"16 January 2011" Archive

Some banks not monitoring use of loans- RBI

Even as India has been cited as an example of prudential banking norms, the Reserve Bank of India (RBI) today said some lenders are not monitoring effectively use of loans by borrowers, which is facilitating diversion of funds. This came to light whe...

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Posted Under: Fema / RBI |

Citibank fraud – RBI probes possible violation of KYC, STR norms

In the alleged Rs 400-crore fraud by a senior employee at a Gurgaon branch of Citibank, RBI is probing whether there have been any violations of norms related to customer verification and monitoring of accounts. The initial probe by the banking regul...

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Posted Under: Fema / RBI | ,

Empanelment with Navodaya Vidyalaya Samiti of CA Firms for Internal Audit Work

Sealed Tenders are invited from Registered Chartered Accountant Firms having minimum 10 years experience to be empanelled for internal audit work of Jawahar Navodaya Vidyalayas located in the State of Uttar Pradesh and Uttarakhand. Tender forms with ...

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Posted Under: Fema / RBI |

Depreciation allowable on Assets forming part of Block of Assets even if same not used during the year

Commissioner Of Income Tax Vs M/s. Oswal Agro Mills Ltd. (Delhi High Court)

Pursuant to the insertion of the concept of “block of assets” w.e.f. 1.04.1988, depreciation is allowable on the WDV of the “block of assets” and individual assets lose their identity upon introduction into the block. The department’s argument that user of each and every asset is essential is not acceptable because it would mean...

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Even if commercial transaction is at arms’ length, debt overdue for long period attracts transfer pricing interest

M/s. Logix Micro Systems Ltd. Vs. Asst. Commissioner of Income-tax (ITAT Bangalore)

The fact that the international transactions are at ALP does not mean that no addition can be made on the funds kept by the assessee with the AE. If the assessee had received funds within the normal period, it could have earned interest on the same. The potential loss is a factor to be considered while evaluating the financial impact of t...

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No Disallowance u/s. 14A of interest on borrowed funds if AO does not show nexus between borrowed funds and tax-free investment

Dy. Commissioner of Income Tax Vs M/s. Maharashtra Seamless Ltd. (ITAT Delhi)

As the funds were mixed, it is not possible to ascertain whether the investment in tax free bonds is out of the assessee’s own funds. The source of investment in the tax free bonds was not identified. The AO did not establish any nexus between the borrowed funds and the investments in the tax free bonds. The cash flow of the assessee wa...

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Exception provided in both the provisos of s. 92C(2) with regard to the +/- 5 Percent variation applies only when more than one price is determined

Assistant Commissioner of Income-tax, Circle 18(1) Vs. UE Trade Corporation (India) (ITAT Delhi)

1. Under the Proviso to s. 92C(2) (pre-amendment w.e.f. 1.10.09) the option to the assessee to choose a price which may vary from the arithmetical mean by an amount not exceeding five per cent is available only where more than one price is determined and not where there is only one comparable instance (Sony India vs. DCIT 114 ITD 448 (Del...

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Minor irregularities (non-production of vouchers) cannot be a ground for rejection of renewal of recognition of a charitable trust under section 80G

M. J. Education Trust Vs. DIT (Exemptions) (ITAT Bangalore)

Non-production of vouchers for few expenditure incurred by the charitable trust will neither change the basic characteristic of the trust nor could it be inferred that the trust has deviated from its activities, which are not charitable in nature....

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A computer software when put into a media and sold, it becomes goods like any other audio cassette

Kansai Nerolac Paints Ltd. Vs. Addl. DIT (ITAT Mumbai), Appeal No: ITA No. 568/Mum/2009

When the amount paid by the assessee to the Singapore company for purchase of computer software cannot be treated as royalty, the assessee is not liable to deduct tax at source from such payment....

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Payment for warding off competition in business even to a rival dealer will constitute capital expenditure and to hold them capital expenditure it is not necessary that non-compete fee is paid to create monopoly rights

Tecumseh India Pvt. Ltd. Vs. Addl. CIT (ITAT Delhi), Appeal No: ITA No. 3759/Del/2003

Where the assessee-company entered into non-compete agreement with one party and the same was applicable for 5 years, which period has been considered to be sufficient to give enduring benefit to the assessee, the expenditure claimed by the assessee in pursuance of non-compete agreement is capital expenditure, the deduction of which canno...

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