The Punjab & Haryana High Court has held in an important case namely Lajpat Rai Chanana V State of Haryana & others (2011) 38 PHT 390 (P&H) that input tax credit to a works contractor executing the works contract will be justified if the contractee has already paid the tax on the goods supplied by him to the contractor. The assessee was a works contractor for executing various works for the Government and its authorities. For executing the work, the State and its authorities supplied material to the petitioner (Contractor) which was treated as sale. Since the said authorities had paid the tax while purchasing the said material before supplying the same to the petitioner, the petitioner claimed the benefit of input tax credit. It is held by the Hon’ble High Court that in such case assessee (Contractor) is entitled to input tax credit paid by the contractee.
CIT vs. SAS Pharmaceuticals (Delhi High Court) Though it is possible that but for detection in the survey, the assessee might not have offered the income, penalty u/s 271(1)(c) can only be levied if “in the course of proceedings” the AO is satisfied that there is “concealment” or “furnishing of inaccurate particulars“. The words “in the course of proceedings” mean the assessment proceedings because there is no question of the satisfaction of the AO in survey proceedings. Further, the question whether there is “concealment” or “inaccurate particulars” has to be determined with reference to the return of income. As the assessee had offered the detected income in the return, there was neither concealment nor the furnishing of inaccurate particulars.
A.A.R. No. 840 of 2010 in the case of ABC International Inc. USA- Foreign corporates with subsidiaries in the country are not subject to payment of withholding tax for financial services like discounting of bills provided to their Indian arms. In a ruling, the Authority of Advanced Rulings (AAR) also held such companies are also not liable to pay income tax in case the firm is based in a country which has a Double Taxation Avoidance Agreement (DTAA) agreement with India.
India signed a Double Taxation Avoidance Agreement (DTAA) with the Federal Democratic Republic of Ethiopia for the avoidance of double taxation and for the prevention of fiscal evasion with respect to taxes on income on 25th May, 2011 at Addis Ababa. The Agreement was signed by Shri S.M. Krishna, External Affairs Minister on behalf of the Government of India and by Mr. Sufian Ahmed, Minister of Ethiopia in the presence of the Prime Minister, Dr. Manmohan Singh and the Ethiopian Prime Minister. Mr. Meles Zenawi.
The Reserve Bank will soon release guidelines for implementing its proposal to locate at least a quarter of the new bank branches in the unbanked areas, which generally fall in the rural areas. RBI will issue guidelines for 25% rural branches soon, said a banker present at the central bank’s post-policy meeting today.
The OECD on Wednesday pegged India’s growth at 8.5 per cent for the current fiscal, indicating that economic expansion would be slower. The Organisation for Economic Cooperation and Development has projected the Indian economy to expand 8.5 per cent in 2011-12, much lower than the growth of 9.6 per cent witnessed in 2010-11 financial year.
Circular No. 143/12/ 2011 – ST Representations have been received that client processing of tobacco involving threshing and drying of tobacco leaves and client processing of raw cashew involving roasting/drying, shelling and peeling of raw cashew to recover kernel, are considered by the field formations as not falling within the meaning of the expression “in relation to agriculture” appearing in notification 14/2004-ST (as amended) dated 10th September, 2004, resulting in avoidable disputes and litigation.
DGFT Notification No 49 (RE – 2010)/2009-2014 – Notification No. 47 of 18.05.2011 stipulating export of Guar gum to EU to be allowed only if it does not contain Penta Chlorophenol (PCP) in any proportion, has been rescinded. Thus, the earlier stipulation of Notification No. 50 of 06.07.2010 of allowing presence of upto 0.01 mg/Kg. of Penta Chlorophenol (PCP) in the consignments of Guar gum when exported to EU will continue to be valid.
Mahendra C Shah vs. Addl CIT (ITAT Mumbai) – The fact that the assessee borrowed for the purpose of buying shares is not conclusive that the assessee intended to do business in shares and not merely invest in them if the interest is capitalized as cost of the shares & not claimed as a revenue expenditure (Shanmugam 120 ITD 469 (Pune) followed). The fact of borrowing cannot be held against the assessee if there are other predominating factors in favour. Also as the assessee has own funds, it can be presumed that the shares were bought out of those funds.
DBS.CO.FrMC.BC.No. 9/23.04.001/2010-11 – RBI has also issued various circulars for the prevention of frauds and malpractices in banks. In this connection reference is specifically drawn to circulars DBOD. No.BC.20.17.04.001 dated August 25, 1992 on the recommendation of the Committee to enquire into various aspects relating to frauds and malpractices in bank; DOS.No.PP.BC.20/16.03.026/96-97 dated November 01, 1996 conveying the recommendations of the Working group on Internal Controls and Inspection/ Audit Systems in banks; DBS.FrMc.No.7/23.04.001/2004-05 dated September 20, 2004 on strengthening of Internal Vigilance machinery in banks & Financial Institutions.
