ITR HIGHLIGHTS ISSUE Dt 11-1-2010 Volume 320 : Part 2

INCOME TAX REPORTS (ITR) HIGHLIGHTS ISSUE DATED 11-1-2010  Volume 320 : Part 2

 

 

 

HIGH COURT JUDGMENTS

>> DVO's report not a ground for reassessment : CIT v. Iqbal Hussain (All) p. 142 and CIT v. Gulam Mohammad (All) p. 168

>>Tribunal not to interfere with the concurrent finding of AO and Commissioner (Appeals) that accounts manipulated subsequent to search : CIT v. S. N. Murali Mohan (Karn) p. 144

>>Valuation of diamonds during search at an average : CIT v. S. N. Murali Mohan (Karn) p. 144

>>Interest shown in computation sheet annexed to assessment order sufficient for levy of interest u/ss 234B and 234C : CIT v. Assam Mineral Development Corporation Ltd. (Gauhati) p. 149

>>Assessee obtained a decree to recover debt does not mean that debt was not bad : CIT v. Punjab Tractors Ltd. (P&H) p. 153

>>Commissioner not competent to assume jurisdiction where issue taken by him already dealt with by Commissioner (Appeals) : CIT v. Shalimar Housing and Finance Ltd. (MP) p. 157

>>Interest paid by assessee on delayed payments of sales tax not a penalty : CIT v. H. P. State Forest Corporation (HP) p. 170

>>Share broker purchasing shares for its client and paying money against purchase but money receivable from client becoming bad and treated as bad debt, allowable : CIT v. Bonanza Portfolio Ltd. (Delhi) p. 178

>>Cash payments allowable where nature of business of assessee and evidence in form of bills and cash memos : CIT v. Raja Pal Automobiles (All) p. 185

>>Tribunal rightly condoned the delay in filing application for registration by trust where there was a reasonable cause : CIT v. Village Life Improvement Foundation (P&H) p. 188

>>Revenue cannot claim interest from employee where employer paying tax with interest u/s 201(1A) : CIT v. Emilio Ruiz Berdejo (Bom) p. 190

>>Appellate authorities cannot decide appeal against order u/ss 195(1) and 201 whether payment was assessable or not : CIT v. Samsung Electronics Co. Ltd. (Karn) p. 209

>>Assessee deducting tax at source and remitting amount to Revenue but disputing such liability : Appeal denying such liability maintainable before Commissioner (Appeals) : CIT v. Samsung Electronics Co. Ltd. (Karn) p. 209

>>Housing society entitled to deduction from interest income on account of expenses incurred towards maintenance of houses of members : CIT v. Maruti Employees Co-operative House Building Society Ltd. (P&H) p. 254

NEWS-BRIEF

>>Direct tax code may spare home loans

The Government may modify the draft direct tax code to retain tax shelters on interest and principal repayments for home loans to make the proposed new code more attractive for the average Indian, a Finance Ministry official said.

The proposed direct taxes code, which has been unveiled for public debate and is due to become operational from April 2011, does not provide tax incentives to loan-funded house purchases that are for personal use.

At present, taxpayers are allowed to deduct from their income the interest paid on home loans to a maximum of Rs. 1.5 lakh every year. In addition, the repayment of the principal amount is also allowed to be included within the rebate available under section 80C, which has a maximum limit of Rs. 1 lakh.

The draft code, billed as a comprehensive reform of the direct taxes regime, has suggested increasing the exemption limit under section 80C to Rs. 3 lakh, but the list of eligible expendi-ture/savings does not include the principal payment. The code also restricts the interest deduction only in respect of houses rented out and where such income is included in the income of the assessee.

At present, if a home buyer in the highest 30 per cent. tax slab were to avail the maximum tax exemption available on home loans then Government loses over Rs. 77,000 in tax.

The planned move to discontinue tax benefits for housing has faced widespread criticism and the Finance Ministry official said "we are looking at provisions (in the direct taxes code) that concern common man directly, including tax incentives to housing."

Tax reforms are aimed at increasing compliance and widening the tax base by lowering rates and removing exemptions. The Government is hoping to redraft the new code quickly so that it can be placed in Parliament in the Budget session itself. [Source : www.economictimes.com dated December 26, 2009]

>>Payments to Foreign universities for services to non-profit organisations are tax-free

Foreign universities providing consultancy services to business chambers or other non-profit organisation are not liable to pay tax in India, the Authority for Advance Rulings (AAR) has said.

