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Ethics, The Assessee & The Law

Hon'ble Shri. R. V. Easwar

Ethics, The Assessee & The Law

Hon’ble Shri. R. V. Easwar, President

The Hon’ble President of the Tribunal speaks with candour on the sensitive topic of ethics with regard to the tax payer, his advisers as well as the judiciary. While he cautions assessees and tax professionals to beware of the "demon of greed", he strongly advises the Members of the Tribunal to "scrupulously avoid misdemeanor or deviant behaviour". Ethical Behaviour should never be compromised emphasizes the Learned Judge

Respected Shri Ashvin Shah, the Chairman of the Convention, Members of the All Gujarat Federation of Tax Consultants and the West Zone of the All India Federation of Tax Practitioners, other dignitaries present, Members of the Bar and the Accountancy profession, ladies and gentlemen:

I consider it a privilege to be invited as the guest of honour for the valedictory session of the National Convention on Taxation – 2011 organised jointly by the All Gujarat Federation of Tax Consultants and the West Zone of the All India Federation of Tax Practitioners. It is nice to be back in Ahmedabad, though for a short period. I like the city for its warmth and hospitality and for the vibrant and good-natured people. During my brief stay here for about 9 months, we felt at home. The city is one of the few cities in India which still retain the old-world charm and welcome everyone cheerfully.

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Assessment Of Search & Seizure Cases: A Treatise

Shri. K. C. Singhal

Assessment Of Search & Seizure Cases: A Treatise

Shri. K. C. Singhal, Advocate

The law relating to assessment of search & seizure cases is a confusing maze of complicated statutory provisions and conflicting judgements. The author, a former Vice-President of the Tribunal, uses his mastery over the subject to explain the law in his usual lucid style

The Income Tax Act 1961 (the Act), as originally enacted, did not contain any special provisions relating to assessment in search cases. For the first time, the legislature enacted special provisions by introducing Chapter XIV-B in the Act by Finance Act 1995 containing sections 158B to 158BH for assessment of search cases where search was initiated on or after 1.7.95. Lot of litigation arose between the tax payers and the revenue authorities. Most of the issues arising from the litigations were settled by various decisions of the Tribunal and the High Courts. However, the legislature, for the reasons best known to it, enacted new provisions by inserting sections 153A to 153C in the Act by Finance Act 2003 for assessment in search cases where search is initiated u/132 or requisition is made u/s 132A on or after 1.6.2003. In order to understand the true scope of the new provisions, it would be appropriate to know the salient features of both the schemes which are being discussed hereafter.

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Analysis of six important judgements (July to November 2010)

Shri. Anant Pai

Analysis of six important judgements (July to November 2010)

CA Anant N. Pai

No practitioner can afford to be unaware of latest judgements & whether experts view the judgement as being right or wrong. Towards that end, the author has agreed to take time out of his busy schedule to make an analysis of landmark judgements every quarter. In the fourth part, the author has identified six landmark judgements analyzed them with a critical eye and identified their strengths & shortcomings.

It is true that the law is attired in the language used in the statute. But, it would be sheer folly to assume that this law is bound or self contained in the language only. Law, in its natural state, has a dimension that extends beyond the language used in the statutory provisions. It has capabilities to overflow in to the realm of the unwritten law i.e. the principles of law and its interpretations. Whereas the language used in a statutory provision constitutes the ‘express law’, the legal principles constitute the “implied law.”

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DTC Bill 2010: Anomalies in Charities Law & Suggestions

Shri. M. A. Bakshi

DTC Bill 2010: Anomalies in Charities Law & Suggestions

Shri M. A. Bakshi, Vice President (Retd), ITAT

The author, using his vast experience as Lawyer & Judge, has not only meticulously & critically examined the provisions of the Direct Tax Code Bill relating to charities and identified several anomalies and loopholes therein, but also made several valuable suggestions on how the law should be amended to make it just & effective.

Suggestion No. 1:-

Charitable trust/institutions carrying out “any other object of public utility” not to carry on any business etc.

It would be relevant to mention that under the Income Tax Act, 1961 following are the broad principles of law relating to taxation of charitable/religious trusts/institutions:

Income derived from the property held under Trust wholly for charitable or religious purposes is exempt from taxation subject to fulfillment of certain conditions laid down under the Act. The relevant provisions are contained in Section 11 to 13. Section 2 (15) of the Income Tax Act, 1961 is also relevant as it defines” charitable purposes.”

