Techno Shares judgment of Hon’ble Apex Court

The decision of the Hon’ble Apex Court in the case of Techno Shares has given birth to a whole new chapter in the confounding world of taxes or rather aggravated the already existing such world. The decision allows depreciation on BSE membership card at the rate of 25%, holding the same to be an intangible asset under section 32. This decision has led the Revenue to a very strange domain, example whereof is as follows:-

Suppose the assessee has purchased the BSE card for Rs. 10,000/- in the year 1996. By virtue of this decision, he will start claiming the depreciation from that year on. And thus, within a period of time, would recover the cost qua depreciation. In the PY 2005-2006, the BSE was corporatized and the then members got two things in lieu of that:-

1. Equity shares in BSE Ltd.

2. Trading and clearing rights.

The cost of acquisition of both of these capital assets are DEFINED under section 55(2)of the Act wherein the CoA of the former is same as that of the card and CoA of the latter is nil. Conspicuously, the Act is absolutely quiet about the ‘actual cost’ of trading and clearing rights which suggests the inference that the same is no depreciable asset.

Now, suppose the assessee sells the equity shares of BSE Ltd. Then, by the deeming fiction created in section 55 of the Act, the assessee will claim not only the cost of acquisition of the BSE card (on which depreciation has already been claimed, that is the cost is already recovered) but rather the indexed cost of acquisition. This has led the taxation into blatant realm of double deduction which is held by the Hon’ble Courts of law as not permissible come what may. The assessee has already got the deduction of his cost by way of depreciation and now again getting the same by having indexed cost of acquisition. Hon’ble Supreme Court, while passing the order, missed the point and has thereby contradicted its own decisions delivered earlier.

To add salt on the wound, the assessee also continues to claim the depreciation on trading and clearing rights, stating audaciously that it’s the CoA which is nil and not the ‘actual cost’.

So, welcome to the strange new world of double deductions!!!

 

 

January to March 2010

Almost one year of posting in Mumbai as Assistant Commissioner is getting over. Till December I really did not have much time to think anything other than the income tax assessment. With a constant assurance to my Senior Tax Assistant that the work will be considerably lesser in the coming months, I somehow got the work done from her. Then came a small little lull in the month of January only for the coming storm of pending appeal effects, unattended rectifications, consolidating arrear and demand collection register along with understanding and reconciling the figures of CAP I report. I had to demonstrate everything to my Sr TA by doing it myself. And had to bear her constant complaints that she was doing calculations for the first time after her high school. Somehow, I got the works for Jan and Feb done only to know and realize that I am far behind in the terms of collection of taxes. The month of March saw a hell lot of work with constant pestering, phone calls, persuasion, voice modulations and face changes to recover the demands which I had raised in the first year of my assessment. I finally succeeded to recover majority of the demand in which I felt that the assessee will not win at the appellate stage. It finally culminated in the making of CAP I report myself so as to depict correctly the work done by me.

The first year left on me a kind of mixed feeling. While I am very happy that I could do all the works assigned to me with the highest efficiency I could offer, yet the staff crunch and lack of supportive systems practically tested my endurance like anything. And the biggest bravery is that you have to have a smiling face despite all this.

Having said this, apart from meeting all the professional targets, something else happened in between. From somewhere, I heard the name of Tapovan Swami. He was the Guru of Swami Chinmayanand. I searched on net and found that his most acclaimed book is ‘Iswara Darshan’. Originally written in Sanskrit, then translated to Malayalam and subsequently to English, this book has come out as a result of pious life of a greatly courageous man. Each and every word of this book has to be read very carefully as we had read ‘Concepts of Physics’ by HC Verma for JEE. This book suddenly invigorated my basic propensity, striving for Bhagvan. I had almost forgotten spirituality in my quest to understand and master Income-tax Act. A sure relief from that, I started reading all major works of Tapovan Swami, Swami Chinmayananda and others. A brief list is as follows:-

1. Iswara Darshan
2. Wanderings in the Himalayas
3. Kailas Yatra
4. Commentary on Bhagvad Geeta by Swami Chinmayananda
5. Sanskrita Prabodhini by Swami Pragyatirtha
6. Bhakti Yoga by Swami Niranjananada
7. Shiv Puran
8. Soordas Bhajan
9. Shrimad Gyaneshwari by Sant Gyaneshwar of Maharashtra
10. Sowmya Kaseesha Stotram
11. Astavakra Geeta
12. Commentary of Shankaracharya on Geeta

The list goes on and on. I am still into all this. After a lot of introspection, reading, thinking and professional working, what has culminated is as follows:-

Never neglect Bhagvan in your day-to-day activities. Make Him the centre point of your existence. Make His pleasure as the single goal of your life. Follow His orders as enshrined in Geeta. Do all your duties, personal, professional and spiritual, with highest possible efficiency and least possible attachment. In all honesty, go through the scriptures with submissive mindset in a regular fashion. This world is not a place which you can ignore. Professional excellence is an absolute must.

