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: articles on VAT and GST in India :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: empanelment :: ARTICLES ON INPUT TAX CREDIT IN VAT :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: ACCOUNTING STANDARDS :: ACCOUNTING STANDARD :: Central Excise rule to resale the machines to a new company :: list of goods taxed at 4% :: VAT RATES :: cpt :: due date for vat payment :: VAT Audit :: form 3cd
News Headlines »
 CBDT releases Income Tax Return statistics for last two fiscals
 CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 FinMin looks at cut in corporation tax
 Draft Rules for prescribing the method of valuation of fair market value in respect of the trust or the institution-Chapter XII-EB of the Income-tax Act, 1961- reg.
 India is moving towards a flawed GST
 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

Income-tax department gets more teeth to conduct special audit
August, 05th 2013

When DLF Commercial Projects Corporation - a partnership firm in which India's largest real estate firm, DLF, held 74% - filed its income-tax returns in September 2009, declaring a loss of 20.1 crore, the assessing officer could not understand certain transactions. One such transaction was 3,717 crore received as advances by DLF Commercial from its parent, on which it paid no interest and invested this amount in more than 100 firms.

The assessing officer ordered a 'special audit' - a relook at the company's accounts by an auditor appointed and paid for by the I-T department. DLF Commercial objected to this special audit in the Delhi High Court, and won the decision in October 2012. In recent years, several frontline companies have challenged the I-T department's special audit in court - Nokia India, Hero MotoCorpBSE 0.08 % and Sahara India are three other examples.

But the ability of corporates to resist such an oversight audit might be weakened following a widening in the scope of the law. Effective from June 1, the I-T department can order such audits on six counts, against two counts earlier (see graphic). Accounting professionals say that while this gives more teeth to the I-T department to order special audits, it also raises the spectre of harassment if these powers were used more as a rule than as an exception.

"This move is surely a weapon in hands of I-T department to gather exhaustive facts of transactions and would lead to more instances of special audit," says Himanshu Parekh, partner-global international corporate tax with KPMG. "These (six) provisions should be reviewed at the earliest by the I-T department and the government should bring in appropriate control measures so that the assessing officer cannot misuse these provisions by calling for a special audit without adequate justification."

Previously, an assessing officer could call on a special audit only on two counts: a company's accounts were complex or there was a revenue loss to the exchequer. In most cases, companies went to court, and won.

When asked why the company opposed the special audit, a DLF spokesperson replied: "Our stand has been validated through the Delhi High Court judgement." The court order shows that DLF argued that a day before the special audit was ordered, the assessing officer had written an internal note stating that DLF Commercial had clarified the "apparent complexities noticed". DLF accessed this document through a right to information (RTI) request.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Internet Marketing Website Marketing Internet Promotion Internet Marketing India Website Marketing India Internet Promotion India Internet Marketing Consultancy Website Marketing Consulta

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