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Cross Border Business Reorganization: Indian Law Implications

Aniket Singhania & Vaibhav Shukla

Cross Border Business Reorganization: Indian Law Implications

Aniket Singhania & Vaibhav Shukla

Cross-Border transactions like Mergers, Acquisition, Joint Venture, Takeovers and Slump sale have serious legal implications. The authors have, in this succinct analysis, identified all the legal implications that one must be aware of whilst effecting cross-border transactions and also cited landmark judgements in support of their analysis

Economic Liberalization in India” started from 1991 which aimed at integration of national economy with “market oriented globalised economy”. The real opening of the economy started with the industrial policy 1991 whereby “continuity with change” was emphasized and main thrust was on relaxation in industrial licensing, foreign investments, transfer of foreign technology, joint ventures etc.

 

Historically, capital has flown to countries offering better returns, protection and certainty in terms of policies and regulations. Recently, emerging markets are not just experiencing outbound deals; there is also a lot of hindrance by western firms in acquiring targets in these markets. fnThis will be the century of the emerging market”, Goldman Sachs, Chief Financial Officer, David Viniar, told investors. The whole concatenation depicting a shift of economic activities and capital flow constitutes the much talked about abstraction known as “Globalization”. Globalization is one of the serious challenges for tax policy makers, as the consequences of globalization are not restricted by the physical boundaries of countries and domestic legislation. With globalization Indian companies are looking forward to drive cost lower, innovate speedily and increase their international presence, which may help insulate from the vagaries of domestic market and to spread the risk.

 

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The Art Of Advocacy

Hon'ble Shri. R. V. Easwar

The Art Of Advocacy

Hon’ble Shri. R. V. Easwar, President

Hon’ble Shri. R. V. Easwar, qualified as a CA and a lawyer, was a very successful practicing lawyer before his elevation to the Bench. The author uses his unique experience at the Bar and the Bench and draws on the example of Nani Palkhivala and other stalwarts at the Bar to give some inspirational tips on the art of advocacy

Dr. Smt. Kagalkar, Principal of the GLC, Dr. Shivaram, Mr. Arun Sathe, Mr. Patodi, Mr. Dinesh Vyas, Mr. Ranka, Mr. Manmohan, the Vice-President of the Tribunal, my esteemed colleagues, participants in the moot court competition and students of law.

I consider it to be a privilege to deliver the inaugural address of the 7th Palkhivala Moot Court Competition to be held from tomorrow. I am grateful for the opportunity.

It is a fitting tribute to the memory of the legendary Nani Palkhivala that a Moot Court Competition should be held in his city for the benefit of students of law. Though these days there are several avenues open to the new entrants to the legal profession, lawyering as it is traditionally and popularly known has always laid emphasis on the performance in courts which field is now referred to as “litigation”. Dictionaries define an “advocate” as “one who pleads the cause of another, generally in courts of law”. After joining the legal profession, one is expected to take up the client’s brief and plead for him in the courts and the Tribunals. This involves arguments before the judges, legal research, a thorough knowledge of the facts of the case, the law applicable, the precedents bearing on the case, good anticipation of the arguments of the opponent, a deep insight into the strengths and weakness of one’s case and the ability to think on one’s feet. In addition, you are expected to be prepared for the questions coming from the bench. All these are collectively known as skills of advocacy. Nani Palkhivala was widely considered to be the best in court performance and advocacy and every one knows that Justice H. R. Khanna said that the arguments of Mr. Palkhivala in the Supreme Court before the full court of 13 judges constituted to review the Keshavananda Bharati’s case were “rarely equaled and seldom surpassed” in the history of the Supreme Court. A Moot Court Competition affords a platform where you as students of law start honing your skills of advocacy.

