Important Jugdments

 

Dear Subscriber,

The following important judgements are available for download at itatonline.org:

Rayala Corporation Pvt. Ltd vs. ACIT (Supreme Court)

S. 28: Income from letting of property on rent by an assessee engaged in the business of letting is assessable as "business profits" u/s 28 and not as "Income from house property" u/s 22

The issue involved in these appeals is no more res integra as this Court has decided in the case of Chennai Properties and Investments Ltd. v. Commissioner of Income Tax [2015] 373 ITR 673 (SC) that if an assessee is having his house property and by way of business he is giving the property on rent and if he is receiving rent from the said property as his business income, the said income, even if in the nature of rent, should be treated as “Business Income” because the assessee is having a business of renting his property and the rent which he receives is in the nature of his business income 

United Breweries Limited vs. DCIT (Karnataka High Court)

S. 14A is applicable even where the motive of the assessee in acquiring the shares is to obtain controlling interest in a company and not to earn dividends

The question arose whether s. 14A applies to a case where the motive of the assessee is to acquire controlling interest in a company and not to earn dividends. The Tribunal followed the judgement of the Special Bench in ITO v. Daga Capital Management Pvt. Ltd (2009) 312 ITR (AT) 1 and held that section 14A is applicable even where the motive in acquiring the shares was to obtain controlling interest in the companies. The Tribunal upheld in principle the applicability of section 14A but remanded the matter to the Assessing Officer to ascertain from the facts of the case as to how much interest bearing borrowings was utilized to acquire shares in the companies 

Triad Resorts & Hotels P.Ltd vs. WTO (ITAT Bangalore)

Conduct of the Counsel in making selective reference to the Tribunal’s order in “very deceitful manner” is “highly deplorable”. Attempt to re-argue matter is “clear case of abuse of process of court” and is condemned “in no uncertain terms as it resulted in colossal waste of valuable time of this Tribunal”. Verdict in Dr. T.K. Dayalu (202 TM 531 (Kar) on taxability of development agreements is “not good law” in view of CIT vs. N. Vemanna Reddy (Kar)

We highly deplore the attempts of the petitioner to knock the doors of the Tribunal again in the guise of seeking rectification of order alleging that additional ground of appeal was not decided. As mentioned supra, the additional grounds have been specifically adjudicated and a specific finding had been rendered vide para.9 of the impugned order. Attempts made by the petitioners is nothing but clear case of abuse of process of court and in breach of principles of Res Judicata. We condemn this conduct of petitioner in no uncertain terms as it resulted in colossal waste of valuable time of this Tribunal 

Updates

SEBI

SEBI issued a Circular directing all commodity derivatives exchanges to conduct annual system audit of their trading members and monitor the same. SEBI said that the framework of system audit for trading members should cover audit process, selection norms for auditor and terms of reference for brokers. It further prescribed stock broker system audit framework and mandated commodity exchanges to ensure conduct of system audit of its members as per the prescribed framework and monitor the same. The circular would come into force from financial year 2016-17 onwards. SEBI clarified that for the F.Y. 2015-16, the brokers / trading members who have commenced their annual system audit, may follow existing annual system audit framework prescribed by exchanges, if any. However, stock brokers/ trading members who are yet to commence annual system audit should carry out their system audit as per the prescribed framework.

 

SEBI

SEBI has launched electronic mode for payment of penalties, disgorgement as well as settlement amounts.  SEBI has advised all payees to forward the details and confirmation of the payments so made, to the concerned dealing department of SEBI for their records. It has introduced such option to ease the payment of penalties, disgorgement amounts, settlement amounts, legal charges and recovery amounts as  currently, SEBI accepts payments only through Demand Drafts. 

Updates:

1. CBDT has notified Income Declaration Scheme, (Second Amendment) Rules, 2016 primarily to revise form 3 to specify details of payments made under the IDS 2016.
2. Where notice has not been given by the landlord for payment of rent due from the lessee under the Rent Act, there can be no eviction on ground of non-payment of rent by the lessee-company in liquidation. [Jabal C Lashkari and Others vs. Ol and others ( SC of india)].
3. CBEC has clarified that a freight forwarder, when acting as a principal  will not be liable to pay service tax when the destination of the goods is from a place in India to a place outside India, Circular No. 197/7/2016 -Service Tax dated 12 Aug. 2016.
4. Service Tax on alcoholic liquor manufacture on job work basis for human consumption valid. [ Carlsberg India Private Limited vs. Union of India & Ors. (Delhi HC)].
5. Exemption U/s. 54F despite delayed investment in Capital Gain Account Scheme. [ ACIT vs. Smt. Umayal Annamalai (ITAT Chennai)].

