volume 02/14-15 institute of chartered accountants of...

Volume 02/14-15 Institute of Chartered Accountants of India Navi Mumbai Branch of WIRC

Newsletter, April 2014

News letter April 2014 Volume 02/2014-15

Dear Members Year 2014 is buzzing nationwide with the excitement of Elections and it is indeed equally exciting to take charge of Navi Mumbai Branch as Chairman along with my dedicated and committed TEAM 2014. I feel privileged to communicate through this news letter, the various developments happening at WIRC and ICAI. On 23rd and 24th March, 2014, we attended the “Orientation Pro-gramme” organized by WIRC. This program enabled the leaders of the Institute, 200 office bearers and the committee members of various branches Interact and exchange the views and experi-ences. The insight provided by various members helped us to head-start the branch activities planning for the year. We have drawn up detailed blue print for number of activities for members and students of our Navi Mumbai Branch. During the program we got an opportunity to interact with team members of WIRC for the year 2014-15, which was led by young and energetic CA Anil Bhandari, whose theme for the year is “Rise Above the Ordinary and Think Beyond Imagination”. During this programme, ICAI President CA K. Raghu and Vice Presi-dent CA Manoj Fadnis guided Office Bearers and articulated the theme for this year “Moving Towards New Frontiers” and inspired Members with his planned and detailed roadmap In 12 strategic areas – 1. Leadership and influence, 2. Global Recognition, 3. Members in Industry, 4. Members in Practice, 5. Women Em-powerment, 6. Young Members Empowerment, 7. Students Ini-tiatives, 8. Technology Initiative, 9. Infrastructure and Governance, 10.Branding and Capacity Building, 11. Member Support and Bene-fits and 12. Research Initiatives.

Managing Committee Chairman CA. Sameer L. Gavli 9821161072 Vice-Chairman CA. Shrikant Limaye 9819455561 Secretary CAMinaxi Rachchh 9820898183 Treasurer CA. Ananthram Rao 9320433833 Members CA. Sreekumar Nair 9892290909 CA. J.D.Tandel 9820192895 CA. Santosh Sharma 9323582884 CA. Nawanit Jaipuriyar 9920062526 Co-opted Members CA. Sanjay Nikam 9820446329 CA. Suresh Ameria 9821368836 CA. Manoj Pandey 9322804994

Inside this issue:

Personal Financial Planning…….3

Re-assessment u/s 147

in relation to bogus purchase…..5

Rectification of mistakes

in payment of Service Tax….....9

Some Recent Judgments……...10

Photo Gallery …………………12

Forthcoming programmes…….13



To create synergy with the road map given by the Supreme Torch Bearers of our Profession, Navi Mumbai Branch, apart from regular CPE programmes, would be organizing various programmes, including; Mind Mapping and Mind Training for effective & fast reading for students CPT / IPCC Mock Tests Career Counseling before CA Final Results in Industry, Practice & Business Mock Interviews for Young CAs RRC for women members and students Young Practice Group Training Programs for employees of Local Authority in Direct & Indirect Taxes Industry specific program for Members in Industry Certificate Courses in Indirect Taxes, FEMA, IFRS. In the month of March we organised a One Day Seminar on Bank Audit, which was well attended by members. In the months of April, we are organising a Full Day Seminar on Companies Act, 2013 and a half Day Seminar on VAT. Friends, the largest democracy in the world is entering into the race for choosing their new leader for a better tomorrow. Let us all commit to Vote for a shining future. My Team at Navi Mumbai Branch urges the CA frater-nity to ensure that they cast their vote along with their family and friends on the D-day. Let’s vote to assert our affirmation and our faith in democratic principles and values. I would like to end with the words of Louis L' Amour, "To make democracy work, we must be a notion of participants, not simply observers. One who does not vote has no right to complain. “ Thank you Your Chairman, CA Sameer Gavli Navi Branch of WIRC of ICAI

While answering the felicitation function

organised by WIRC at "Y.B.Chavan Audito-

rium" on 24th March,2014, President CA

K.Raghu, appealed members to donate gen-erously for CA Benevolent Fund so that the

Corpus Fund of the CA Benevolent Fund can

be utilized for the maximum benefit of fami-

lies of CA Members." I therefore request

members either send the cheques directly to

CA Benevolent Fund or to send it to Branch.

