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Showing posts from July, 2017

Whether Income Tax can be Abolished ?

Income Tax Vs. Bank Transaction Tax There are excellent arguments in favour of abolishing the income tax in India. Given the chaos that surrounds the system currently, the leakage, it doesn't even pass the usual equity desires of making sure that the richer people carry a larger part of the tax burden and as we all should know an income tax is an inefficient method of taxation to boot. So, the start of this idea is just fine, that perhaps India should cut through the Gordian Knot by just abolishing that income tax system altogether. However, there is then the question of where to gain that necessary revenue from in the absence of that taxation system. And that's where this idea fails and fails horribly. A bank transaction tax--any transaction tax in fact--would be far worse than even the current income tax system. Plus, of course, a bank transactions tax would push everyone back into the cash and black money economy we've all just spent so much time and effort tr

Blog # 15. Metamorphosis : The New Tomorrow ~ Digital & Forensic

A unique IT National Conference : “Metamorphosis : The New Tomorrow ~ Digital & Forensic", hosted by Ahmedabad branch of WIRC of ICAI is all set to become premier gathering in the area of IT audit / assurance, Security & Control Professionals IT risk management, Governance, Forensics and just about anyone interested in Topics like Digital Currency, ERP for SMESs MSMEs, Big Data, Money Laundering, Forensics, Digital Footprints, IOTs etc. It will be a Happening Event of Knowledge, Opportunities, Learning, Wisdom, Live Demonstration and Case Studies, with best of the best Speakers from the Country. Don’t forget to spread the word. This Round Table Conference is set to be held on 11th & 12th August, 2017 @ Golden Glory Hall – Karnavati Club, Ahmedabad. For more details & Registration visit :

Blog # 14. All about Aadhar Privacy Case

The Supreme Court today observed that it is nearly impossible to define privacy, which is not absolute and the state cannot be prevented from imposing reasonable restrictions on citizens, according to a report by The Hindu. The nine-judge bench of the apex court, which is looking into the limited matter of right to privacy, attached to the Aadhaar case, also observed that any attempt to define privacy may cause more harm than good. The hearing in the privacy matter will continue on the second day tomorrow. The petitioners today put forth a statement by Finance Minister  Arun Jaitley , which he had given in the parliament while moving the Aadhaar Bill. “The present bill presupposes and is based on a premise, and it’s too late in the day to contest that privacy is not a fundamental right. Privacy is not an absolute right, which is subjected to a restriction established by law on a fair and just procedure,” Jaitley had said. In past , the Apex court has held that right to privacy is n

Blog # 13. Hon’ble Gujarat High Court raps RBI for giving Directions to NCLT

The Hon'ble Gujarat High Court today rebuked the Reserve Bank of India for asking the National Company Law Tribunal in its June 13 directive to give priority to the insolvency proceedings against companies with huge debts. It also questioned the functioning of the central bank. The bench of Justice S G Shah came down heavily on the RBI for stating in its press release dated June 13, 2017 that the Insolvency and Bankruptcy Code (IBC) proceedings against companies with outstanding dues of more than Rs 5,000 crore “will be accorded priority by NCLT.” Essar Steel had moved the high court challenging the RBI order to banks. The court also questioned the “functioning” of the RBI for its decision to issue the press release in which it had directed banks to initiate insolvency proceedings against defaulting companies. “The RBI has to be careful while issuing press releases, it must be in consonance with the Constitutional mandates, based upon sound principles of law, but in any

Blog # 12. Half Monthly Digest (Income Tax) - July 2017

In this edition, we have analysed few orders. A very brief catch note of the related section of The Income Tax Act, 1961, indicates the contents of the order. For reading the whole order, click on the hyperlink attached with the name of the order. S.221(1). Penalty u/s 221(1) cannot be levied on the interest component charged on “tax”. [CIT vs. M/s. Oryx Finance and Investment Pvt. Ltd. – Income Tax Appeal No. 1 of  2015 – Dt. 01/07/2017 – High Court of Bombay 221(1) – Penalty u/s 221(1) cannot exceed the amount of “Tax in arrears” [CIT vs. M/s. Oryx Finance and Investment Pvt. Ltd.–  Income Tax Appeal No. 1 of  2015 – Dt. 01/07/2017 – Bombay High Court] S.37(1). Predevelopment expenses which are directly identifiable with the operations and maintenance of existing business shall be treated as revenue expenses, irrespective of treatment given in the books of accounts. [CIT VSReliance Supply Chain Solutions Ltd./ Reliance Foot Print Ltd.  – Income Tax Ap

Blog # 11. Attachments under Prohibition of Benami Propert Tranactions Act, 1988 and Initial Response

Under the provisions of Prohibition of Benami Property Transactions Act, 1988, the attachments are made as per the provisions of Section 24 by an Initiating Officer.  Who are Initiating Officers ? As per Section 2(19) of Prohibition of Benami Property Transactions Act, 1988, initiating officer means an Assistant Commissioner or Deputy Commissioner as defined in clause (9A) and (19A) respectively of section 2 of the Income Tax Act, 1961. As per Section 2(9A) of the Income Tax Act, 1961 , "Assistant Commissioner" means a person appointed to be an Assistant Commissioner of Income-tax  [or a Deputy Commissioner of Income-tax] under sub-section (1) of  section 117 ;] And As per Section 2(19A) of The Income Tax Act, 1961, "Deputy Commissioner" means a person appointed to be a Deputy Commissioner of Income-tax under sub-section (1) of  section 117 ; Accordingly, proceedings under The Prohibition of Benami Property Act, 1988 as amended by the present Modi Gove

Blog # 10. Unnecessary Litigations

On May 1, the Supreme Court’s three-Judge bench headed by the Chief Justice of India, J.S.Khehar, had imposed exemplary cost of Rs.25 lakh on the NGO, Suraz India Trust, for filing frivolous petitions, and wasting judicial time, and restrained the trust and its chairman, Rajiv Daiya, from filing any case, including PIL, in any court. On June 22, the bench gave a reasoned order for its decision. The judgment, authored by CJI Khehar, on behalf of himself, and Justices D.Y.Chandrachud and Sanjay Kishan Kaul.   In its order, accompanying the judgment, the bench said that the imposition of exemplary costs on the Trust would discourage “the instant nature of indiscretion, not only at the hands of the Suraz India Trust, but also at the hands of other similarly placed individuals, who may have been emboldened, to adopt the course treaded by Rajiv Daiya. Giving details of the 12 different petitions and applications, which were agitated by Daiya in 64 different proceedings since 2009, un

Blog # 9. Understanding S.269ST of Income Tax Act

Amid the brunt of the De-monetization, which was relatively fresh in the minds of the common people, Budget 2017 spelt out a loud message. The message was very clear; the government wanted the economy to be digitally equipped with no or very less cash transaction. While it seems impossible for the government to have an absolute cash free economy, but the tremors of the change can be felt. The budget 2017 has brought with it several measures which aims to stop or minimize tax evasion, money laundering and generation of black money. One of such measures happens to be putting a cap on the cash transactions. This has been done by bringing section 269ST which bars persons receiving money in cash. Though section 269SS very well corresponds to the idea and existed since the inception of the Income Tax Act, 1961 (“IT Act”) but the application of such section is limited to only loans and deposits while section 269ST has a very wide scope. The sae is as under for your ready reference:-