PRINCIPLE of ‘economic
taxation’ * – RV Easwar Committee>
https://taxguru.in/wp-content/uploads/2016/01/Report-Eswar-Committee.pdf
(pg. 15,16,17)
* Principle Of 'economic taxation' >
musings (related):
commercialization - greed nd over-greed (on the part government- men in governance)
ADams
Artha Sastra (CHanakya)
Unjust enrichment - started with <...
Keynesian
Transfer Pricing - Instances of >>>>
like the ruler , the ruled !?
rampant corruption - root cause (all the above) ?
percolated to 'education'- paper leak - why ????
medical college...
double taxation -
income x expenditure
service tax - input credit ?
Areas , TO Dilate:
cross refer-
the SC judgment - paras to be countered
RVE's Report - to note, constituted by also the govt' rep. / hence binding
why govt. did not act even on the limited special and general recommendations- then why waste time and public funds - what authority or power to ignore ?
ADD-ons (April 2 2018)
Godrej Boyce - Bom. HC
https://indiankanoon.org/doc/1269729/
(see previous )
https://taxguru.in/wp-content/uploads/2016/01/Report-Eswar-Committee.pdf
(pg. 15,16,17)
* Principle Of 'economic taxation' >
musings (related):
commercialization - greed nd over-greed (on the part government- men in governance)
ADams
Artha Sastra (CHanakya)
Unjust enrichment - started with <...
Keynesian
Transfer Pricing - Instances of >>>>
like the ruler , the ruled !?
rampant corruption - root cause (all the above) ?
percolated to 'education'- paper leak - why ????
medical college...
double taxation -
income x expenditure
service tax - input credit ?
Areas , TO Dilate:
Maxopps
Points>
Income v expenditure
Expenditure – income of beneficiary - recipient
Deductible – the only condition to be satisfied is as
spelt out in the residuary sec37
S 14 A is not a deeming provision or proviso or
explanation to HAVE THE EFFECT OF DOVETAILING OR CURTAILING THE IMPLICATIONS
OF, WELL ESTABLISHED LAW/CASE LAW/SETTLED LEGAL AND COMMON LAW PRINCIPLES OF - sec 37
NAP -
Definition of income
Exemptions and exclusions- e.g. new undertakings- based on
policy decisions
One-to-one correlation- instances not requiring
Not just ‘in relation to’ but many more-
Sec 37 – no way to read sec 14 A into s 36 (1)(iii) or sec
37 or sec 56/57 < look into
WHY and HOW the change has brought about /made a
difference to the original intention underlying the scheme of the applicable/governing
provisions- as interpreted and adjudicated upon by the Pre- sec 14 A scenario ?
To judicially /judiciously delve into and
decide/adjudicate upon the constitutional issues , a MUST ?!
No Non-obstante clause -
1
|
Through
this technical guide, an effort has been made by the ICAI to gear up
the members of our fraternity for implementation of ICDSs and to guide
the stakeholders about the significant changes and impact which will take
place in computation of taxable income. Reference to Indian Accounting
Standards (Ind-AS) and Accounting Standards (AS), to the extent as
considered necessary has been made at many places in this technical guide.
Also, this publication will assist the members to remove the ambiguity and
guide them in implementation of the ICDSs in a more effective manner. To
view/ download PDF copy of this guide, please refer the link below:
Deloitte – not case
specific – but what, in general, is being broadly done/followed?!
More>
'intention' - pre and post enactment - why different ?
Rules /Principles of -
letter of the law - no scope for changing and subsituting the plain language
no reading down, or violence to
stare decisis
controlling interest 'an intangible asset' - cannot be. not capable of being transferred except through transfer of shares
ignored-
sec 14 A has no 'non-obstante' clause;
also, see sec 37 (1) ...(expenditure(not being in the nature...sec 30 to 36)
so also, the EXplanations 1 and 2, thereunder
but sub-sec (2B) prefixed with one (- not to be read as 'anything to the contrary' - even otherwise 36 (1)(iii) lays down nothing to the contrary) its implication and effect)- it is, indisputably, a residuary provision, in that it expands the deductibles, not curtail
also, see sec 37 (1) ...(expenditure(not being in the nature...sec 30 to 36)
so also, the EXplanations 1 and 2, thereunder
but sub-sec (2B) prefixed with one (- not to be read as 'anything to the contrary' - even otherwise 36 (1)(iii) lays down nothing to the contrary) its implication and effect)- it is, indisputably, a residuary provision, in that it expands the deductibles, not curtail
to focus on - the inconsistency in legislation- nothing to be read in, or omitted , or to read down ?!
s 36 (1) (iii) - a special enactment, not general - again expands not curtails, contrary to what Maxopps has , in essence held, only by interpreting sec 14 A
see RVE's suggestions/recommendations - to insert new provisions- but to clarify a couple of points, one (?) in favor of assessee - what that implies or be taken to...