——-Appeal——-



Financial planning To de-stress our lives at least from the angle of finances

The month of April marks the beginning of a new fi-nancial year. Our community of Chartered Account-ants is busy in finalizing financials of our clients or our employer. We are busy in preparing the annual budg-ets and plans of our clients or employer as the case may be, but do we care to manage our personal fi-nances? The month of april not only is a beginning of new financial year we can also mark it as a beginning of planning of our personal finances. Why Personal Financial Planning We engage ourselves in daily routine of exercises or morning walks to keep ourselves physically fit and fine. As for a healthy future we plan our exercise re-gime it also important we plan our personal finances. Planning our financial future is one of the most impor-tant things we can do in our life. Every successful as-pect of our life requires planning, whether it is plan-ning a weekend, or planning a year long home im-provement project. Personal financial planning could be the most important of all, because it can secure us and our loved ones futures. Planning our financial fu-ture should not be taken lightly; there are many dif-ferent aspects that should be examined. Our finances

should be balanced, taking into account short-term goals as well as long. The first important step in planning our finances is to have a monthly budget that includes expenses, sav-ings, and investments. Having a fixed budget will help you stick to our plan to ensure future success. After a couple of months it should be very easy to tell if our budget needs to be modified to fit with our individual situation. A monthly budget not only helps to set up long-term financial goals, it also can make our short-term budget issues disappear. Knowing exactly where our money is going every month can keep us out of debt, and can help you figure out where you might have future monetary issues. Our budget can also help you come up with an immediate savings plan if you have a large pending expense, such as a new home or college for kids. Research is imperative when it comes to setting up our budget, especially when it comes to investing money for our future and our fam-ily. The best part of personal financial planning is that our future will be more secure. We will no longer have to

Personal

- By CA Abhilash Tewari



worry about having money for unforeseen expenses such as car accidents or emergency hospital visits. Putting a little extra money away in our budget can offer peace of mind that we never had when living paycheck to paycheck. Having a budget that you stick to will make you much more knowledgeable about our finances, and about money in general. As our budget becomes more fa-miliar to us, we will be able to come up with new ways to squeeze savings out of our monthly income; even 1000 Rs a month adds up after ten years, espe-cially if it is earning interest. Being financially secure can be one of the best feelings in the world. Personal financial planning leads to the ultimate goal: a comfortable retirement. In the end, this is the most important reason to plan for our future. With an unstable economy, and negligible social security benefits, having enough money to comfortably sur-vive after retirement is essential. No one knows what the years to come will bring, so having our own life under control can be a huge positive. Having a well

thought out budget can allow you to be secure now and secure for the future. It is not that we are unaware of all the facts men-tioned here it is that we are too lazy to go ahead and plan our finances in such a way so that we not only have a secure future but also have a pleasant pre-sent. At the beginning of the new financial year let us promise ourselves that we would ensure that we plan our finances in such a way that we can de-stress our life’s at least from the angle of finances.



Initiation of Reassessment U/s. 147 of the Income Tax Act, 1961 (‘the Act’) is not something which is a surprise for Trader or Manufacturer Assessees these days. Since, past few years there has been plethora of re-opening cases which relates to the major issue of bogus pur-chases. Some of the products or articles which have been a major hit in such cases are iron & steel, pharmaceutical products, gems, jewellery & precious stones, dyeing & colour raw material etc. In India, states like Maharashtra, Gujarat, Rajasthan and West Bengal are the mecca of Income Tax cases pertaining to bogus purchases. Latest trend which one can see is the re-opening of the Assessment by the In-come Tax Officer on the basis of the information given by the Sales Tax De-partment. The information mainly con-tains the scanned copies of the state-ments/deposition/affidavits given by the suppliers before the Sales Tax Depart-ment and tabular information containing the purchase amounts. There are many cases where the Assessee has done no mala-fide business and all the documen-tary evidences to support the purchases like Purchase bills, Delivery challans, Transportation bills, Stock Register, Bank statements, Audit report, letters of confirmation of suppliers, Sales Tax re-turn & Audit report etc. are submitted before the Assessing Officer (‘AO’).

