The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.

The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.
The Principal Commissioner of Income Tax-17 …Appellant
M/s Mohommad Haji Adam & Co. …Respondent.

All these appeals arise out of common Judgment of the Income Tax Appellate Tribunal. The facts in all these appeals being same, we make it from ITXA No. 1004 of 2016. The revenue – appellant has raised following questions for our consideration “(a) Whether on the facts and in the circumstances of the case and in law, the Hon’ble ITAT was justified in not confirming the addition made by the Assessing Officer on account of bogus purchases shown to have been made through hawala transactions from certain parties who were only providing accommodation sale bills?

(b) Whether on the facts and in the circumstances of the case and in law, where evidently no purchases were made from these parties who were issuing only bogus accommodation bills and this finding has been accepted by the CIT(A) and the ITAT, the ITAT, without any evidence, was justified in presuming that there must have been purchases and thereupon giving huge relief to the assessee ?

(c) Whether on the facts and in the circumstances of the case and in law, the order of the Hon’ble ITAT is perverse as no reasonable person acting judicially and properly instructed in the relevant law could arrive at such a finding on the evidence on record?”

2 The issues relate to the Assessment Year ( “A.Y.” for short) concerning the respondent - assessee who is a trader of fabrics. During the survey operations in case of the entities from whom the assessee had claimed to have made purchases, the department collected information suggesting that such purchases were not genuine. The Assessing Officer (“A.O.” for short) noticed that the assessee had shown purchases of fabrics worth Rs.29.41 Lacs (rounded off) from three group concerns, namely, M/s Manoj Mills, M/s Astha Silk Industries and M/s Shri Ram Sales & Synthetics. On the basis of the statement recorded during such survey operations, the A.O. concluded that the selling parties were engaged only in supplying the bogus bills, that the goods in question were never supplied to the assessee, and therefore, the purchases were bogus. He, therefore, added the entire sum in the hands of the assessee as its additional income.

3 The assessee carried the matter in the appeal before the Commissioner of Appeals who accepted the factum of purchases being bogus. However, he compared the purchases and sales statement of the assessee and observed that the department had accepted the sale, and therefore, there was no reason to reject the purchases, because without purchases there cannot be sales. He, therefore, held that under these circumstances A.O. was not correct in adding the entire amount of purchases as the assessee’s income. He, therefore, deleted the addition refreshing it to 10 % of the purchase amount. He also directed the A.O. to make addition to the extent of difference between the gross profit rate as per the books of accounts on undisputed purchases and gross profit on sales relating to the purchases made from the said three parties.

4 The assessee carried the matter before the Tribunal. The Revenue also carried the issue before the Tribunal. The Tribunal in the impugned Judgment allowed the appeal of the assessee partly and dismissed that of the Revenue. The Tribunal noted that the CIT(A) had not given any reasons for retaining 10 % of the purchases by way of ad hoc additions. The Tribunal, therefore, deleted such additions, but retained the portion of the order of the CIT(A) to that extent he permitted the A.O. to tax the assessee on the basis of difference in the GP rates.

Learned counsel Mr Chhotaray for the Revenue strenuously contended that the CIT(A) and the Tribunal committed serious error. In the present case when it was established that the purchases are bogus, the entire amount should have been added to the income of the assessee. There is no question of granting any relief in the facts of the case. In this context he relied on a decision of the Division Bench of Gujrat High Court in the case of N.K. Industries Ltd. Vs Dy. C.I.T. in Tax Appeal No. 240 of 2003 and connected appeals decided on 20 th June, 2016. In such judgment the Court had observed as under-

“The Tribunal in the case of Vijay Proteins Ltd. Vs. CIT had observed that it would be just and proper to direct the Assessing Officer to restrict the addition in respect of the undisclosed income relating to the purchases to 25 % of the total purchases. The said decision was confirmed by this Court as well. On consideration of the matter, we find that the facts of the present case are identical to those of M/s Indian Woolen Carpet Factory (supra) or M/s. Vijay Proteins Ltd. In the present case the Tribunal has categorically observed that the assessee had shown bogus purchases amounting to Rs.2,92,93,288/- and taxing only 25 % of these bogus claim goes against the principles of Sections 68 and 69C of the Income Tax Act. The entire purchases shown on the basis of fictitious invoices have been debited in the trading account since the transaction has been found to be bogus. The Tribunal having once come to a categorical fiding that the amount of Rs.2,92,93,288/- represented alleged purchases from bogus suppliers it was not incumbent on it to restrict the disallowance to only Rs.73,23,322/-.”
6 Counsel pointed out that the S.L.P. against such decision was dismissed by the Supreme Court.

7 On the other hand, Ms Khan learned counsel for the assessee opposed the appeals contending that the Tribunal has given proper reasons. The assessee was a trader. Even if the purchases are found to be bogus, entire purchase amount cannot be added by way of assessee’s income.

8 In the present case, as noted above, the assessee was a trader of fabrics. The A.O. found three entities who were indulging in bogus billing activities. A.O. found that the purchases made by the assessee from these entities were bogus. This being a finding of fact, we have proceeded on such basis. Despite this, the question arises whether the Revenue is correct in contending that the entire purchase amount should be added by way of assessee’s additional income or the assessee is correct in contending that such logic cannot be applied. The finding of the CIT(A) and the Tribunal would suggest that the department had not disputed the assessee’s sales. There was no discrepancy between the purchases shown by the assessee and the sales declared. That being the position, the Tribunal was correct in coming to the conclusion that the purchases cannot be rejected without disturbing the sales in case of a trader. The Tribunal, therefore, correctly restricted the additions limited to the extent of bringing the G.P. rate on purchases at the same rate of other genuine purchases.

