Friday, October 9, 2015

[aaykarbhavan] Judgments and Infomration [6 Attachments]




The Recent Two Verdicts Of Apex Court: Guiding Star For High Courts & Advocates Fraternity

Akhilesh
Shri. Akhilesh Kumar Sah, Advocate, has dealt with two landmark judgements of the Supreme Court on the rights, duties and privileges of advocates and explained the entire issue in the proper perspective in the context of the rules of the Bar Council of India and the Code of Ethics
The recent two judgments, one Himalayan Cooperative Group Housing Society vs. Balwan Singh [decided on April 29, 2015] and another, AG vs. Shiv Kumar Yadav & Anr., decided on September 10, 2015] are very important in respect of workings of the High Courts as well as of Advocates.
Here, in brief, some of the points/ decision in these two judgments are given below:
Himalayan Cooperative Group Housing Society vs. Balwan Singh (supra):
1. Lawyers are perceived to be their client's agents. The law of agency may not strictly apply to the client – lawyer's relationship as lawyers or agents, lawyers have certain authority and certain duties. Because lawyers are also fiduciaries, their duties will sometimes more demanding than those imposed on other agents. The authority-agency status affords the lawyers to act for the client on the subject matter of the retainer. One of the most basic principles of the lawyer-client relationships is that lawyers owe fiduciary duties to their clients. As part of those duties, lawyers assume all the traditional duties that agents owe their principals and, thus, have to respect the client's autonomy to make decisions at a minimum, as to the objectives of the representation. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client's instructions rather than substitute their judgment for that of the client. The law is now well settled that a lawyer must be specifically authorized to settle and compromise a claim, that merely on the basis of his employment he has no implied or ostensible authority to bind his client to a compromise/ settlement. To put it alternatively that a lawyer by virtue of retention, has the authority to choose the means for achieving the client's legal goal, while the client has the right to decide on what the goal will be. If the decision in question falls within those that clearly belong to the client, the lawyers conduct in failing to consult the client or in making the decision for the client, is more likely to constitute ineffective assistance of counsel.
2. The Bar Council of India Rules, 1975 (for short, "the BCI Rules"), in Part VI, Chapter II provide for the 'Standards of Professional Conduct and Etiquette' to be observed by all the advocates under the Advocates Act, 1972 (for short, "the Act, 1972"). In the preamble to Chapter II, the BCI Rules provide as follows:
"An advocate shall, at all times, comport himself in a manner befitting his status as an officer of the Court, a privileged member of the community, and a gentleman, bearing in mind that what may be lawful and moral for a person who is not a member of the Bar, or for a member of the Bar in his non-professional capacity may still be improper for an advocate. Without prejudice to the generality of the foregoing obligation, an advocate shall fearlessly uphold the interests of his client and in his conduct conform to the rules hereinafter mentioned both in letter and in spirit. The rules hereinafter mentioned contain canons of conduct and etiquette adopted as general guides; yet the specific mention thereof shall not be construed as a denial of the existence of others equally imperative though not specifically mentioned."
3. The Preamble makes it imperative that an advocate has to conduct himself and his duties in an extremely responsible manner. They must bear in mind that what may be appropriate and lawful for a person who is not a member of the Bar, or for a member of the Bar in his non-professional capacity, may be improper for an advocate in his professional capacity.
4. Section II of the said Chapter II provides for duties of an advocate towards his client. Rules 15 and 19 of the BCI Rules, has relevance to the subject matter and therefore, they are extracted below:
"15. It shall be the duty of an advocate fearlessly to uphold the interests of his client by all fair and honourable means without regard to any unpleasant consequences to himself or any other. He shall defend a person accused of a crime regardless of his personal opinion as to the guilt of the accused, bearing in mind that his loyalty is to the law which requires that no man should be convicted without adequate evidence.
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19. An advocate shall not act on the instructions of any person other than his client or his authorised agent."
5. While Rule 15 mandates that the advocate must uphold the interest of his clients by fair and honourable means without regard to any unpleasant consequences to himself or any other. Rule 19 prescribes that an advocate shall only act on the instructions of his client or his authorized agent. Further, The BCI Rules in Chapter I of the said Section II provide that the Senior advocates in the matter of their practice of the profession of law mentioned in Section 30 of the Act, 1972 would be subject to certain restrictions. One of such restrictions contained in clause (cc) reads as under:
"(cc) A Senior Advocate shall, however, be free to make concessions or give undertaking in the course of arguments on behalf of his clients on instructions from the junior advocate."
6. The 'Code of Ethics' prescribed by the Bar Council of India, in recognition of the evolution in professional and ethical standards within the legal community, provides for certain rules which contain canons of conduct and etiquette which ought to serve as general guide to the practice and profession. Chapter of the said Code provides for an 'Advocate's duty to the Client'. Rule 26 thereunder mandates that an "advocate shall not make any compromise or concession without the proper and specific instructions of his/her client." It is pertinent to notice that an advocate under the Code expressly includes a group of advocates and a law firm whose partner or associate acts for the client.
7. The BCI Rules make it necessary that despite the specific legal stream of practice, seniority at the Bar or designation of an advocate as a Senior advocate, the ethical duty and the professional standards in so far as making concessions before the Court remain the same. It is expected of the lawyers to obtain necessary instructions from the clients or the authorized agent before making any concession/ statement before the Court for and on behalf of the client.
8. While the BCI Rules and the Act, does not draw any exception to the necessity of an advocate obtaining instructions before making any concession on behalf of the client before the Court, Supreme Court in Periyar & Pareekanni Rubber Ltd. v. State of Kerala, (1991) 4 SCC 195 has noticed the sui generis status and the position of responsibility enjoyed by the Advocate General in regards to the statements made by him before the Courts. The said observation is as under:
"19. …Any concession made by the government pleader in the trial court cannot bind the government as it is obviously, always, unsafe to rely on the wrong or erroneous or wanton concession made by the counsel appearing for the State unless it is in writing on instructions from the responsible officer. Otherwise it would place undue and needless heavy burden on the public exchequer. But the same yardstick cannot be applied when the Advocate General has made a statement across the bar since the Advocate General makes the statement with all responsibility."
(See: Joginder Singh Wasu vs. State Of Punjab, 1994 SCC (1) 184).
9. The Privy Council in the case of Sourendra Nath Mitra vs. Tarubala Dasi, AIR 1930 PC 158 has made the following two observations which hold relevance to the present discussion:
"Two observations may be added. First, the implied authority of counsel is not an appendage of office, a dignity added by the Courts to the status of barrister or advocate at law. It is implied in the interests of the client, to give the fullest beneficial effect to his employment of the advocate. Secondly, the implied authority can always be countermanded by the express directions of the client. No advocate has actual authority to settle a case against the express instructions of his client. If he considers such express instructions contrary to the interests of his client, his remedy is to return his brief."
(See: Jamilabai Abdul Kadar vs.. Shankarlal Gulabchand, (1975) 2 SCC 609, Svenska Handelsbanken vs. Indian Charge Chrome Ltd, 1994 SCC (2) 155)
