S. 271(1)(c): Consistent losses show mistake/ absence of intention to evade taxes

Amruta Organics Pvt. Ltd vs. DCIT (ITAT Pune)

               The assessee filed a return declaring a loss of Rs. 16 lakhs in which it had made a wrong claim of depreciation. The AO disallowed the claim and levied 100% penalty which was upheld by the CIT(A). Before the Tribunal, the assessee claimed that its’ Directors were technical persons not knowing the intricate provisions of the Act but were dependent on the advice of professionals for preparing income tax returns. It claimed that it had committed a bona fide mistake and that there was no intention to evade taxes. HELD by the Tribunal upholding the plea:

 

 "A mere mistake in making of a claim in the return of income would not ipso facto reflect concealment or furnishing of inaccurate particulars of income in terms of s. 271(1)(c). The wrong claim of depreciation cannot be said to be made with an intention to evade taxes in as much as even after the disallowance of depreciation, the resultant income of the assessee remains a loss. The assessee had been incurring losses since the year 2003 due to the market forces. Considering the entirety of circumstances, the claim on account of depreciation was a mistake, and did not invite the provisions of s. 271(1)(c)"

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in 

ಹೀಗೂ ಉಂಟೆ..?

ಹೀಗೂ ಉಂಟೆ..?

(ನಾರಾಯಣ ಸ್ವಾಮೀ.. ಎರಡು ಕೈಗಳನ್ನು ಅಕ್ಕ ಪಕ್ಕ ಇಟ್ಟುಕೊಂಡು, ಒಳ್ಳೆ (ಮೂಲವ್ಯಾಧಿ ಪೇಶಂಟ್ ತರಹ) ಮುಲುಗುತ್ತಾ, ಮುಕ್ಕುತ್ತಾ ಡೈಲಾಗ್ ಹೇಳ್ತಾ ಇದ್ದಾನೆ..)

ತಲೆ ಕೂದಲು ಉದುರುವ ರಹಸ್ಯವೇನು? ತಲೆ ಕೂದಲು ಯಾಕಾಗಿ ಉದುರುತ್ತೆ? ಅದರ ಹಿಂದಿರುವ ರಹಸ್ಯವೇನು? ತಲೆ ಕೂದಲು ಉದುರುವ ಹಿಂದೆ ಯಾರ ಯಾರ ಕೈವಾಡ ಇದೆ.. ತಿಳಿದು ಕೊಳ್ಳುವ ಕುತೂಹಲವೇ.. ನೋಡಿ.. ಹೀಗೂ ಉಂಟೆ.. !!

( Tv  ಯಲ್ಲಿ ಹೀಗೂ ಉಂಟೆ ಕಾರ್ಯಕ್ರಮದ ಲೋಗೋ ಪ್ರಸಾರ ಆಗುತ್ತೆ)

(ಪುನಃ ನಾರಾಯಣ ಸ್ವಾಮೀ ಮೂಲವ್ಯಾಧಿ ಪೇಶಂಟ್ ತರಹ ಮುಲುಗುತ್ತಾ...ಮುಕ್ಕುತ್ತಾ..)

ಈ  photho  ದಲ್ಲಿರುವ ವ್ಯಕ್ತಿ ಯಾರು ಗೊತ್ತೆ? ಅವನ ಹೆಸರೇನು ಗೊತ್ತೆ? ಚಂ..... ಜಿ. ಚಂ.... ಅಂತ. ಮಾಡುವ ಕೆಲಸ ಏನು ಗೊತ್ತೆ? ಈತ ಮಾಡುವ ಕೆಲಸ ಎನು ಅಂತ ಹೇಳ್ತೀವಿ..

ಈತ... 2005  ರಲ್ಲಿ  Chartered Accountant  ಕೋರ್ಸಿಗೆ ಸೇರಿಕೊಂಡ.. ನೀವೇ ನೋಡ್ತಾ ಇದ್ದೀರಲ್ಲಾ? ಹೇಗೆ ಇತ್ತು.. ಇವನ ತಲೆಗೂದಲು. ತಲೆ ತುಂಬಾ ಜೊಂಪೆ ಜೊಂಪೆ ಕೂದಲು.. ನೋಡ್ತಾ ಇದ್ದರೆ ನೋಡುವವರಿಗೆ ಅಸೂಯೆ ಆಗ್ತಾ ಇತ್ತು. ಆದ್ರೆ.. ಈಗ ಹೇಗಿದೆ.. ನೀವೇ ನೋಡ್ತಾ ಇದ್ದೀರಲ್ಲಾ.. ಇದು ಹೇಗಾಯ್ತು.. ಯಾಕಾಯ್ತು.. ಯಾರಿಂದ ಆಯ್ತು. ತಿಳಿದು ಕೊಳ್ಳ ಬೇಕೆ.. ನೋಡಿ ಹೀಗೂ ಉಂಟೆ... ಬ್ರೇಕ್‍ನ ನಂತರ.