The decision of the Gujarat High Court in the case of N.K. Industries Ltd. (supra) cannot be applied without reference to the facts. In fact in paragraph 8 of the same Judgment the Court held and observed as under-

” So far as the question regarding addition of Rs.3,70,78,125/- as gross profit on sales of Rs.37.08 Crores made by the Assessing Officer despite the fact that the said sales had admittedly been recorded in the regular books during Financial Year 1997-98 is concerned, we are of the view that the assessee cannot be punished since sale price is accepted by the revenue. Therefore, even if 6 % gross profit is taken into account, the corresponding cost price is required to be deducted and tax cannot be levied on the same price. We have to reduce the selling price accordingly as a result of which profit comes to 5.66 %.

Therefore, considering 5.66 % of Rs. 3,70,78,125/- which comes to Rs.20,98,621.88 we think it fit to direct the revenue to add Rs.20,98,621.88 as gross profit and make necessary deductions accordingly. Accordingly, the said question is answered partially in favour of the assessee and partially in favour of the revenue.”

9 In these circumstances, no question of law, therefore, arises. All Income Tax Appeals are dismissed, accordingly. No order as to costs.

(B.P.COLABAWALLA, J.)                                                                     (AKIL KURESHI, J.) 


ITA  No. 1502 OF 2016

1. This appeal is filed by the Revenue to challenge the judgment of the Income Tax Appellate Tribunal (“the Tribunal” for short) raising following question for our consideration:-

“Whether on the facts and in the circumstances of the case and in law, the Tribunal is correct in deleting the addition of Rs. 2098.25 crores made under Section 68 of the I.T. Act, 1961?”

2. Brief facts are as under:-

3.1 Respondent assessee, M/s. Aditya Birla Telecom Ltd is a registered company and is engaged in providingtelecommunication services. While assessing the company’s

return of income for the assessment year 2009-10, the Assessing Officer noticed that the assessee company had issued 19,25,000 preference shares, each of the face value of Rs. 10/- to one P5 Asia Holding Investment (Mauritius) Ltd  (hereinafter referred to as “P5AHIML”) at Rs. 10,890/- per share. Through allotment of these shares, thus, the company had received the share amount of Rs. 1,92,50,000/- and total premium of Rs. 2096.32 crores (rounded off). The company had thus received total sum of Rs. 2098.25 crores. The dividend would be paid at the rate of 0.00001% per annum on the face value of the preference shares. Upon completion of period of ten years of issuance of preference shares, the same would be converted into equity shares at a premium of Rs. 10,890/- per share. The Assessing Officer noticed that the assessee’s holding company M/s. Idea Cellular Limited and its nominee owed 1,00,00,000 equity shares of Rs. 10/- each. He was of the opinion that the assessee had received share capital towards preference shares from P5AHIML at terms which were so adverse to P5AHIML, that no prudent businessman would ever agree to subscribe to preference shares on such terms. 3.2 On such basis, the Assessing Officer initiated inquiry into the assessee receiving such sum of Rs. 2098.25 crores, whether the same would be covered by Section 68 of the Income Tax Act, 1961 (“the Act” for short). The Assessing Officer, therefore, called upon the assesee to prove the identity of the investor, its capacity to make such investment and the genuineness of the transaction. In furtherance of the same, the Assessing Officer asked the assessee to provide various details such as the proof of identity, financial capacity of P5AHIML, copy of the annual report, assessment orders and financial statements of P5AHIML for the last two years, justification for such huge premium charged etc. 3.3 The assessee supplied the desired documents and made submissions why according to the assessee, the transaction being genuine, Section 68 of the Act had no applicability.

3.4 Rejecting the submissions of the assessee, the Assessing Officer passed the order of assessment holding that the assessee had failed to prove the genuineness of the transaction of the receipt of funds amounting to Rs. 2908.25 crores from P5AHIML. He, therefore, invoked Section 68 of the Act and made addition of the said sum in the hands of the assessee. In the process, he relied on following factors:-

(i) The assessee had used only a sum of Rs. 7.31 crores received from P5AHIML for its own operation, the balance amount was transferred to Idea Cellular Ltd (holding company) or to Idea Cellular Infrastructure Services Ltd (another group company) for the purpose of other investment;

(ii) In his opinion, there was no reason why P5AHIML should have transferred such huge amount without any apparent return;

(iii) The assessee failed to produce the assessment order of P5AHIML;

(iv) In the opinion of the Assessing Officer, P5AHIML representing Province groups and the assessee representing Idea group were front companies;

(v) The assessee had opened the bank account in HSBC Bank only for receipt of funds from P5AHIML which was closed shortly after the transfer of funds;

(vi) In the opinion of the Assessing Officer, culmination of these facts would be that the subscription of the preference shares by P5AHIML was colourbale device and not genuine transaction.

3.5 The assessee carried the matter in appeal. In appellate proceedings, the CIT(A) allowed the assessee to produce on record certain documents which did not form part of the assessment proceedings and called for remand report from the Assessing Officer. The CIT(A) dismissed the appeal. Perusal of this order would show that the assessee having approached the Bombay High Court in a Writ Petition seeking stay against the recoveries, the High Court, while disposing of the Writ Petition had desired that the Commissioner should dispose of the appeal within three months. The Commissioner in the order referred to the contentions of both sides as also the decisions cited before him. He also noted that after allowing the assessee to produce additional documents which could not be produced earlier, he had called for remand report. In his concluding remark in the appellate order, he stated as under:-

“…. As the documents furnished by appellant are under investigation and verification which was stated in remand report of A.O. Under these circumstances, I uphold the order of the A.O. These grounds of appeal are dismissed. Appeal order was passed to comply with Hon’ble Bombay High Court direction.” The assessee thereupon approached the Tribunal. The Tribunal, by the impugned detailed judgment, allowed the assessee’s appeal.