10. It is the solemn duty of an advocate not to transgress the authority conferred him by the client. It is always better to seek appropriate instructions from the client or his authorized agent before making any concession which may, directly or remotely, affect the rightful legal right of the client. The advocate represents the client before the Court and conducts proceedings on behalf of the client. He is the only link between the Court and the client. Therefore his responsibility is onerous. He is expected to follow the instructions of his client rather than substitute his judgment.
11. Generally, admissions of fact made by a counsel is binding upon their principals as long as they are unequivocal; where, however, doubt exists as to a purported admission, the Court should be wary to accept such admissions until and unless the counsel or the advocate is authorised by his principal to make such admissions. Furthermore, a client is not bound by a statement or admission which he or his lawyer was not authorised to make. Lawyer generally has no implied or apparent authority to make an admission or statement which would directly surrender or conclude the substantial legal rights of the client unless such an admission or statement is clearly a proper step in accomplishing the purpose for which the lawyer was employed. We hasten to add neither the client nor the Court is bound by the lawyer's statements or admissions as to matters of law or legal conclusions. Thus, according to generally accepted notions of professional responsibility, lawyers should follow the client's instructions rather than substitute their judgment for that of the client. The learned hon'ble judges the Supreme Court held that we may add that in some cases, lawyers can make decisions without consulting client. While in others, the decision is reserved for the client. It is often said that the lawyer can make decisions as to tactics without consulting the client, while the client has a right to make decisions that can affect his rights. We do not intend to prolong this discussion. We may conclude by noticing a famous statement of Lord Brougham:
"an advocate, in the discharge of his duty knows but one person in the world and that person is his client."
12. Hon'ble judges of the Supreme Court in the above case (supra) have observed the case of Jaisingh and Ors. vs. Municipal Corporation of Delhi and Anr. (2010) 9 SCC 385, wherein the Court has stated:
"13….., we may notice certain well recognized principles governing the exercise of jurisdiction by the High Court under Article 227of the Constitution of India. Undoubtedly the High Court, under this Article, has the jurisdiction to ensure that all subordinate courts as well as statutory or quasi judicial tribunals, exercise the powers vested in them, within the bounds of their authority. The High Court has the power and the jurisdiction to ensure that they act in accordance with well established principles of law. The High Court is vested with the powers of superintendence and/or judicial revision, even in matters where no revision or appeal lies to the High Court. The jurisdiction under this Article is, in some ways, wider than the power and jurisdiction under Article 226 of the Constitution of India. It is, however, well to remember the well known adage that greater the power, greater the care and caution in exercise thereof. The High Court is, therefore, expected to exercise such wide powers with great care, caution and circumspection. The exercise of jurisdiction must be within the well recognized constraints. It can not be exercised like a `bull in a china shop', to correct all errors of judgment of a court, or tribunal, acting within the limits of its jurisdiction. This correctional jurisdiction can be exercised in cases where orders have been passed in grave dereliction of duty or in flagrant abuse of fundamental principles of law or justice. The High Court cannot lightly or liberally act as an appellate court and re-appreciate the evidence. Generally, it can not substitute its own conclusions for the conclusions reached by the courts below or the statutory/quasi judicial tribunals. The power to re-appreciate evidence would only be justified in rare and exceptional situations where grave injustice would be done unless the High Court interferes. The exercise of such discretionary power would depend on the peculiar facts of each case, with the sole objective of ensuring that there is no miscarriage of justice."
AG vs. Shiv Kumar Yadav & Anr.(supra):
The issue raised for consideration in the above appeals before Supreme Court was whether recall of witnesses, at the stage when statement of accused under Section 313 of the Code of Criminal Procedure ("Cr.P.C.") has been recorded, could be allowed on the plea that the defence counsel was not competent and had not effectively cross-examined the witnesses, having regard to the facts and circumstances of this case.
The Supreme Court observed that it can hardly be gainsaid that fair trial is a part of guarantee under Article 21 of the Constitution of India. Its content has primarily to be determined from the statutory provisions for conduct of trial, though in some matters where statutory provisions may be silent, the court may evolve a principle of law to meet a situation which has not been provided for. It is also true that principle of fair trial has to be kept in mind for interpreting the statutory provisions.
In the name of fair trial, the system cannot be held to ransom. The accused is entitled to be represented by a counsel of his choice, to be provided all relevant documents, to cross-examine the prosecution witnesses and to lead evidence in his defence. The object of provision for recall is to reserve the power with the court to prevent any injustice in the conduct of the trial at any stage. The power available with the court to prevent injustice has to be exercised only if the Court, for valid reasons, feels that injustice is caused to a party. Such a finding, with reasons, must be specifically recorded by the court before the power is exercised. It is not possible to lay down precise situations when such power can be exercised. The Legislature in its wisdom has left the power undefined. Thus, the scope of the power has to be considered from case to case.
The interest of justice may suffer if the counsel conducting the trial is physically or mentally unfit on account of any disability. The interest of the society is paramount and instead of trials being conducted again on account of unfitness of the counsel, reform may appear to be necessary so that such a situation does not arise. Perhaps time has come to review the Advocates Act and the relevant Rules to examine the continued fitness of an advocate to conduct a criminal trial on account of advanced age or other mental or physical infirmity, to avoid grievance that an Advocate who conducted trial was unfit or incompetent. This is an aspect which needs to be looked into by the concerned authorities including the Law Commission and the Bar Council of India.
The learned judges of the Supreme Court summarized reasons for disapproving the view of the High Court in the above-mentioned case:
(i) The trial court and the High Court held that the accused had appointed counsel of his choice. He was facing trial in other cases also. The earlier counsel were given due opportunity and had duly conducted cross-examination. They were under no handicap;
(ii) No finding could be recorded that the counsel appointed by the accused were incompetent particularly at back of such counsel;
(iii) Expeditious trial in a heinous offence as is alleged in the present case is in the interests of justice;
(iv) The trial Court as well as the High Court rejected the reasons for recall of the witnesses;
(v) The Court has to keep in mind not only the need for giving fair opportunity to the accused but also the need for ensuring that the victim of the crime is not unduly harassed;
(vi) Mere fact that the accused was in custody and that he will suffer by the delay could be no consideration for allowing recall of witnesses, particularly at the fag end of the trial;
(vii) Mere change of counsel cannot be ground to recall the witnesses;
(viii) There is no basis for holding that any prejudice will be caused to the accused unless the witnesses are recalled;
(ix) The High Court has not rejected the reasons given by the trial court nor given any justification for permitting recall of the witnesses except for making general observations that recall was necessary for ensuring fair trial. This observation is contrary to the reasoning of the High Court in dealing with the grounds for recall, i.e., denial of fair opportunity on account of incompetence of earlier counsel or on account of expeditious proceedings; Crl. Appeal No…… of 2015 Etc. @ SLP (Crl.) No.1899-1900 of 2015 Etc.
(x) There is neither any patent error in the approach adopted by the trial court rejecting the prayer for recall nor any clear injustice if such prayer is not granted.
Shri. Akhilesh Kumar Sah, Advocate, has dealt with two landmark judgements of the Supreme Court on the rights, duties and privileges of advocates and explained the entire issue in the proper perspective in the context of the rules of the Bar Council of India and the Code of Ethics

