Friday, 31 May 2013

Taxes- Due Date Alert for the month June 2013


Sr No
Due Date
Related to
Compliance to be made
1
06.06.2013
Service Tax
Payment of Service Tax for the Month of May 2013. Please also make payment for use of service under reverse charge mechanism
2
07.06.2013
TDS/TCS
(Income Tax)
· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of May 2013.
· Deposit TDS from Salaries deducted during the month of May 2013
• Deposit TCS for collections made under section 206C including sale of scrap during the month of May 2013, if any
• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of May 2013, if any
3
15.06.2013
Income Tax
Payment of first instalment of advance tax (15%) for corporate
4
20.06.2013
VAT
Payment of VAT & filing of monthly return for the month of May 2013
5
21.06.2013
STPI
Filing of Softex Form for the month ended May 2013
6
30.06.2013
VAT
Filing of Annual return in hard copy (Karnataka VAT

“Due date” in s. 36(1)(va) for payment of employees’ Provident Fund, ESIC etc contribution should be read with s. 43B(b) to mean “due date” for filing ROI

CIT vs. Kichha Sugar Company Ltd (Uttarakhand High Court)


The assessee collected employees’ Provident Fund contribution for payment to the provident fund authorities. However, the amount was not paid to the provident fund authorities within the “due date” specified in the Provident Fund Act though it was paid before the due date of filing the return of income. The AO assessed the amounts received as income u/s 2(24)(x) but refused to allow a deduction u/s 36(1)(va) on the ground that the amounts were not paid within the prescribed “due date“. The CIT(A) and Tribunal allowed the assessee’s claim for deduction u/s 43B(b). The Department filed an appeal in the High Court claiming that s. 43B did not apply to employees’ contribution. HELD by the High Court dismissing the appeal:

Whether when an assessee follows mercantile system of accounting, it has freedom to follow receipt system merely to account for VAT refunds - NO: ITAT

THE issues before the Bench are - Whether when an assessee follows the mercantile system of accounting, it has the freedom to follow the receipt system merely to account for VAT refunds; Whether any income by way of cash incentive accrues to an assessee at the time of filing of the claim in this respect and Whether method of accounting of refund claims can be changed in case there is a procedural delay in release of refund by the Revenue authorities. And the answers to all the questions go against the assessee.
Facts of the case
Assessee concern had been consistently following the receipt method of accounting in respect of the refund of VAT arising to it. Accordingly, the refund of Rs. 22,74,136, pertaining to AYs. 2005-06 & 2006-07, received during the relevant year, was credited in its accounts, and duly

Whether enforcement of a debt being barred by limitation, ipso facto leads to conclusion that there is cessation or remission of liability - ruled against Revenue: HC

THE issues before the Court are - Whether enforcement of a debt being barred by limitation, ipso facto leads to the conclusion that there is cessation or remission of liability; Whether in order to attract the provisions of Section 41(1), there should be an irrevocable cession of liability without any possibility of the same being revived; Whether section 41(1) also includes the benefit obtained by an assessee by virtue of remission or cessation of a liability and Whether there can be a cession of liability in case, where the debt has been acknowledged by the assessee company, has already been accepted by the revenue. And the verdict goes against the Revenue.

Comprehensive guidelines on Offer For Sale (OFS) of Shares by Promoters through the Stock Exchange Mechanism.

CIRCULAR No. CIR/MRD/DP/17 /2013 , Dated – May 30, 2013
Sub: Comprehensive guidelines on Offer For Sale (OFS) of Shares by Promoters through the Stock Exchange Mechanism.
1. This is with reference to the comprehensive guidelines on sale of shares through OFS mechanism issued vide circular no CIR/MRD/DP/18/2012 dated July 18, 2012 and amended vide circular CIR/MRD/DP/04/2012 dated January 25, 2013.
2. The aforesaid circular is amended as under:
2.1. Para 5 (b) shall be replaced by the following:
“Seller(s) shall announce the intention of sale of shares at least on the day prior to the offer for sale, along with the following information:”.
2.2. Para 5 (b) (i) to (viii) shall remain the same.
3. All other conditions for sale of shares through OFS framework shall be as per SEBI Circular