3. We will take note of the contents of the order of the Tribunal at a later stage. We may, however, record that the Tribunal in the said judgment concluded as under:-

“29. After analyzing the above documents we can safely conclude that P5 Asia is a company belonging to the Providence Equity Partners (“PEP”), a global private investment group specializing in media, entertainment, communication and information companies, managing funds of USD 22 billion and having investments in over 100 companies spread over 20 countries. P5 Asia has registered itself as a Foreign Venture Capital Investor (“FVCI”) with Securities and Exchange Board of India (“SEBI”). Approvals were also taken from the Foreign Investment Promotion Board (“FIPB”). The investment in CCPS of the assessee was made after PS Asia registered as a FVCI with SEBI and the assessee obtained the necessary approvals from the FIPB. In connection with the issue of CCPS, the assessee submitted all the relevant details in the course of the assessment proceedings. Accordingly, all the three ingredients of section 68 of the Act i.e. identity, genuineness and creditworthiness of investor are duly established.”

4. It is against this judgment of the Tribunal that the Revenue has filed this appeal.

5. Appearing for the Department, learned counsel Mr. Suresh Kumar submitted that the Assessing Officer had analyzed the facts on record and had cited proper reasons to come to the conclusion that the entire transaction was not genuine. The assessee had through complex web of corporate structures, merely routed its own money. The Assessing Officer was, therefore, justified in invoking Section 68 of the Act. Learned counsel relied on the decision of the Supreme Court in the case of Pr. CIT Vs. NRA Iron & Steel(P) Ltd1 to contend that even in the context of share application money, the genuineness to the transaction is always open to the inquiry by the Assessing Officer.

6. Learned counsel Mr. Mistri appearing for the assessee submitted that the Assessing Officer had proceeded on entirely erroneous basis. The respondent assessee was awarded cellular licence for providing telecommunication services in Bihar and Jharkhand blocks. The assessee' company, therefore, required sufficient funds. The investment was made by the leading US based company Providence Equity Partners through a specially constituted Mauritius based company i.e P5AHIML. The requirement of issuing shares at high premium was obvious namely in order to ensure that the holding company does not loose its majority stake in the assessee company. The Assessing Officer himself had examined the source of such investment. Further examination was conducted by the Commissioner (Appeals). The Assessing Officer in his remand report agreed that the investments were genuine. The Tribunal has given elaborate reasons for reversing the orders passed by the Revenue Authorities. Return of such investments in the form of dividend was not the only return for the investor as correctly recorded by the Tribunal. He stated that later on the investor company had exited with the sizable return on investments which itself would show the fallacy in the Assessing Officer’s stand that the transaction was a colourable device.

7. As is well known in the context of Section 68 of the Act, the basic duty would be on the assessee to establish the genuineness of the transaction, credit worthiness of the investor and the source of funds. Equally well settled principle through series of judgments is that the Department cannot insist on the assessee establishing source of the source. With this background, we may peruse the impugned judgment of the Tribunal more minutely.

8. In its decision, the Tribunal noted that the investment made by P5AHIML was done registering itself with SEBI and after obtaining necessary approvals from Ministry of Finance. The application made to the Ministry of Finance contained full details of the investment, the background of the transaction, the terms of the agreement, identity of the investor and the investor group. The Tribunal noted that P5AHIML was an investment arm of Providence Equity Partners and the Tribunal had perused the financial statements which disclosed the flow of funds in the said P5AHIML. The Tribunal further recorded that while making such investment, the investor not only looks for dividend or interest but also expects return on such investment as capital appreciation, when the investment finally gets converted into equity shares. The Tribunal found that this was the reason why P5AHIML had made the investment in assessee company. In the opinion of the Tribunal merely because there were multiple entities involved in such investment process, would not enable the Assessing Officer to draw an adverse inference on the financial capacity of P5AHIML. The Tribunal noted that during the assessment, the Assessing Officer had called for all necessary details which were supplied by the assessee. In view of such materials, it was not open for the Assessing Officer to invoke Section 68 of the Act. The Tribunal further noted that information was also sought from Foreign Tax Division with regard to the genuineness of the investment made by Providence Equity Partners in P5AHIML. Necessary information was also received. During the course of hearing of the appeal, the Commissioner had called for remand report from the Assessing Officer on the additional evidence produced on record. In the report, the Assessing Officer had made remark suggesting that the transactions were genuine. The Tribunal also verified the necessary permissions for remittances of the funds and other relevant documents.

9. It can, thus be seen that at every stage, the full inquiry of source of funds and other relevant factors in relation to the investment in question was carried out. The Assessing Officer himself carried out a detailed inquiry. His initial suspicion or in other words starting point of inquiry on the basis that apparently the investor was investing huge amount which may prima facie appear to be without adequate possible returns, may be fully justified. However, when all the relevant factors are properly explained, including the fact that the payment of dividend was not the sole attraction for the investor and that the investor could expect a fair return on the investment, of course, subject to vagaries of the any business decision, the Assessing Officer had to advert to all such materials on record in proper perspective. As noted by the Tribunal, all necessary permissions and clearances were granted by the Government of India and other government authorities for such investment. The source of the funds in the hands of P5AHIMLwas also verified. Merely because multiple corporate bodies may have been involved in the entire process of collecting funds in P5AHIML and then investing the same in the assessee company, by itself would not be sufficient to establish a sham transaction or colourable device.