The ruling make business with the Indian non-profit sector more attractive for the foreign universities.

In a recent ruling involving a wing of a foreign university, the AAR has said the university is not liable to pay income-tax in respect of the payments received by it from FICCI, a prominent industry body.

FICCI had sought direction from AAR over the tax liability of the university and the amount of tax which the chamber had to deduct while making payments.

AAR is a quasi-judicial body, set up to give opinion to guide companies on their potential tax liabilities. AAR's rulings are case-specific, but they have a persuasive impact on tax assessment cases of similar circumstances.

The AAR ruling means that FICCI is not required to deduct tax at source while making payments to the university for its consultancy services.

The industry chamber had entered into an agreement with a wing of the foreign university for certain work and services related to a Defence Research and Development Organisation (DRDO) project. [Source : www.economictimes.com dated December 26, 2009]

 

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TRIBUNAL TAX REPORTS HIGHLIGHTS ISSUE Dt 11-1-2010 Volume 1 : Part 2

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS

ISSUE DATED 11-1-2010 Volume 1 : Part 2

 

 

REPORTS

>>  Expenses incurred for keeping business alive after suspension order by SEBI : Allowable : KNP Securities P. Ltd. v. Asst. CIT (Mumbai) . . . p. 130

 

>> A. O.'s observation "loss to be carried forward" on late return erroneous and prejudicial to interests of Revenue justified : Lodhi Property Co. Ltd. v. CIT (Delhi) . . . p. 140

 

>> Interest on deep discount bonds accrues from year to year : Gujarat Toll Road Investment Co. Ltd. v. Asst. CIT (Ahd.) . . . p. 146

 

 

>> Interest accrued on deep discount bonds issued to financial institutions not interest on loan or borrowing for purpose of s. 43B : Gujarat Toll Road Investment Co.Ltd. v. Asst. CIT (Ahd.) . . . p. 146

 

>> Where funds advanced to subsidiary on grounds of commercial expediency, disallowance of interest not valid : Industrial Cables (India) Ltd. v. Addl. CIT (Chandigarh) . . . p.156

 

>> Income representing waiver of interest by bank and on debentures taxable : Industrial Cables (India) Ltd. v. Addl. CIT (Chandigarh) . . . p. 156

 

>> Where assessee acting as conduit between group concern and contractors, no violation of section 269T on making payment in cash to contractors for and on behalf of group concern : Canara Housing Development Co. v. Addl. CIT (Bangalore) . . . p. 165

 

 

>>  Where assessee not having permanent establishment in India but having its source of income from resident of India, amount received is business profits under art. 7 of DTAA (Australia), not taxable in India : Asst. CIT v. Paradigm Geophysical P. Ltd. (Delhi) . . . p. 178

 

>> Where resident company collecting data in area proposed to prospect for mineral oil, data area specific and not development and transfer of technical plan or design, art.12(3)(g) of DTAA (Australia) not applicable : Asst.CIT v. Paradigm Geophysical P. Ltd. (Delhi) . . . p. 178

 

>> Where no proof of attempt to serve notice on assessee, service of notice by affixture invalid : Deputy CIT v. K.G. Singhania (Amritsar) . . . p. 205

NEWS-BRIEFS

Budget 2010 to put in place anti-avoidance rules for tax

The forthcoming Union Budget may have an anti-avoidance provision, which can effectively check convoluted transactions devised exclusively for the purpose of evading payment of taxes in India.

 

Incorporation of such a law into the country's Income-tax Act has been a long standing demand of the tax authorities who often find themselves handicapped whenever they come across a transaction of this nature.

 

The Income-tax Act, 1961, which is the existing tax code, does not have provisions that can effectively check such an exercise. Common examples of transactions that are convoluted are when there is a shell company registered in Mauritius or another country with low tax rates, which ensures the taxpayer can avoid paying tax in India.