Thursday, 30 May 2013

S. 143(3) assessment void if case picked up contrary to CBDT’s Scrutiny Guidelines

Crystal Phosphates Ltd vs. ACIT (ITAT Delhi)






For AY 2006-07, the assessee filed a ROI declaring income of Rs. 3.97 crore. The case was selected for scrutiny under clause 2(v)(b) of the Scrutiny Guidelines issued by the CBDT. The said clause of the Scrutiny Guidelines provided that a case had to be selected for compulsory scrutiny if an addition/ disallowance of Rs. 5 lacs or more was pending in appeal before the CIT(A) and such identical issue also originated in the year under consideration. The assessee claimed that as this condition stipulated in the Scrutiny Guidelines was not satisfied, the AO had no jurisdiction to select the case for scrutiny. The AO & CIT(A) rejected the claim. On appeal by the assessee to the Tribunal, HELD allowing the appeal:

THANKS FOR YOUR LOVE & SUPPORT


Download Form-16 (Part-A and B) & Form-16A is mendatory from TRACES w.e.f. 31.05.13

All TDS Deductors/Deductees can download TDS Certificate (Form 16 (Part A) and Form 16A) from TRACES. The file will be provided in text format and will contain certificate details for all requested PANs. Deductor will have to convert the text file into PDF using TRACES PDF Generation Utility. This utility will convert the text file into individual PDFs for each PAN. The same utility can be used to convert text file for Form 16 / 16A. The certificate should specify the amount of tax deducted and rate at which it is deducted Form No. 16A, under Rule 31.

Download TRACES PDF Generation Utility Ver. 1.3L

 

Procedure to install utility

E FILING MANDATORY WHERE TOTAL INCOME EXCEEDS RS. 5 LAKHS

E-filing was mandatory for those whose Taxable Income over Rs. 10 Lakhs. But from the Assessment Year 2013-14 it is mandatory to file electronic income tax return if Taxable Income is exceeds Rs. 5 Lakhs. In this regard the Income Tax department has already issued Notification No. 34/2013 dated 01-05-2013.

A senior Finance Ministry officially said on Last Tuesday from Asstt. Year 2013-14 e-filing of Income Tax Return is mandatory to taxpayer whose annual taxable income above Rs. 500000/-. Now in current year i.e. Asstt. Year 2012-13 e-filing is is mandatory to those taxpayee whose income more than 10 lakhs. Besides, the Finance Ministry is also making provisions for e-filing of Wealth Tax returns.

Income Tax Return for AY 2013-14 will be different

chidambaram_new_350_040613051646Assessment Year 2013-2014 will be influenced by some very important amendments which have been made in the Income-tax Rules with reference to filing of Income-tax Return. This article is intended to elaborate the fact that Income Tax Return for AY 2013-14 will be different, and that too, in a considerable manner. Read how.

1. All individuals having salary income as also income from house property and income from other sources except income from lottery or from horse races was permitted to file income tax return in Form No. SAHAJ-ITR1 until last year. However, as a result of the new amendment the individual if he has got any loss under the head Income from Other Sources, then such person will not be able to file Income-tax Return in Form No. SAHAJ(ITR1). It is specifically mentioned in the new

File an error free Income Tax Return


Now as we are entering to the season of Income Tax Return filings we need to look into some matters to make the return error free to abstain from facing any harassment in the future. Smart filing of Return keeps you away from getting a demand notice from the department and filing a rectification against it or doing a revise return. As we all want to file our return smartly, we need to note certain things:
1. Permanent Account Number (PAN) :-
First of all you need to provide your PAN number accurately. If you do not provide your accurate PAN number then Income Tax Department will not be able to identify you as the real tax payer which would not be an easy thing for you to accept. So check your PAN card as many times as

How you can reduce your Tax Liability



As the time draws near for Filing tax returns for the previous year, one tends to realize things that could have be done to lower tax liability. But as they say, there is no gain in crying over spilt milk

However, even though if you can’t do anything about the tax you paid on 31st March or tax that you have to pay now along with interests, there’s still time to plan your taxes for the current year and be a smart tax payer.