10. We further notice that when the Commissioner (Appeals) had permitted additional evidence to be produced on record during the appellate proceedings, he had called for remand report from the Assessing Officer. Such report was made by him on 27.5.2013. In such report, his remarks were as under:-

11. On going through the documentary evidence, prima facie it appears that the identify of P5 Asia Holdings is established through residency certificate issued by the Mauritius Government. Assessee has filed documentary evidence of funds transfer vide letter dated 27th May 2013 by filing of copy of bank extracts. Copies of the said letter along with annexures are enclosed. Prima facie these prove the genuineness and the financial capacity of the persons making investment in preference shares. (Zerox Copy of the said reference enclsoed as Annexure -E).” 11. Thus, the Assessing Officer himself was also prima facie of the belief that the materials on record prove genuineness and financial capacity of the persons making investment.

The Commissioner (Appeals) was under the directive of the High Court of Bombay to dispose of the appeal within a short time. It was for this reason that in his appellate order, he had recorded that further investigation into the additional documents was pending and therefore, in compliance with the order of the High Court, he was disposing of the appeal. Thus, the order of the Appellate Commissioner cannot be seen as the decision on merits of the matter for which he found inadequate time available with him. As noted, the Tribunal carried out the detailed inquiry into all aspects of the matter and noticed no suspicious movement of the funds. Merely because the investment was considerably large and as noted, several corporate structures were either created or came into play in routing the investment in the assessee through P5AHIML would not be sufficient to brand the transaction as colourable device.

12. In the result, the Income Tax Appeal is dismissed.

[ SARANG V. KOTWAL, J. ]                                                  [ AKIL KURESHI, J ]


Case Laws - Benami Property
Dy. Commissioner of Income Tax vs M/s. Manpreet Estates LLP 26th March, 2019 Appellate Tribunal
Smt. P. Leelavathi (D) by LRS Vs V. Shankarnarayana Rao (D) on 09 April, 2019 Supreme here to read further

FAQ's on Filing of MCA Form DPT-3

With Companies (Acceptance of Deposits), Amendment Rules, 2019, MCA introduced Form DPT-3 which mandates Filing of Details of Loan with ROC. Language of Companies (Acceptance of Deposits) Amendment Rules, 2019: Sub Rule 3 of Rule 16A : Every company other than Government company shall file a onetime return of outstanding receipt of money or loan by a company but not considered as deposits, in terms of clause (c) of sub-rule 1 of rule 2 from the 01st April, 2014 to the date of publication of this notification in the Official Gazette, as specified in Form DPT-3 within ninety days from the date of said publication of this notification along with fee as provided in the Companies (Registration Offices and Fees) Rules, 2014.”. here to read further

(Trademark / Patent / Copyright)

Software Patent Registration
Creators and inventors of software products have always strived to protect their intellectual property rights and obtain patent registration for software products. The rapid growth of the internet and fast increasing competition has further increased the demand for software patents in India. However, patenting of software was not allowed for a long time in India, due to restrictions in the patent laws of India. But to cope up with the demand, boost innovation and safeguard the rights of inventors, the Indian Patent Office has evolved detailed guidelines for patenting Computer Related Inventions (CRIs). In this article, we look at patentability of software and Computer Related Inventions in here to read further



The traditional channels of searching real estate listings and working with real estate agents aren't the only ways to acquire a property. Experienced real estate investors often purchase properties at auctions. But auctions aren't limited to professionals; novices have purchased their homes at auctions, too.

How Do Properties End Up at Auction?

The two main types of property auctions are foreclosure auctions and tax lien auctions. Before a property reaches this stage, several things have to happen.

First, the homeowner has to have not paid the mortgage for several months. Then, the bank files a notice of default with the county recorder. If the homeowner doesn't pay the balance owed or renegotiate the mortgage with the lender, the home can be put up for auction. The amount of time it takes from when the homeowner stops paying the mortgage to when the home ends up at auction varies, but can be anywhere from a few months to a year or here to read further





The Government of the Hong Kong Special Administrative Region of the People’s Republic of China and the Government of the Republic of India, desiring to conclude an Agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income, have agreed as here to read further




Scope of Total Income - Section 5(2) of Income Tax Act
Subject to the provisions of this Act, the total income of any previous year of a person who is a non-resident includes all income from whatever source derived which—
(a) is received or is deemed to be received in India in such year by or on behalf of such person ; or
(b) accrues or arises or is deemed to accrue or arise to him in India during such year.
Explanation 1.— Income accruing or arising outside India shall not be deemed to be received in India within the meaning of this section by reason only of the fact that it is taken into account in a balance sheet prepared in here to read further



According to Section 2(13) of the CGST Act, 2017 “Audit” means the examination of records, returns and other documents maintained or furnished by the registered person under the GST Acts or the rules made there under or under any other law for the time being in force to verify the correctness of turnover declared, taxes paid, refund claimed and input tax credit availed, and to assess his compliance with the provisions of the GST Acts or the rules made here to read further



Income Tax Settlement Commission is a premier Alternative Dispute Resolution (ADR) body in India. Its mandate is to resolve tax disputes in respect of Indian Income Tax & Wealth Tax Laws between the two disputing parties, Income Tax Department on one side and litigating tax payer on the other.