During the assessment proceedings al-most all the notices U/s. 133(6) or 131 of the Act sent by the AO to the supplier returns un-served. When the Assessee is asked to produce the suppliers for verifi-cation of purchases, the Assessee in most cases is not able to produce them. De-spite submitting all the evidentiary docu-ments, the AO disallows the alleged bo-gus purchase and adds it to the income of the Assessee. With respect to this is-sue, I have made an attempt to lay down few judgments of Hon’ble Courts which can be useful to the Assessees while fil-ing an appeal before the Appellate Au-thorities. Since, the AO disallows the alleged bo-gus purchases mainly on the basis of the statements/deposition/affidavits of the suppliers; it is paramount to know the validity of such statements. Since, these statements are the scanned duplicate copies of the original state-ments; these statements are Secondary evidences as per Section 63 of the Indian Evidence Act, 1872. As per Section 65 of the Evidence Act, secondary evidence can be admitted as evidence only in the circumstances/conditions specified therein. The circumstances are as fol-lows, a) When the original is shown or ap-

pears to be in the possession or power of the person against whom the document is sought to be proved,

Re-Assessment

in relation to Bogus Purchase

u/s 147

-By CA Kunal Mangal



or of any person out of reach of, or not subject to, the process of the Court, or of any person legally bound to produce it, and when, after the notice mentioned in Section 66, such person does not produce it;

b) When the existence, condition or contents of the original have been proved to be admitted in writing by the person against whom it is proved or by his representative in interest;

c) When the original has been destroyed or lost, or when the party offering evidence of its contents cannot, for any other reason not arising from his own default or neglect, produce it in reasonable time;

d) When the original is of such a nature as not to be easily movable; e) When the original is a public document within the meaning of Section 74; f) When the original is a document of which a certified copy is permitted by this Act, or by any other law in

force in India to be given in evidence; g) When the originals consist of numerous accounts or other documents which cannot conveniently be exam-

ined in Court and the fact to be proved is the general result of the whole collections. Since, none of these conditions are fulfilled in this case; such statements/depositions can neither be admitted as evidence nor can be used against the Assessee. Hon’ble Jodhpur Bench of the Income Tax Appellate Tribunal in the cases of Income-Tax Officer. Vs

Permanand (2006) 107 TTJ 395 and Jagdamba Trading Company vs. Income tax officer (2007) 107 TTJ 398 ITAT Jodhpur ‘SMC’ Bench has held that the statements made before the sales tax authorities which do not have any concern with the income-tax proceeding of the Assessee, have hardly any evidentiary value against the Assessee.

Hon’ble Supreme Court in the case of ITO vs. Lakhmani Mewal Das, 103 ITR 437(SC) has held that a general confession by a person that all his transactions are bogus or that he has indulged only in bogus trans-actions cannot be basis for re-opening the assessment of an Assessee who has transactions with this person. This is more particularly so when the Assessee has not been specifically named in the confession. Similar view has been followed in the following judgments,

Shaf Broadcast Private Limited vs. Asst. Commissioner of Income Tax (ITA No. 1819/Mum/2012, dtd. April 17, 2013). S. P. Agarwalla v. ITO (1983) 140 ITR 1010 (Cal.). Income Tax Officer v. Aggarwal Steel Traders (1994) 77 Taxman 95 (Chd. ITAT). Income-tax Officer vs. Central Finance Co. [1982] 13 TTJ 248 (MAD).

One more peculiar point which is noticeable that many of these depositions do not contain the signature

and/or seal of the Officer before whom the supplier gave the deposition. So this point itself makes such depositions invalid and can neither be used in Income tax assessment nor in the Sales Tax Assessments. Also, for many suppliers there are no depositions. The ITO has only a visit report of the Sales Tax Investi-gating Officer wherein it is nowhere mentioned that the supplier was involved in the business of accommo-dation entries. So, when the Sales Tax Dept is not sure whether the supplier is a hawala dealer or not, how can ITO initiate assessment U/s. 147 of the Act.

Various Courts have held that without affording opportunity of cross-examination, a statement recorded at

the back of the Assessee will not partake of the nature of evidence against the Assessee and cannot be read/used against the Assessee. Since, in the current cases, the Assessee at most times do not get the opportunity to cross examine, the Assessee can certainly take help of the following judgments, Mohanlal R. Daga v. Income Tax Officer (2005) 147 Taxman 28 (Mum ITAT). Commissioner of Income Tax v. Pradeep Kumar Gupta (2008) 303 ITR 95 (Delhi). Prakash Chand Nahta vs. Commissioner of Income-tax [2008] 301 ITR 134 (MP).