 

The Direct Tax Code (DTC), the new tax code proposed to be replacing the existing Income-tax Act, also contains provisions for anti-avoidance. The DTC empowers the Commissioners to declare a transaction as an impermissible arrangement to avoid paying taxes in India. A part or even the complete transaction can be declared impermissible or lacking in business substance. The Government, it is gathered, may incorporate some of the proposals made in the DTC to the existing Income-tax Act in the budget proposal. [Source : www.economictimes.com dated December 30, 2009]

 

Oil explorers to pay tax at lower rate : AAR

 

Foreign firms helping domestic oil explorers need to pay tax at lower rate of 10 per cent. only as their business is technical services, the Authority for Advance Ruling has ruled.

 

The income earned by foreign firms by providing survey and technical services to an Indian oil exploration company will be taxable at 10 per cent. as fee for technical services (under section 44BB of Income-tax Act), rather than as royalty fee (section 44DA of the Income-tax Act) which is double at 20 per cent., AAR has ruled.

 

The AAR set aside the contention of the Revenue Department that the services provided by Dubai-based exploration company do not fulfil the requirement for being taxed under section 44BB (technical services) and therefore the income from its activities has to be taxed under section 44DA of the Income-tax Act (royalty fee). [Source : www.economictimes.com dated December 30, 2009]

 

Income-tax Department claims Rs. 30k cr. for MAT violations

 

The Income-tax Department has claimed Rs. 30,000 crores from companies that have violated provisions under the minimum alternate tax (MAT).

 

Sources said the claim is not only for the current assessment year of 2009-10, wherein assessments are still going on, but also for previous four-five assessment years, which are under litigation either in courts or at appellate levels. Also, for each year, cases have been re-opened for block assessment of the last four years preceding the assessment year in consideration.

 

According to section 115JB, a company is required to pay tax under special provisions of "minimum alternate tax" even if it does not make profit and its total income for the specific assessment year is less than 10 per cent. of its book profit. Enacted in 2000-01 as section 115JA, it was later amended to section 115JB.

 

Registrar of Companies (RoC) said inspections were done to check violations of Companies Act, and not revenue generation. Under MAT, accounts have to be prepared as per Companies Act.

 

In order to tackle such violations in future and get revenue without any legal hassles, the Central Board of Direct Taxes has suggested that I-T authorities should have the power to qualify accounts for violation of Companies Act in cases pertaining to income-tax. These powers will help the I-T authorities to recover the amount even if balance sheets are not qualified by the RoC. [Source : www.businessstandard.com dated December 31, 2009]

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ITR ISSUE Dt 4-1-2010 Volume 320 : Part 1

INCOME TAX REPORTS (ITR) HIGHLIGHTS

ISSUE DATED 4-1-2010 Volume 320 : Part 1

 

 

SUPREME COURT JUDGMENTS

>>CBDT circular avoiding harassment in the course of enquiry/search of the air-passengers by the Air Intelligence Units/Investigation Units of the Income-tax Department : Rajendran Chingaravelu v. R. K. Mishra, Addl. CIT p. 1

>>Sawing marble blocks into slabs and tiles and polishing entitled to deduction u/s 80-IA(2)(iii) : ITO v. Arihant Tiles and Marbles P. Ltd. p. 79

HIGH COURT JUDGMENTS

>>Tribunal not justified in reviewing its order : Express Newspapers Ltd. v. Deputy CIT (Mad) p. 12

>>Exemption u/s 10(26) available to member migrating from his place of origin in one of areas specified in section 10(26) to another area also specified therein : Pradip Kr. Taye v. Union of India (Gauhati) [FB] p. 29

>>High Court not interfering with notice for reassessment but granting one week time to assessee to file explanation before AO : Mavis Satcom Ltd. v. Deputy CIT (Mad) p. 46

>>Proceeding invoking provisions u/s 179 against director justified where concurrent finding that due amount could not be recovered from company : Alex Cherian v. CIT (Ker) p. 49

>>Order of Tribunal directing assessment not be at figure higher than that determined by AO u/s 144 not sustainable : CIT v. H. P. State Forest Corporation Ltd. (HP) p. 54

>>Tribunal not justified in remanding matter to Commissioner (Appeals) where Commissioner (Appeals) ascribing reasons and dislodging order of AO on merits : Rajesh Maheshwari v. Asst. CIT (MP) p. 58

>>Actual cost to assessee to be treated as WDV for purposes of depreciation : CIT v. Hybrid Rice International P. Ltd. (Delhi) p. 63