This institution was set up in 1976 by the Central Government on the recommendations of the Direct Taxes Enquiry Committee (1971) set up under the Chairmanship of Justice K.N. Wanchoo, the retired Chief Justice of the Supreme Court of India. The Wanchoo Committee had conceived of the Settlement Commission as a mechanism to allow a one-time tax evader or an unintending defaulter to make clean breast of his affairs. At present, there are Seven benches of the Commission located at New Delhi, Mumbai, Kolkata and here to read further




Prime Minister Shahid Khaqan Abbasi, after a meeting of the Economic Advisory Council, announced tax reforms aimed at clamping down on tax evaders. Building his case for the government's new package, the prime minister noted that only 1.2 million Pakistanis file income tax returns. He further noted that of the 1.2m filers, only 700,000 actually paid tax, while others filed returns but paid no income tax. Presenting his package as an incentive for more people to enter the tax net, PM Abbasi stressed that he felt this to be the most optimum way to maximise the government's revenues keeping in mind the significant challenges it here to read further





The Uttarakhand High Court has ruled that samosa is considered to be cooked food, hence it would attract higher tax rate. In the instant case Assessee is running shop and engaged in the activity of selling sweets, namkeen, samosa, milk and curd etc. and he has filed his return of income for the relevant assessment year and declared his taxable income at Rs.50,720 on the basis of the total turnover of Rs.11,55,900. During the course of assessment proceedings, the Assessing Officer (AO) recomputed the income of the Assessee and declared his total income at Rs.13,66,400 while completing the here to read further


Hon’ble F. M.  Arun Jaitley – Budget 2018

CA Anil Kumar Jain

Once again the Finance Minister of India has gone through the ritualistic Annual Budget exercise on 1st of February, 2018. As, this is the last functional financial budget in the present tenure of this BJP Government, Economic and Financial wizards around the world were holding their breath in the expectation of some far-fetched fiscal announcements on this day.

There was also a feeling that, the budget documents will be election driven. So far, international investors and Indian industry has shown its stout confidence, conviction and admiration in the leadership of this regime. Pragmatic decisiveness on demonetarization and tax reforms also raised optimism for incredible proclamations through budget documents 2018.

Although, it will be hasty and unreasonable to judge and conclude the far reaching implications and affects of this presentation, but apparently it appears that, a lot is missing …………….. an opportunity is lost……… fiscal issues are inadequately balanced………common person is somewhat confused on his choice of …………!!!

In the juggleries of financial politics and democratic limitations, we as a nation are the worst victim of appeasement practices and policies. It is distressing to say that, “the illiterate farming community and allied classes of Indian Diaspora, which supersede in electoral numbers have restrained our finest leadership from dynamic fiscal decisions in the interest of nation as a whole”.

If India has to stand in the frontline, we have to compulsorily grow consistently  at least 12% plus rate for next three to five years. Revenue from direct and indirect taxes can by no means fulfill the necessities of the nation. Steel, Power, Transport, Industries are the backbone of growth cycle. Massive capital investment is required in Infrastructure, education and health sector. There is no answer for all this in budget documents.

On multiple occasions it is governmentally acknowledged that, abundant financial resources are held / parked by our own fellow Indians outside India.  In the interest of the Nation, the Hon’ble Finance Minster should not be shy in acknowledging this reality of the economics. The issue is, “why can’t, we find a respectable mutually acceptable solution so that, these staggering funds can voluntarily flow back to country and contribute in our economic growth”. I once again accentuate that, tax revenue can, on no account meet the resource needs of India.

Besides, it is also noteworthy that, good intent, announcements and allocations of Finance Minster are not getting to the last point. The administrative machinery is extremely enervated and inefficient. Historically, there appears to be lack of synchronisation and harmonisation amongst Ministry of Finance, Commerce, Law, Reserve bank of India, Judiciary etc. The Hon’ble Prime Minister must find a way out so that, there is conceptual  understanding of action from conceivement to execution.

 In his budget documents, additional tax collection provisions through increase in direct taxes may not be purposeful. Capital gain tax may negatively impact the sentiments of capital market. In nutshell, economic sentiments can be better managed through greater dependence on indirect taxes rather than direct taxes. Some of the penal provisions introduced in Direct Taxes appear to be too harsh and impractical. Being our representative on national mission, we expect our Finance Minister to be a friend and a philosopher in his approach while drafting his budget proposals. We are sure he will have a relook at some of the penal provisions in Budget Documents. Besides, it is worth mentioning that, the present rates of individual and corporate taxes are still very high as compared to other progressive nations. Higher rates can definitely be justified only in the circumstances where social security scheme and other welfare programmes are effectively serving every citizen of the here to read further




What are shell companies?
The Companies Act, 2013 has not defined what a ‘shell company’ is and as to what kind of activities would lead to a company being termed a ‘shell’. Shell companies are typically corporate entities which do not have any active business operations or significant assets in their possession. The government views them with suspicion as some of them could be used for money laundering, tax evasion and other illegal activities.

Is there a law governing shell companies?
In India, there is no specific law relating to “shell companies.” However, some laws help, to an extent, in curbing illegal activities such as money laundering and can indirectly be used to target shell companies — Benami Transaction (Prohibition) Amendment Act 2016; The Prevention of Money Laundering Act 2002 and The Companies Act, here to read further




1. In the last two and half years administration has moved from discretionary, favouritism based to system and transparency based.

