The twin losses in quick succession on the depreciation front have put depreciation – aficionados in a sense of gloom. First, in Techno Shares & Stocks, they were told in no uncertain terms that their esoteric arguments on the intangible assets front was far fetched. Second, in Plastiblends, they were told that their gambit to extract maximum deduction u/s 80-IA while postponing the claim for depreciation for later years when the s. 80-IA relief would run out was not going to work.
The decision of the President of the ITAT to stay hearing of appeals involving Daga Capital 119 TTJ 289 (Mum) (SB) has provided temporary reprieve to beleaguered assesses reeling under the twin losses of Daga Capital and Cheminvest. In Daga Capital, it was held that Rule 8D though inserted vide notification No. 45/2008 dated 24th March 2008 would apply to pending matters as well. Though the Special Bench was not concerned with the mechanics of Rule 8D, its ruling cast a gloom because Rule 8D, if literally applied, can result in the quantum of disallowance exceeding the quantum of exempt income! Of course, the correct interpretation, according to some experts, is that Rule 8D is meant as a measure of last resort only; i.e., when it is not possible to work out the disallowance correctly having regard to the accounts.
The author is chillingly polite when he says that even the draftsmen of the Direct Taxes Code have not realized the far reaching consequences that their proposals will have. He identifies ten conceptual problems with the Code and warns that unless these are addressed, the Direct Taxes Code will become a draconian piece of legislation. He implores tax professionals to rise to the occasion and come forward with objective suggestions which will help simplify and rationalize tax laws and procedures
The author slams the Government for repeatedly trying to scuttle the settlement mechanism. He argues that a statutory provision designed to bring taxpayers who have gone astray onto the right path must be implemented in a pragmatic manner. He lauds the Bombay High Court for reading down the ill-conceived amendments to the settlement provisions by the Finance Act, 2007 and exhorts the Government to accept the judgement of the Bombay High Court in the right spirit and not exacerbate the matter by filing an appeal. The author also uses his rich experience to set out a road map to be followed by all the stake-holders for a speedy disposal of the settlement applications.
The author is aghast that while the Finance Minister has been generous in providing funds to the other sections of society, he has totally overlooked the judiciary. He implores the Government not to ignore the judiciary and warns that unless financial independence is given to the judiciary, judicial reforms are not possible.
The author puts on his thinking cap and conjures up a 10-point wish-list of conceptual changes that need to brought about in the tax policy to ensure effective compliance. He also puts his vast experience in the field of tax laws to good use to identify specific loop holes and suggests measures to plug the same.
The author does some soul-searching to discover the reasons why fellow-Indians do not pay their taxes honestly even though they know it is their constitutional duty to do so. He argues that the poor policies of the tax administration are responsible for this sorry state of affairs and suggests a few solutions to set things right.
The author is severely critical of the proposal of the Government to appoint Members of the Tribunal on contract basis for 5 years subject to renewal at the discretion of the Government. He warns that making the Members insecure about …
Judges on Contract! Read More »
The author argues that the Bar must not just complain about faults in the judicial process but must play a proactive role in bringing about reforms. He makes a fervent plea that we should follow the Ten Commandments and promises that we can then restore the Tribunal to its’ past pristine glory.
The author endorses the stand of the Swadeshi Brigade and argues that while Indian lawyers can tackle the stiff competition put up by the foreign lawyers, their sense of values, tradition and ethics will be compromised by the business-like approach of such lawyers.