Heirs and Legal Representatives of Late Laxmanbhai S. Patel vs. Commissioner of Income-tax [2010] 327 ITR 290 (GUJ). Multitex Filtration Engineers (P.) Ltd. vs. Deputy Commissioner of Income-tax, Circle-5(1), New Delhi [2007] 13 SOT

208 (DELHI). The second basis on which the AO disallows the alleged bogus purchases is the non-appearance of the suppliers be-fore the AO to verify the purchases. Many Benches of ITAT and Hon’ble High Courts have held that when pur-chases are supported by sufficient documentary evidences then merely because the suppliers have not appeared be-fore the AO, one cannot conclude that the purchases were not made by the Assessee. The judgments are as follows, Nikunj Eximp Enterprises Pvt Ltd vs. Commissioner of Income Tax, Mumbai (Bom HC) ITA No. 5604

of 2010, dtd. 17th Dec. 2012. The SLP filed by the Revenue was also dismissed by the Hon’ble Supreme Court by order dated Aug. 30, 2013 (SLP Civil No. 27890 of 2013).

Commissioner of Income Tax vs. M/s Nangalia Fabrics Private Limited Ltd (Guj HC, Tax Appeal No. 689 of 2010 dtd. 22nd April, 2013).

Commissioner of Income Tax vs. M.K. Brothers [1987] 163 ITR 249 (GUJ). Assistant Commissioner of Income Tax vs Akruti Dyeing & Printing Mills Pvt. Ltd. (Guj HC, Tax Appeal

No. 997 of 2008, dtd. 27/01/2009). Commissioner of Income Tax vs. M/S Veekay Prints Pvt. Ltd. (Guj HC, Tax Appeal No. 2557 of 2010, dtd.

01/02/2012). M/s. Diagnostics vs. Commissioner of Income Tax (Calc. HC, dtd. March 04, 2011, ITA No. 153 of 2004). Income Tax Officer vs. Totaram B. Sharma (Guj HC, dtd. Feb. 09, 2010, Tax Appeal No. 1344/2008 &

1355/2008). Deputy Commissioner of Income Tax vs. Adinath Industries [2001] 252 ITR 476 (GUJ HC). Commissioner of Income Tax vs. Precious Jewels Corporation [2012] 17 taxmann.com 264 (Rajasthan HC). Commissioner of Income Tax vs. Rajesh P. Soni (Guj. HC, dtd. 27th Feb. 2012, Tax Appeal No. 1107 of

2006). It is also pertinent that the name of the selling dealer is placed on the Mahavat list only as a ‘suspicious’ dealer i.e. a person who is suspected for issuing fake bills without selling the goods. The law on reassessment is clear to the effect that an assessment can be opened only if the Assessing Officer has reasons to believe that income of the Assessee has escaped assessment. The formation of this belief is a jurisdictional condition and its absence can vitiate the re-assessment proceedings. The Court would be entitled to quash the reassessment proceedings if the reasons to believe are non-existent. The reasons must be genuine and not a pretence. An assessment cannot be re-opened on mere suspicion. After all, ‘reason to believe’ is not the same thing as ‘reason to suspect’. The decision of the Supreme Court in the case of Sheo Nath Singh v. AAC (1971) 82 ITR 147 (SC) is a good authority for the proposition that an assessment cannot be re-opened on the basis of mere suspicion. Based on this decision, it is can be argued that the reassessment proceedings cannot be initiated on the basis that the seller is found to be a ‘suspicious dealer’ on the Mahavat list. The apparent has to be treated as real unless proved otherwise. This has long been held by the Hon’ble Supreme Court in the case of CIT vs. Daulat Ram Rawatmal (1964) 53 ITR 574 (SC), wherein the Respondent had coun-tered the statement of alleged hawala dealers by way of his submissions and evidences. Credence cannot be given to the statement of a person who himself admits and has dubious dealings as against the documentary evidences pro-duced by the Assessee. The same view has been held by Hon’ble ITAT, Agra in case of Shri Ashok Kumar Lava-nia, Prop. Bajrang Automobiles, Agra in ITA No.112/Agr/2004 vide order dated 30.05.08. The same has been followed by Hon’ble ITAT in case of Shri Baijnath Agrawal, Prop. M/s. Baijnath Scrap Centre in ITA No.133/Agr/2005 vide order dated 13.04.2010.



