins into gherkin pickles was eligible for deduction under section 10B, as it stood prior to 1-4-2001 - [2011] 13 taxmann 174 (CHENNAI - ITAT)

Merely because income from certain business is assessed under heading 'Income from other sources', expenditure incurred in running that business cannot be disallowed under section 57(iii) - [2011] 13 taxmann 167 (KAR.)

Extension of time for realization of export proceeds by competent authority under FEMA constitutes deemed approval granted by RBI under section 10A(3) - [2011] 13 taxmann 166 (BOM.)

Merely because a liability is pending for many years it cannot be said to have ceased to exist and charged to tax under section 41(1) - [2011] 13 taxmann 163 (MUM. - ITAT)

Where assessee utilized unspent credit limit of other party and reimbursed said party amount of interest payable by it to bank, assessee would be liable to deduct tax at source from such payment under section 194A - [2011] 13 taxmann 162 (CAL.)

Where due to amendment assessee became liable to pay advance tax under section 115JB on book profit deemed to be total income whereas it had paid advance tax on total income, interest could not be charged under sections 234B and 234C - [2011] 13 taxmann 161 (KAR.)
 

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