Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: due date for vat payment :: TAX RATES - GOODS TAXABLE @ 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: list of goods taxed at 4% :: Central Excise rule to resale the machines to a new company :: VAT Audit :: TDS :: VAT RATES :: empanelment :: form 3cd :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: ACCOUNTING STANDARDS :: cpt
« News Headlines »
 ICAI to organise two-day international conference in Hyderabad
 Here's how to calculate tax payable on your capital gains
 Income Tax calculations for the financial year 2016-17
 CPE Events 17 October - 22 October 2016
 High Court raps I-T Department for wrong tax demand
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Finance ministry warns tax officials of action against GST protest
 Big changes for small units under GST
 Parliament’s winter session to begin on November 16 to expedite GST rollout
 Income-tax (27th Amendment) Rules, 2016 - 92/2016
 Announcement - Clarifications in Respect of MEF 2016-17

Gratuity liability
December, 11th 2006

The Supreme Court has set aside the ruling of the Calcutta High Court in the Commissioner of Income Tax vs Hoogly Mills Co Ltd case and denied depreciation on the gratuity liability of the buyer of a company. The mills had purchased an undertaking, taking over the accrued and future gratuity liability of the seller. 
The mills then claimed the total amount as capital expenditure, entitled to depreciation. The revenue authorities argued that it was revenue expenditure. 
The Supreme Court rejected this, but allowed the appeal on another ground. Under Section 32 of the Income Tax Act, depreciation is allowable only in respect of buildings, machinery and similar tangible assets or intellectual property like copyrights and franchises. 
The liability to pay gratuity of the employees does not fall under any of these categories. Therefore, no depreciation can be claimed even if it is regarded as capital expenditure. 
Export notification 
The Supreme Court has upheld the Gujarat High Court order allowing Asian Food Industries Ltd to export 87 containers of pulses to West Asia, despite a temporary ban imposed on June 27. The exporter had received orders before the June 27 notification and the goods cleared by the Customs authorities. Bills of lading were also issued. 
However, the consignment were not loaded in the ships because of the notification. Then another notification was issued on July 4 permitting export of pulses against irrevocable letters of credit opened prior to June 22. The exporter sought to load the goods in view of the latter notification. The request was refused. 
The issue was taken to the Gujarat High Court, which held that the exporter was entitled to load the pulses in terms of the policy decision despite the notification. This view was upheld by the Supreme Court. In a similar case involving Agri Trade India Ltd, the Delhi High Court had declared the July 4 notification illegal. The Supreme Court held that the Delhi High Court view was not sustainable. 
Notice to Siemens 
The Supreme Court last week allowed the appeal of Siemens Ltd against the show-cause notice issued to it by the Bombay Municipal Corporation demanding cess on goods supplied by it from outside the jurisdiction of the corporation. 
The Supreme Court stated that though it was in the form of a show-cause notice, in fact it was a demand giving detailed reasons. The Bombay High Court had dismissed the company's petition treating it as a mere show-cause notice. 
The Supreme Court held that the high court was wrong in doing so. The show-cause notice has stressed the liability of the company and only the quantification of the cess was to be determined. The high court had dismissed the petition without going into the issues. 
Computer programme 
The dispute over bids for the fourth phase of the Rajiv Gandhi Computer Literacy Programme was solved by the Supreme Court by apportioning 100 schools on BOT basis to a consortium led by Educomp Solutions Ltd. NIIT, the rival contender, will supply equipment to 200 schools. 
The Supreme Court observed in the appeal, Assam Electronics Development Corporation Ltd vs Educomp Solutions Ltd, that the tender was vitiated by non-disclosure of the scoring methodology, lack of transparency and lack of accountability. 
The Guwahati High Court had quashed the whole contract. Since litigation should not be allowed to affect education and there was considerable delay in the project, the Supreme Court asked the Assam corporation to start the programme within two weeks. 
Electronic advertisements (e-advertisements) or e-tenders would be welcome but then there should be greater transparency in their conduct, the Supreme Court said last week. 
The court said so while upholding the Guwahati High Court judgement setting aside the e-auction scheme of Coal India Ltd, in a large number of appeals. The high court said the method adopted was arbitrary. The chairman of the Coal India Ltd had no authority to frame such a scheme. 
Coal India's appeal against the high court judgement was dismissed. E-auction was introduced also by Western Coal Field Ltd. It was challenged in the Madhya Pradesh High Court, which held that the scheme was valid. 
On appeal, the Supreme Court has set aside the MP judgement. Several petitions pending in the high courts were transferred and the Supreme Court gave a final ruling on all these issues.

M J Antony

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions