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How To Argue Matters Before The Tribunal: Shri. H. L. Karwa, President, ITAT

Shri. H. L. Karwa

How To Argue Matters Before The Tribunal

Shri. H. L. Karwa, President, ITAT
Shri. H. L. Karwa was a leading High Court Advocate before his elevation to the Bench. He uses his rich experience as an Advocate and as a Judge to pinpoint a few techniques that Lawyers & Chartered Accountants should adopt while arguing matters before the Tribunal so that they are able to convey their point more effectively to the Bench. He also sends the gentle reminder that more Professionals should join the Bench

Good Evening to all. I am grateful for inviting me to inaugurate the National Seminar at Radhika Beach Resort, Diu. Diu is a famous tourist destination and the weather is pleasant. At the very outset, I wish every success of this National Seminar 2013 at Diu which is organized by All India Federation of Tax Practitioners, Mumbai and All Gujarat Federation of Tax Consultants, Ahmedabad jointly with Rajkot Tax Consultants Society, Jamnagar Tax Practitioners Association and Taxation Association, Junagadh.

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A Treatise On The Law & Practice Of Stay & Recovery Of Tax Arrears

Dr. K. Shivaram

A Treatise On The Law & Practice Of Stay & Recovery Of Tax Arrears

Dr. K. Shivaram
The author, an eminent advocate, has meticulously explained the entire law relating to the stay and recovery of tax arrears. After from a reference to a plethora of judgements to support every proposition, the author has drawn from his rich practical experience to explain the points that should be emphasized in a stay application so as to get a favourable verdict from the assessing and appellate authorities

Recovery is one of the most important subjects in direct taxation, of which all of us are very much concerned in our day to day practice, either as consultants or while dealing with our own taxation matters. I must congratulate the President and his team for selecting a very appropriate subject at a very appropriate time, because maximum recovery proceedings are initiated in the month of January, February and March every year.

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Why This GAAR?

Shubhangi Gupta & Arnab Naskar

Why This GAAR?

Arnab Naskar & Shubhangi Gupta
GAAR is destined to be a way of life for taxpayers in India. But is it a boon or a curse? How does it compare with the provisions in other Countries? Does it have loopholes? Can it be circumvented? Will it be used as a tool to harass the taxpayer? These are the crucial existential questions that the young authors have dared to ask and, after commendable research, answered them with remarkable clarity

1.      Introduction

A country levies taxes, both direct and indirect for promoting its own economic development. For economic development not only domestic capital is necessary but also the contribution of foreign capital in the domestic market is required. Prior to 1970, world trade grew at a greater pace than that of the FDI, but in the following decades since then the flow of FDI has grown at twice the pace of the growth of worldwide exports.1 Hence the sovereign authorities felt the need to relax the taxation statutes in order to seek contribution from foreign capitalists, with an ultimate motive of economic development.
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The Law On Deductibility Of Expenditure Incurred For An “Unlawful Purpose”

S-Kalyanasundaram

The Law On Deductibility Of Expenditure Incurred For An “Unlawful Purpose”

CA S.Kalyanasundaram
The law on deductibility of expenditure incurred for an illegal purpose has had a long history with the Courts & Tribunals taking a practical view of the matter & upholding the assessee’s claim. Though the Explanation to s. 37(1) was inserted to supersede these judgements, there is still scope to argue that some types of unlawful expenditure are deductible, says the author, and makes good his contention by reference to several case laws

Section 37 of the Income Tax Act, 1961 (the “Act”) has been a source of numerous disputes between the department and the taxpayer.  For the sake of convenience, the sub-section with explanation thereto is quoted below:

37 (1) 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”.

Explanation—For the removal of doubts, it is hereby declared that 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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S. 153A: The Law Of Search Assessments Explained

Dr.  Raj K. Agarwal & Dr.  Rakesh Gupta

S. 153A: The Law Of Search Assessments Explained

Dr. Raj K. Agarwal & Dr. Rakesh Gupta, Advocates
The authors argue that the law laid down by the Special Bench in All Cargo Global vs. DCIT is inconsistent with the law now laid down by the Delhi High Court in Anil Kumar Bhatia. Using their immense experience in the subject, the authors have put the entire issue in its proper perspective, identified the controversies that need to be answered by the Courts and explained the way forward

The nature and scope of assessment/ reassessment and nature & scope of additions/disallowances in assessments to be made u/s 153A of the Act have been contentious issue. Contradictory views have been expressed by different benches of Income Tax Appellate Tribunal on the issue as to whether those assessments which have already been passed u/s 143(3) or u/s 143(1) on the date of search would abate or not and whether addition can be made during assessment/ reassessment u/s 153A relating to the matters for which no incriminating material was found during the course of search.

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Analysis of three important judgements (June 2012 to August 2012)

Shri. Anant Pai

Analysis of three important judgements (June 2012 to August 2012)

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 this part, the author has identified three landmark judgements analyzed them with a critical eye and identified their strengths & shortcomings.

