| COURT: | Gujarat High Court |
| CORAM: | K. J. Thaker J, M. R. Shah J |
| SECTION(S): | 147, 148 |
| GENRE: | Domestic Tax |
| CATCH WORDS: | Audit Objection, Reopening |
| COUNSEL: | B. S. Soparkar |
| DATE: | July 30, 2014 (Date of pronouncement) |
| DATE: | October 15, 2014 (Date of publication) |
| AY: | 2009-2010 |
| FILE: | Click here to download the file in pdf format |
| CITATION: | |
| S. 147: If AO contests the audit objection but still reopens to comply with the audit objection, it means he has not applied his mind independently and the reopening is void | |
To satisfy ourselves, whether the reassessment proceedings have been initiated at the instance of the audit party and solely on the ground of audit objections ….. On a perusal of the files, the noting made therein and the relevant documents, it appears that the assessment is sought to be reopened at the instance of the audit party, solely on the ground of audit objections. It is also found that, as such, the AO tried to sustain his original assessment order and submitted to the audit party to drop the audit objections …. … if the reassessment proceedings are initiated merely and solely at the instance of the audit party and when the Assessing Officer tried to justify the Assessment Orders and requested the audit party to drop the objections and there was no independent application of mind by the Assessing Officer with respect to subjective satisfaction for initiation of the reassessment proceedings, the impugned reassessment proceedings cannot be sustained and the same deserves to be quashed and set aside (MAYUR WOVENS PVT. LTD and Shilp Gravures Ltd and Vodafone West Ltd followed).
Correct judgement indeed, it appears Aos do not understand simple English it seems.
Audit objection notes cause the matter to arise if so how sec 147?
i came across an issue.
i saw in one LTCG issue, the concept is a Role of Asset allocation principle that is yet to be mastered by government of India. Here the Harry Markovitz principle is involved. Actually he won Nobel prize in economics in 1990. I do not know how many read his principle especially in macro economic managers called the government.
Principle is a Mean-variance Optimization (MVO)- Assets have some weights;
– Maximum expected return(MER) for a given level of risk; or conversely , the minimum risk(MR) for given expected returns.
The inputs needed to conduct MVO are –
security expected returns (SER)
Expected Standard Deviations (ESD);
Expected cross-security correlations (EC-sC)
THIS WORKS in all Asset allocations.
Economics of Taxation is based on certain principles as it is said – ‘No taxation without representation”;
No government can tax arbitrarily once there is a constitution of a country is in place;
So too Finance Acts cannot be any whim of any finance minister as such as he is tied up by constitution of the country concerned – tax is some excise on one’s real income a certain percentage he willingly pays to government to run the country , that way taxpayer allocates his income part to governance purposes, so it is obvious no government machinery can arbitrarily tax one;
Asset allocations are made of Dynamic Asset Allocation principle that is public finance economics;
Always assets need to be always like capital cyclicals… that means capital never gets eroded at all that way Net National products arise without Erotion, if well safe guarded, economic business cycles get controlled that way consistent growth is possible without economic downturns.
When governments economic management leadership fails naturally chaos all through;
that led to ‘Chaos theory’ that i will discuss later ;
Audit is a mechanism based on some principles of accounting; AOs independent view is not always standing on four spuds, if it stands then he can use sec 147 is the principle;
space being limited, i limit myself with a small example;
AO uses sec 69 unaccounted income under CASS on an income;
income is derived revenue either by cheques or cash, whereas CASH is normal money but cheque is a convenience process but over emphasizing cheques, black money is generated as we give excessive credence to cheques than it deserves.
That way economy is affected as supposed to be unaccounted cash does not pass through banks (again a convenience mechanism only).
Giving over credence to banks but forcing it not to accept cash unless accounted, who decides which is accounted which is not?
obviously robber would not put cash in bank, but others would as an automatic route of banking;
When a person sells his fixed asset he gets a gross income (revenue) certainly not a net income; when net income only face tax issue;
in landed assets , every landed asset need to be maintained YOY to maintain the same as good as when that was purchased time, not better;
Maintaining the property means repairs/maintenance/taxes/water cess/electricity/painting not only inside but also outside in case of a multistory whole structure by apportioning the expenses to maintain the asset…besides inflation caused by running governments in place over which tax payer has no control, for the governing government mismanagement, inflation/recession or depressions occur is is the real fact;
So under a straight line method some 30% is deducted from the sale proceeds besides the loans loaded with interests he had taken to buy the flat or asset he purchased also gets, including several expenses he incurred over years, then the balance subject to he buying an asset that value is deducted if he bought within two years of sale, there after some 20% in case of long term capital gains is deducted on the balance net revenue.
That 30% incurred for maintenance/repairs…no doubt paid out in a normal way that ordinary man cannot maintain big books of accounts, for not maintaining books of accounts is it fair to punish the assessee by so called intelligent AO is also need to be senses by law makers, after all tax payer is paying on his income by his hard work, none donated any money to him, so fair play is needed by lump sum deductions ideas surfaced like standard deductions.
Assets are maintained by buyer and in this process he helps building towns, cities and the like with necessary infrastructure from his payments under various categories of expenses is it not?
But right royally harass tax payers is the fact by the so called AOs or their cohorts for obvious reasons, that harassing need to be curbed at the earliest, by honorable courts!
that way i like the judgement!