SFIO to hire financial experts; SEBI to overhaul disclosure norms; Two-third cos miss CSR target
SFIO to hire financial experts; SEBI to overhaul disclosure norms; Two-third cos miss CSR target
Approves Capgemini-iGate merger, despite overlaps in consulting, BPO segments, as combined market-share negligible
CCI approves acquisition of USA co., iGate Corporation, by French co., Capgemini S.A., whereby iGate will become a wholly owned subsidiary of Capgemini; Notes that both the cos. are IT cos, thus defines relevant product market for the proposed combination as IT and IT enabled services, relevant geographic market as entire India; Observes that in overall market for IT and IT enabled services, there are overlaps between Capgemini and iGate in the segments of consulting, implementation services, business process outsourcing & IT outsourcing in India; However, notes that, "overall IT services industry is fragmented and characterized by the presence of large players… Even within the narrower scope of each overlapping segment as identified above, the combined market share of Capgemini and iGate is insignificant, is below 3% in each segment in India"; Thus, holds that proposed combination is not likely to have an appreciable adverse effect on competition in India:CCI
Approves IndusInd-RBS slump-sale deal; Banking services to jewelers standalone, forms separate market
CCI approves acquisition of entire banking portfolio of Royal Bank of Scotland N.V. (seller) with respect to its Indian customers engaged in gem and jewelry business by IndusInd Bank Limited ('Acquirer'), by way of slump sale; On acquirer's submission that definition of relevant market should be left open, observes that banking portfolio pertaining to customers engaged in gem & jewelry business forms a standalone bouquet of services offered to such customers, which could form a separate relevant product market; Further observes that horizontal overlap between the parties is only vis-à-vis the customers based in Mumbai, thus, defines relevant geographic as certain districts of Mumbai; Observes presence of larger players such as State Bank of India, Bank of India, ICICI Bank and Union Bank of India in gem and jewelry segment of banking, thus holds no appreciable adverse effect on competition in India by proposed combination; Also notes that customer who do not wish to migrate to Acquirer shall continue to be customer of the seller and will be governed by their existing contracts with seller:CCI
Approves acquisition of Crompton Greaves' Indian subsidiary by foreign investor & investment co.
CCI approves acquisition of 34.37 % share capital of Crompton Greaves Consumer Electricals Ltd's ('Target') by Advent International Corporation and MacRitchie Investments Pte. Limited ('Acquirers') and further acquisition of its 26% share capital by Acquirers by way of open offer; Notes that Advent was US based private equity investor, and MacRitchie, was Singapore based investment holding company and Target co. was Indian subsidiary of Crompton Greaves Limited ('Parent Co'), to carry on consumer products business; Observes that neither of the Acquirers produce or provide similar or substitutable products or services as that of Target co.; Further observes that there is no vertical relationship between the consumer products business of the Target and Acquirers' operating portfolio companies in India; Thus, holds that proposed combination is not likely to have an appreciable adverse effect on competition in India:CCI
Rejects 'anti-competitive behavior' allegation against Bhopal real-estate developer & Bank of India
CCI rejects duplex buyer's (informant) complaint against Bhopal based real-estate developer ('OP1'), alleging that due to non-supply of necessary documents by OP-1, informant was unable to avail home loan from banks that offered low interest rates, and had to take loan from Bank of India (OP-2); Thus, it was alleged that opposite parties ('Ops') had entered into an anti-competitive arrangement between them; CCI observes no prima facie contravention of Competition Act, absent any evidence to show any anti-competitive arrangement between OPs; With respect to abuse of dominance complaint against OP1, CCI delineates relevant market as "services for development and sale of residential apartments in Bhopal"; Observes presence of large number of other real estate developers operating in the relevant market, holds OP-1 as not dominant, thus, no question of abuse of dominance arises:CCI
US pharma cos merger approved, no adverse effect on competition in India
CCI approves 100% acquisition of Hospira Inc. (US pharma co.) by Pfizer Inc. (US pharma co.); Notes that Hospira does not sell any formulations in India and manufactures & sells only few active pharmaceutical ingredients (APIs) in India, while Pfizer does not manufacture or sell any APIs in India and imports APIs to manufacture & sell formulations in India; Thus, holds that there is no horizontal overlap between Pfizer and Hospira; With regard to vertical foreclosure, notes that majority of the APIs manufactured by Hospira in India were for captive consumption, however, there was one API, viz., Tadalafil, which may have potential usage for Pfizer; However, in presence of other suppliers of Tadalafil, holds that proposed combination not likely to result in any vertical foreclosure :CCI
KOLKATA, JULY 13, 2015: THE issue before the Bench is - Whether when revised return includes an expenditure disallowable u/s 37(1) it would automatically follow that inaccurate particulars were furnished even in originally filed return. YES is the verdict.