Foreign Company in India

A foreign company can commence operations in India in one of the many different legal forms as discussed in the article. 100% foreign equity is allowed in Indian companies, subject to equity caps in respect of the area of activities under the Foreign Direct Investment (FDI) policy of India.Any foreign company in India can establish its place of business in India by filling Form 44 (Documents delivered for registration by a foreign company). The eForm has to be digitally signed by authorized representative of the foreign company.There is no need to apply and obtain DIN for Directors of a foreign company but the DSC of the authorized representative is mandatory, which again is not required to be registered on MCA Application. If a company is incorporated in India, even if it is wholly owned by a foreign company, it is treated on par with domestic companies. Let us spend this time discussing on foreign company in India, and the various formats of availability.

Whether search assessment can be made even when no incriminating material or evidence is seized at time of search - NO: ITAT

THE issues before the Bench are - Whether assessment can be made u/s 153A even when no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO’s order; Whether merely because the payment for investment in property was made through the bank account, it can be presumed that the source is explained and verified and hence no addition on account of unexplained investment can be made and Whether in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO.
Facts of the case

Wednesday, 29 May 2013

S. 115AD: FII’s securities transactions’ profits not assessable as “business profits’

Platinum Investment Management Ltd vs. DDIT (ITAT Mumbai)






The assessee, a Foreign Institutional Investor (“FII”), suffered a loss of Rs. 41 crore on account of derivative transactions. The AO & CIT(A) relied on the AAR Ruling in Royal Bank of Canada 323 ITR 380 and held that as the said loss arose out speculative transactions, it had to be treated as a business loss and could not be set-off against STCG. On appeal by the assessee to the Tribunal HELD allowing the appeal:

Interesting case in respect of compensation for death due to motor car accident.


 

 


S. 192
--Deduction of tax at source--Motor accident--Compensation on account of death--Quantification--Victim a salaried person--Presumption that employer paid salary after deduction of tax at source--Notional sum not to be deducted for income-tax-- Vimal Kanwar v. Kishore Dan (SC) . . . 95

http://indiankanoon.org/doc/119587841/

 

Tax Update - MAY 2013

Direct Tax


High Court


Re-initiation of assessment proceedings under compulsion of the Audit Party and not independently is invalid and unsustainable

Set off and carry forward of losses are completely different

1359728584set-off-carried.jpgChapter VI of the Income Tax Act contains provisions related to set off and carry forward of losses, though it comes a legal twist, which makes it ambiguous on a layman’s part to understand whether set off and carry forward of losses are completely different.
Chapter VI opines that set off implies current year’s expenses set off against current year incomes.Occurrence of Carry forward of Losses happen when current year profits are not sufficient to cover the current year expenses or the company/LLP is into losses since inception.Therefore , the losses which generated on account of non set off with that year’s profit or in a case where no profits generated at all will be carried forward to the next year and set off in the next year’s profit.

Whether search assessment can be made even when no incriminating material or evidence is seized at time of search - NO: ITAT

THE issues before the Bench are - Whether assessment can be made u/s 153A even when no incriminating material or evidence was found or seized at the time of search and there is no reference to the same in the AO’s order; Whether merely because the payment for investment in property was made through the bank account, it can be presumed that the source is explained and verified and hence no addition on account of unexplained investment can be made and Whether in case of search in the absence of any incriminating material found during search, no addition can be made on the basis of Report of the DVO.
Facts of the case

Tuesday, 28 May 2013

Requirements of a valid affidavit in support of delay condonation application set out

Kunal Surana vs. ITO (ITAT Mumbai)






The assessee filed an appeal before the CIT(A) which was delayed by 4 months. The delay was explained to have been caused by the fact that the assistant of the Authorized Representative kept the papers in a drawer and overlooked them till a penalty notice was received. The CIT(A) declined to condone the delay and dismissed the appeal. The assessee filed an appeal before the Tribunal and also filed an affidavit of the Authorized Representative in support of the application for condonation of delay. HELD by the Tribunal dismissing the application and the appeal:

Income Tax Returns is mandatory for all Companies and LLPs

last_date_for_tax_returnThis content addresses the compulsion of income tax return filing under Sec 139 of Income Tax Act, 1961 for all companies and LLPs. Now the next big question that arises with the usage of the word ‘All’. Are all companies and LLPs required to file income tax returns ? The answer is surprisingly yes. Income Tax Returns is mandatory for all Companies and LLPs.
Section 139(1) of the Income Tax Act,1961-
A Company or Firm or LLP is required to furnish the return of income in all the following illustrative cases, a company or firm or LLP is under an obligation to file Return of income:
(1) A newly incorporated company or Firm or LLP which has not commenced business.
(2) A foreign company/foreign firm operating in India and having no incomes in India
(3) A company or firm or LLP whose entire income is exempt from Income Tax.
(4) A company or firm or LLP which is in the process of setting up the business.
(5) A company or firm or LLP which has incurred Loss.
(6) A company or firm or LLP which has closed all its activities and is in the nature of a defunct company or firm or LLP.

Whether transaction of sale of merchant banking business to an erstwhile global accountancy firm can be considered as colourable device, although payments were made only for transfer of business and contracts - NO: ITAT

THE issues before the Bench are - Whether a transaction of sale of merchant banking business to an erstwhile internationally acclaimed accountancy firm can be considered as a colourable device, although the combined reading of the provisions of the Business Transfer Agreement suggests that the payments have been made only for transfer of business and contracts; Whether only when the document is not bona fide nor intended to be acted upon, but is only used as a cloak to conceal a different transaction, a transaction can be regarded as a sham or colourable; Whether consideration received by the assessee for transfer of its sole merchant banking business, which was discontinued thereafter, is in the nature of capital receipt; Whether

e-Filing Utility for ITR- 2 for Assessment year 2013-14

Income tax Department has released e-Filing Utility for ITR- 2 for Assessment year 2013-14 / Financial Year 2012-13. cle. We here discussed Who can use this Return Form?, Who cannot use this Return Form?, Manner of filing this Return Form etc.
1. Assessment Year for which this Return Form is applicable
This Return Form is applicable for assessment year 2013-2014 only, i.e., it relates to income earned in Financial Year 2012-13.

Monday, 27 May 2013

No s. 271(1)(c) penalty for not offering capital gains on s. 50C stamp duty value

CIT vs. Madan Theatres (Calcutta High Court)



The assessee sold property for a consideration of Rs. 2.50 crore. However, for the purpose of stamp duty, the property was valued at Rs. 5.19 crore and stamp duty was paid on that value. The assessee offered capital gains on the basis that the sale consideration was Rs. 2.50 crore. The AO invoked s. 50C and held that the sale consideration had to be taken at Rs. 5.19 crore and capital gains computed on that basis. The AO imposed penalty u/s 271(1)(c) which was deleted by the CIT(A) and the by relying on Renu Hingorani. On appeal by the department to the High Court, HELD dismissing the appeal:

Common 8 Questions with Exemption from filing of Income Tax Return.

1. What is the purpose of this notification and who are proposed to be exempted from the requirement of filing of the return?The primary objective of this notification is to exempt those salaried taxpayers from the requirement of filing income-tax returns, who have (i) total income not exceeding Rs.5,00,000, and (ii) the total income consists only of income chargeable to income tax under the head Salaries and interest income from savings bank account if such interest income does not exceed Rs.10,000. Further, such salaried taxpayer would be eligible for exemption from filing a return of income only if tax liability has been discharged by the employer by way of Tax Deducted at Source (TDS) and the deposit of the same to the credit of the Central Government. For this purpose, taxpayer has to intimate his interest income to the employer during the course of the year.
For Example –


TAX E BOOKS


There are so many books available on net for tax information. These e-book are available on changes. The tax payers and the tax administrators on various aspects of the new concept in order to assist them in gaining better understanding about the new system of taxation. It is clarified at the outset that this guide is merely an educational aid based on a broad understanding of a team of officers of the issues. But most of the people does not have a source where they can know provisions of the tax. But i have able to found a book on this subject. These books have following and are taxpayers can download free