Hon’ble Jaipur Bench of ITAT has been taking a consistent view that where certain purchases remained unverifiable the rejection of books of account by invoking provisions of section 145(3) of the Act is justified. However, the Jaipur Benches of the Tribunal are taking a consistent view also that where books of account are rejected on account of unverifiable purchases, then in that case the addition should be made after taking into consideration the past his-tory of the case and also current events of the case. On this basis they have been disallowing a small percentage rang-ing from .7 % to 2% of the alleged bogus purchases on ad-hoc basis to cover any possibility of leakage of revenue. Following are the judgments for reference,

The Income Tax Officer vs. M/s. Agrasen Jewellers (Jai. ITAT, ITA No. 861/2010, dtd. 10.06.2011). M/s. Arham Jewellers vs. Income Tax Officer (Jai. ITAT, ITA No. 167/2012, dtd. 28.06.2012). The DCIT vs. Shri Dharmendra Tank (Jai. ITAT, ITA No. 772/2011, dtd. 02.02.2012). The Income Tax Officer vs. M/s. Lakhi Gems (Jai. ITAT, ITA No. 893/2011, dtd. 25.05.2012). M/s. Rambhajo Jewellers vs. The Addl. CIT (Jai ITAT, ITA No. 1075/2011, dtd. 31.08.2012). In cases where it is found that the Assessee has purchased bogus bills to regularize its URD purchases, the AO gener-ally disallows 25% of the alleged bogus purchases on the presumption that the Assessee must have got benefits of sales tax and other taxes & duties from URD purchases. The AO does it so by relying on the Hon’ble Ahmedabad Bench of ITAT’s decision in the case of Vijay Proteins Pvt. Ltd vs. CIT reported in 58 ITD 428. The decision has been challenged before the Hon’ble Gujarat High Court by the Assessee (Income Tax Reference No. 139/1996) which is yet to be disposed of. But on the basis that in Vijay Protein’s case, the purchases were made in cash and some of the transporters denied transportation of goods, many Appellate Authorities and Courts have distinguished this judgment. The Hon’ble Gujarat High Court in the cases of Commissioner of Income Tax vs. Simit P. Sheth [2013] 38 tax-mann.com 385 (Gujarat) and Commissioner of Income Tax vs. Bholanath Poly Fab (P). Ltd. [2013] 40 tax-mann.com 494 (Gujarat), has held that where purchases were not bogus but were made from parties other than those mentioned in books of account, not entire purchase price but only profit element embedded in such purchases can be added to income of assessee. The estimation of rate of profit return must necessarily vary with the nature of business and no uniform yardstick can be adopted. To conclude, if an Assessee is able to provide documentary evidences to support the purchases as referred above, the Appellate Authorities on the basis of ratios explained in the above judgments may decide in favor of the Assessee. But then also it will be a daunting task for the Assessee to prepare the submissions to satisfy the both Sales Tax and Income Tax Department.



Office of The Commissioner of Service Tax-I, Mumbai vide Trade Notice No. 21/13-14-ST-I dated 11.03.14 specifies ways to rectify mistakes in payment of service tax as under-

Where mistake has happened in accounting codes but Service Tax Code is correct, assessee should inform Dep-uty Commissioner (Technical), Office of the Commissioner of Service Tax-I, Mumbai, 115, New Central Excise Building, M K Marg, Churchgate, Mumbai-400 020 along with service tax challan and relevant information in formats mentioned below:-

In case of online payment:

In case of manual payment:

Where mistakes have happened in entering Service Tax Code, there is no system available to transfer amount from wrong service tax code to correct service tax code. However following legal remedies are available to as-sessee to rectify mistakes:

As per rule 6(4A) of the Service Tax Rules, 1994, Service Tax paid wrongly, can be adjusted against the li-ability of succeeding month or quarter, as the case may be.

If not above, the assessee may file a refund application under section 11B of the Central Excise Act, 1944

Sr. No.

CIN as mentioned in challan

Description of Accounting head (as men-tioned in Challan)

Accounting code (as mentioned in Challan)

Amount (in Rs.)