Venus Financial Services Ltd vs. ACIT (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: September 28, 2015 (Date of pronouncement)
DATE: October 9, 2015 (Date of publication)
AY: 2009-10
FILE: Click here to download the file in pdf format
CITATION:
S. 48: In computing "capital gains" the AO is not entitled to substitute the "market value" for the actual "consideration" received by the assessee. He also cannot disregard the valuation report without cogent material
(i) It is settled position of law that in the case of sale, the Assessing Officer has no power to replace the value of the consideration agreed between the parties. In this regard, we find strength from the above cited decision of Hon'ble Delhi High Court in the case of Nilofar Singh holding that the expression "full value of consideration" used in section 48 of the Act does not have any reference to market value (Nilofer Singh 309 ITR 233 (Delhi); George Handorson 66 ITR 622 (S.C); Gillanders Arbuthonot 87 ITR 407 (S.C) referred);
(ii) A report of a valuer is an important piece of evidence and the same cannot be discarded without there being any cogent material on record showing that the report of the valuer is not correct (S.K. Construction & Co. 167 Taxman 171 (Delhi) followed);
(iii) As the expression "full value of consideration" in section 48 of the Income-tax Act, 1961 does not have any reference to market value, the Assessing Officer was having no power to replace the value of the consideration agreed between the parties with any fair market value or estimation. Only because the Pioneer Ltd. had shown the book value of shares at the rate of Rs.3.50 per share, the Assessing Officer was not justified to ignore the price agreed between the parties and to doubt the genuineness of the claimed loss, even ignoring the valuation report.