FileSizeDate
Tax-Salaried-Employees.pdf
Taxation of Salaried Employees, Pensioners and Senior Citizens
175.86 KB05/23/2013Download
TDS-on-Salaries.pdf
T.D.S. on Salaries
14.73 MB05/23/2013Download
Tax-deduction-at-source.pdf
TAX DEDUCTION AT SOURCE (TDS) OTHER THAN SALARIES
14.74 MB05/23/2013Download
Assessment-of-Income-from-house-Pro-1.pdf
Assessment of Income From House Property
2.93 MB05/23/2013Download
How-to-Compute-your-Capital-Gains-1.pdf
How to Compute Your Capital Gains
2.18 MB05/23/2013Download
TPI_PAN-Book.pdf
BOOKLET ON PERMANENT ACCOUNT NUMBER (PAN)
2.86 MB05/23/2013Download
FBT Hindi.pdf98.88 KB05/23/2013Download
Assessment-of-Charitable-Trust-and-Institution.pdf
Assessment of Charitable Trusts and Institutions
6.06 MB05/23/2013Download
Advance-Pricing-Agreement-Guidance-with-FAQs-(TPI-43).pdf
Advance Pricing Agreement Guidance with FAQs-(TPI-43)
17.72 MB05/23/2013Download
Aayakar-Lokpal.pdf413.71 KB05/23/2013Download
Appeals-and-Procedures-for-filing-Appeals.pdf
APPEALS AND PROCEDURES FOR FILING APPEALS
1.72 MB05/23/2013Download

Procedure of E Filing of Income Tax Return

It is well known fact that tax payers are now required to file their Income-tax Return for the Financial Year 2012-13 relevant to the Assessment Year 2013-14. These Income-tax Returns in most cases have to be filed by 31st July, 2013. All Taxpayee carefully read the new ammended ITR forms and applicable ITR form select to submit Annual Income Tax Return. The most important point is that taxpayee who have PAN card may submit Annual Income Tax Return on or before 31st July, 2013. In this regard I want to share some important point to filing e-return with Income Tax Department. But on the contrary most of Taxpayee not watch or read the post carefully. So due to this problem I will try at my level best to clarify & escape from Problem of online Income Tax Return Filing for Assessment year 2013-14.

Online Income Tax Return Filing if income above 5 Lakh

If you are used to the old-fashioned pen on the paper form of filing annual tax returns, you are going to have a bit of a problem this year. Earlier this month, the Income Tax Department issued a notification making e-filing mandatory for those with a taxable income of over Rs 5 lakh. This means that if you are not IT-savvy , it’s time to brush up your technical skills.
After all, July 31st the last date for filing the income tax return is not too far away. However, you don’t have to fret about it as the process is not as tedious as it is imagined to be. Once you follow a few simple steps and avoid the common mistakes , you could be through in a couple of hours. Also,

Timely Receipts of Tax Refunds

Tax refunds – only few of us get on time, while most of us may have to wait for a long time. There could be several reasons for delays in tax refunds: mismatch in the tax paid details, error in bank account details, technical problems at the department, growing number of tax payers, change in mailing address etc.
Let us look into some basic things about tax refunds, the process and how you can ensure timely receipt of tax refunds:
When are you eligible for tax refunds?
Normally, employees declare their investments or the details of tax saving investments to their employers at the beginning of each Financial Year (FY). The employer deducts the tax based on the

Whether when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as term 'relative' is very much covered by provisions of Sec 56 - YES: ITAT

THE issue before the Bench is - Whether when assessee receives a gift from a relative in HUF capacity, exemption u/s 56(2)(v) cannot be denied as the term 'relative' is very much covered by the provisions of Sec 56. And the answer goes in favour of the assessee.
Facts of the case
The assessee is an HUF of Harshadbhai Dahyalal Vaidhya, who had received a gift from his uncle Shri Ishwarlal Ambalal Vaidhya. This fact was clarified by the donor when his statement was recorded on oath during the proceedings. In his statement, he had stated that Shri Harshadbhai Dahyalal Vaidhya was the son of his elder brother and an amount of Rs.7 lacs was given to Harsahdbhai Dahyalal Vaidhya(Individual). He had also stated that the contents of the

