Celebrating Diwali Differently
Dr. Sanjiv Agarwal As we all celebrate the festival of Diwali next week, we see hectic business activities and preparations all around – host of business exhibitions; sale of what not; decked up markets, shops, showrooms, hotels etc; investments in durables, metal, stocks, vehicles, appliances and tons of shopping at personal level. Each one has an agenda for shopping- be it businessmen, industrialist, investors, children or even house makers. And that makes Diwali a unique Indian festival which is celebrated both at macro and micro level. Everything and everybody is over charged with enthusiasm, fun and zeal. Diwali means business. Diwali means investments. Diwali means money. That's the connotation of Diwali in today's time. It also means rituals and religious sentiments but which have also now imbibed commercial angle in it. It has become the show business or reflecting and show casing what you can afford. Diwali is one festival which seeks invocation of goddess lakshmi, the goddess of wealth and this is done by each individual who celebrates Diwali. Lakshmi or wealth even come to those who don't worship but pursue the means to achieve it. To make this festival more joyful and objective, why not celebrate it differently by participating in celebrations of others who cannot celebrate the Diwali as we do. That perhaps may give more joy and solace. Spending a few bugs less this Diwali on self and lighting up the Diwali festival for those in need may bring more light and sparkle in somebody else's life and ours as well. Gift a pair of new shoes or new dress to someone nearby your house or school, to bring smile on their faces. Buy some one few crackers or a pack of sweets to be a reason of their happiness or celebrations. On the other hand, avoid wasteful spends on extravagant expenditure on luxuries, food & sweets, fireworks etc. and it may be saving to you which may be used for more objective and purposeful spends or just saved for rainy days. May be our small efforts brings happiness and cheers to many people whom we may not know but it would certainly add to happiness on a larger canvas. That may perhaps be a desirable way of celebrating Diwali, differently of course. - See more at: http://taxguru.in/finance/celebrating-diwali-differently.html#sthash.UguzR118.dpuf
Deemed dividend applies only where there is 'actual payment' & not on transaction in kind
CA Pankaj G. Shah
Deemed Dividend – For invoking provisions of Section 2(22)(e) there should be actual payment, existence of Reserves at the time of making payment – Credit sale is not 'loan' or 'advance' for purpose of S.2(22)(e) – ITAT Indore BenchPlease find attached a recent decision of Parag Desai v. Addl. CIT (ITA 488/Ind/2013) by ITAT Indore Bench as under:
The Assessee was a significant shareholder in a company – The company sold building to shareholder on credit – Department treated it as 'loan' or 'advance' for invoking Section 2(22)(e). CIT(A) upheld the addition on the ground that since the unpaid purchase price has not been paid till date the addition is justified. ITAT reversed the order of CIT(A) and while allowing the appeal the following Broad Principles were laid down:
- Deemed dividend does not apply to credit sale of goods or stock in trade.
- Deemed dividend is applicable only where there is 'actual payment' and not on transaction in kind
- Before making distribution the company should possess accumulated profits
Held by Tribunal that:
"The main thrust of these decision is that the provision of Section 2(22)(e) itself is a "fiction section" hence while applying this section it is presumed that a dividend is earned and distributed so held that it is improper to introduce another fiction. Further it is held that it is wrong and unjust to impose one fiction over another fiction. Therefore, following these decisions, we hereby hold that merely on presumptions the provisions of Section 2(22)(e) were wrongly invoked; hence, the addition in question deserves to be deleted."
Followed CIT v. Savithri Sam (263 ITR 1003)(Mad.), CIT v. Parle Plastics(332 ITR 63)(Bom), CIT v. P.V. John (181 ITR 001)(Ker)
(Contrast with M.D. Jindal v. CIT [1986] 164 ITR 28 (Cal.))
(The author can be reached at pankajgshah@gmail.com or on +91 96918 93040 for any queries)
- See more at: Deemed dividend applies only where there is 'actual payment' & not on transaction in kind
__._,_.___
No comments:
Post a Comment