Correct de-scription of Accounting head

Correct Accounting

code

Correct Amount (in Rs.)

Sr. No.

BSR code as men-tioned in the Re-ceipt (challan) is-sued by the receiv-ing bank

Serial No. and date as men-tioned in the Re-ceipt (challan) issued by the re-

Accounting code as men-tioned in the Receipt (Challan)

Amount (in Rs.)

Correct Accounting code

Correct Amount (in Rs.)

Rectification of Mistakes

in Payment of Service Tax

- By CA Vighnesh Palkar



Crompton Greaves Limited vs. DCIT (Bombay High Court)

Write-off of irrecoverable advances is not a “transfer” and the loss cannot be claimed as a capital loss u/s 45

Having regard to the definitions of terms “capital asset” and “transfer” in sections 2(14) and 2(47), in order to be eligible for carry forward of capital loss, the capital asset should be of the nature defined in s. 2(14) and should be transferred in the manner defined in s. 2(47). Equally, it should be subjected to tax as per s. 45(1) of the Income-tax Act. The advances given to the said two parties and written off are not the capital assets nor there is any transfer. Therefore, they were not allowed to be carried forward to subsequent years. It is a capital loss and should be ignored (Ahmed G.H. Ariff 76 ITR 471 (SC) & Minor Bababhai 128 ITR 1 (Guj) distinguished)

CIT vs. Intervet India Pvt.Ltd (Bombay High Court)

S. 194-H TDS does not apply to all sales promotional expenditure. It applies only if relationship be-tween payer & payee is that of principal & agent

The assessee had undertaken sales promotional scheme viz. Product discount scheme and Product cam-paign under which it offered an incentive on case to case basis to its stockists / dealers / agents. An amount of Rs.70 lakhs was claimed as a deduction towards expenditure incurred under the said sales promotional scheme. The relationship between the assessee and the distributor / stockists was that of principal to princi-pal and in fact the distributors were the customers of the assessee to whom the sales were effected either directly or through the consignment agent. As the distributor / stockists were the persons to whom the product was sold, no services were offered by the assessee and what was offered by the distributor was a discount under the product distribution scheme or product campaign scheme to buy the assessee’s product. The distributors / stockists were not acting on behalf of the assessee and that most of the credit was by way of goods on meeting of sales target, and hence, it could not be said to be a commission payment within the meaning of Explanation (i) to Section 194H of the Income-tax Act, 1961. The contention of the Revenue in regard to the application of Explanation (i) below Section 194H being applicable to all categories of sales expenditure cannot be accepted. Such reading of Explanation (i) below Section 194H would amount to reading the said provision in abstract. The application of the provision is required to be considered to the relevant facts of every case

Recent Judgments Source – www.itatonline.org

http://itatonline.org/archives/index.php/crompton-greaves-limited-vs-dcit-bombay-high-court-write-off-of-irrecoverable-advances-is-not-a-transfer-and-the-loss-cannot-be-claimed-as-a-capital-loss-us-45/

http://itatonline.org/archives/index.php/cit-vs-intervet-india-pvt-ltd-bombay-high-court-s-194-h-tds-does-not-apply-to-all-sales-promotional-expenditure-if-relationship-is-not-that-of-principal-agent/



Alkaben B. Patel vs. ITO (ITAT Ahmedabad) (Special Bench)

The term “month” in s. 54E, 54EA, 54EB & 54EC does not mean “30 days” but the “calendar month”. So, the expression “within a month” means “before the end of the calendar month”

Sections 54E, 54EA & 54EB require the investment to be made “within a period of six months after the date of such transfer”. The subtle question is that whether the word “month” refers in this section a period of 30 days or it refers to the month only. The term ‘month’ is not defined in the Income-tax Act. Therefore, its meaning has to be understood as per the General Clauses Act, 1897 which defines the word “month” to mean a month reck-oned according to the British calendar. In Munnalal Shri Kishan Mainpuri 167 ITR 415 (All) it was held in the context of limitation u/s 256(2) that the word ‘month’ refers to a period of 30 days and, therefore, the ref-erence to “six months” in s. 256(2) is to “six calendar months” and not “180 days”. On some occasions, the Legislature had not used the term “Month” but has used the number of days to prescribe a specific period. For example, the First Proviso to s. 254(2A) provides that the Tribunal may pass an order granting stay but for a period not exceeding 180 days. This is an important distinction made in the statute while subscribing the limi-tation/ period. This distinction thus resolves the present controversy by itself

