In accordance with Instruction No.96 dated 21st August, 1969 issued by the CBDT where the income determined is substantially higher than the returned income, that is, twice the latter amount or more, then the collection of tax in dispute had to be held in abeyance till the decision on the appeal is taken

In a case where it is alleged that persons contributing share application moneys are bogus, it is quite obvious that is very difficult for the assessee-company to show the creditworthiness of strangers. If the Revenue has any doubt with regard to their ability to make the investment, their returns may be re-opened by the department.

It is not open to the WTO u/s 16A of the W. T. Act to call for the report of the Valuation Officer after the assessment proceedings are completed and use that report to commence proceedings for reassessment. The jurisdiction conferred on the WTO is limited to calling for the report when the proceeding are pending and not when the Wealth Tax Officer becomes functious officio.

The word “tax”in Articles 14(2) and 2(1)(b) of the India-USA DTAA includes “surcharge” and for purposes of Article 14(2) which provides that the rate of tax payable by a USA company shall not exceed 15% of the rate payable by domestic companies, the surcharge payable by domestic companies has to be included.

In McDowell 154 ITR 148, the Court nowhere said that every action or inaction on the part of the tax payer which results in reduction of tax liability to which he may be subjected to in the future, is to be viewed with suspicion and be treated as a device for avoidance of tax irrespective of legitimacy or genuineness of the act.

The issue of notice under s. 16 (2) W. T. Act {s. 143 (2) I. T. Act} is mandatory for reassessment proceedings. If notice u/s 16 (2) {143 (2)} is not issued, the assessment order passed u/s 17 {s. 147} is not valid.

The consequences arising out of invoking Chapter XIV-B of the Act are drastic and draconian. The accounts of the assessee may be re-opened for ten years and not only a legal presumption is raised against the assessee but the burden shifts on the assessee to show that it did not have any undisclosed income. Under these circumstances the Revenue should not exercise its powers in a mechanical power but should be circumspect while taking action under the provisions of Chapter XIV-B of the Act.Where the ‘satisfaction’ recorded by the AO u/s 158 BD was vague and lacking material particulars, held the proceedings were bad-in-law.

In ACIT vs. Rogini Garments 108 ITD 49, the Chennai Special Bench of the ITAT held that in view of s. 80-IA (9), relief under s. 80-IA had to be deducted from the profits and gains before computing relief u/s …

M/s SCM Creations vs. ACIT (Madras High Court) Read More »

S. 61 of the MVAT which confers right to do audit to CAs and excludes Advocates and STPs is neither discriminatory, arbitrary or unreasonable and consequently not unconstitutional. Only CAs are competent to perform audit functions having regard to the expertise achieved as a result of their academic knowledge and practical experience.

(1) Though the assessee company was the defacto owner of the shares, the dividends could not be said to have accrued to it as it was not the dejure owner of the shares. (2) If there is an accounting standard (AS-9), the same has to be accepted in the absence of any other statutory provision.