 10 ನಿಮಿಷಗಳ ಬ್ರೇಕ್‍ನ ನಂತರ...

ಡಾಕ್ಟರ್ ವೇಷದಲ್ಲಿ, ಕೈಯಲ್ಲಿ ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿದುತ್ತಾ.. ಮಿಸ್. ಸಬೀನಾ... ಪ್ರತ್ಯಕ್ಷ...

"ವೀಕ್ಷಕರೇ.. ನೀವೇ ನೋಡ್ತಾ ಇದ್ದೀರಲ್ಲಾ..  2005 ರಲ್ಲಿ ತಲೆ ತುಂಬಾ ಕೂದಲು ಇದ್ದ ವ್ಯಕ್ತಿಯ ತಲೆಯಲ್ಲಿ ಈಗ ಇರುವ ಕೂದಲು ಎಷ್ಟು (ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿಸುತ್ತಾ).. ಎಲ್ಲಿ ಹೋಯ್ತು.. ತಲೆ ಕೂದಲು.. ವೀಕ್ಷಕರೇ.. ಆಶ್ಚರ್ಯ ಆಗ್ತಾ ಇದೆಯಲ್ಲಾ.. ? ಎಲ್ಲವನ್ನು ತಿಳಿದುಕೊಳ್ಳ ಬೇಕಾ.. ನೋಡಿ .. ಹೀಗೂ ಉಂಟೆ..!!

(ಪುನಃ ನಾರಾಯಣ ಸ್ವಾಮೀ .. ಮುಲುಗುತ್ತಾ...ಮುಕ್ಕುತ್ತಾ..)

ಈತನ ತಲೆ ಕೂದಲು ಹೇಗೆ ಬೋಳಾಯ್ತು.. ತಿಳಿದುಕೊಳ್ಳ ಬೇಕೆಂತ ನೀವೆಲ್ಲಾ ಎಷ್ಟು ಕಾತರದಿಂದ ಕಾಯ್ತಾ ಇದ್ದೀರಂತಾ ನಮಗೆ ಚೆನ್ನಾಗಿ ಗೊತ್ತು.. ಬನ್ನಿ . ಅದೇ ವಿಷಯದ ಬಗ್ಗೆ ಹೇಳ್ತಾ ಇದ್ದಿವಿ.

ಈತ  2005  ರಲ್ಲಿ  Chartered Accountant course ಗೆ  join  ಅಗಿದ್ದ. ಮತ್ತೆ  2007 ರಲ್ಲಿ  inter pass ಆದ. ನಂತರ  Article Ship  ಗೆ ಸೇರಿದ. ನಿಮಗೆ ಈ  Articleship  ಅಂದ್ರೆ ಏನಂತ ಗೊತ್ತಿಲ್ಲವಲ್ಲ. ನಾವು ಈಗ ಅದನ್ನೇ ಹೇಳ್ತಿವಿ ವೀಕ್ಷಕರೇ. ಅದು ಈ ಬ್ರೇಕ್‍ನ ನಂತರ. ನೋಡ್ತಾ ಇರಿ ..  Tv9

[( 10  ನಿಮಿಷಗಳ ಕಾಲ ಬೋಳು ತಲೆ ಮೇಲೆ ಕೂದಲು ಬರಿಸೊ  Adds ) ನಂತರ ಮತ್ತೆ ನಮ್ಮ ನಾರಾಯಣ ಸ್ವಾಮೀ ಮುಲುಗುತ್ತಾ, ಮುಕ್ಕುತ್ತಾ ತೆರೆ ಮೇಲೆ ಬರುತ್ತಾನೆ. ]

