Tuesday, May 12, 2015

Analytical / Critical Study – Subject for law fraternity >

An UPdate

Facts :
a) The block assessment of the assessee was sought to be initiated under Section 153A of the Income-tax Act ('the Act') following a search conducted on the assessee. The same has been interdicted by the High Court rejecting the validity of the warrant authorizing the search under section 132 of the Act;
b) The High Court held that it was the Director General who took the decision to issue the search warrant but the said decision was not on the basis of its own satisfaction but was issued on the basis of the satisfaction recorded by the Director of Income-tax (Investigation). Consequently, the High Court held that the satisfaction mandated by Section 132 of the Act was not that of the authority who issued the search warrant, there by vitiating the authorization issued;
c) Aggrieved by the order of High Court the revenue filed the instant appeal.
Supreme Court held in favour of revenue as under :
1) The necessity of recording of reasons in case of search under Section 132 has been repeatedly stressed upon by the Courts so as to ensure accountability and responsibility in the decision making process;
2) The necessity of recording of reasons also acts as a cushion in the event of a legal challenge being made to the satisfaction reached. Reasons enable a proper judicial assessment of the decision taken by the Revenue. However, it would not confer on the assessee a right of inspection of the documents or to a communication of there a sons at the stage of issuing of the authorization. Any such view would undermine the entire exercise contemplated by Section 132 of the Act. It is only at the stage of commencement of the assessment proceedings after completion of the search and seizure, if any, that the requisite material may have to be disclosed to the assessee;
3) The High Court had committed a serious error in reproducing in great details the contents of the satisfaction notes containing the reasons for the satisfaction arrived at by the authorities under the Act. We have already indicated the time and stage at which the reasons recorded may be required to be brought to the notice of the assessee. Thus, we could not approve of the aforesaid part of the exercise undertaken by the High Court which has the potential of conferring an undue advantage on the assessee;
4) A careful reading of the order of the Director General would go to show that all he did was to record the view that the satisfaction of the Director, Income-tax (Investigation) was reasonable and therefore administrative approval should be accorded. The view taken by the High Court, therefore, could not be sustained. In view of the foregoing discussions the order of the High Court was to be set aside. - DGIT (Investigation) v. Spacewood Furnishers (P.) Ltd. (2015) 57 taxmann.com 292 (SC)


Compilation of data and its transformation into e-book for foreign clients held as export of software u/s 10B

Where assessee was collecting text, compiling material, designing same and exported it in form of computer software, assessee was entitled to claim benefit of section 10B
Facts :
a) The assessee was involved in process of collecting text, compiling material, designing layout, scanning, etc., for projects of foreign clients. She claimed herself to be a software exporter and, accordingly, claim exemption under section 10B.
b) The Assessing Officer (AO) disallowed said claim holding that process deployed by the assessee was neither manufacture nor did it amount to creation of software.
c) On appeal, CIT(A) upheld the order of the AO which was reversed by the tribunal. Aggrieved with the order of tribunal, revenue filed the instant appeal before the High Court.
The High Court held in favour of assessee as under :
1) Section 10B uses the expression "manufactures or produces…… things or computer software". The four stage process of collecting text , compiling material, designing the layout, scanning, digital image editing (to remove distortion) and final arrangement of the data, ultimately transmitted according to the customer's specification - and ready to be used for printing, (or even e-Book publication) is undoubtedly manufacture or production.
2) CBDT vide Notification No. 11521, dated 26.09.2000 had specified 'content Development or animation' or 'Data Processing' as information technology enabled products or services.
3) "Content Development or animation" covers compilation of material or data and its transformation into a ready to print/ready to publish book.
4) In the instant case, the work which ultimately results in the culmination of the assessee's efforts of compiling, editing, digital designing, etc. "is transmitted or exported from India to any place outside India by any means". It is, therefore, computer software that is produced or manufactured, to qualify for benefit under section 10B.
5) Hence, tribunal rightly allowed assessee's claim of deduction under section 10B. - CIT v. Ms. Kiran Kapoor (2015) 57 taxmann.com 39 (Delhi)


Tax Tentacles – 1: An Overview

The Indian tax system is devilishly complex, extortive and a patchwork of various haphazard ideas. This is the first part of a multi-part series on the vexing Indian tax system and the path to genuine reforms, adapted from Justice S Rangarajan Memorial Lecture in Bangalore delivered recently
Justice TNC Rangarajan (retd)

Sporadic Jottings- to explore ! 

Judiciary X Executive X Legilature

Judiciary – can it impose or influence or simply suggest
Consequences of – dire or ...