1. Capital Gains exemption u\s 54 – Mumbai Tribunal decision – Jatinder Kumar Madan vs. ITO – [2012] 26 SOT 583 {Mum}{Trib} – Surrender of  a residential flat in an existing  building by assessee to a developer under a development agreement in lieu of another flat to be allotted to him in the new building to be developed. Held – Agreement amounts to construction of new flat by assessee and not purchase.

Under the provisions of section 54, an assessee is entitled to exemption in respect of long term capital gains resultant from transfer of residential premises, if he either purchases another residential premises within a period of two years or constructs a residential premises within three years from the date of the transfer. In the case before the Mumbai Tribunal cited above, the assessee had entered in to a development agreement with a developer under which he had agreed to surrender his residential flat in an existing building in lieu of a another flat agreed to be allotted by the developer in the building proposed to be  re-developed. Before the Assessing Officer, the assessee had canvassed his claim for exemption u\s 54 on a proposition that the development agreement amounted to an agreement for construction of a new flat by the developer on his behalf and this being so, he ought to be entitled to the exemption as the construction of the flat had been completed within a period of three years from the date of surrender of his old flat. In assessment, this claim of the assessee had been turned down by the Assessing Officer. The assessee’s appeal to the Appellate Commissioner was also dismissed

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The Govt Has Killed The “India Growth Story”: Narayana Murthy

Shri. Narayana Murthy

The Govt Has Killed The “India Growth Story”: Narayana Murthy

Editorial Staff

Narayana Murthy, the billionaire founder of Infosys, has expressed deep disappointment that India has faltered in its growth pace owing to the abject indifference of the Govt and the flawed policies of the Income-tax dept. There is so much pessimism about India amongst Global Cos that India does not even figure as an investment alternative anymore, he says, and offers solutions on what can be done to reverse the trend

Narayana Murthy, the billionaire founder of Infosys and doyen of the Indian I. T. Industry has expressed deep disappointment that India has faltered in its growth pace owing to the abject indifference of the Government and the flawed policies of the Income-tax department.

In an interview, Narayana Murthy took off from where entrepreneurial whiz kid Jaitirth Rao had left it (Dear Income-tax Department, ‘Thank You’ For Ruining Indian Economy) and agonized that while the entire World had great expectations from India, we had “fallen very, very short”.

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Scope of search assessments u/s 153A: The unending controversy

CA Vidhan Surana & CA Sunil Maloo

Scope of search assessments u/s 153A: The unending controversy

CA Vidhan Surana & CA Sunil Maloo
S. 153A, which deals with search assessments continues to baffle tax experts. In All Cargo, the Special Bench held that “completed assessments” can be assessed only on the basis of seized / incriminating material. While one view is that this interpretation is incorrect, the authors have taken the converse view after a careful study of the entire law on the subject

The scope of Assessment u/s 153A of the Income Tax Act, 1961 has been a controversial aspect since long. Though recently it has been settled courtesy to the announcement of the Finance Act 2012, which has lead to certain legal development and judicial clarification; nevertheless the verdict of Apex Court on the same is yet awaited.

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Why The Verdict Of The Special Bench In All Cargo Global Requires Reconsideration

Dr.  Raj K. Agarwal & Dr.  Rakesh Gupta

Why The Special Bench Verdict In All Cargo Global Requires Reconsideration

Dr. Raj K. Agarwal & Dr. Rakesh Gupta, Advocates
In All Cargo Global vs. DCIT, the Special Bench held that in the case of a completed assessment, the assessment u/s 153A can only be with respect to the undisclosed income or incriminating material discovered in the course of search. The authors argue that this interpretation is not correct and leads to absurdity. They also claim that the Special Bench’s interpretation confers an unintended benefit on the searched person

The nature and scope of assessment / re-assessment of total income u/s 153A in the case of a person who has been searched u/s 132 or in whose case requisition has been made u/s 132A has been an issue of debate and controversy. The issue as to what kind of additions can be made during assessment and re-assessment proceedings undertaken u/s 153A in the case of searched person has been put to judicial test  at different occasions and there have been contradictory judgments delivered by different benches of Income Tax Appellate Tribunal.
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Guide to the law on reopening of assessments u/s 147 of the Income-tax Act

Ajay Singh, Advocate

Guide to the law on reopening of assessments u/s 147 of the Income-tax Act

Advocate Ajay R. Singh
The law on reopening of assessments u/s 147 of the Income-tax Act is a complicated subject with a multitude of propositions and a plethora of judgements. The author has used his rich experience as a practicing advocate to cull out all the core principles of law and to present them in a simple and straight forward manner. The Guide will prove invaluable to all taxpayers and tax professionals

The scope and effect of a reopening of assessment is still shrouded in mystery even after various judgments of the Supreme Court and High courts. Reassessment is one of the distinguishing weapons in the armoury of the Department, empowers the Assessing Officer to assess, reassess or recompute income, turnover etc, which has escaped assessment. A number of intricate issues crop up during the reassessment proceedings. Some of the issues are been dealt with here under:

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