Related Judgements

  1. Barjinder Singh Bhatti vs. ITO (ITAT Chandigarh) 
    The Assessing Officer, if was not satisfied with the report of the Registered Valuer, could have made a reference to the Departmental Valuation Officer under section 55A of the Act for the purpose of computing income from capital gains. The Assessing Officer has thus, not acted in accordance with…
  2. EXL India Business Services Pvt Ltd vs. ACIT (ITAT Delhi) 
    The assessee filed the return of income of 29th October 2007, and that the time limit for issuance of notice, under section 143(2), selecting the case for scrutiny assessment expired on 30th September 2008. It is also an admitted position…Read more ›
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    At the outset, we have to demarcate the territory of the case, i.e. application of section 50C and addition to be made u/s 69C. We find that both the sections operate independently i.e. to say that section 50C shall bet…Read more ›
  4. Computer Engineering Services India (P) Ltd vs. ACIT (ITAT Delhi) 
    For making the assessment, it is absolutely essential that the person so to be assessed should be in existence at the time of making the assessment. In the present case the assessment has been framed by the AO on a date when the present assessee was not in existence…
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    We notice that in this appeal, the assessee has raised as many as 30 substantial questions of law. In our considered opinion, it is not really necessary to consider any of these questions, as in the first instance, the order of the Tribunal is not at all adverse to…