(refer para. 2.2 . (pg. 15)); also para. 2.3
s 36 (1) (iii) - a special enactment, not general - again expands not curtails, contrary to what Maxopps has , in essence held, only by interpreting sec 14 A
see RVE's suggestions/recommendations - to insert new provisions- but to clarify a couple of points, one (?) in favor of assessee - what that implies or be taken to...
(refer para. 2.2 . (pg. 15)); also para. 2.3
Objects clause in the memorandum and articles (of Maxopps)- of every relevance, NOT of NO relevance ; still not relied upon-
that says, - (an Indian based company) which carries on the business of subscribing, investing, exchanging, endorsing, holding and dealing in shares, stocks, debentures, bonds, privileges, licenses, obligations, units and other securities issued or guaranteed by Indian or foreign…,
that says, - (an Indian based company) which carries on the business of subscribing, investing, exchanging, endorsing, holding and dealing in shares, stocks, debentures, bonds, privileges, licenses, obligations, units and other securities issued or guaranteed by Indian or foreign…,
if 'business', then on a conjoint reading no scope to tweak or do violence or read down
even if a capital asset, profits/gains only on transfer of the shares, not de hors
capital borrowed- see provisions governing house property income, capital gains, etc.
self- occupied- deduction for interest expense cannot exceed, if let out no such restriction and a loss can be claimed
borrowed for the purpose of / for purchase of X for the purpose of business - divisible or indivisible why should a distinction be made or is warranted ?
Walfort case - RVE stands, implicitly/ by inference, discredited ?!
Revenue's pleas addressed and accepted-
say,- ???
whay cries for a review- perhaps, either in and/or in other cases - where the dispute is already pending in HC or SC - others should be stalled/stayed until finally decided !
cross refer-
the SC judgment - paras to be countered
RVE's Report - to note, constituted by also the govt' rep. / hence binding
why govt. did not act even on the limited special and general recommendations- then why waste time and public funds - what authority or power to ignore ?
ADD-ons (April 2 2018)
(comment posted @ https://indiacorplaw.in/2018/03/making-arbitration-consumer-friendly-way-forward-india.html)
pending before the SC in the case of 'Godrej & Boyce' -https://indiankanoon.org/doc/1269729/ (*); in
which the constitutional validity of Sec 14A as original enacted, itself (de
hors its later amendments) has been taken on and is being challenged.
Walfort case @ https://indiankanoon.org/doc/47515605/
The real objection of the Department appears to be that the assessee is
getting tax-free dividend; that at the same time it is claiming loss on the
sale of the units; that the assessee had purposely and in a planned manner
entered into a pre-meditated transaction of buying and selling units yielding
exempted dividends with full knowledge about the fall in the NAV after the
record date and the payment of tax-free dividend and, therefore, loss on sale
was not genuine. We find no merit in the above argument of the Department.
Therefore, AS-13 has no application to the facts of the
present cases where units are bought at the ruling NAV with a right to receive
dividend as and when declared in future and did not carry any vested right to
claim dividends which had already accrued prior to the purchase.
SC
Judgment in Maxopps case; the full text of which has been reported in
the Judgment @https://indiankanoon.org/doc/172126674/
This view has already been upheld by this Court in Civil
Appeal No. 2165 of 2012 (Commissioner of Income Tax, Mumbai v. M/s. Essar
Teleholdings Ltd. through its Manager), pronounced on January 31,
2018
https://indiacorplaw.in/2018/03/transferability-winding-proceedings-high-court-nclt.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+IndiaCorpLaw+%28IndiaCorpLaw%29
https://indiacorplaw.in/2018/03/transferability-winding-proceedings-high-court-nclt.html
https://indiacorplaw.in/2018/03/transferability-winding-proceedings-high-court-nclt.html
Godrej Boyce - Bom. HC
https://indiankanoon.org/doc/1269729/
-(d) The basic principle of taxation is to tax net income.
This principle applies even for the purposes of Section 14A and
expenses towards non-taxable income must be excluded;
28. Now, Sub-section (1) of Section 115-O prior to its
substitution by the Finance Act
of 2003 with effect from 1 April 2003, provided as follows :
"(1) Notwithstanding anything contained in any other
provision of this Act and subject to the provisions of this section, in
addition to the income-tax chargeable in respect of the total income of a
domestic company for any assessment year, any amount declared, distributed or
paid by such company by way of dividends (whether interim or otherwise) on or
after the 1st day of June, 1997 but on or before the 31st day of March, 2002,
whether out of current or accumulated profits shall be VBC 35 ITXA626.10
charged to additional income tax (hereinafter referred to as tax on distributed
profits) at the rate of ten per cent."