>>Tribunal to consider claim of accumulated agricultural income on basis of books of account of assessee and documents and certificates filed by assessee : Swapna Rani Sarkar v. CIT (Gauhati) p. 70

>>Interest on interest payable only where refund is made without interest and there is delay in payment of interest : Motor and General Finance Ltd. v. CIT (Delhi) p. 88

>>S 40A(3) does not apply unless any one payment is above Rs. 2,500 : CIT v. Ashok Iron and Steel Rolling Mills (All) p. 101

>>Provision for presumptive tax applicable where processes starting with soil testing and evaluation of available data, assessment of risk involved and certification as to whether rig could be moved from one site to another : Director of I. T. v. Jindal Drilling and Industries Ltd. (Delhi) p. 104

>>Notice for reassessment valid where reasons given by AO not influenced by superior officer : Jagjit Pal Singh Anand v. CIT (Delhi) p. 106

>>Reassessment on basis of order of DVO not valid where assessment order passed on 4-12-1990 : CIT v. Leather Trends (P) Ltd. (All) p. 114

>>Court will not interfere where deletion of additions for suppressed sales based on cogent reasons : CIT v. Mascot (India) Tools and Forgings (P) Ltd. (All) p. 116

AUTHORITY FOR ADVANCE RULINGS

>>Amount paid to Institute of University of Texas not taxable in India where activities of institute not technical services : Federation of Indian Chambers of Commerce and Industry, In re p. 124

STATUTES

>>Notified scientific research association u/s 35(1)(ii) p. 15

>>Officers nominated as members of DRP p. 15

>>Specified association/territory u/s 90A, Expln. 2(a) and (b) p. 14

>>Valuation of perquisites : Rule 3 substituted p. 1

 

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Applicability of year end rate for conversion of business income earned in foreign currency

This article summarizes ruling of the Delhi Income Tax Appellate Tribunal (ITAT) in the case of DCIT v Dolphin Drilling Pte. Ltd. (Taxpayer) [2009-TIOL-754- 1TAT-DEL]. The ITAT held that the conversion of business income earned in foreign currency into INR, in accordance with Rule 115 (Rule) of the Indian Tax Law (ITL), is to be made by adopting the conversion rate prevailing at the end of the tax year. It also held that the Taxpayer, a company incorporated in Singapore and engaged in the business of hiring out drill-ship in India, is entitled to claim depreciation on the value of the drill-ship.

Background and facts of the case

• As per the Rule, taxpayers earning income in foreign currency are required to convert such income into INR using the telegraphic transfer (TT) buying rate as on the specified date. The specified date is different for different sources of income. In respect of income chargeable under the head 'house property', 'business and profession' and 'income from other sources', the specified date is the last day of the relevant tax year.

• The Taxpayer, a company incorporated in Singapore, hired out its drill-ship to its sister concern in connection with the execution of the latter's contract with an Indian entity. The income from hiring out was earned in USD by the Taxpayer.

• The Taxpayer declared the hiring income as business income. In its computation, the Taxpayer claimed deduction for depreciation on the cost of drill-ship which was incurred in USD. For earning the hiring income, the Taxpayer also incurred certain expenses in foreign currencies other than USD.

• Relying on the Rule, the Taxpayer converted revenue and expenses by adopting the conversion rate prevailing at the end of the tax year.

• In support of its claim for depreciation, the Taxpayer furnished the invoices, the auditor's certificate certifying the actual cost, the certificate of registration and the valuation report from renowned valuers.

• The Tax Authority held that the method for conversion adopted by the Taxpayer was incorrect. The Tax Authority contended that the Taxpayer's business income should be computed by first converting the business transactions in other currencies into USD by applying the rate on the date of such transaction. Thereafter, the net result in terms of USD should be converted to INR by adopting the rate prevailing at the end of the tax year.

• The Tax Authority also denied the claim of depreciation by contending that the Taxpayer had failed to substantiate the ownership of the drill-ship, as also the actual cost incurred for acquiring the drill-ship.

• The Tax Authority rejected the Taxpayer's books of account for the above reasons and computed the income on a presumptive basis, with reference to its gross receipts.