2. Inflation brought under control. CPI-based inflation declined from 6% in July 2016 to 3.4% in December, 2016.

3. Economy has moved on a high growth path. India’s Current Account Deficit declined from about 1% of GDP last year to 0.3% of GDP in the first half of 2016-17. FDI grew 36% in H1 2016-17 over H1 2015-16, despite 5% reduction in global FDI inflows. Foreign exchange reserves have reached 361 billion US Dollars as on 20th January, 2017.

4. War against black money launched.

5. Government continued on path of fiscal consolidation, without compromising here to read further




Circular No. 06 of 2017 / F. No. 142/11/2015-TPL / Government of India / Ministry of Finance / Department of Revenue / Central Board of Direct Taxes / Dated: 24th January, 2017

Section 6(3) of the Income-tax Act, 1961 (the Act), prior to its amendment by the Finance Act, 2015, provided that a company is said to be resident in India in any previous year, if it is an Indian company or if during that year, the control and management of its affairs is situated wholly in India. This allowed tax avoidance opportunities for companies to artificially escape the residential status under these provisions by shifting insignificant or isolated events related with control and management outside India. To address these concerns, the existing provisions of section 6(3) of the Act were amended vide Finance Act, 2015, with effect from 1st April,2016 to provide here to read further



Bitcoin is a form of digital currency, created and held electronically. No one controls it. Bitcoins aren’t printed, like dollars or euros they’re produced by running computers using software. It is a crypto-currency. Bitcoin is designed around the idea of using cryptography to control the creation and transfer of money, rather than relying on central authorities. The first Bitcoin concept was published in 2009 by Satoshi Nakamoto. However, Satoshi left the project in late 2010 without revealing much about himself. The community has since grown here to read further



General lack of transparency and inefficiencies in the handling and disposal of the seized, confiscated, obsolete, surplus, unused assets has time and again created embarrassing situation for the government’s functionaries. Non - standardized assets disposal policies have also resulted into enormous financial losses, bribery, bungling, corruption and crime in this sector.

High value disposable assets in considerable quantum are regularly generated by all Government departments, financial institution, banks, public sector organization, local bodies etc.  Besides, revenue departments like Income Tax, Customs, VAT, Excise regularly seize / confiscate valuable assets in course of raids or at the time of recovering their dues. NPA accounts are also generating disposal assets in the hands of government here to read further



ANALYSIS: The 2016 Budget of the Narendra Modi Government, which was delivered on 29th February, was eagerly awaited. With increasing criticism of the perceived gap between promises made and action taken on the ground, this Budget was the key opportunity to regain lost ground and accelerate the process of converting the ‘Make in India’ dream into a reality. Indeed, there was little in the run-up to the Budget that generated cheer or optimism. The data from the manufacturing, banking, and real estate sectors were depressing. The ill-timed notice from the Indian tax department of over Rs. 14,000 crore to Vodafone two weeks ago seriously cast doubts on whether the Prime Minister’s Office and the Finance Ministry were pursuing a common agenda of making India an investment-friendly destination. The only large silver lining on the dark economic cloud was the drastic fall in oil here to read further


"STARTUP INDIA" A Step Forward in Right Direction

STARTUP INDIA is a flagship initiative of the Government of India, intended to build a strong eco-system for nurturing innovation and Startups in the country that will drive sustainable economic growth and generate large scale employment opportunities. The Government through this initiative aims to empower Startups to grow through innovation and design. In order to meet the objectives of the initiative, Government of India is announcing this Action Plan that addresses all aspects of the Startup here to read further




Those assessee with any undeclared overseas income or assets will have a 3 month window to come clean beginning on July 1, 2015 and a further 3 months to deposit the appropriate tax and penalty till Dec 31, 2015. Ministry of Finance, Government of India has announced details of a compliance window to curb black money. Central government has notified on 30th  September, 2015, as the date on or before which a person can make a declaration in respect of an undisclosed asset located outside India. The last date for depositing tax is December 31, here to read further



The Finance Minister, in his budget speech, while acknowledging the limitations under the existing law, had conveyed the considered decision of the Government to enact a comprehensive new law on black money to specifically deal with black money stashed away abroad. He also promised to introduce the new Bill in the current Session of the Parliament.


In order to fulfil the commitment made by the Government to the people of India through the Parliament, the Undisclosed Foreign Income and Assets (Imposition of Tax) Bill, 2015 has been introduced in the Parliament on 20.03.2015. The Bill provides for separate taxation of any undisclosed income in relation to foreign income and assets. Such income will henceforth not be taxed under the Income-tax Act but under the stringent provisions of the here to read further


A few years back, when the world was looking at us with high expectation of growth and stability, the apathetic fiscal management severely dented the Indian economic system. The erstwhile Indian Government failed to appreciate the ground rules and requirements of a growing Indian economy. When Indian corporate was looking at world map for their next destination, some over-enthusiastic Economists did everything possible to rattle the aspiration, ambition and dignity of the entrepreneurs and their enterprise. Why did they do it? This is a question for everyone.

Anyway, that is past. India has to come back and cover the losses of sixty seven years. In 1947, one rupee was giving us one dollar and today we have to pay almost sixty rupees for a dollar. As a person of basic virtues,  I am more than confident that, an emotional connect to country and little financial sensibilities in economic policy framing can progressively take us back to 1917. I am sure, our new PM will show us again, those respectable days.