Documents to be submitted with Annual Reports by listed company

The SEBI circular No. CIR/CFD/DIL/7/2012 dated August 13, 2012 had inter-alia amended the clause 31(a) of the Listing Agreement by advising the listed companies to submit the following forms, as may be applicable, along with copies of annual reports submitted to Stock exchanges:
Form A: Unqualified/Matter of Emphasis Report
Form B: Qualified/Subject to/Except for Audit Report
The companies are required to ensure that
1) Form A or Form B as applicable is submitted with copies of the Annual Report to the Stck

Saturday, 25 May 2013

Sanofi Pasteur Holding SA Versus v. Department of Revenue, Ministry of Finance- High Court of Andhra Pradesh



No. - W.P. NOS. 14212 OF 2010 AND 3339 & 3358 OF 2012
Dated - February 15, 2013

DONT WORRY WITH VODAFONE JUDGEMENT, NOW SANOFI JUDGEMENT IS THERE

In the recent case law of Sanofi Pasteur Holding SA Vs Dept of Revenue, Andhra HC there are various landmark analysis of various provision of DTAA, Income Tax as well as, various distinguishing features as compared to the Vodafone case.

Facts of the case

In August, 2009 M/s Sanofi Pasteur Holding SA, France acquired the entire share capital of M/s

Friday, 24 May 2013

How to Download ITR-V (For Tax Payee not audited u/s 44AB) ?

Taxpayee not audit u/s. 44AB of Income Tax Act and wants to file Income Tax Return without DSC (Digital Signature required ITR-V. On the Income Tax Site portal there is no any provision of Form ITR-V. Therefore the new website of e-filing of return provides facility to download ITR-V. The following procedure is helps to Taxpayee to dowload Form ITR-V:

For Income Tax Returns e-Filed without using Digital Signature Certificate (DSC), submission of ITR-V is mandatory.

An ITR-V is
  • a form which is generated if the Income Tax Return is e-Filed without Digital Signature Certificate.
  • generated to authenticate the identity of the sender/e-Filer.
  • required to be printed, signed and sent to the below address by Ordinary Post or Speed Post ONLY within 120 days from the date of e-Filing.
Address
Income Tax Department
Centralized Processing Centre,
Post Bag No. 1,
Electronic City Post Office,
Bangalore - 560100

Updated all Income Tax Forms for Asstt. Year 2013-14 free download

Income Tax Department has published updated Income Tax ITRs for Annual Income Tax Return i.e. ITR-1 (Sahaj), ITR2, ITR-3, ITR-4, ITR-4S (Sugam) and ITR-5 to file Income Tax Return for Asstt. Year 2013-14. The all revised ITR Forms are available in "PDF" Format. Income Tax Department has started uploading ITR-1 (Sahaj) and ITR-4S (Sugam) online or offline. It has released latest Excel Base Utility for Taxpayers to submit Annual Income Tax Return for Asstt. Year 2013-14 with new amendments. The latest amendment in Income Tax Return Forms this Excel utility is available Income tax return Sahaj(ITR-1) and Sugam(ITR-4S) online/offline with Checklist of documents and pre-requisites.


Whether when assessee has filed returns of subscriber Cos and also bank statements & balance sheets in addition to confirmation letters from them, assessee can be considered to have discharged burden of proof - YES: HC

THE issues before the Bench are - Whether mere furnishing of the bank statements of the share subscribers without any explanation for the deposits in the accounts can meet the requirements of Section 68; Whether to establish the creditworthiness of the investors, is it necessary to know the business activities of the share-subscribers and also the repaying capacity, in case the amount has been borrowed for making the investment; Whether when the assessee has filed the income-tax returns of the subscriber companies as also their bank statements and balance sheets in addition to the confirmation letters from the said two companies, the assessee can be considered to have discharged the burden of proof and Whether once the assessee has established its case, the AO cannot shift the burden back onto the assessee without the AO producing any tangible material to doubt the veracity of the documents furnished by the assessee. And the verdict goes in favour of assessee.