Sub-section (2) of Section 115-O stipulates that
the tax on distributed profits under sub-section (1) shall be payable by the
company notwithstanding that no income tax is payable by a domestic company on
its total income computed in accordance with the provisions of the Act.
Sub-sections (4) and (5) of Section
115-O provide as follows :-
"(4) The tax on distributed profits so paid by the
company shall be treated as the final payment of tax in respect of the amount
declared, distributed or paid as dividends and no further credit therefor shall
be claimed by the company or by any other person in respect of the amount of
tax so paid.
(5) No deduction under any other provision of this Act shall
be allowed to the company or a shareholder in respect of the amount which has
been charged to tax under sub-section (1) or the tax thereon."
Sub-section (1) of Section 115-O begins with a non
obstante provision and stipulates that any amount declared, distributed or paid
by a company by way of dividends shall be charged to additional income tax:
'Additional' because this is in addition to VBC 36 ITXA626.10 income tax
chargeable in respect of the total income of the domestic company. The total
income of a domestic company is chargeable to income tax under the Act. In
addition, any amount declared, distributed or paid by such company by way of
dividends is subjected to additional income tax at the stipulated rate. The charge
under sub section (1) of Section
115-O is on a component of the profits of the domestic company representing
an amount declared, distributed or paid by way of dividend.
C.4 Retrospectivity
………………………
(iii) In
Commissioner of Income Tax v. Podar Cement (P) Ltd.34, the Supreme Court
considered the provisions of Section 27 of the Income Tax Act, 1961 under which certain
persons who are not otherwise legal owners were deemed to be owners for certain
34 (1997) 226 ITR 627.
VBC 92 ITXA626.10 purposes. The Finance Bill of 1987 sought to
enlarge the meaning of the expression "owner of house property" in
Clause (iii) of Section
27 by providing that a person who comes to have control over the property
by virtue of such transactions as are referred to in Section 269 UA(f) will
also be deemed to be the owner of the property. The Supreme Court held that the
amendment was intended to supply an obvious omission or to clear up doubts as
to the meaning of the word "owner" in Section 22 and was
therefore declaratory or clarificatory.
Podar case >
To add a personal NOTE:
One's deep--rooted regret is that, even at this late hour, with sufficient useful clues available to be made a conscious note of, and remedied , not only from the R V Eswar Committee's (Tax Simplification) Report , but also from the recently proposed (since enacted 2018 Budget Proposals), there has been no awareness or awakening , on the part of one and and all expected to have direct or indirect concern, with sharp focus on the following:
The subject enactments (Sec 14 A and Rule 8D) brought in on the statute book almost over a decade ago, - on which there has been a continuous stream / spate of litigation, with no let up- have no leg to stand on; especially if examined closely, and decided upon having due regard to the first principles' of THE LAW.
And, had it been done so, in one's long standing firm conviction, -canvassed for stoutly for reasons put forth cogently and on grounds of common sense based 'logic', - the stance taken and being persisted in obstinately thus far, by the Revenue, with no intelligible rhyme or sane reason, ought have been dismissed at the outset, in the very initial stages.
By way of firming up one's own independent thoughts and viewpoints as widely shared, with a altruistic motive /for the common good, it needs to be reaffirmed that the subject enactments indisputably suffer from faulty logic, - rather more than deserve to be struck down, as to have been wrongly proceeded with, not withstanding that the idea behind (in introducing such mindless amendments of the law) is, for patent reasons, fanatically misconceived to the core ?!
Over To >>>>!
One's deep--rooted regret is that, even at this late hour, with sufficient useful clues available to be made a conscious note of, and remedied , not only from the R V Eswar Committee's (Tax Simplification) Report , but also from the recently proposed (since enacted 2018 Budget Proposals), there has been no awareness or awakening , on the part of one and and all expected to have direct or indirect concern, with sharp focus on the following:
The subject enactments (Sec 14 A and Rule 8D) brought in on the statute book almost over a decade ago, - on which there has been a continuous stream / spate of litigation, with no let up- have no leg to stand on; especially if examined closely, and decided upon having due regard to the first principles' of THE LAW.
And, had it been done so, in one's long standing firm conviction, -canvassed for stoutly for reasons put forth cogently and on grounds of common sense based 'logic', - the stance taken and being persisted in obstinately thus far, by the Revenue, with no intelligible rhyme or sane reason, ought have been dismissed at the outset, in the very initial stages.
By way of firming up one's own independent thoughts and viewpoints as widely shared, with a altruistic motive /for the common good, it needs to be reaffirmed that the subject enactments indisputably suffer from faulty logic, - rather more than deserve to be struck down, as to have been wrongly proceeded with, not withstanding that the idea behind (in introducing such mindless amendments of the law) is, for patent reasons, fanatically misconceived to the core ?!
Over To >>>>!
(see previous )
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