7 Habits for effective Finance Director

Here are the top 7 Habits for effective FDs:-

1. Competence
2. “Bean Growers” not “Bean Counters”
3. Build a team outside the business as well as in it
4. Manage up as well as down
5. Communication is everything
6. Passionate
7. Sharpening the Saw

Competence
There’s no getting away from it that an Accounting qualification and experience gained being a real life FD counts for a lot. FDs will be judged initially on how well they keep the score, solve financial problems in the business and direct management attention to the things that matter financially. Although it starts here, this is not where it stops! Other key habits are:-
Bean Growing, not Bean Counting
Highly effective FDs should come with Business, Commercial and Strategic skills that are super strong. Super financial skills are merely a pre-requisite.

Team Orientation
Teamwork is key for the modern day FD. As well as the ability to build their own team, highly effective FDs must be able to work effectively with the management team of the business and develop relationships outside the business to provide a strong network of support professionals.

People Skills
“Soft skills” are the hard skills these days. Managing down, across and most importantly up to MDs and business owners is key. Being a great FD and doing the FD “stuff” is not sufficient in adding real value to the business. People need to be brought with you.
Communication
The way you communicate and get your point across is critical to making a difference. Influence and persuasion skills are massively important to be highly effective.

Passionate
Yes “passionate”. High energy levels and having some fun is an important factor in effectiveness. What FDs do is a serious business, but it doesn’t have to be dour, and nobody likes a bore!

Sharpening the Saw

Keeping fresh and finding time to keep up to date is vital in this fast moving world. This relates to all the effectiveness habits not just technical skills!

FDs who want to make a difference to their businesses should work on these habits to become highly effective. Those that can master all these skills will find themselves in very high demand!

Government to unveil new I-T tool to check PAN transactions history

NEW DELHI: Government is set to unveil an ambitious PAN activity monitoring and analysis software tool that will enable Income Tax department to check transactions history of a person country-wide and help sleuths in effective tracking of black money trail.

The digital and smart platform is called the Income Tax Business Application-Permanent Account Number (ITBA-PAN) and is currently being put to final tests by a special team of tax sleuths and business software analysts at a facility in the national capital.

The new software tool will enable the taxman to view, in a chronological order, the entire "PAN life cycle summary" or to simply say transactions history of an individual or entity where a PAN number has been quoted, in any part of the country.

The project is expected to be activated by the end of this month by the Finance Ministry and will also enable the tax department and its two intermediary organisations--NSDL and UTIITSL-- to allocate a fresh PAN number and subsequently issue a new card in 48 hours flat as compared to the about 15 days time taken currently.

The operationalisation of the project assumes significance as Finance Minister Arun Jaitley had recently said that the government is at an "advanced stage in considering the requirement of furnishing PAN card details if cash transactions beyond a certain limit are undertaken." 

The department, in order to enhance its capabilities to better track large value transactions in the country, has brought the ITBA-PAN portal and has for the same has also closed down its "legacy" and the existing Assessee Information System (AIS) early this month which till now used to hold the PAN database. 

The new platform, according to an official proposal accessed by PTI, will also allow the taxman to view and capture various events of an assessee like "death, liquidation, dissolution, de-merger, merger, acquisition, fake PAN or amalgamation of PAN" in a specific or general case in an event of any investigation to be carried out in a case of black money or tax evasion. 

"The ambitious project will be rolled out soon and the I-T department has already migrated all the PAN data last week from the old system to the new one. With this project going operational, PAN will become a unique identifying database in the real sense all across the country," a senior official said today. 

The new tool will also allow the taxman to remotely identify duplicate or fake PANs in its system which has been troubling the tax investigators for a long time and was used by criminals to perpetrate black money operations within and outside the country.

The ITBA-PAN software will also allow a PAN holder to request for deletion or de-activation of his or her PAN and it will send an electronic and digitally signed "intimation letter" in this regard to the concerned assessee. 

The soon-to-be launched platform will also allow an entity to activate a wrongly deleted or de-activated PAN number.

In order to provide better services to taxpayers, the platform will allow for a smooth computer-based transfer of an individual's PAN number in case they are transferred or re-located from one place to the other. 