 

नव निकुंज मे श्यामा-श्याम

Yesterday I read this beautiful bhajan written by Shri Pandey Ramayandatt Shashtri ’Ram’. I read this bhajan for the first time, heard the writer’s name for the first time, but was simply amazed by the beauty and devotion pervading all through this bhajan. I make my blogpage sacred by putting this over here.

रसनिधान पावन बृंदाबन रबि-तनया-तट सोहै,
नित नूतन निज सुख-सुषमा सौं सुर-नर-मुनि-मन मोहै।
सेष सारदा हू पै जाकी सोभा बरनि न जाई,
जहँ पावस बसंत आदिक ऋतु संतत रहैं लुभाई। ।

जहाँ बेलि-तृण-तरु-समूह ह्वै संत मोच्छ-सुख वारैं,
बिकसित कुसुम सरिस नैनन सौं स्यामा स्याम निहारैं।
वा बृंदाबन बीच मंजु इक नवल निकुंज बिराजै,
जाकी स्याममयी सुषमा लखि नंदन कोटिक लाजै। ।
 
मध्य मनोहर वा निकुंज के एक कदंब सुहावै,
निज अनुपम अनल्प महिमा सौं पादप कल्प लजावै।
डाल डाल अरु सघन पात बिच कुसुमित कुसुम घनेरे,
कै सुरराज जुगल छबि हेरत सहस नैन करि नेरे। ।
 
नीचे वा कदंब तरुवर के कोटि मदन छबि हारी,
ठाढ़े ललित त्रिभंगी छबि सौं बृन्दाबिपिन-बिहारी।
बाईं और मदनमोहन के श्रीबृषभानुकिसोरी,
चितवति स्याम बिनत चितवन सौं मानौ चंद चकोरी। ।
 
मोर-मुकुट स्वर्नाभ सुघर सिर श्रीहरि के छबि पावै,
सीस चंद्रिका भानुसुता के भानु-बिभा बगरावै।
पेखि स्याम द्युति पीत प्रिया को पीत बसन तन धारैं,
पिय के रंग सम नील-स्याम पट स्यामा अंग संवारैं। ।
 
कुंडल लोल अमोल स्रवन बिच बक्ष बिमल बनमाला,
मुरली मधुर बजाई बिस्व कौ मन मोहत नंदलाला।
घूंघट नैक उठाई हाथ सौं पिय छबि निरखति प्यारी,
रूप सुधा कौ दान पाइ त्यों हिय हरषत बनवारी। ।
 
बिबिध बरन आभरण बिभूषित रसिक राय गिरिधारी,
झीन बसन भूषन कंचुक पट सोभित भानु दुलारी।
दोउन के दृग द्वै चकोर बनि दोउ मुखचंद निहारैं,
प्रेम बिबस दोउ दोउन पै तन-मन-सरबस हारें। ।
 
परम प्रेम फलरूप, कोटि सत रति-मन्मथ छबि छीने,
संत-हृदय-सम्पति दम्पति नव लसत-प्रणय-रस भीने।
ढारति चँवर जुगल प्रीतम कौं स्नेहमयी कोउ बामा,
अरपन कर सौं करति पान कौ बीरो कोउ अभिरामा। ।
 
सेवा रत सहचरी-बृंद जुत स्याम और स्यामा की,
जाके हिय बिच बसति सदा यह भुवनमोहनी झांकी।
सोइ  तापस गुनवंत संत सुचि, सोइ ध्यानी, सोइ ज्ञानी
सोई लाह लह्यो जीवन कौ भावुक भगत अमानी। ।  

The treasury of all mellows, the Holy Vrindavan is beautifully glorifying at the bank of Yamuna, and is charming the minds of devatas, sages and human beings. Even Sheshnag and Saraswati Ma are unable to describe Vrindavan’s grace and beauty, where spring season is always present.

