Disallowance of Interest on borrowed capital advanced without interest

In the case of S.A.Builders Ltd. 288 ITR 1 (SC), the Hon’ble Apex Court have examined the issue of disallowance of interest on account of advance of interest free funds to sister concerns. The Hon’ble Apex Court have held in this decision that the issue of lending of funds to the sister concern should have been examined from the view point as to whether this was done as a measure of commercial expediency.

ITAT Asr on Disallowance of Expenses paid through Cheque

I.T.A. No.277(Asr)/2012 dated 7-08-2012 Chaman lal Jain dismissed the disallowance of expenses paid through cheque

ITAT Asr on GP Ratio

Assessee engaged in business of wholesale goods like, shampoo, soaps, Hair dye, Mehndi and other cosmetic items etc. Books rejected  GP ratio was better than last year. Addition made by AO held not sustainable

I.T.A. No.277(Asr)/2012 Chaman lal Jain

ITAT Asr on S.263

Royal Times Traders ITA 220/2012 09-08-2012
Assessee firm had offered explanation regarding capital introduced by partners before AO being amount introduced in cash from various sources. Order under s. 263 was held bad in law.
Decisions relied:

Judgements on Stock Valuation

CIT vs. Hindustan Zinc Ltd. (2007) 210 CTR (SC) 282 : (2007) 291 ITR 391 (SC)
British Paints India Ltd 188 ITR 44 SC
Hot Line Teletube & Components 175 Taxmann 286
M/s Dynavision (Supreme Court) ITA 197/2005

No TDS u/s 194H on discount to stamp vendors

Supreme Court in case of   AHMEDABAD STAMP VENDORS ASSOCN Date: 06/09/2012 “Heard learned counsel on both sides. The respondent in this civil appeal is Ahmedabad Stamp Vendors Association and the Members of the said Association are licensed Stamp Vendors.We are satisfied that 0.50% to 4% discount given to the Stamp Vendors is for purchasing the stamps in bulk quantity and the said discount is in the nature of cash discount.In the circumstances, we concur with th e impugned judgement that the impugned transaction is a sale. Consequently, Section 194H of the Income Tax Act, 1961, has no application. The civil appeal filed by the Department is dismissed with no order as to costs

Luxuries Tax on Hotel and marriage palaces increased from 4% to 8% w.e.f 5-09-2012

Public Notice issued on 5-09-2012

Processing Fee of Rs. 800 under Vat

  Rules 40-A has been added to the Punjab Vat Rules, 2005 as per which “Every taxable person shall 

pay annual processing fee of Rs. Eight Hundred only during the month of October along with the 

filing of quarterly return. This  processing fee is in lieu of operation, maintenance and up gradation of 

such facilities  and services as electronic issuance of statutory forms, e-filing of returns, e-payment 

of taxes and such other online and offline services being rendered or proposed to be rendered by the 

Excise and Taxation Department.”

So Only Vat dealers are required to required to pay processing fee. TOT dealers or casual traders 

are not required to pay processing fee.

(Public Notice dated 05-09-2012)