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Binding Force Of Supreme Court And High Court Judgements


Shri. Akhilesh Kumar Sah, Advocate, has dealt with the interesting issue of the binding force of judgements in the context of income-tax law. He argues that as the Income-tax Act extends to the whole of India, the judgments rendered by a High Court should normally be followed by the other High Courts in order to preserve uniformity in law unless there are compelling reasons for departing from the view taken by the High Court

There remains controversy, many a times, in the cases relating to taxation matters whether decision of the particular Tribunal or High Court (not being of the jurisdiction) be followed or not in deciding the appeal. Recently, in Astik Dyestuff Pvt Ltd Vs. CCE [2014-TIOL-237-HC- AHM-ST] it has been held that if there is any conflict between the jurisdictional High Court and the CBEC circular, the decision of the jurisdictional High Court is binding on the department rather than CBEC circular, and, when there are two contrary decisions, one of jurisdictional High Court and another of the other High Court, then the decision of the jurisdictional High Court is binding on the department and not the decision of another High Court. Read more ›

Question Of Imposition Of Service Tax On Advocates


Shri. Akhilesh Kumar Sah, Advocate, has analyzed the controversy relating to the imposition of service-tax on Advocates and explained the contrasting view points of the contesting parties

The Hon’ble Supreme Court Of India on 10.08.2015 in Bombay Bar Association vs. Union of India & Ors. [Petition(s) for Special Leave to Appeal (C)….CC No(s). 13944/2015 (Arising out of impugned final judgment and order dated 15/12/2014 in WPL No.1764/2011 passed by the High Court of Bombay)], has held that until further orders, there shall be interim stay of the operation and implementation of the impugned final order and judgment passed by the High Court of Judicature at Bombay in W.P.(L) No.1764 of 2011, dated 15.12.2014.
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Levy Of Penalty And Factors Affecting Levy Of Penalty Including Nature Of Offense, Mens Rea And Bona Fide Belief


CA Dr Arpit Haldia has conducted a masterful analysis of the entire law relating to the levy of penalty with particular emphasis on whether “mens rea” is an essential ingredient and whether “bonafide belief” can save the offender from penalty

Longstanding and never ending has been the debate regarding what is penalty and whether mens rea is an essential ingredient in levy of penalty or bonafide belief that “what was being done was correct” would hold good and save the offender from penalty. Over the years the law has evolved and Courts of Law have tried to lay down a law providing clarity in this regard. Read more ›

Law On Claiming Deduction For Unspecified Expenditure U/s 37(1) Of The Income-tax Act, 1961


Shri. Akhilesh Kumar Sah, Advocate, has carefully analyzed numerous judicial pronouncements on the allowability of expenditure under section 37(1) of the Income-tax Act, 1961 and has explained the propositions arising from them

According to section 37(1) of the Income Tax Act, 1961, any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively for the purposes of the business or profession shall be allowed in computing the income chargeable under the head “Profits and gains of business or profession.Also, according to Explanation inserted by the Finance (No. 2) Act, 1998, w.e.f. 1-4-1962 to section 37 (1), any expenditure incurred by an assessee for any purpose which is an offence or which is prohibited by law shall not be deemed to have been incurred for the purpose of business or profession and no deduction or allowance shall be made in respect of such expenditure.

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We Will Restore Dignity, Majesty and Global Reputation Of Indian Judiciary: Law Minister


Hon’ble Shri Sadananda Gowda, the Minister for Law & Justice, has assured that reforms will be ushered in to remove “legal dead wood” in the form of obsolete laws. He has also stated that reforms will be made in the fields concerning the “dignity, majesty and global reputation” of the judiciary so that its independence is always preserved and it is kept in high esteem

Ladies and gentlemen participating in the Conference, members of print and electronic media covering the proceedings of the Federation must recognise the essentiality of the inherent need for revenue for all countries either developed, under developed or a developing country in the world, as without revenue, the whole functioning of the sovereign State comes to a brutal standstill. You are all well aware that a major chunk of revenue either for the Centre or the State as the case may be, is always generated through levy and collection of taxes of both direct and indirect taxation from the public. Read more ›

Transfer Pricing & The Law Of Selecting Comparables


Shri. K. C. Singhal, former Vice President of the ITAT, has carefully analyzed the judgement of the Delhi High Court in Chryscapital Investment Advisors (India) (P) Ltd vs. CIT [2015] 56 417 (Delhi) and explained the law relating to the selection of comparables in the context of section 92C and Rule 10B

There had always been a dispute between the revenue and the assessees as to which comparables should be included or excluded while determining the ALP u/s 92C of the Income Tax Act 1961 (hereafter called the ‘Act’). What factors should be taken into consideration while selecting such comparables had been the core issue before the appellate authorities. Various decisions have been delivered by the hon’ble Tribunal on this issue. Recently, the hon’ble Delhi high court had to consider such issue in the case of Chryscapital Investment Advisors (India) (P) Ltd vs. CIT [2015] 56 417 (Delhi) and such decision is of great significance on such issue.