Facts of the case
The assessee is a sugar manufacturing company. After the assessee had filed its return, the assessment u/s 143(3) was completed showing a total income of Rs. 5,91,48,819/- and tax was charged u/s 115JB. Subsequently, the assessee filed a revised return showing a total income of Rs. 9,63,48,819/- under Normal Provisions of the Act. However Book-Profit was shown at Rs. 65,49,20,882/- u/s 115JB. On scrutiny of the said return, it was observed that assessee had disclosed additional amount of Rs. 3,40,00,000/-. The assessment was, thus, reopened u/s 147 and notice u/s 148 was issued and served on the assessee. In response, the assessee replied to consider the revised return as return filed u/s 148. It appeared that the assessee had made payments of Rs. 3,40,00,000/- to U.P. Distillers Association during previous year. Accordingly, a search u/s 132 was conducted in the office of the UPDA. From the seized record the payment of Rs. 3,40,00,000/- was found, made by the assessee. It was submitted by the AR that to avoid protracted litigation and to put a quitous to the whole issue the assessee had offered this amount as disallowable item u/s 37(1), through the revised return. Since the amount was offered as income by the assessee this amount was added back in computation of Income, in addition to the assessments made u/s 143(3). Since the assessee offered the additional income due to the search operation u/s 132 in the premises of UPDA, penalty proceedings u/s 271(1)(c) was also initiated separately.
On appeal, the CIT(A) reversed the order of the AO by holding that the Department has not brought any independent evidence on records to prove that the alleged payments reflected in the seized papers were actually made by the assessee and all along the assessee has maintained that the additional income has been offered for the purpose of buying peace with the Department and to negate the course of a protracted litigation with the Department. On further appeal, the Tribunal upheld the order of the CIT(A) observing that since the assessee has itself offered the additional income and the department has not brought anything positive on record to substantiate the conclusion that the assessee has mens rea of concealment of its true income or furnishing inaccurate particulars thereof, the action of the AO in holding the assessee liable for penalty u/s 271(1)(c) was not correct.
Having heard the parties, the High Court held that,
++ from the bunch of documents, it appears that a summons u/s 131 was issued to the assessee requiring the latter to appear both for the purpose of giving evidence and producing documents required and indicated therein. From the letter addressed by the assessee to the Joint Director of Income Tax, it appears that the assessee was informed that the summons have been issued with regard to the payments appearing to have been made by the assessee to U.P. Distilleries Association. The assessee rather than appearing on the appointed day to give evidence and to produce documents as required by the summons, wrote to the Joint Director of Income Tax, that it was offering the amount, representing the alleged payments made by it to UPDA during the A.Ys 2003-04, 2004-05 & 2005-06, as its income and also paid tax on it, to avoid protracted litigation and to put a quitous to the whole issue. In the light of our voluntarily surrendering the aforesaid sum as its income in the respective years to which they pertain, the assessee requested that no penalty/prosecution shall be imposed against them. The assessee thereafter filed a revised return, wherein, the computation of total income made in this return is inclusive of a sum of Rs.340.00 Lacs being the alleged payments made by to U.P. Distilleries' Association (UPDA), which are not allowable by virtue of Explanation to Section 37(1). The additional liability pursuant to this amounts to Rs.25.35 lacs which has been adjusted against the amount refundable from the Department. Although, the assessee does not agree to have made any such payments to UPDA, it has agreed to include the amount in its return and pay tax thereof. This is being done by the assessee just to buy peace and put an end to the protracted litigation. Subsequently, a notice u/s 147 was issued requiring the assessee to file a return for the A.Y 2004-2005. The assessee through his advocate replied stating that the revised return may be treated as a return filed u/s 148. Thereafter, the assessment was made u/s 143(3) r/w/s 147. It may be true that the assessee did not expressly own up payment of a sum of Rs.3.40 crores to U.P. Distilleries Association. It may also be true that the revenue did not adduce any proof to show that any such payment was made by the assessee to U.P. Distilleries.The omission on the part of the assessee to answer the question as regards the payment to U.P. Distilleries would attract the presumption laid down in illustration (h) to Section 114 of the Evidence Act which provides that, if a man refuses to answer a question which he is not compelled to answer by law, the answer, if given, would be unfavourable to him;
