In the Budget 2011-12, the Government, for the first time, permitted Qualified Foreign Investors (QFIs), who meet the KYC norms, to directly invest in Indian Equity Mutual Fund (MF) schemes and in MF debt schemes that invest in infrastructure. It was for the first time that this new class of investors was allowed to directly participate in the Indian capital market. In January 2012, the Government expanded this scheme to allow QFIs to directly invest in Indian Equity Markets.
Under the mercantile system of accounting, deduction of expenses is allowed when liability to pay such expenses is incurred irrespective of the fact whether such an amount has been paid or remained unpaid at the end of the year. In the like manner, income, under such a method of accounting, is recognized on accrual basis. In other words, only when the assessee finally acquires a right to receive such income, that it is charged to tax. Actual receipt of such amount, whether before or after accrual, is of no consequence.
On the issue of retrospective amendment, Union Finance Minister, Shri Pranab Mukherjee has said that he had given a commitment in the Parliament with regard to retrospective amendments that CBDT will issue a policy circular to clarify that in cases where assessment proceedings have become final before first day of April, 2012; such cases shall not be reopened. Now CBDT has issued a circular in this regard, the Finance Minister has stated.
Income from ‘jeep charges’ and ‘no dues certificates’, as would be apparent from the foregoing, is clearly business income. Revenue’s stand of the same being assessable u/s. 56 is inconsistent with the facts of the case.
Normally my advise would be that if there be no point of law, if its a matter of fact, then I think with the two appeals at the commissioner’s level the department need not rush to the High Court if there be no point of law concerned, Mukherjee said which addressing I-T officials here.
After hearing the rival submissions and on careful perusal of materials available on record, keeping in view of the fact that sufficient opportunity of being heard to AO has not been given by ld. CIT(A) for preparation of Remand Report and further keeping in view of the fact that all the materials placed before ld. CIT(A)has not been sent to AO for his consideration, in our considered opinion, the order of ld. CIT(A) is not in accordance with the principles of natural justice. Therefore we set aside the order of ld. CIT(A) and restore the matter to the file of AO to re-decide all the three issues afresh by taking into consideration of the various submissions and documents placed before ld. CIT(A) and after giving a reasonable opportunity of being heard to assessee.
It is not disputed that the directors of the company have undergone foreign travelling for the purpose of export and looking for the business avenues abroad. The details submitted by the assessee though only provides the date of travelling, details of country visited and amount of fare, visa charges and other miscellaneous expenses incurred, however, the Assessing Officer has not brought anything in record to show that the foreign travelling was for personal purposes. Once the foreign travelling has been accepted for the purpose of business then part of the amount cannot be disallowed on account of personal user unless it is established that there was personal and non business expenditure. Since no basis has been given nor anything adverse has been brought on record, the ad hoc addition of Rs. 5,00,000/- cannot be disallowed. Thus, the order of the CIT(A) confirming the addition is set aside and accordingly, ground of appeal No.2 is allowed.
Notification No. 10/2012-Income Tax The president is pleased to appoint the following IRS(IT) officers in the grade of ACIT(Junir Scale) in the pay scale of Rs. 15,600 to Rs. 39,100 with effect from the dates stated against their names. Notification No. 10 of 2012 appointing IRS Officers As Assistant CITs
DGFT Policy Circular No. 66 (RE-2010) /2009–Dated 31ST May, 2012- Sub:- File applications for 9 SEZ port codes – reg. Director General (Systems) have accorded SEZ port codes to the following 9 SEZs which have been uploaded on DGFT’s website:-
It has now been decided to communicate the UIN in respect of cases under the Automatic Route to the ADs/Indian Party through an auto generated e-mail to the email-id made available by the AD/Indian Party. Accordingly, with effect from June 01, 2012 (Friday), the auto generated e-mail, giving the details of UIN allotted to the JV / WOS under the automatic route, shall be treated as confirmation of allotment of UIN, and no separate letter shall be issued by the Reserve Bank to the Indian party and AD Category – I bank confirming the allotment of UIN.