S. 48: In computing "capital gains" the AO is not entitled to substitute the "market value" for the actual "consideration" received by the assessee. He also cannot disregard the valuation report without cogent material
It is settled position of law that in the case of sale, the Assessing Officer has no power to replace the value of the consideration agreed between the parties. A report of a valuer is an important piece of evidence and the same cannot be discarded without there being any cogent material on record showing that the report of the valuer is not correct

Tristar Intech (P) Ltd vs. ACIT (ITAT Delhi)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS: , ,
COUNSEL:
DATE: September 7, 2015 (Date of pronouncement)
DATE: October 9, 2015 (Date of publication)
AY: 2006-07
FILE: Click here to download the file in pdf format
CITATION:
S. 271(1)(c): The deeming provision of Explanation 1 to s. 271(1)(c) applies only to a case of "concealment of income" and not to a case of "furnishing inaccurate particulars of income"
(i) In the assessment order passed u/s.143(3), the AO initiated penalty for concealing the particulars of income. However, at the time of passing penalty order the AO levied penalty for filing of inaccurate particulars of income under the virtue of Explanation 1 to Section 271(1)(c) of the Act. From a reading of Explanation 1 to Section 271(1)(c) of the Act, it is apparent that, if the AO in the course of assessment proceedings is satisfied that, any person has concealed the particulars of income or furnished inaccurate particulars of such income, then he may levy penalty on the assessee. Thus, there are two different charges i.e. concealment of particulars of income or furnishing of inaccurate particulars of income. The penalty can be imposed only for a specific charge. Furnishing inaccurate particulars of income means, when the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas, concealment of particulars of income means, when the assessee has concealed the income and has not shown the income in its return or in its books of accounts. Explanation 1 is a deeming provision and is applicable when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 cannot be applied in a case where the assessee furnishes inaccurate particulars of income.
(ii) In the present case, the AO initiated penalty proceeding u/s 271(1)(c) on the basis that the assessee has concealed the particulars of income and the penalty ultimately levied on the assessee has been for furnishing inaccurate particulars by observing that the case of the assessee is covered by the Explanation 1 to Section 271(1)(c).
(iii) It is also observed that mistake of the assessee was bonafide which has been corrected by filing revised return before completion of assessment. Merely because there were some discrepancies, it cannot be held that the assessee intended to evade tax. The assessee had rectified the same and had accepted the mistake before the AO. The assessee also chose not to prefer appeal before the first appellate authority, itself shows that the mistakes were not wilfull (Reliance Petro Products 322 ITR 158, Price WaterHouse Coopers Pvt. Ltd. vs. CIT reported in (2012) 348 ITR 306 and DCIT vs. Nepa Limited (2015) 58 Taxmann.com 137 followed)

Related Judgements

  1. DCIT vs. Nepa Limited (ITAT Indore) 
    (i) It is incumbent upon the Assessing Officer to state whether penalty was being levied for concealment of particulars of income by the assessee or whether any inaccurate particulars of income had been furnished by the assessee. There are two…Read more ›
  2. Global Green Company Limited vs. DCIT (ITAT Delhi) 
    Despite the insertion of sub-section (1B) to s. 271, the necessity for "prima facie satisfaction" for initiation of penalty proceedings continues to be a jurisdictional fact. The AO has to record the finding that there was concealment of income. In the s. 143(3) assessment order, the AO has not…
  3. Rushi Builders and Developers vs. ACIT (ITAT Mumbai) 
    The disallowance of expenditure was attracted due to non-deduction of TDS and it cannot be said to be a case of concealment of income or furnishing of inaccurate particulars of income. The levy of penalty u/s.271(1)(c) of the Act is not attractedRead more ›
  4. CIT vs. Dalmia Dyechem Industries (Bombay High Court) 
    Conditions under Section 271(1)(c) must exist before the penalty can be imposed. Mr.Chhotaray tried to widen the scope of the appeal by submitting that the decision of the Apex Court should be interpreted in such a manner that there is no scope of misuse especially since minuscule number of…
  5. 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" in the return of…