++ when the case of the assessee is that the return already filed by him for A.Y u/s 139 includes an expenditure disallowable u/s 37(1), it would automatically follow that inaccurate particulars had been furnished in the return originally filed, assessment whereof was completed in previous year. The provisions of 271(1) suggests that if the assessee furnishes inaccurate particulars coupled with absence of satisfactory explanation, that would per se make the assessee liable to pay penalty. Concealment of income in that case shall be presumed provided assessment leads to addition or disallowance of any amount in computing his total income. In the present case, the assessee on his own showing had furnished inaccurate particulars. The assessee admitted that the return originally filed by him included expenditure disallowable u/s 37(1) which occasioned the revised return filed by him by which a sum of Rs.3.40 crores was added by the assessee himself to his total income originally returned. The submission advanced by Assessee's counsel that the AO did not call for any explanation from the assessee is not factually correct because it would appear from the assessment order that a notice u/s 271(1)(c) was issued to which the assessee duly replied and offered an explanation that there was no deliberate concealment which was not acceptable to the AO. It is, therefore not correct to say that the exercise calling for an explanation from the assessee was not undertaken. Section 271(1)(c) originally qualified an act of concealment of income or furnishing of inaccurate particulars with the expression 'deliberately' which was omitted by the Finance Act, 1964 w.e.f. 1.4.1964 as a result concealment of income or inaccurate particulars need not originally have been furnished deliberately. The use of the expression 'deliberately' was a pointer to show that mens rea was a necessary element. With the omission of the expression 'deliberately', mens rea is no longer a prerequisite for imposition of penalty. It is now a case of strict liability;
++ there can be no quarrel with the proposition that the Tribunal is the final fact finding authority. The Tribunal was correct in observing that no independent evidence was adduced by the Revenue to prove that the alleged payments reflected in the seized papers were actually made by the assessee. But on that premise, the inference could not have been drawn that there was no concealment of income arising out of furnishing of inaccurate particulars as demonstrated by this court. It is true that in Revenue matters there is no scope for equity but in the present case, the charge of concealment of income arising out of furnishing inaccurate particulars has duly been proved. The last submission advanced by Assessee's counsel that in the absence of any appeal against the order for the A.Y 2003-04, the present appeal cannot be maintained has also not impressed this court. The judgement cited by him in the case of CIT Vs. M/s. PFH Mall and Retail Management Pvt. Ltd. is distinguishable. In that case, the Supreme Court had refused to entertain the appeal applying rule of consistency because the view of the High Court sought to be assailed was also taken in connection with an earlier assessment year which was not challenged. A view taken by the High Court stands on a different footing than the view taken by the Tribunal. The Tribunal is a statutory body. A judgement rendered by the Tribunal cannot attract the principles of res judicata whereas a judgement rendered by the High Court would certainly attract the principles of res judicata. For the aforesaid reasons, the question is answered in the negative.
(See 2015-TIOL-1576-HC-KOL-IT)
When a complaint is made to Bar Council of Gujarat and India for indulging in bad practices by Advocates No action for last 5 years taken???? See the fun and Pun...........