PAN is a ten-digit alphanumeric number issued in form of Aa laminated card by the Income Tax department.

It is also a national identification number of the taxpayer which has to be mandatorily quoted on the return of income and in all correspondences with the department. 

7 Common myths about mental illnesses that India needs to reject



In spite of an escalating number of mental health patients, the subject
 of mental health illness, is still by and large a taboo topic for several
 Indians. “World Health Organisation (WHO) estimated that globally
 over 450 million people suffer from mental disorders,“ says Dr (Captain)
 Kushilab Bose, chief of medical operations at a network of healthcare 
clinics. “Currently mental and behavioural disorders account for about 
12% of the global burden of diseases, and this is likely to increase to 15% 
by 2020.

“Mental illnesses are amongst the most common ailments, and yet 
 are the least understood,“ says Dr Jawahar Shah, co-founder of a 
virtual clinic that features over 100 doctors supplying online help. “This
 gives way to many misconceptions, resulting in misgivings or insensitive 
attitudes.“

A study reported in WHO states that at least 6.5% of the Indian population
suffers from some form of serious mental disorder, with no discernible
rural urban differences. Here are some common myths in India that warrant 
dispelling, and should instead give way to more support, and understanding...

Myth 1: Psychiatric disorders are personal weaknesses or a personality
 flaw: Neurotransmitters are brain chemicals responsible for various functions
 such as mood, sleep and concentration. An imbalance in these chemicals
(serotonin, norepinephrine, dopamine and others) causes psychiatric
 disorders. The imbalance leads to serious illnesses, with underlying
 physical and psychological effects, and cannot simply be overcome by will
power, says mental health and behavioural sciences expert, Dr Samir Parikh.
Unfortunately , because these mental illnesses don't always have 
visible physical manifestations, a sudden change in a person's behaviour is
dismissed as a flaw in their personality. “There are 113 laws in India that
take away the rights of persons living with mental illness,“ says 
senior consultant psychiatrist and psychotherapist, Dr Achal Bhagat.
 It's important to understand that a person is not faking these symptoms. 
On the contrary , he she is acting facing a lot of distress.

Myth 2: Mental health disorders affect very few people: “Any body and every
body can be affected. Economic status, social background and education have
nothing to do with it,“ says psychiatrist Dr Sanju Gambhi. Studies estimate 
that 20 million Indians (approximately two per cent of the population) need
professional help for serious mental disorders. An additional 50 million suffer 
from not-so-serious mental illnesses, adds Dr Shah. People have a hard 
time accepting that they could be suffering from a mental disorder, primarily
because they feel it is a weakness, which will be looked down upon by society
at large.

Myth 3: Once a psychiatric patient, always a psychiatric patient: “Almost 
every patient starts his her session with the same question -if I start these
medicines, will I be able to come out of it?“ says Dr Jay Shastri of the Indian
Association of Biological Psychiatry . Medicines are not addictive, they are to
combat the imbalance of neurotransmitters in your brain, and don't always
need to be prescribed. Mental disorders, just like any other illness are
completely treatable. “With early identification, and adequate and timely 
intervention, an individual with a mental illness can be treated and helped
to lead a happier and healthier life,“ says Dr Parikh.

Myth 4: Children don't suffer from psychiatric illnesses: On the contrary , says
Dr Gambhi, mental disorders can set in at a very early age. At least 20% of
Indian children suffer from some form of mental illness, among which about
five per cent are serious illnesses, says Dr Shah adding that most parents 
refuse to accept that their child may be mentally ill out of fear of embarrassment
or social stigma. What's more, mental health problems can't be `outgrown' as
most people seem to think, adds Dr Parikh.

It's important to pay attention to children as they themselves can't explain their
frustrations. "Instead, they'll exhibit it by associating it with a physical pain like
an inexplicable headache or a stomach ache,“ says Dr Shashtri.

Myth 5: Mental health disorders are a result of bad parenting : Parenting has
nothing to do with mental disorders. Children hailing from `happy' families can
suffer from psychological complications too. Mental disorders are caused due
to multiple interactions of biological, psychological and genetic factors,“ says Dr
Parikh. However, a support system plays an essential role in recovery. A 
strong family structure will ensure the right support and care for a child's 
treatment and future development, adds Dr Shastri.