S. 271(1)(c): The deeming provision of Explanation 1 to s. 271(1)(c) applies only to a case of "concealment of income" and not to a case of "furnishing inaccurate particulars of income"
There are two different charges i.e. concealment of particulars of income or furnishing of inaccurate particulars of income. The penalty can be imposed only for a specific charge. Furnishing inaccurate particulars of income means, when the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas, concealment of particulars of income means, when the assessee has concealed the income and has not shown the income in its return or in its books of accounts. Explanation 1 is a deeming provision and is applicable when an amount is added or disallowed in computation of total income which is deemed to represent the income in respect of which particulars have been concealed. Explanation 1 cannot be applied in a case where the assessee furnishes inaccurate particulars of income

DIT vs. Mitchell Drilling International Pvt Ltd (Delhi High Court)

COURT:
CORAM: ,
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: September 28, 2015 (Date of pronouncement)
DATE: October 9, 2015 (Date of publication)
AY: 2008-09
FILE: Click here to download the file in pdf format
CITATION:
S. 44BB: Service tax & Customs duty collected by assessee from clients is not includible in gross receipt while computing income u/s 44BB
The High Court had to consider the following important question of law: "Whether the amount of service tax collected by the Assessee from its various clients should have been included in gross receipt while computing its income under the provisions of section 44BB of the Act?" HELD by the High Court:
(i) Section 44BB begins with a non obstante clause that excludes the application of Sections 28 to 41 and Sections 43 and 43A to assessments under Section 44 BB. It introduces the concept of presumptive income and states that 10% credit of the amounts paid or payable or deemed to be received by the Assessee on account of "the provision of services and facilities in connection with, or supply of plant and machinery on hire used, or to be used, in the prospecting for, or extraction or production of, mineral oils in India" shall be deemed to be the profits and gains of the chargeable to tax. The purpose of this provision is to tax what can be legitimately considered as income of the Assessee earned from its business and profession.
(ii) The expression 'amount paid or payable' in Section 44 BB (2) (a) and the expression 'amount received or deemed to be received' in Section 44 BB (2) (b) is qualified by the words 'on account of the provision of services and facilities in connection with, or supply of plant and machinery.' Therefore, only such amounts which are paid or payable for the services provided by the Assessee can form part of the gross receipts for the purposes of computation of the gross income under Section 44 BB (1) read with Section 44 BB (2).
(iii) It is in this context that the question arises whether the service tax collected by the Assessee and passed on to the Government from the person to whom it has provided the services can legitimately be considered to form part of the gross receipts for the purposes of computation of the Assessee's 'presumptive income' under Section 44BB of the Act?
(iv) The Court concurs with the decision of the High Court of Uttarakhand in DIT v. Schlumberger Asia Services Ltd (2009) 317 ITR 156 which held that the reimbursement received by the Assessee of the customs duty paid on equipment imported by it for rendering services would not form part of the gross receipts for the purposes of Section 44 BB of the Act. The Court accordingly holds that for the purposes of computing the 'presumptive income' of the assessee for the purposes of Section 44 BB of the Act, the service tax collected by the Assessee on the amount paid by it for rendering services is not to be included in the gross receipts in terms of Section 44 BB (2) read with Section 44 BB (1). The service tax is not an amount paid or payable, or received or deemed to be received by the Assessee for the services rendered by it. The Assessee is only collecting the service tax for passing it on to the government.
(v) This position has been made explicit by the CBDT itself in two of its circulars. In Circular No. 4/2008 dated 28th April 2008 it was clarified that "Service tax paid by the tenant doesn't partake the nature of "income" of the landlord. The landlord only acts as a collecting agency for Government for collection of Service Tax. Therefore, it has been decided that tax deduction at source) under sections 194-I of Income Tax Act would be required to be made on the amount of rent paid/payable without including the service tax.' In Circular No. 1/2014 dated 13th January 2014, it has been clarified that service tax is not to be included in the fees for professional services or technical services and no TDS is required to be made on the service tax component under Section 194J of the Act.
(Chowringhee Sales Bureau Pvt. Ltd. v. Commissioner of Income-tax [1973] 87 ITR 542 and George Oakes (P.) Ltd. v. State of Madras [1962] 2 SCR 570, DIT v. Schlumberger Asia Services Ltd. (2009) 317 ITR 156, CIT v. Lakshmi Machine Works (2007) 290 ITR 667 (SC) Sedco Forex International Inc. v. CIT 299 ITR 238 (Uttarakhand) and CIT Tax-XI v. M/s DLF Commercial Project Corporation 2015-TIOL-1609-HC-DEL-IT referred).