 Articleship  ಅಂದ್ರೆ ಅದು  3  ವರ್ಷಗಳ ಕಾಲ ಟ್ರೈನಿಂಗ್. ಹಾಗಂತ ಟ್ರೈನಿಂಗ್ ಯಾರತ್ರ? ಯಾರಂದ್ರೆ ಅವರತ್ರ ಅಲ್ಲ. ಅದೂ  practice  ಮಾಡ್ತಾ ಇರೋ  Chartered Accountat  ಹತ್ರ. ಅದೂ ಎಂಥ ಟ್ರೈನಿಂಗ್? ಬೆಳಿಗ್ಗೆಯಿಂದ ರಾತ್ರಿವರೆಗೂ ಕತ್ತೆ ತರಹ ದುಡಿತ. ಸಂಬಳ ಕೊಡೊಲ್ಲ. ಆದ್ರೆ  stipend  ಅಂತ ಕೊಡ್ತಾರೆ. ಮೊದಲನೇ ವರ್ಷ  3,000/- , ಎರಡನೇ ವರ್ಷ  4,000-  ಮತ್ತು ಮೂರನೇ ವರ್ಷ  5,000/- . ನೀವೇ ಹೇಳಿ.. ಈ ದುಬಾರಿ ಪ್ರಪಂಚದಲ್ಲಿ ಬೆಂಗಳೂರಿನಂಥ ಸಿಟಿನಲ್ಲಿ  3,000/- 4,000/- and 5,000/-  ಯಾವ ಮೂಲೆಗೆ .. ನೀವೇ ಹೇಳಿ..?

ಈಗಿನ  CA ಗಳು ಕೆಲ್ಸಕ್ಕೆ ಸೇರಿದ ತಕ್ಷಣ, ಕೈಗೊಂಡು  laptop  ಕೊಟ್ಬಿಡ್ತಾರೆ. ಆಮೇಲೆ ನಿಮಗೇ ಗೊತ್ತು. ಆಫ಼ೀಸ್‍ನಲ್ಲೂ ಕೆಲ್ಸ, ಮನೆನಲ್ಲೂ ಕೆಲ್ಸ, ಬಸ್‍ಸ್ಟಾಪ್‍ನಲ್ಲಿ ಬಸ್‍ಗೆ ಕಾಯೋವಾಗ್ಲೂ ಕೆಲ್ಸ ಮಾಡ್ಬೇಕು. ರಾತ್ರಿ ಮನೆನಲ್ಲಿ ಮಲಗಿದಾಗ್ಲೂ ಕೆಲ್ಸದ್ದೇ ಚಿಂತೆ. ಬೆಳಿಗ್ಗೆ ಎದ್ದ ಕೂಡ್ಲೇ ಹೋಗೋ ಟಾಯ್ಲೆಟ್‍ನಲ್ಲೂ ಕೆಲ್ಸದ್ದೇ ಚಿಂತೆ. ಇನ್ನೇನಾಗುತ್ತೆ.. ಚಿಂತೆ.. ಚಿಂತೆ... ತಲೆ ತುಂಬಾ ಚಿಂತೆ.. ಒತ್ತಡ.. ಎಲ್ಲಾ ಸೇರಿ ಇನ್ನೇನಾಗುತ್ತೆ.. ತಲೆಗೂದಲು ಉದುರಿ ತಲೆ ಬೋಳಾಗುತ್ತೆ.. ಪಾಪ .. ನಮ್ಮ  CA student  ಗಳ ಪಾಡು .. ನಾಯಿ ಪಾಡು..! ಇನ್ನು ಈತ  CA final year  ನಲ್ಲಿ ಓದ್ತಾ ಇದ್ದಾನೆ. ಆದ್ರೆ ಈತನ ತಲೆ ನೋಡಿ.. ಹೇಗೇ ಬೋಳಾಗಿದೆ..

ಬನ್ನಿ .. ಈಗೊಂದು ಬ್ರೇಕ್.

[ 10 ನಿಮಿಷಗಳ ಬ್ರೇಕ್ ನಲ್ಲಿ ಬೋಳುತಲೆಯಲ್ಲಿ ಕೂದಲು ಬರಿಸೋ ಆಮ್ಲ, ತೈಲಗಳ ಜಾಹೀರಾತುಗಳೇ]

[ನಂತರ ನಮ್ಮ ಮಿಸ್. ಸಬೀತಾ ಹಾಜರ್. ಅದೇ ಡಾಕ್ಟರ್ ವೇಷದಲ್ಲಿ ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿಸುತ್ತಾ...]