• The first appellate authority accepted the Taxpayer's contentions and approved the method adopted for conversion of income in terms of the Rule. It also held that the Taxpayer was entitled to depreciation on the drill-ship as it had adequately substantiated the proof of ownership and the actual cost.

• Aggrieved by the decision of the first appellate authority, the Tax Authority further appealed to the ITAT.

Contentions of the Tax Authority

• The Taxpayer maintains its books of account in USD and also receives revenue in USD. It should, therefore, first convert all its business transactions in other currencies into USD by adopting the rate prevailing on the date of the transaction and then convert the net result in USD into INR by adopting the rate prevailing at the end of the tax year. The method adopted by the Taxpayer of directly converting all business transactions into INR at the year-end rate is not in accordance with the accounting principles.

• The Taxpayer had failed to substantiate the ownership of the drill-ship, as also the actual cost incurred for acquiring the drill-ship.

• For the above reasons, the Tax Authority was justified in rejecting the Taxpayer's books of accounts and computing the income on a presumptive basis, with reference to its gross receipts.

Contentions of the Taxpayer

• The Taxpayer had correctly computed its income earned in foreign currency, by applying the Rule. The conversion of revenue and expenses directly into INR by adopting year­end rate is consistent with the method prescribed by the Rule.

• As regards the claim for depreciation on the cost of the drill-ship, the documents submitted in support of proof of ownership by way of the invoice, the auditor's certificate, the certificate of registration and the valuation reports, adequately substantiate the Taxpayer's ownership over the drill-ship and the actual cost incurred by the Taxpayer.

• The Taxpayer had allotted shares of the value of USD 270 m (of face value USD 1 each) to its sister concern as the consideration for the purchase of the drill-ship which was made at an arms' length price. The same had been evidenced by way of a Chartered Accountant's report (in Form 3CEB) submitted to the Tax Authority, under the transfer pricing provisions of the ITL.

Ruling of the ITAT

The ITAT held that the Taxpayer had correctly converted income earned in foreign currency by applying the Rule. It also allowed the claim for depreciation on drill-ship for the following reasons:

• Since the Taxpayer is in the business of hiring out drill-ship, the hiring income has to be assessed either under the head 'profits and gains of business or profession' or 'income from other sources'.

• It is a settled position that the Rule provides for conversion of income earned in foreign currency by adopting the rate prevailing on the specified date. The Rule does not require the taxpayer to convert the income first into USD or any other currency and subsequently into INR.

• Income under the head 'profits and gains from business or profession' is the culmination of the day-to-day business transactions. The requirement under the Rule, to convert the income at the end of the year, effectively implies that the day-to-day transactions are to be converted at the year­end rate.

• As regards the admissibility of the depreciation on the drill-ship, the ITAT took into account the diverse evidence of ownership of the drill-ship furnished by the Taxpayer, including the purchase agreement, the registration certificate, the customs clearance record etc. Considering this evidence, the ITAT confirmed that the Taxpayer had adequately substantiated both its ownership over the drill-ship as well as the actual cost incurred and held that the Taxpayer was entitled to depreciation on the drill-ship.

Comments :-This ruling provides guidance on the application of Rule 115 that the conversion of income earned in various foreign currencies into USD, prior to its conversion into INR, is not required. The requirement under the Rule is only to convert 'income from profits and gains from business' i.e. the net result at the year-end rate. The ruling also emphasizes the need for adequate documentation for establishing ownership and the actual cost of an asset in order to claim depreciation thereon.

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Procedure for representation before BIFR and AAIFR

In supersession to all circulars and instructions of the Central Board of Direct Taxes (CBDT) issued on the above subject, the CBDT prescribes the following procedure to be followed before the Board for Industrial and Financial reconstruction (BIFR) and the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) in respect of granting Income tax reliefs/concessions to be given to sick companies for its rehabilitation under the Sick Industrial Companies (SICA) Act, 1985.

1. The Director General Income Tax (Administration) , [DGIT (Admn.)] will be the Nodal agency for co-ordination between the BIFR and the CBDT and between the AAIFR and the CBDT.

2. It will be the responsibility of DGIT (Admn) to represent the CBDT before BIFR and AAIFR in every case in which Income Tax reliefs is sought under the Draft Rehabilitation Scheme or in the Sanctioned Scheme circulated by BIFR/AAIFR.

