The Hindu Business Line : Not the way to treat a war hero

CIT vs Major B. K. Kaul is a case for gender fighters and those who clamour for sensitivity in administration. The Allahabad High Court had to decide whether the payment of salary to assessee's wife was to be clubbed to his own income. An excerpt from the judgment: "The assessee was a war hero, who lost both his hands, in the 1971 war. He was given a Vijay scooter agency so that he could earn his livelihood. While framing the assessment, the ITO noticed that the assessee had paid a salary of Rs 1,200 per month to his wife. The ITO asked the assessee to explain why this salary should not be added to his income. The assessee replied that he was handicapped and disabled ex-serviceman and had to get 24 hours constant attendant to look after his day-to-day business activities. Instead of engaging any outsider, the assessee employed his wife who was said to be an efficient worker." When the Tribunal had earlier discussed the case, its ruling went in favour of Major Kaul, and it had noted that his wife was an MA in economics. It seems strange that the Department chose to carry the case to the High Court, which however found no infirmity in the Tribunal's order.

Date with auditors

THE date of audit report was the central issue in the Amar Chand Raj Kumar case that came up before the Chandigarh ITAT. Since two members of the tribunal could not agree on a decision, the Third Member ruled that the date on which the audit report is signed by the auditor is considered to be date on which the assessee obtained the same. Reason: "In most cases, auditors themselves are the tax consultants of the said concern and the audit report is retained or given back to them for furnishing the same along with their income-tax returns." An interesting excerpt from the ruling is a paragraph from the assessee's reply to the AO's show-cause notice: "Sir, at the time of your honour's visit to our business premises, to the best of my remembrances I had told your honour that the audit had been completed and the return of income had also been filed. Your honour had also seen the books of account and even enquired from me about the tick marks which were on the books and I had explained that the same were by the auditors."

CCBB after CCBA

IF you want to baffle your non-accounting friend, try this: "In exercise of the powers conferred by Section 295 of the Income-tax Act, 1961 (43 of 1961), read with sub-clause (iii) of clause (b) of sub-section (7B) and clause (aa) of sub-section (14) of Sec 80-IB... " That is the opening phrase of a recent notification from the CBDT, to insert Rule 18 DC after 18 DB, and also Form No. 10CCBB after 10 CCBA.

Fairness is a two-way street

A FEW one-liners from the Mardia Chemicals verdict: Percentage of NPA as against GDP is only 6 per cent in India, which is much less compared to China, Malaysia, Thailand, Japan, South Korea and other countries. It is not good for a financial institution to have heavy NPA. Normal process of recovery of debts through courts is lengthy. Concept of lender's liability has also developed which cannot be ignored. Fairness cannot be a one-way street. And, on the pre-condition of deposit of 75 per cent of amount, over and above secured asset: "We feel this can well be one example of hitting below the belt."

Tailpiece

Overheard in Inspector's lounge:

First: "I told the assessee he owed the Department Rs 5 lakh, and that I had come to collect the same. Immediately he collapsed."

Second: "How insensitive! You shouldn't have told the amount first."

Third: "I met an assessee and told him I was from the Department. He buckled down before I could tell him the amount."

Fourth: "You know what. I met a businessman and first asked him if his heart was okay. He looked at me and asked if I was from the Department. Before I could answer, he swooned."

Second: "Good you told me. I was planning to go out and meet a few of these chaps."

Detaxification@TheHindu.co.in

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