ವಿಕ್ಷಕರೇ.. ಈಗ ನಿಮಗೆಲ್ಲಾ ಗೊತ್ತಾಯ್ತಲ್ಲಾ.. ತಲೆ ಕೂದಲು ಉದುರುವ ರಹಸ್ಯ. ಬನ್ನಿ.. ನಮ್ಮ ಡಾಕ್ಟರ್| ನರಹರಿ ತಲೆಬಾಗ್ಲು ರವರು ನಮ್ಮ ಜೊತೆ ಇದ್ದಾರೆ. ಅವರನ್ನೇ ಕೇಳೋಣ..!

ಮಿಸ್. ಸಬೀತಾ (ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿಸುತ್ತಾ): ಡಾಕ್ಟರ್ .. ನೋಡಿದ್ರರಲ್ಲಾ...  CA student  ನ ತಲೆ ಕೂದಲು ಉದುರಿ ತಲೆಯೆಲ್ಲಾ ಬೋಳಾಗಿರೋದನ್ನು ನೀವೇ ನೋಡ್ರಿದ್ರರಲ್ಲಾ.. ಇದಕ್ಕೇನು ಕಾರಣ ಸ್ವಲ್ಪ ಹೇಳ್ತೀರಾ ಡಾಕ್ಟರ್.

ಡಾಕ್ಟರ್: ನರಹರಿ: ನೋಡಿ ಮಿ. ಸಬೀತಾ,  Over pressure  ಅತಿಯಾದ ಒತ್ತಡ, ವಿಶ್ರಾಂತಿಯಿಲ್ಲದ ದಿನಚರಿ, ಆಧುನಿಕ ಪಾಸ್ಟ್‍ಫುಡ್.. ಇವೆಲ್ಲವುಗಳ ಮಿಶ್ರಣವೇ ಈವತ್ತಿನ ಈ ತಲೆ ಉದುರುವುದರ ಮೂಲ.

ಮಿಸ್. ಸಬೀನಾ (ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿಸುತ್ತಾ): ಹಾಗಾದ್ರೆ ಡಾಕ್ಟರ್, ಈ ತಲೆ ಉದುರುವುದನ್ನು ನಿಲ್ಲಿಸುವುದಕ್ಕೆ ಏನು ಔಷಧಿಯೇ ಇಲ್ವೇ.. ?

ಡಾಕ್ಟರ್. ನರಹರಿ:  ಇಲ್ಲಾ ಮೇಡಮ್. ನಿಯಮಿತವಾದ ಮಿತಭೋಜನ, ಸಮಯಕ್ಕೆ ತಕ್ಕಂತೆ ವಿಶ್ರಾಂತಿ, ಒತ್ತಡರಹಿತವಾದ ಜೀವನವೇ ಇದಕ್ಕಿರುವ ಔಷಧ..!!

ಮಿಸ್. ಸಬೀನಾ (ಸ್ಕೆತಾಸ್ಕೋಪ್ ಅಲ್ಲಾಡಿಸುತ್ತಾ): ಹಾಗಾದ್ರೆ.. ವೀಕ್ಷಕರೇ.. ಕೇಳಿದ್ರರಲ್ಲಾ.. ಈ ತಲೆಕೂದಲು ಯಾಕ್ ಉದುರುತ್ತೆ. ಅದಕ್ಕಿರುವ ಪರಿಹಾರಗಳು ಎಲ್ಲಾ ಕೇಳಿದ್ರರಲ್ಲಾ.. ಬನ್ನಿ.. ಇನ್ನು ಉಳಿದ ವಿಷಯಗಳನ್ನು ತಿಳಿದುಕೊಳ್ಳೋಣ ಈ ಬ್ರೇಕ್‍ನ ನಂತರ...