This is the place where grass, creepers, plants and trees are so beautiful that sages leave aside even the happiness of liberation. At that place Shri Radha, whose eyes are like fully blossomed flowers, is lovingly seeing Shri Krishna. In the midst of that Vrindavan, there is a beautiful garden before which even the garden of paradise is nothing.

In the midst of that garden there is a Kadamba tree compared to which even the Kalpa Taru is nothing. On the branches of that tree, there are several flowers as if Indra is happily seeing Shri Radha Krishna, by his thousand eyes.

Under that Kadamba tree, the person having the beauty of thousands of Kaamdeva, the eternal dweller of Vrindavan, Shri Krishna is standing. On His left side, the daughter of Shri Vrishbhanu, Shri Radharani is seeing Her Shri Krishna as if a Chakora bird is seeing moon.

Shri Hari is having peacock crown on His head. Krishna is having yellow clothes whereas Shri Radha is wearing the clothes which are blue and of the complexion of Shri Krishna.

With beautiful earrings and holy garland, Shri Krishna is charming entire universe by His flute. Shri Radha is lifting Her veil by Her hands and seeing Krishna. As if He has got the charity of beauty-nectar, Banvaari is extremely joyous in His heart.

The king of all jolly persons, the lifter of Govardhana, Shri Krishna and Shri Radha are adorned with beautiful clothes and ornaments. The eyes of both have become Chakor birds and both of them are beholding each other’s face as moon. Helpless in each other’s love, they have sacrificed their body, mind and everything on each other.

The result of Holiest of love, the wealth of the hearts of sages, these two persons are better than thousands of Rati and Kaamdeva. Just beside them, one affectionate Gopi is fanning them while other is offering paan to them.

A person, within whose heart is placed this picturesque scene of Shri Radha Krishna along with Gopis, is sage, saint, holy, meditative and learned. And only he has reaped the benefit of this human life.  

 

 

Standard of success

I was just watching a video on you tube. It was Swami Prabhupada’s lecture. Rather a question-answer session. I am always confused about the objective of life. I don’t really know as to what is the goal of life. I have asked many people, but am still dissatisfied. I have no idea of what a successful life means. Having a good academic background, a good service, sufficient money in your bank account? These materialistic parameters are obviously not the yardsticks of a successful life. Then what is it? At the end of the session, Swami Prabhupada has made a striking statement. It is so true. I was thrilled. The statement is, “the standard of success is whether you have pleased God”. God has stated His desire in several scriptures. He has stated categorically as to what He wants from us. He has said as to how He wants us to live our lives. If we want to please Him, we have to do exactly what He demands from us. Two persons may understand the same statement spoken by God in different ways. But as long as, in all honesty, they work as per their understanding of God’s statement, it is my intuitive belief that they have pleased God. Bhagvan will be happy with that person and that is the only standard of success in life.

 

Innocuously simple..

A brand new interpretation is making rounds in the corridors of Revenue. Something which was seen as pretty obvious and neglected has started showing its real form thanks to the two orders passed by the gentleman writing this post. Let us take a situation. A partnership firm has ten lakhs of business profits and is also availing deduction of 100% under section 80-IB of the Income-tax Act, 1961. So, the deduction is ten lakhs and the total income is, therefore, nil. However, the firm, in all its wisdom, has chosen to credit the partner’s capital account by five lakh Rs. as the partner has fifty percent share. Now, the partner claims this five lakhs as exempt under section 10(2A) of the Act. Innocuously correct? Seems so! Let’s examine.

Section 10(2A) of the Act exempts not the share of business profit but the share in total income of the firm. The share in total income of firm in the the instant case is nil as the total income itself is nil. However, the partner has a credit in its capital account of five lakhs Rs. Zero is the amount whic is exempt and hence the entire five lakhs is the income of the partner. And this interpretation is further supported by the explanation below the clause, which clearly distinguishes between share of profit of firm and share in total income of the firm. It is a literal interpretation which cannot be discarded unless the ramifications are manifestly unjust or absurd. Distancing from this literal interpretation will amount to an amendment in the Act itself, which, as far as Assessing Officer is concerned, cannot be done.

And let me tell you friends, this interpretation will do wonders. Best wishes.

P.S. This discovery is not mine.