3. The DGIT (Admn) will consider each case of Income Tax reliefs/concessions under the Direct Tax Laws on merits of each individual case for the purpose of consent as contemplated in Section 19 (2) of the SICA, 1985. In cases where the company and the assessing officer have quantified the Income tax reliefs the DGIT (Admn) will communicate the consent or denial of consent to BIFR at the time of hearing itself after obtaining the approval of CBDT. Where the information from the company and the assessing officer is incomplete, the DGIT (Admn.) will obtain the necessary information from the concerned parties and put up the file for the consideration of CBDT and subsequently intimate the BIFR.

4. It is the responsibility of DGIT (Admn) to obtain the approval of CBDT in every case in which Income tax relief/concessions is sought and to communicate the approval of CBDT to BIFR and the concerned assessing officer. The decision thus communicated by the DGIT (Admn.) on behalf of the CBDT is binding on all assessing officers. 

5. The assessing officer should give the Income Tax reliefs to sick companies only after obtaining the approval as mentioned above. In cases where BIFR/AAIFR is taking a different view from that of the CBDT, it will be the responsibility of DGIT (Admn) to file appeal before the appellate authority (AAIFR) or before the Delhi High Court as the case may be. It is also hereby clarified that in cases where the sick companies file appeals against the order of BIFR/AAIFR in any of the High Court other than Delhi High Court, it will be the responsibility of concerned Chief Commissioner of Income Tax (Administration) to defend the case in the respective High Court.

This Circular may be brought to the notice of all officers working in your region for strict compliance.

This Circular should also be brought to the notice of the officers responsible for conducting internal audit and adherence to these should be checked by the auditing parties.

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HC (MUM): Writ, If refund is legitimately due to assessee, mere delay should not defeat claim for refund

HIGH COURT OF BOMBAY

Sitaldas K. Motwani

v.

DGIT (Int'l Taxation)

Writ Petition No. 1749 of 2009

December 15, 2009

RELEVANT EXTRACTS:

**       **          **          **          **          **          **          **          **          **          **          **

15.          The phrase "genuine  hardship" used in Section119(2)(b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular  dated 12 the October,1993. The Legislature  has conferred the power to condone  delay to enable the authorities to do substantive  justice  to the  parties  by disposing of  the matters  on  merit.  The  expression "genuine " has  received  a  liberal meaning  in  view  of  the  law laid  down  by  the  Apex  Court  referred to  hereinabove  and  while  considering this  aspect, the  authorities  are expected  to  bare  in  mind  that ordinarily  the applicant, applying  for condonation  of  delay  does  not  stand  to  benefit  by lodging  its  claim late.  Refusing  to  condone  delay  can  result  in  a  meritorious matter being  thrown  out  at  the  very  threshold  and  cause  of  justice  being defeated.  As against  this, when  delay  is  condoned  the  highest that can happen is that a cause would be decided on merits after hearing  the parties.  When substantial justice and technical considerations  are  pitted against each other,  cause  of  substantial  justice  deserves  to  be preferred  for  the  other side  cannot  claim  to  have  vested  right  in  injustice  being done  because  of  a non ­deliberate  delay.   There  is  no  presumption  that delay is occasioned  deliberately, or  on account  of  culpable  negligence, or  on  account  of  malafides.  A  litigant  does  not  stand  to  benefit  by  resorting  to  delay.  In  fact  he  runs  a  serious  risk.  The  approach  of  the  authorities  should  be  justice  oriented  so  as  to  advance  cause  of  

justice.  If  refund  is  legitimately  due  to  the  applicant, mere  delay should  not  defeat  the  claim  for  refund.

16.          Whether  the  refund  claim  is  correct  and  genuine, the  authority must satisfy itself that the applicant has a prima facie  correct  and genuine  claim, does  not  mean  that  the  authority  should  examine  the  merits  of the refund  claim  closely  and  come  to  a  conclusion  that  the  applicant's claim is bound  to succeed. This  would  amount  to  prejudging  the  case  on  merits.  All  that  the  authority  has  to  see  is  that  on  the  face  of  it  the  person  applying  for refund  after  condonation  of  delay  has  a  case  which  needs  consideration  and which  is  not  bound  to  fail  by  virtue  of  some  apparent  defect.  At this stage, the authority  is  not  expected  to  go  deep  into  the  niceties  of  law.  While determining  whether  refund  claim  is  correct  and  genuine, the  relevant consideration  is  whether  on  the  evidence  led, it was possible to arrive at the conclusion in  question  and  not  whether  that  was  the  only  conclusion  which could  be  arrived  at  on  that  evidence.   