[ಮತ್ತೆ ೧೦ ನಿಮಿಷಗಳ ಕಾಲ .. ಬೋಳುತಲೆಯಲ್ಲಿ ಕೂದಲು ಬರಿಸುವ ಆಮ್ಲ, ತೈಲಗಳ ಜಾಹೀರಾತುಗಳ ಹಾವಳಿ]

[ಹತ್ತು ನಿಮಿಷಗಳ ನಂತರ ಮತ್ತೆ.. ನಮ್ಮ ನಾರಾಯಣ ಸ್ವಾಮೀ ಮುಲುಗುತ್ತಾ, ಮುಕ್ಕುತ್ತಾ ಹಾಜರ್]

ವೀಕ್ಷಕರೇ.. ನೋಡಿದ್ರರಲ್ಲಾ.. ಇಷ್ಟು ಚಿಕ್ಕ ವಯಸ್ಸಿನಲ್ಲೇ.. ಅದೂ ಮದುವೆಯಾಗದ ಇನ್ನೂ ವಿದ್ಯಾರ್ಥಿ ಜೀವನದಲ್ಲೇ ತಲೆಕೂದಲು ಯಾಕೆ ಉದುರುತ್ತೆ ಅನೋದು ನಿಮಗೆ ಗೊತ್ತಾಯ್ತಲ್ಲಾ.. ಇದೇ ತರಹದ ವಿಚಿತ್ರ, ವಿಶಿಷ್ಟ ಸುದ್ಧಿಗಳಿಗಾಗಿ ವೀಕ್ಷಿಸಿ.. ಹೀಗೂ ಉಂಟೆ... ನಿಮ್ಮ  Tv9  ನಲ್ಲಿ..!

 (ಯಾವುದೇ ವ್ಯಕ್ತಿಗೆ ನೋವುಂಟು ಮಾಡುವ ಉದ್ಧೇಶವಿಲ್ಲ. ಯಾರಿಗಾದರೂ ನೋವುಂಟಾಗಿದ್ದರೆ ಅದಕ್ಕು ನಮಗೂ ಯಾವುದೇ ಸಂಬಂಧವಿಲ್ಲ..)

 CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

  

'adds income' of google, yahoo is not taxable in India (Kolkata ITAT)

In a landmark ruling, the Kolkata bench of the Income Tax Appellate Tribunal (ITAT) has ruled that no tax is deductible on payments made by Indian companies to Google and Yahoo for online advertisement on their respective search engines.

ITAT has held that search engines such as Google having their presence in India through website cannot create a permanent establishment (PE) in India, unless their web servers are also located in the country and hence, cannot be taxed under the Indian Income-tax Act.

Delving extensively into how Google and Yahoo search engines operate and even reproducing screen shots from the websites, the ITAT judges ruled: "A search engine's presence in a location, other than the location of its effective place of management, is only on the internet or by way of a website, which is not a form of physical presence."

ITAT also called upon the government to clarify its stand on taxation of e-commerce activity. ITAT members Pramod Kumar and George Mathan observed: "Clearly, conventional PE tests fail in this virtual world even

when a reasonable level of commercial activity is crossed by foreign enterprise.

It is a policy decision that government has to take as to whether it wants to reconcile to the fact that conventional PE model has outlived its utility as an instrument of invoking taxing rights upon reaching a reasonable level of commercial activity and that it does fringe neutrality as to the form of commercial presence i.e. physical presence or virtual presence, or whether it wants to take suitable remedial measures to protect its revenue base. Any inertia in this exercise can only be at the cost of tax certainty."

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

Remedies for Dis-Honour of the Cheque

According to statistics of Supreme Court; there are over 40 lakh pending cases of cheque bounce in the country. Lack of adequate knowledge has brought most of them on the verge of losing money. Here are some of the remedies a person can opt for while dealing with issues pertaining to return of cheque.

Penalties for dishonor of cheques due to insufficiency of funds:

Section 138 of the Negotiable Instruments Act has provided for penalties in case a cheque gets dishonored for insufficiency of funds. When a cheque is drawn by any person from his account for payment to another person, it can get bounced due to the following reasons -

    1.   Insufficiency of funds.

    2.   The cheque amount is exceeding the agreed amount arranged to be       paid from that account.

In the above mentioned cases, the person drawing the cheque is deemed to be the committer of offence and is liable to be punished under the act for a period of imprisonment that can extend up to two years. The person whose cheque gets dishonored is also liable to pay a fine which can be up to twice the amount of cheque.

However, in order to drag the drawer of the cheque for penalty it must be understood that following conditions need to be fulfilled -

1.   Cheque should be presented to the bank within a period of three months (earlier it was 6 months) from the date mentioned.