Although, Mr. Modi has the best of the technology and talent around him to coordinate his plans and proposal, with all the humbleness, I would like to mention some suggestive ideas for the desired upgradation of Indian Fiscal System.
It is foremost important that the fiscal system should not be draconian, excruciating and compelling. It should be appeasable and amenable. Present Indian fiscal system is not only perplexing but also mystifying for a common person.  In existing format, Government is collecting revenue through multiple and multilevel tax legislation. The basic concept of Indian tax laws is centuries old and had its origin somewhere in Egypt. It is written in thousands of pages and most seasoned tax professional are often found totally befuddled in their interpretation and application. That is why the end result is recent cases of Nokia and Vodaphone. These two cases have disgraced and embarrassed the country around the world. We need to have fundamentally something very different from the here to read further



Railway Minister Shri D. V. Sadananda Gowda, in his 2014 Budget Speech has mentioned, “in the last 10 years, 99 New Line projects worth` 60,000 crore were sanctioned out of which only one project is complete till date. In fact, there are 4 projects that are as old as 30 years, but are still not complete.” The principal reason attributed by the Hon’ble Minister for the dismal performance is lack of availability of adequate financial resources. The Hon’ble Minister has further announced some new projects. But the big question is how the Railways will fund these schemes.

Traditional funding sources have already been exploited to their optimum level. Now the Railway Board has to look for some unconventional sources to fund the operational and developmental projects.….. including Prime Minister, Narendra Modi’s Bullet Train. If, the authorities involved in the process look beyond their centuries old rule book…….solutions are not far from reach.  To be more precise, the freely available Railway Real Estate assets have the required potential to generate enormous surplus to meet its financial needs and also to strengthen the Railways Balance Sheet to the envy of any successful corporate in the world. India has at least 500 - 700 major Railway Stations Real Estates assets, which can be developed for augmenting Railway revenue. Each of the Railway Station occupies sizable land. This station land over the platforms and adjoining Railway lines can be easily monetized. A multi-story multipurpose complex can be constructed without disturbing the regular functioning and movement, over the Railway platforms. This real estate can be easily marketed to generate capital and revenue profits. The monetary valuations of these properties can run into astronomical figures. Keeping in view the size of the city, a multistory complex can be erected over any railway stations. The construction can be done on BOT basis or contract basis etc. depending on various factors. The research data suggests, the space available can be easily marketed as the railway stations are always city centers and enjoy tremendous locational here to read further


The final Budget for the year is on the floor and will be shortly enacted to rule the country. This time, the expectations from Budget were extremely high but for the reasons best known to the Budget Makers, much has been left to be addressed in future. Whatever may be the reasons for going cautious, if India has to progress and survive in this competitive world and amongst aggressively progressing neighbouring countries, then some out of the box thinking, dynamic decision making and fearless actions are the only choices. We hope to look forward an aggressive Indian regime determined to put India on self sustaining growth course of over 10%. May be by 15th August our Hon’ble Prime Minister Mr. Narendra Modi will chalk out his new economic and development programme and unfurl the same with the flag of the nation.

Various Budget provisions have been comprehensively summarized herein below. We note from the detailed budget document that, with regards to Income Tax budget proposals several changes have been proposed which will have far reaching impact on the economy and business. These subtle changes although very important have not become the headlines of any media. Particularly changes about advance against assets, survey / search rules, charitable institutions, long term capital gains, dividend distribution tax, debt based mutual funds, investment allowance, institutions governed by section 35, overseas borrowing and divided, transfer pricing, FII income clarifications, MAT, TDS, anonymous donation, presumptive taxation u/s 44AE, commodity transaction tax, compulsory acquisitions, speculative gains, asset valuations, loan transactions u/s 269SS, attachment of property etc. must be studied meticulously.

The Current Economic Situation And The Challenges
  1. Decisive vote for change represents the desire of the people to grow, free themselves from the curse of poverty and use the opportunity provided by the society. Country in no mood to suffer unemployment, inadequate basic amenities, lack of infrastructure and apathetic governance here to read further

 A few years back, when the world was looking at us with high expectation of growth and stability, the apathetic fiscal management severely dented the Indian economic system. Anyway, that is past. Let’s look forward to a brighter future in the hands of indomitable team of Governors. In 1947, one rupee used to fetch one dollar and let’s hope the time returns. I am confident that, an emotional connects to nation and financial sensibilities in economic policy framing can show us again those respectable days.

Present Indian fiscal system is perplexing to all concerned. Government is collecting revenue through multiple tax legislations. The basic tax concept is centuries old and had its origin somewhere in Egypt and travelled through Greece U. K. to India with British. Revenue laws are written in thousands of pages and most seasoned tax professional are often found totally befuddled in their interpretation and application. That is why the end result is recent cases of Nokia and Vodaphone. These two cases have disgraced the country around the world. We need to have fundamentally something very different from the present and aptitude to accept out of box thinking.

With complete new mindset, the entire revenue collection law can be framed in less than hundred pages. A suggestive scheme which will be manageable without the fleet of tax collecting agencies can be drafted on following lines. The simplicity itself will boost revenue collection by manifolds. The scheme may be referred as “Consolidated Revenue Act of India.” here to read further



To finance the welfare and the administrative expenditure, governments around the world impose certain taxes on their subjects. The taxation system helps in collecting revenue besides it also provides direction to the economic growth and also brings economic equilibrium amongst various classes. In any taxation system, the residential status of the taxpayer is of crucial significance. Residential status confirms the jurisdiction and the application of taxation account abilities.

However, in cases, where cross country economic activity is carried out, it is a tricky affair to identify and justify the appropriate jurisdiction of tax authorities. In order to mitigate the hardships of multiple jurisdictions, the Governments enter into bilateral arrangements, which are commonly denoted as “Double Taxation Avoidance Agreements” (DTAA). DTAA refers to an accord between two countries, aiming at elimination of double taxation. These are bilateral economic agreements wherein the countries concerned assess the sacrifices and advantages which the treaty brings for each contracting nation. It would promote exchange of goods, persons, services and investment of capital among such countries.