17.Having  said  so, turning  to  the  facts  of  the  matter  giving  rise  to   the present petition, we are satisfied that respondent No.1  did  not consider the prayer  for condonation of delay in its  proper  perspective.  As such, it needs consideration  afresh.

18.     In  the  result, we set  aside  the  impugned  order  and  remit  the matter  back  to  the  respondent  No.1  for  consideration  afresh, with  the direction to decide the  question  of hardship as well  as  that  of correctness and  genuineness  of  the  refund  claim   in  the  light  of  the observations made hereinabove.  All other rival contentions on merits are kept open. Rule is  made  absolute  in  terms  of  this  order  with  no  order  as to

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Fwd: [aaykarbhavan] FinMin:~ Trade Receivables Engine for E-DISCOUNTING launched~

---------- Forwarded message ----------
From: srinivasan rm <badrinivas10@yahoo.com>
Date: Wed, Dec 23, 2009 at 11:53
Subject: [aaykarbhavan] FinMin:~ Trade Receivables Engine for E-DISCOUNTING launched~
To: lck ca lucknow <lucknowca_reinvented@yahoogroups.com>, meerat <icai_circ_meerut_ca@yahoogroups.com>
Cc: aaykar bhavan <aaykarbhavan@yahoogroups.com>, thane cas <ThaneCas@yahoogroups.com>, mbsirc google gr <mbsirc@googlegroups.com>

Press Information Bureau Government of India

Tuesday, December 22, 2009
	Ministry of Finance
	TRADE RECEIVABLES ENGINE FOR E-DISCOUNTING LAUNCHED
	19:19 IST
	Finance Secretary, Shri Ashok Chawla today launched an e-platform 'NTREES', an acronym for Trade Receivables Engine for E-discounting. Promoted by SIDBI & NSE, NTREES will facilitate discounting of MSME bills on their supplies to large purchaser companies. Reiterating the importance of the historic event, Shri Chawla discussed the journey of MSMEs that have been recognized as the true engines of growth not just in India but all over the world. In India, their contribution to manufacturing and exports is significant, apart from providing gainful means of employment opportunities to large number of people. Over the years, MSME needs have gradually expanded with credit being one of the critical requirements which is provided to them by banks, as well as, specialised financial institutions, such as the SIDBI. NTREES provides a qualitative approach to addressing their needs and he expressed his hope that this will take off and become an optimum framework and institutional mechanism. In the next phase, as more and more banks adopt this platform, the platform could also emerge as a price discovery mechanism. Congratulating SIDBI and NSE on this path breaking endeavour, Shri Chalwa extended his best wishes towards the success of NTREES. The launching occasion at Vigyan Bhawan, New Delhi witnessed the presence of bankers, corporates, MSMEs, industry associations, bureaucrats, international experts and the press and electronic media. Shri Ravi Narain, MD and CEO of NSE stated that major challenges facing the MSMEs today are meeting their capital requirements at reasonable cost. NTREES is a unique and exciting platform to address these challenges for MSMEs. Shri Narain expressed his acknowledgement towards SIDBI's partnership for this unique platform and hoped that NTREES – which has received encouraging response, becomes an industry-wide platform and goes a long way in its mission. Shri R M Malla, CMD, SIDBI, informed that the Bank's Bill Discounting mechanism called Receivable Finance Scheme, has grown in popularity over the years to reach out to more than 17,000 MSME suppliers related with about 250 large corporates. NTREES replaces the paper-based physical mechanism with e-trading which will make discounting of bills transactions cost-effective, expeditious, and more transparent. Shri Malla mentioned that NTREES is a part of SIDBI's financing and developmental support to MSMEs. While mentioning various diverse activities of SIDBI, he said that with GOI support, SIDBI has set up Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) for encouraging collateral free lending to MSEs. BSC/Samir/AS

 

courtesy:FinMin

regards

ca srinivasan rm

karaikudi

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