2.   In case the cheque gets bounced, the holder of the cheque should ask for the payment by giving a legal notice to the drawer in writing within 30 days of the receipt of information of nonpayment by the bank.

3.   Even after receipt of notice if the drawer of the cheque fails to make the payment within the stipulated time, which is 15 days from the receipt of notice.

How to Recover the Money?

The notice sent to the drawer should be legal as explained earlier and the same should mention that the cheque was dishonored and payment needs to be made. This notice should be sent by registered post. Even after 15 days of receipt of the notice, if the person fails to clear his dues, the payee has a right to file a criminal complaint under Section 138 of the Negotiable Instrument Act. The complaint should be registered within one month of the expiry of the notice period.

Exemptions:

A cheque that was drawn in the name of the charitable trust as a donation or as an application amount of shares does not come under the purview of dishonor. There might also be other reasons for dishonor of cheque such as alterations or corrections in the cheque or difference in signature. In such cases, it is not termed as an offence. Banks might impose a penalty, though. It should always be remembered that cheque should be a liability and legal enforceability on the person who has issued it. One should always follow procedures like legal notification and demand of funds from the drawer. Most of the pending cases in courts are because of lack of legal procedure followed. A simple understanding of these rules can save you from cheque dishonor cases that happen in day to day life.

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

ಯುಗಾದಿ ಹಬ್ಬದ ಹಾರ್ದಿಕ ಶುಭಾಷಯಗಳು

ನನ್ನ ಪ್ರೀತೀಯ ಅಣ್ಣ-ತಮ್ಮಂದಿರಿಗೆ ಅಕ್ಕ-ತಂಗಿಯರಿಗೆ ಗೆಳೆಯ-ಗೆಳತಿಯರಿಗೆ ಬಂಧು-ಬಳಗದವರಿಗೆ ಹಿರಿ-ಕಿರಿಯವರಿಗೆ ವೃತ್ತಿ ಮಿತ್ರರಿಗೆ ಸಮಸ್ತರಿಗೂ ಯುಗಾದಿ ಹಬ್ಬದ ಹಾರ್ದಿಕ ಶುಭಾಷಯಗಳು..

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

Delay in filing TDS return through NSDL is Technical Breach

Delay in filing TDS return through NSDL is Technical Breach. No penalty attracts

Branch Manager, UCO Bank Vs. ACIT (ITAT Cuttack)

The AO imposed penalty u/s 272A(2)(k) for delay in filing the TDS return u/s 200(3). The assessee’s argument that the delay was due to a shortage of staff was rejected on the ground that the same was not reasonable cause. The CIT(A) confirmed the penalty. On appeal by the assessee to the Tribunal, HELD allowing the appeal:

“The penalty was levied by the department in a mechanical manner. The assessee would have filed the hard-copy of the quarterly statements but this is not accepted by the department. The computer has to generate a number for acknowledging receipt of such statements. The number is not generated till the computer tallies the PAN and the information available on AS-26. The late filing is caused by an administrative glitch. The delay occurs because the assessee-deductors are dependent on information of TDS and its deposit from the sub treasury of the Government and the filing of the e-return through the designated service provider of the Income-tax Department. The assessee-deductors have no technical competency to file the return by themselves without external aid. They are also not competent to do so by themselves as per rule 37B and “Filing of Return of Tax deducted at source” scheme 2003, which requires the submission of quarterly statement through NSDL or other approved agencies which are third parties and not under the control of the assessees. Penalty u/s 272(A)(2) cannot be levied in a routine manner. The late filing of TDS return cannot be said to be intentional or willful. It is only a technical or venial breach”

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

ಇದು ಮಾಡರ್ನ್ ಮದುವೆಯ ಅತಿಥಿ ಸಂಸ್ಕಾರದ ದೃಶ್ಯ..!!!

               ಮದುವೆ ಹೆಣ್ಣು ಗಂಡಿನ ನಡುವೆ ..ನಿಜ..! ಆದರೆ ಮದುವೆಗೆ ಕರೆದವರು ಬಂದ ಅತಿಥಿಗಳನ್ನು ಸರಿಯಾಗಿ ಗಮನಿಸದೆ ಹೋದ ಪಕ್ಷದಲ್ಲಿ ಆಗುವ ಅನಾಹುತವಿದು.. ಬಂದವರನ್ನು ಹೇಳುವವರು ಕೇಳುವವರು ಯಾರೂ ಇಲ್ಲ. ಕುಳಿತು ಕೊಳ್ಳಲು ಒಂದು ನೆರಳಿನ ವ್ಯವಸ್ಥೆಯಿಲ್ಲ. 