Myth 6: Mental illnesses are contagious : “Psychiatric disorders are medical
conditions, which are a result of an imbalance in the neurotransmitters in the
brain. They are can be genetically passed on, but are in no way contagious. 
Indians have to understand that mental health issues are never evidence of
bad morals. Some patients we see even suspect black magic behind illnesses
,“ says psychologist Dr Harsheen Arora, who specialises in counselling and the
rapy .

Myth 7: Attempting suicide is a sign of cowardice: According to a WHO
 report, most suicides in the world occur in the South Asia region with India 
accounting for the highest estimated number of suicides overall in 2012.
The average suicide rate in India is 10.9 for every lakh people and the majority
of people who commit suicide are below 44 years of age. “It is a myth that
suicide is usually an impulsive decision or that it hap pens on the spur of the
moment,“ says Dr Parikh. “There are many clear warning signals that people 
contemplating suicide give, that indicate their feelings of helplessness. It 
should not be considered a taboo topic,“ he adds.

Giving a person the environment to be able to discuss his her feelings can 
actually provide a release for pent-up negative emotions, and go a long way
in preventing suicide attempts.

Spell Check in Excel –How to Use it?

Excel is one of the common application used in our day to day office life and business like word, Power point, outlook etc. In the case of word or Power point any spell mistake is visible with a red underline below the word that is misspelled.

However in the case of Excel we mainly deals with figures and such kind of misspelled word are not clearly visible in excel.

Most of the people are not at all aware of spell check feature provided by this application. In this article we will explain how to use spell check feature and how the spell check works.

Where to find Spell Check in Excel

The spell check feature is available under review tab in the ribbon in Excel. We can also use “F7” as short cut key.

When you click on the Spelling option in the review tab (or use “F7” key), it opens the Spell Check dialogue box.

How Does Spell Check Works in Excel

It is important to know is how spell check in Excel works.

If you select cell A1, it will go through all the cells in first row, then move to the second row and check all the cells in the second row (from left to right) and then move to the third row and so on. If it identifies a cell with a spelling error, it displays the Spelling dialogue box.

If you select a cell somewhere else in the worksheet, let’s say C5, then it will go through the cells to the right and then to the row below it. When it is done with checking for all the cells after C5, it will show a prompt that asks the user if he want to continue checking at the beginning of the sheet. Something as shown below:

If the user select Yes, it goes back and checks the remaining cells (which would be A1 to C4 in our example).

To get a better understanding, have a look at this example below (cell shaded are the ones with a spelling error):

As shown, when we begin the spell check with A1, it completes the spell check for all the cells. But when we begin with cell C5, it checks for all the cells from C5 and then asks the user if he/she wants to continue checking from the beginning.

Understanding the Spell Check Dialogue Box

Whenever you run spell check in excel and it finds an error, it shows the Spell check dialogue box (as shown below):

Let’s quickly understand the different options available in the spell check dialogue box:

• Ignore Once: If spell check encounters a word it identifies as an error, but you want to keep it that way, you can click on Ignore Once. This will ignore that error once.
• Ignore All: If excel identifies a word as error, but you want to keep all instances of that word (as is), click on Ignore All.
• Add to Dictionary: If Excel flags a word as error but it is the correct word to be used (may be it’s a name or abbreviation that you use in your company), then you can add it to the dictionary. When such a word is flagged as error and you click on Add to Dictionary, Excel will make that a part of acceptable words and wont flag it again. Note that this word is now part of Excel dictionary and would never be flagged in any of the workbooks.
• Change: When Excel highlights an error, it also shows some suggestions (for example it suggests Good in place of Goood). There can be one or more that one suggestion. Select the suggestion that you want to use and click on Change to apply that.
• Change All: If you click on this button, it will change all the occurrence of the misspelled word with the selected suggestion.
• AutoCorrect: This option will change the misspelled word with the selected suggestion, and also add it to the auto correct list. This means, that next time you type the same misspelled word, excel would automatically convert it into the suggestion that you selected.
• Dictionary Language: You can change the dictionary language using this drop down.

Here are some default settings in Spell Check in Excel:

1. It ignores words which are in Upper Case. For example, if you have the word HELLOOO, it will not be flagged as an error.
2. It ignores words that contain numbers. For example, if you have the word Hello123, it will not be flagged as an error.
3. It ignores internet and file addresses.
4. It DOES NOT ignore repeated words. For example, if you have the text – Hello, How areare you? – then it the additional are will be flagged as an error.

You can change these default setting by clicking on the Option button in the Spell Check Dialogue box.

It will open the Options dialogue box where you can make the necessary change.