- Bar Council of Delhi issues notice to Ernst & Young, PwC, Deloitte & KPMG on complaint filed by Society of Indian Law Firms alleging unauthorized practice of law by Big 4
ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
F Assessee entitled to depreciation on assets on amount claimed as application for charitable purposes : Parkar Medical Foundation v. Deputy CIT (Pune) p. 608
F Request to award costs on Department to be rejected on failure by assessee to prove mala fide action of Commissioner : Parkar Medical Foundation v. Deputy CIT (Pune) p. 608
F Double Taxation Avoidance Agreement : Reimbursement of salary of seconded employees governed by article 7 of agreement to be treated as revenue receipt : Morgan Stanley International Incorporated v. Deputy DIT (International Taxation) (Mumbai) p. 625
F Provisions of rule 8D applicable prospectively in respect of disallowance of expenditure relating to exempt income : Stream International Services P. Ltd. v. Asst. CIT (Mumbai) p. 646
F Selection of comparables : Functionally different companies to be excluded: Stream International Services P. Ltd. v. Asst. CIT (Mumbai) p. 646
F Dividend : Provisions of section 2(22)(e) applicable to registered shareholders alone : IAG Promoters and Developers P. Ltd. v. Asst. CIT (Delhi) p. 1 (10-6-2015)
F Payments towards purchase of satellite rights cannot be treated as royalty : Penalty cannot be levied for non-deduction of tax at source : ITO v. Aishwarya Art Creations P. Ltd. (Hyd) p. 4 (10-6-2015)
F Assessment null and void on failure by Assessing Officer to issue notice to correct address and before six months of date of filing of return : Total Presentation Device P. Ltd. v. Deputy CIT (Delhi) p. 10 (1-6-2015)
F Determination of arm's length price : Functionally different companies to be excluded from selection of comparables : NXP Semi Conductors India P. Ltd. v. Deputy CIT (Bang) p. 23
F Risk adjustment not claimed either before authorities or Appellate Tribunal cannot be granted : NXP Semi Conductors India P. Ltd. v. Deputy CIT (Bang) p. 23
F Charging of interest consequential and mandatory in nature, no discretion with Assessing Officer : NXP Semi Conductors India P. Ltd. v. Deputy CIT (Bang) p. 23
F Competency of appeal to Appellate Tribunal : Only appeals with tax effect exceeding Rs. 4 lakhs maintainable : ITO v. Fobeoz India P. Ltd. (Mumbai) p. 62 (10-6-2015)
F Whether assessee a credit co-operative bank or credit co-operative society is disputed question of fact : Dharti Nagrik Sarafi Sahkari Mandali Ltd. v. Asst. CIT (Ahd) p. 68 (5-6-2015)
F Service tax to be excluded from gross receipts for purpose of determining income u/s. 44BB of 1961 Act : Sundowner Offshore International (Bermuda) Ltd. v. Asst. DIT (International Taxation) (Delhi) p. 71 (5-6-2015)
F Trust registered u/s. 12AA and fulfilling conditions specified in section 80G, entitled to approval for exemption u/s. 80G of 1961 Act : Keshav Madhav Dham Trust v. CIT (Delhi) p. 77 (2-6-2015)
F Companies having enormous turnover cannot be treated as comparables : Functionally similar companies to be treated as comparables : e4e Business Solutions India P. Ltd. v. Deputy CIT (Bang) p. 90 (26-5-2015)
F Telecommunication charges excluded from export turnover, to be excluded from total turnover : e4e Business Solutions India P. Ltd. v. Deputy CIT (Bang) p. 90
F Failure by authority to give sufficient opportunity to substantiate claim of assessee is contrary to principles of natural justice, matter remanded : Shiv Mandir Gori Sankar Viswnath Bakunt Dham v. CIT (Exemptions) (Delhi) p. 110 (5-6-2015)
F Assessee entitled to depreciation on purchase of motor car in director's name for business activities : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114 (5-6-2015)
F Bad debt allowable on assessee fulfilling requirement of s. 36(2)(i) by writing off debts as bad in books of account : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Matter remanded for examination on failure by parties to furnish break-up details of penalties for violation of bye-laws : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Where fines and penalties imposed for violation of bye-laws, order deleting disallowance proper : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Assessing Officer applying rule 8D for computing disallowance for earlier years, disallowance to be computed u/s. 14A, matter remanded : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Amortisation of expenses : Order confirming disallowance justified on failure by assessee to demonstrate how amortisation amount allowable as deduction under 1961 Act : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Where assessee having no intention to purchase shares as investor, assessment of short-term capital gains as business income of assessee proper : Kisan Ratilal Choksey Shares and Securities P. Ltd. v. Addl. CIT (Mumbai) p. 114