                ಇಂದಿನ ಆಧುನಿಕ ಜೀವನದ ಅವಸರದ ಜೀವನಕ್ಕೆ ಹಿಡಿದ ಕನ್ನಡಿಯಂತಿದೆ ಈ ಮದುವೆ. ಎಲ್ಲಾ ಅರ್ಜೆಂಟ್. ಯಾರಿಗೂ ಮತ್ತೊಬ್ಬರನ್ನು ವಿಚಾರಿಸುವ ಕಡೆಗೆ ಗಮನವಿಲ್ಲ. ಎಲ್ಲರಿಗೂ ತಮ್ಮನ್ನು ತಾವು ಮಾರ್ಕೆಟಿಂಗ್ ಮಾಡುವುದರಲ್ಲೇ ಆಸಕ್ತಿ.  ಏನೋ... ಹಿಂದಿನಿಂದ ಬಂದ ಸಂಪ್ರದಾಯಕ್ಕೋಸ್ಕರ ಒಂದು ಮದುವೆಯ ಸಮಾರಂಭ.  ಮದುವೆಯ ಕರೆಯೋಲೆ ತಗೊಂಡ ಕರ್ಮಕ್ಕೆ ಹೋದ ನಮ್ಮಂತಹವರ ಪಾಡು.. ನಾಯಿ ಪಾಡು..!!

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

A family settlement does not result in a “transfer” and compensation received to equalize inequalities in family settlement is not taxable as “income”

Background:

There was a dispute between two groups of a family. During the pendency of litigation, the parties agreed to divide the assets and businesses of the family into two lots i.e. lot-1 containing the Jalandhar and Ambala units and lot-2 containing the Delhi and Jaipur units. In terms of such settlement, lot-1 fell to the share of Group ‘A’ and lot-2 fell to the share of Group ‘B’ with the condition of payment of Rs.24 crores. A dispute regarding the date of split of the said amount was pending. 

The AO assessed the said sum in the hands of the assessee. This was reversed by the CIT(A) and Tribunal on the ground that the distribution of assets including the sum of Rs.24 crores was not complete as the matter was sub-judice and the amount did not accrue to the income of the group ‘A”. 

Verdict:

On appeal by the department to the High Court, the Court had to consider whether the compensation paid to the assessee to settle inequalities in partition, being a provision of “owelty” represents immovable property and is not an income exigible to tax. HELD by the High Court dismissing the appeal:

"A family partition which results in an adjustment of shares and of the respective rights in the family properties is not a “transfer” in the eyes of law. When there is no transfer of asset, there is no capital gain and consequently there is no liability to pay tax on capital gains. In a family partition, a situation arises where an item of property is not capable of physical partition or is such that, if divided, it will lose its intrinsic worth. In such a case, with a view to ensure an equitable partition, the item is allotted to one party and he is asked to pay compensation in money value to the other party. This amount is called “owelty”. As the amount of compensation is only to equalize the inequalities in the partition it is nothing but a share in the immovable property itself (though paid in cash) and cannot be treated as income liable to capital gain. If such amount is to be treated as income liable to tax, inequalities would set in as the share of the recipient will diminish to the extent of tax. On facts, the payment of Rs.24crores to Group A is to equalize the inequalities in partition of assets. The amount so paid is immovable property and is not income liable to tax (T.S.Swaminatha Odayar vs. Official Receiver AIR 1957 SC 577, CIT vs. A. L. Ramanathan 245 ITR 494 (Mad), CIT vs. Kay Arr Enterprises 299 ITR 348, CIT vs. R. Nagaraja Rao 207 Taxmann 74 (Kar) & Ziauddin Ahmed vs. CIT 102 ITR 253 (Gau), Parvathi Amma Vs. Makki Amma AIR 1962 Kerala 85 reviewed)"

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

Human body treated like a factory in IT assessment?

Brief :

Section 28 of the Income-Tax Act, 1961, taxes income from business or profession after deduction of expenses, as provided in Section 29. These expenses, among others, include expenses on current repairs, insurance and depreciation. Plant has been defined in Section 43(1) in an inclusive way, where there is no mention of 'human body'.