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Practice Law, We Must

Hon'ble Shri. D. Manmohan

Practice Law, We Must

Hon’ble Shri. D. Manmohan, Vice-President (Mumbai Zone)

Hon’ble Shri. D. Manmohan, practiced as a lawyer for more than 15 years before his elevation to the Bench. The author makes the impassioned plea that young lawyers should take to practicing law. He allays fear in the young minds by citing the example of Nani Palkhivala and makes the point that if one practices law with diligence and perseverance, success is guaranteed

Distinguished dignitaries on the dais, my distinguished colleague brothers of the Appellate Tribunal, distinguished invitees and my dear young law students,

I deem it a privilege to be invited as a Guest of Honour on the opening ceremony of the Moot Court Competition being held in memory of late and legendary jurist Mr. Nani Palkhivala. Mr. Patodi, sitting next to me on the dais, has just confided in me the stark reality that most of the brilliant students, produced from reputed Law Colleges – most of their representatives are participating here -, are not choosing to join the profession as Advocates; lured by the high salaries being offered to them by certain big companies/firms.

In the past few decades number of private Law Colleges have been imparting legal education and, probably to attract the students, minimum yard sticks are maintained to award marks thereby such colleges are producing large number of students who are eligible to enter the legal profession. Lawyers are the back bone of this country. Many young and eminent lawyers of the yester years are known to have taken active part in the freedom movement and one should feel proud to belong to such august body rather than being lured by the immediate gains in the form of a fixed monthly remuneration which may initially be attractive but beyond a particular stage the growth is staggered.

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Don’t Make CJ, High Court, President, ITAT!

Shri. M. A. Bakshi

Don’t Make CJ, High Court, President, ITAT!

Shri M. A. Bakshi, Vice President (Retd), ITAT

The author is well known for his landmark judgements, several of which have been upheld by higher courts. The author now carefully ponders over the pros and cons of the controversial provision in DTC 2010 seeking to appoint a Chief Justice of the High Court as President of the Tribunal and concludes that it is a mis-conceived provision. The author also finds fault with the hurried manner in which the change is sought to be made.

Many suggestions made by professional bodies and Industry have been found meritorious and accepted and incorporated in the recently tabled Direct Tax Code Bill 2010. However in the Direct Tax Code Bill 2010 certain provisions relating to the INCOME-TAX APPELLATE TRIBUNAL have been incorporated which were not in the earlier draft and therefore we do not have the benefit of any intelligent or meaningful debate in the hands of stake holders. The professional bodies such as trade associations, chambers of commerce and industry, Bar associations , lawyers, chartered accountants etc are yet to come out with their opinions on these provisions but I assume, considering the importance of these provisions, the Bar associations connected with ITAT at least are debating them and may come out with their view point shortly.

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S. 14A & Rule 8D: A comprehensive analysis

Shri. K. C. Singhal

S. 14A & Rule 8D: A comprehensive analysis

Shri. K. C. Singhal, Advocate

S. 14A & Rule 8D have been the source of unending controversy. The author, a former Vice President of the Tribunal who delivered the dissenting judgement in ITO vs. Daga Capital, has studied the controversy in great depth. With his usual clarity of thinking, the author has provided valuable guidance on the prevailing legal position and as to how assessees can defend themselves from an arbitrary application of s. 14A & Rule 8D

Right from inception, the scope of section 14A of I.T. Act 1961 ( the Act) has been a subject matter of litigation between the tax payers and the tax collectors. Divergent views had been expressed by various benches of the Tribunal on this subject. In order to resolve certain controversies, special benches of the Tribunal were constituted which resolved certain disputes between the parties. Subsequently, various High Courts have also expressed there views on this subject. Some observations have also been made by the Apex Court. In this Article, my endeavour would be to highlight the findings recorded by the tribunal and various courts and to reconcile the legal position as on today along my personal views.

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The Law On Taxation Of Gifts

Shri. K. C. Devdas

The Law On Taxation Of Gifts

CA K. C. Devdas

Clauses (v) to (viia) of s. 56(2) incorporate the law on taxation of gifts. The author, an eminent Chartered Accountant, has meticulously analyzed the provisions of law and identified numerous problems therein. Using his vast experience in the subject, the author has proposed a number of credible solutions as well.

1. An attempt is made to highlight some of the salient features of Taxability of Gifts as Income under sections 56(vii) and (viia) of the Income Tax Act, 1961 (‘the Act’) i.e., mainly gifts received after 1-10-2009.

1.1 The charging section of the Gift Tax Act, 1957 was suspended w.e.f. 1-10-98 to say that Gifts made after 1-10-98 would not be chargeable to Tax. It is a misnomer to state that the Gift Tax Act has been abolished as it is only the Charging Section which has been kept in abeyance. In short it can be revived if the Legislature deems it fit.

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