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Heads you Quote PAN: Tails you obtain a PAN!!!!!


Chirag Wadhwa has analyzed the provisions of section 206AA of the Income-tax Act, 1961 in relation to its applicability to foreign entities in the light of the judgement of the Pune Bench of the ITAT in Serum Institute and other applicable judgements

Permanent Account Number (“PAN”), other than just being a tax payer identification number, is a very important mechanism in the context of International taxation. This is so because, in India, any credit for taxes whether deducted or paid, is given only against a PAN of a person. In terms of international taxation it gains importance, because, for claiming tax credit, the credits against the PAN of foreign entity would act as a proof to substantiate the deduction of tax, and accordingly claim credit for the same.

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“Merilyn” – A Ship That Neither Sinks Nor Reaches It’s Shore


“Merlyin” – A Ship That Neither Sinks Nor Reaches It’s Shore

CA Prarthana Jalan
The author expresses dismay over the fact that though a Special Bench was constituted to resolve an important controversy, the controversy is far from over. Worse, there appears to be no quick resolution in sight in view of the conflicting High Court judgements on the issue. She pleads for the adoption of a quick dispute resolution process to deal with such issues

We are all aware of the voyage of Merlyin Ship (M/s. Merilyn Shipping & Transports vs. ACIT (ITAT Visakhapatnam Special Bench)- who is sailing in “the sea” of applicability of provision of sec 40 a(ia) of the I.T ACT, 1961 on paid or payable.
Sec 40a(ia) of the I.T Act, 1961 states that if TDS is not deducted, as applicable on the expenses claimed by the assessee then the benefit of deduction of the expenses for computation of the income from business & profession will not be allowed.
The text of sec 40a(ia) is as under-

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The Entire Law On Taxation of Undisclosed Foreign Income and Assets

CA P. N. Shah

The Entire Law On Taxation of Undisclosed Foreign Income and Assets

CA P. N. Shah
The author, an eminent Chartered Accountant, has meticulously analyzed the provisions of The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 and explained all its intricacies and nuances. He has also offered valuable suggestions on how to make the legal provisions more effective and prevent its misuse

1 Background

The Finance Minister, while presenting his Budget on 28th February, 2015, has divided his tax proposals under six heads. One of this relates to “Measures to Curb Black Money”. In Para 100 of his speech he has stated that “The first and foremost Pillar of my tax proposals is to effectively deal with the problem of black money which eats into the vitals of our economy and society. The problems of poverty and inequity cannot be eliminated unless generation of black money and its concealment is dealt with effectively and forcefully”. In his speech he has extensively dealt with the steps taken for investigation of cases of undisclosed foreign assets. He has observed that “Investigation into cases of undisclosed foreign assets has been accorded the highest priority, resulting in detection of substantial amount of unreported income”. Recognising limitation under the existing legislation, he has stated that it is necessary to enact a comprehensive new law on black money to specifically deal with such money stashed away abroad. To achieve this objective he has introduced “The Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015”, in the Lok Sabha on 20th March, 2015. In this article the important provisions of this Bill are discussed.

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Finance Bill 2015: Critique Of Proposed Amendment To Charities Law In S. 2(15)

Shri. M. A. Bakshi

Finance Bill 2015: Critique Of Proposed Amendment To S. 2(15)

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

The author argues with conviction that the proposed amendment to section 2(15) of the Income-tax Act will have the unintended consequence of benefiting large non-profit organisations while adversely affecting smaller non-profit organisations

Section 11 of the Income-tax Act 1961 provides for exclusion of income derived from property held under trust wholly for charitable or religious purposes, to the extent to which such income is applied to such purposes in India; and, where any such income is accumulated or set apart for application to such purposes in India, to the extent to which the income so accumulated or set apart is not in excess of [fifteen] per cent of the income from such property;

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