Citation :

This issue has recently been considered by the Delhi High Court in Shanti Bhushan versus CIT (2011) 199 Taxman 280 (Del). The assessee, an eminent lawyer, incurred expenditure on his heart surgery and claimed such expenditure in his income-tax assessment under Section 31 of the Act as akin to repairs of plant. For 1983-84, he declared professional income of 2,14,050 after claiming deduction of 1,74,000 incurred as expenditure on coronary heart surgery . The surgery considerably improved his health and earning capacity. His income rose from 3.50 lakh in the year of surgery to 106 lakh five years later.

Shanti Bhushan lost his claim up toIncome-Tax Appellate Tribunal (ITAT). The ITAT rejected the claim by a peculiar reasoning saying that a man cannot stop or regulate the functioning of his heart or use it at will to suit his purpose. Since the functioning of heart is involuntary, it cannot be said to have been 'used' for a specific purpose or activity, except to live and to be alive. Therefore, a professional cannot claim that he uses his heart for the purpose of profession. In the case of the assessee, he sharpens his professional skills not by using his heart but by using his brain. 

The reasoning given by the ITAT is far-fetched. If the heart stops functioning, the brain will become dead automatically. Good health and life have to go together and, hence, the whole human body is a plant and cannot be dissected into parts such as brain and heart. To make the brain work, keeping the heart in a healthy condition is imperative and only a novice can say that heart is not like a tool in the plant and achinery of human body.

There is apparently a contradiction in the ITAT reasoning. It tantamounts to saying that only the engine in a car is functional - not other parts - and, hence, depreciation should be allowed only on the value of the engine - not on the value of the entire car. In CIT versus Sibbal Cold Storage (1996) 135 Taxation 576 (MP), it has been said that both operative and supportive structures constitute 'plant', and 'plant' includes within its ambit building in which machines are installed. On this analogy, the brain cannot function unless it is in a sound body.

Judgement :

The high court has decided the appeal against Shanti Bhushan. The grounds are:

1. General well-being of the heart and its functionality cannot be equated with using heart for engaging in trade and professional activity as expenses on repairs and renewals under Section 31 of the I-T Act.

2. Section 31 can be invoked when value of plant and machinery is reflected as an asset in the account books; only then can claim for repairs be made.

3. The claim is not admissible under Section 37(1) of the Act as it cannot be said to have been incurred wholly and exclusively for the purpose of the Act.

The high court has argued that if the heart was an asset, then it should have been listed as such in the list of assets (properties) of the appellant. This does not weaken the claim of the appellant because there are assets like self-generated go , patents, etc, which are not in the balance-sheet but become liable to capital gain tax when sold. The tax liability under the Act does not depend on accounting entries is an accepted principle in the incometax law.

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in

Lord Veerabhadhra Temple at Lepakshi, Hindupur Dist, AP

The Skandhapuranam refers to Lepakshi as one of the 108 Saiva temples in India . Sri Virupanna, who worked as a Treasury Officer of Penukonda Fort of Vijayanagara Empire, took up the construction of the Lord Veerabhadhra Temple at Lepakshi in the 16th-century. One can find the late Vijayanagara style of architecture in the vestiges of Lepakshi.

Built in 1530 AD, it is famous for a huge 100-pillared dance hall, adorned with exquisite sculptures. One can see a life-size granite sculpture of Veerabhadra, a giant monolith of Nandi as well as carvings of Naga linga, flying Gandharvas, Ganesha etc. Special pujas are conducted every Monday. The 10-day Asvayuja Masam Festival celebrated in February is when devotees from far and wide join the celebrations. From the centre of the mantapa emerges a dome, twenty-one feet high, like a great lotus of heaven. In this huge mandapa, the ceiling is divided into different panels by beams that are painted with some of the most exquisite murals of the Deccan.

Lepakshi is situated at a distance of 110 km from Ananthapur. Lepakshi is well connected by road with frequent bus and private transport facilities from Hindupur at the distance of 15 KM. The nearest railhead is at Hindupur

 

CA SHIVA SHANKARA R. SHETTY

CHARTERED ACCOUNTANT

Mobile: +91 9035846043 Email: ca.srshetty@icai.org

www.casrshetty228359.in