F Where assessee prevented by reasonable cause from filing appeals in time, delay to be condoned : ITO v. K-ITES P. Ltd. (Chennai) p. 132 (22-5-2015)
F Exemption allowed after detailed consideration of evidence and not rebutted by Department, assessee entitled to exemption u/s. 10A of 1961 Act : ITO v. K-Ites P. Ltd. (Chennai) p. 132
F Where plant and machinery kept ready for use but assessee failing to get orders, assessee entitled to depreciation : ITO v. K-Ites P. Ltd. (Chennai) p. 132
F Corresponding deposit representing accumulated income amounts to sufficient compliance with provisions of section 11(2)(b), disallowance of income accumulated not proper : Dharmodayam Co. v. ITO (Cochin) p. 140 (14-5-2015)
F Where reasonable belief that assessee had not made investment in terms of section 11(2)(b), reopening of assessment valid : Dharmodayam Co. v. ITO (Cochin) p. 140
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Govt. claims success in improving India's IP ecosystem through e-filing, administrative reforms
Govt. states that numerous measures are taken for ensuring continuous improvement of India's Intellectual Property ('IP') ecosystem, wherein DIPP has formulated multi-pronged strategy for developing IP regime with an objective of promoting creativity and innovations; States that during the year, IP Office has been radically transformed through numerous initiatives that have contributed tremendously in ease of access to IP system, efficiency in processing of IP applications, uniformity and consistency in examination of applications, transparency and dissemination of IP information, bilateral co-operation at the international level etc. ; Govt. takes pride over fact that India's IP system embarked on its e-journey, whereby complete electronic processing of Patents and Trademarks applications through specialized modules was introduced; States that the official website provides vast information relating to patents, trademarks, designs and geographical indications, real time status of IP applications (with entire file wrappers and e-registers) is now open to the public; With an objective of educating stakeholders about the benefits of registration of their rights, perils of IPRs infringement, dealing in pirated and counterfeit products, the Govt. stresses on awareness creation as one of the major planks of the modernization scheme of IP system: PIB .
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RBI prescribes Annual Return formats for non-deposit taking NBFCs
RBI prescribes Annual Return formats to be submitted by all non-deposit taking NBFCs (NBFCs-ND) with assets less than Rs. 500 crore; States that Return formats are created for capturing important financial parameters of the respective category of NBFCs; Prescribes NBS 8 for NBFCs-ND with assets size between Rs.100-500 crore and NBS 9 for NBFCs-ND with assets size below Rs. 100 crore; RBI also prescribes the last date of submission of the Annual Return by the said NBFCs: RBI
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RBI modifies format for furnishing credit information to Credit Information Co.
RBI modifies data format for furnishing credit information to Credit Information Co.; States that annexure to the format has two parts, 'Consumer Bureau' & 'Commercial Bureau', proposes to create new status value as 'Restructured due to Natural Calamity' for the fields 'Written Off and Settled Status" in the Consumer Bureau and 'Major reasons for restructuring' in Commercial Bureau; Observes that such modification will enable Banks /FIs to report to CICs restructured/rescheduled agricultural loans on account of any declared natural calamities and that such reporting will help banks in knowing if any earlier loans availed by the farmers were restructured due to natural calamities: RBI
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