For A Quick Perception/ Ready Read (Search GOOGLE >)  

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nap ON CHANGING THE Constitution ?!
< to what extent, for what purpose and with what objective ?!
Updating Construction   <QUOTE
Concepts- changing, changed, violently changed
Individual X Group X community X Society
Conflict of interest s, hence conflict in thinking
Separation of Judiciary X Executive, co-ordination – object or objective
Man made laws- no longer stick to ageold belief- Common sense touch stone, of Logic  AND logic IS THE Corner stone of any law
Laws X Basic Charter
Taxation X Personal law X religion, Religious beliefs – Old X New
None has the impetus to think, do so independently, more so if personal
Balance – no longer has its original color or flavour- all centred on-
CONVENIENCE – Dominant Question / Imponderable  - Should it be ‘personal’ or societal – centric
‘PIL ‘- a course of action, pro-action – considered as the need , to be explored and tested  in courts ?
Property Right – change in constitution ?!
Ownership- ????
For Tax X Rest of purposes – could or should it be different or uniform,
Impulsive- conscious X Unconscious MIND
Too many conflicts in – thinking, construing, interpreting, so n

N DEvanathan, Adv. HERE

“Merilyn” – A Ship That Neither Sinks Nor Reaches It’s Shore

  1. http://2.gravatar.com/avatar/e416db1c419fd417d6ed33094356e1ec?s=32&d=monsterid&r=gN. Devanathan , Advocate says:
My senior always quotes his professor’s words to the effect: That glorious nature of the law is that it is ambulatory.
I can give example
Application of Mimansa principles sometimes lead to different results. For example, there is a text of Vasishta which says “a woman should not give or take a son in adoption except with the assent of her husband”. This has been interpreted in 4 different ways by our commentators.
(1) The Dattak Mimansa holds that no widow can adopt a son because the assent required is assent at the time of adoption, and the husband being dead no assent of his can be had at the time of adoption. Vachaspati, of the Mithila School of Mitakshara, is of the same opinion, but for a different reason. According to him, adoption can only be resorted to after performing the homa, and since a woman cannot perform the homa with Vedic mantras, she cannot adopt.
(2) The Dayabhaga view is that the husband’s assent is not required at the time of actual adoption, and hence if the husband had given assent in his lifetime his widow can adopt after his death.
(3) The view of the Dravida School of Mitakshara is that the words “except with the assent of the husband” are only illustrative, and hence assent of her husband’s agnates or father-in-law’s agnates is sufficient.
 (4) The Vyavaharmayukha and Nirnayasindhu hold that assent is required only for the woman whose husband is living and hence a widow can freely adopt unless she had been expressly forbidden by her late husband”
Extract from Article The Mimansa Principles of Interpretation
by Justice Markandey Katju*
Cite as: (1993) 1 SCC (Jour) 16

The Mimansa Principles of Interpretation - Eastern Book ...

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·  Mimansa Rules still relevant, says court - The Hindu

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INsightful >

< http://Detaxification.blogspot.com

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< http://jayasreesaranathan.blogspot.in/2009/08/use-mimamsa-principles-sc-tells.html

·  Print - Taxindiaonline.com - one stop destination for taxman ...

·  Ancient principles of interpretation - the Mimansa principles. By Hon'ble Justice Markandey Katju, Judge, Supreme Court of India. IT is deeply regrettable that in ...


1.       By : Justice Markandey Katju, Judge, Supreme Court of India. Speech delivered on .... In the U.S. Constitution, Article. 1 Section 8 states that ... mentioned herein that the Mimansa principles of interpretation were the principles regularly used by ...

  1. http://0.gravatar.com/avatar/6f24b9e48185ba2260ff3aa762267f74?s=32&d=monsterid&r=gvswami says:
In describing the glorious nature of the law as ‘ambulatory’ , what the learned member of the legal fraternity has presumably alluded to is the impermanent nature of the law in olden days; and according to different schools of thoughts, with the then obtaining varying principles of interpretation, wprt the Hindu law.
To attempt and dilate but with a different stroke: Those were the laws /principles handed down , rather passed on, from generation to generation, over the centuries/decades, with no external limiting/restraining factors, notwithstanding that the laws, especially so called ‘personal’ laws, were , in content, far far simple, in comparison to today’s context. In the matter of interpretation of modern day laws / enactments, of varying kinds, – in the context herein, it is the taxation law which is of relevance- as one can readily find from any leading text book, with expert commentary and related citations, there have been quite / overwhelming large number of rules and principles enunciated by courts , to serve as useful aids; but mostly because of the enormity of them, often mutually conflicting, it has always been an arduous task/exercise for both the lawyers and judges to apprise and decide as to which one or more of those aids could be considered as appropriate , and to be applied. As often highlighted by me if and  when called for /occasion arose, the principle of interpretation that has been increasingly gaining currency, and often being called to aid/invoked , mindfully or otherwise*  is what is cryptically called /known as, “UPDATING CONSTRUCTION” . Being obliged to give more and more thoughts, one is left with an irresistible but gut feeling that , because of its virtually all-embracing amplitude, in course of time that is the principle which might happen to hold the field as the most leading aid, for judiciary’s purpose of ‘construction’ of any enactment.
May be worth knowing, should there be more but differing thoughts on the foregoing personal observations of general interest.

NOTE: Left to be Edited 

TAIL Piece: Food for Thought >

“FIRE IN BELLY X ICE IN MIND” – See any connectivity?!
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