Related Judgements

  1. DIT vs. Sedco Forex International Drilling Inc (Uttarakhand High Court) 
    The tax on the salary paid by the employer was a "perquisite" u/s 17(2)(iv) because it was paid in respect of the employees' obligation and it was not by way of monetary payment to the employees concerned but for or on their account to the Income-tax department. Consequently, it…
  2. CIT vs. Montedison of Italy (Bombay High Court) 
    Section 9(1) of the Act provides which incomes shall be deemed to accrue or arise in India. Sub-clause (vii)(b) of section 9(1) of the Act, as applicable to the facts of the present case, inter alia provides that income by…Read more ›
  3. Delhi Chartered Accountants Society vs. UOI (Delhi High Court) 
    Rule 4 of the Point of Taxation Rules, 2011 which has continued even after 01.04.2012 is clearly the answer. It provides for a specific situation namely determination of the point of taxation in case of change in effective rate of tax. As per Rule 4, whenever there is a…
  4. DIT vs. Wizcraft International Entertainment Pvt.Ltd (Bombay High Court) 
    Commission paid to an agent for services rendered abroad and payment by way of reimbursement of expenses are not taxable in India
    The assessee paid remuneration to the artists, to the agent and reimbursed the expenses in connection with the visit and performance of the artists in India. The…
  5. Girnar Investment Ltd vs. CIT (Delhi High Court) 
    S. 220(2) provides for levy of interest if the demand is not paid within 30 days of the service of notice u/s 156. A distinction has to be drawn between a case where the assessee pays up the entire demand raised pursuant to the assessment order within the period…

S. 44BB: Service tax & Customs duty collected by assessee from clients is not includible in gross receipt while computing income u/s 44BB
The Court concurs with the decision of the High Court of Uttarakhand in DIT v. Schlumberger Asia Services Ltd (2009) 317 ITR 156 which held that the reimbursement received by the Assessee of the customs duty paid on equipment imported by it for rendering services would not form part of the gross receipts for the purposes of Section 44 BB of the Act. The Court accordingly holds that for the purposes of computing the 'presumptive income' of the assessee for the purposes of Section 44 BB of the Act, the service tax collected by the Assessee on the amount paid by it for rendering services is not to be included in the gross receipts in terms of Section 44 BB (2) read with Section 44 BB (1). The service tax is not an amount paid or payable, or received or deemed to be received by the Assessee for the services rendered by it. The Assessee is only collecting the service tax for passing it on to the government
 

नमस्कार ,दिनांक 10 अक्टूबर , शनिवार को  डोबरा चांठी पुल की यथास्थिति एंव प्रतापनगर की समस्याओं पर एक विशेष न्यूज रिपोर्ट का प्रसारण CNN IBN पर दोपहर 1:30 पर एवं पुनः प्रसारण 9.30 रात्री किया जायेगा. नीचे दिये लिंक पर क्लिक कर आप यह रिपोर्ट देख सकते है http://www.ibnlive.com/livetv/ धन्यवाद CA राजेश्वर प्रसाद पैन्यूली ग्राम लिखवार गांव प्रतापनगर टिहरी गढवाल


The facility to view tax and computation sheet for demand raised by AO is made available to the assessee in the e­Filing portal. After Login, select e­File ' Response to Outstanding Tax Demand, click on download button next to demand amount to download the details pdf. In case of demand raised by CPC or raised manually outside the system, assessee needs to request for resend of intimation request or Jurisdictional Assessing Officer respectively






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