Indian Government is actively pushing DTAA negotiations with several countries to help its residents in understanding their tax jurisdictions and accountability towards the appropriate authorities. So far India has signed DTAA with 81 countries and discussion is on with many others. The natures of DTAA’s entered by India are greatly diverse in their nature and contents.


The first international initiative regarding DTAA was taken by the Organization for Economic Co-operation and Development. OECD presented the first draft of DTAA in ‘Model Tax Convention on Income and on Capital’. DTAA was proposed as a tool of standardization and common solutions for cases of double taxation to the taxpayers who are engaged in industrial, financial or other activities in other countries. The double tax treaties are negotiated under international law and governed by the principles laid down under the Vienna Convention on the Law of here to read further


The next General Elections are due in 2014. All political aspirants have already started working out policies and strategies to approach public for support and vote. However, it is no longer an easy mission to convince Indian voters to vote for any party or individual. Television programmes and print media have turned Indians into a conscious and informed class. Now, people are looking forward towards strong programmes and policies rather than traditional individuals and parties. It will be now be very tricky to play sentimental issues for electoral success.

In this note, we are providing a evocative programme for effectively setting forth election strategy to the aspiring national players. We are confident, if an organization adopts policies and programme on the lines suggested herein below and delivers on promises, nothing can restrain them from winning and ruling this country for next several decades.

The suggestive programme is outlined herein here to read further



Rajkot Bench of ITAT in the case of Vineetkumar Raghavjibhai Bhalodia v. Income tax Officer, Rajkot has discussed the controversial issue of tax ability of gifts from HUF to its members. The issues taken up were.

1. Whether a gift received from 'relative', irrespective of whether it is from an individual relative or from a group of relatives is exempt from tax under provisions of section 56(2)(vi)?
Answer: Held, yes.

2. Whether HUF is a group of relatives and therefore, gift received from HUF would be exempt from tax under section 56(2)(vi)?
Answer: Held, yes
3. Whether for getting exemption under section 10(2) two conditions are to be satisfied, firstly, a person must be a member of HUF and secondly he should receive sum out of income of such HUF, may it be income of earlier year? Answer: Held, here to read further



Copyright is a legal term refers to protecting a creator’s work. It is a type of intellectual property that provides exclusive publication, distribution, and usage rights for the creator. This means whatever content is created cannot be used or published by anyone else without the consent of the creator. The length of copyright protection may differ from country to country, but it usually lasts for the life of the author plus 50 to 100 years.


Copyright is generally given by the law to creators of literary, dramatic, musical and artistic works and producers of cinematograph films and sound recordings. It is a pack of rights including, inter alia, rights of reproduction, communication to the public, adaptation and translation of the work. In modern times, copyright protection has been extended to websites and other online content. This is important in the digital age, since large amounts of content can be easily here to read further


With the development of Net Based Technologies along with availability of advanced software and hardware systems, it has become feasible to systematize and present the most complex data system in simple formats. This facilitates the quality of data storage system and also improves the retrieval of the information efficiently and accurately. Through the application of software based technologies it has become possible to design and maintain large database structures and provide user friendly application. These databases can be used for criteria based queries and also can be supplemented with other technologies like Biometric Solution etc.


Delhi Police is handling extremely complex and multi dimensional activities. The operations of Delhi Police are spread over very large area which needs to be constantly monitored and controlled. In fact, the operation of Delhi Police is as complex and multifaceted as any top corporate house. The operations just do not end with crime recording / investigation but also involve the application of finest management techniques, personal management skills, financial management acumen, deep knowledge of engineering and medicine sciences .The application of Information Technology can make many complex and strenuous tasks of Delhi Police Executives effortless and error here to read further


The term “Raid in Indian Income Tax Law” is incredulous and any unexpected encounter with IT sleuths generally leads to chaos and vacuity. If you are likely to experience such action it is better to familiarise with the subject, so that, the situation can be faced with confidence and serenity. Income Tax Raid is conducted with the sole objective to unearth tax avoidance. It is the process which authorizes IT department to search any residential / business premises, vehicles and bank lockers etc. and seize the accounts, stocks and valuables.

To face the situation efficiently, it is extremely important to understand some nitty-gritty of I.T. law on the subject. Lack of knowledge leads to panic and all the discomfort. The knowledge of your legal rights and responsibilities always protects here to read further




Survey has not been defined in the Income Tax Act. According to Concise Oxford Dictionary, The expression "survey" means general view, casting of eyes or mind over somethings, inspection or investigation of the condition, amount, etc. of something, account given of result of this etc.

According to Chambers 20th Century Dictionary, the meaning of the word 'survey' is to view comprehensively and extensively, to examine in detail, to examine the structure of a building, to obtain by measurements data for mapping, to perceive, collection of data, an organisation or body of men for that purpose.

In short the term 'survey' in context of the Income Tax Act means collection of data or information for the purposes of the Act.
Objects of Survey

Survey is an important weapon in the armoury of the Income Tax Department to call for information of various kinds as may be found necessary for making proper assessments. Survey is mainly conducted with the object of broadening the tax base by discovering new assessees,to gather information about possible tax evasions by assessees, spot checking of available cash and stock and to verify in a surprise and systematic manner, whether or not accounts are maintained properly and on day to day basis here to read further