CIT vs. M/s Dawoodi Bohara Jamat (Supreme Court) March 19th, 2014

A charitable and religious trust which does not benefit any specific religious community is not hit by s. 13(1)(b) & is eligible to claim exemption u/s 11

On facts, the objects of the assessee are not indicative of a wholly religious purpose but are collectively indica-tive of both charitable and religious purposes. The fact that the said objects trace their source to the Holy Quran and resolve to abide by the path of godliness shown by Allah would not be sufficient to conclude that the entire purpose and activities of the trust would be purely religious in color. The objects reflect the intent of the trust as observance of the tenets of Islam, but do not restrict the activities of the trust to religious obliga-tions only and for the benefit of the members of the community. In judging whether a certain purpose is of public benefit or not, the Courts must in general apply the standards of customary law and common opinion amongst the community to which the parties interested belong to. Customary law does not restrict the charita-ble disposition of the intended activities in the objects. Neither the religious tenets nor the objects as expressed limit the service of food on religious occasions only to the members of the specific community. The activity of Nyaz performed by the assessee does not delineate a separate class but extends the benefit of free service of food to public at large irrespective of their religion, caste or sect and thereby qualifies as a charitable purpose which would entail general public utility. Even the establishment of Madarsa or institutions to impart religious education to the masses would qualify as a charitable purpose qualifying under the head of education u/s 2(15). The institutions established to spread religious awareness by means of education though established to pro-mote and further religious thought could not be restricted to religious purposes. The assessee is consequently a public charitable and religious trust eligible for claiming exemption u/s 11.

http://itatonline.org/archives/index.php/alkaben-b-patel-vs-ito-itat-ahmedabad-special-bench-the-term-month-in-s-54e-54ea-54eb-does-not-mean-30-days-but-the-calendar-month-so-the-ex/

http://itatonline.org/archives/index.php/cit-vs-ms-dawoodi-bohara-jamat-supreme-court-a-charitable-and-religious-trust-which-does-not-benefit-any-specific-religious-community-is-not-hit-by-s-131b-is-eligible-to-claim-exemption-us-11/



Inauguration of Full Day Seminar on “ Bank Branch Audits” on 21st March,2014 L to R – CA Sameer Gavli, CA Sreekumar Nair, CA Sushrut Chitale, RCM, CA Shrikant Limaye

During “Orientation Programme” organized by WIRC on 23rd and 24th March,2014 at Alibag.

L to R – CA Shrikant Limaye, CA Anil Bhandari, Chairman WIRC, CA Zulfesh Shah, Vice Chair-man, WIRC, CA Sameer Gavli and CA Minaxi Rachchh.

PHOTO GALLERY



Forthcoming Programmes of Navi

Mumbai Branch

Day & Date Timing Topic Speakers CPE Hrs

Venue

Saturday, 19th April,2014

9.30 am to 5.30 pm

Companies Act,2013

Eminent Speakers 6 NMSA

Saturday, 26th April,2014

3.00 to 7.00 pm Issues under VAT and Notifi-

cations under VAT

CA J D Adhyapak and CA C B Thacker

3 NMSA

Saturday, 17th May,2014

3.00 to 7.00 pm Mock Tribunal CA C N Vaze and Team 3 NMSA

DISCLAIMER : The views and opinion expressed or implied in the Newsletter are those of the authors / con-tributors and do not necessarily reflect those of Navi Mumbai Branch. Unsolicited matters are sent at the owner's risk and the publisher accepts no liability for loss or damage. Material in this publication may not be reproduced, whether in part or in whole, without the consent of Navi Mumbai Branch. Members are requested to kindly send material of professional interest so that the same may be published in the newsletter subject to availability of space & editorial editing.



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Annual Fees Rs.2,500 for CPE Study Circle Meetings

To,

Navi Mumbai Branch of WIRC of ICAI Address: Rainbow apartments, F-2/C-3, Near Vijaya Bank, Sector 10, Vashi, Navi Mumbai-400703

Phone: Mr. Bhagwat 9323671721, Mr. Manoj 9773153877

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