Whether when assessee specialises in transforming raw food materials into therapeutic food by adopting customised processes, it cannot be denied Sec 80IB benefits - YES: ITAT

THE issues before the Bench are - Whether when the assessee specialises in transforming raw food materials into therapeutic food by adopting customised processes, it cannot be denied Sec 80IB benefits and Whether the computation of deduction u/s 80IB as made by the assessee is erroneous when the assessee has removed the interest paid on partners capital which has resulted into enhancement of profit. And the verdict partly goes in favour of the assessee.
Facts of the case

The
assessee is a partnership firm which is registered as a Small Scale Industry. The assessee was exclusive suppliers of food packets for the “mid day meal scheme” of the Government. For this purpose, it was converting raw food material into therapeutic food in packets. The assessee claimed deduction u/s 80IB. The AO disallowed the entire claim of deduction u/s 80IB after detailed discussion. The CIT(A) too rejected the assessee’s claim on the reasoning that the list of ingredients submitted by the appellant as raw materials & final product did not indicate that any new product had come into existence. Different food items (raw materials) had been merely ground & mixed together, the chemical composition had not changed intrinsically. The constituents of the final product were separate.

Thursday, 23 May 2013

The Law And Procedure For Filing Income-tax Appeals: A Ready Referencer

The Income-tax department has released a publication titled “Appeals And Procedures For Filing Appeals“. The publication seeks to educate taxpayers about the legal provisions and procedures relating to filing appeals before the Commissioner of Income-tax (Appeals) and the Tribunal. The publication lists out the Forms in which the appeal has to be filed, the manner in which it has to be signed, the fees payable etc. The entire law and procedure is explained in lucid language. The guidelines laid down by the Appellate Tribunal for the guidance of the assesses and their representatives on how to conduct appeals is also included in the publication. The publication will prove useful as a ready-referencer for taxpayers and tax professionals

http://www.itatonline.org/info/?dl_id=1217

The Law And Procedure Of Taxation Of Charitable Trusts


The Income-tax department has released a publication titled “Assessment of Charitable Trusts and Institutions“. The publication explains the legal provisions and the procedural requirements for claiming exemption under the Income-tax Act, 1961 for charitable activities. Apart from explaining the concept of ‘Charitable Purposes’, the publication deals with the procedure for registration, assessment, denial of exemptions, incentives given to the donors of the trust etc. The publication also deals with important issues in a FAQ format. All amendments made by the Finance Act, 2012 are incorporated in the publication. The forms which have to be used by the assessees in order to avail of the benefit of various provisions are compiled as Annexures to the publication. The publication will prove very useful for all taxpayers and tax professionals.



http://www.itatonline.org/info/?dl_id=1218

Employees’ PF/ ESI Contribution is not covered by s. 43B & is only allowable as a deduction u/s 36(1)(va) if paid by the “due date” prescribed therein

ITO vs. LKP Securities Ltd (ITAT Mumbai)







In AY 2008-09 the assessee collected employees’ contribution to the Provident Fund and ESIC but did not pay it within the due date prescribed by the relevant legislation. The amount was, however, paid before the due date of filing the ROI. The AO assessed the said amounts as income u/s 2(24)(x) but declined to grant a deduction u/s 36(1)(va) as the amount had been paid after the due date. The CIT(A), relying on Alom Extrusions 319 ITR 306 (SC) and AIMIL 321 ITR 508 (Del) held that the amounts had to be allowed as a deduction u/s 43B as they had been paid before filing the ROI. On appeal by the department to the Tribunal, HELD reversing the CIT(A):

Print Specifications for SAHAJ and SUGAM for Asstt. Year 2013-14

SAHAJ and SUGAM Forms notified by CBDT are the simplest, technology enabled and taxpayer friendly return forms. These have been designed to facilitate error free and faster digitization. This is expected to curtail processing cycle and expedite issue of refunds. Taxpayers are advised to follow steps enumerated below.
  • SAHAJ and SUGAM forms are colored forms with standard features like registration marks, barcode etc. Taxpayers are advised to collect the forms from Income Tax offices, Tax-melas, TRP’s and submit the same to the income tax department.
  • Taxpayers can also download the forms from the website and print using a color printer on an A4 size white paper. It is advisable for taxpayer to set the properties in printing options to “fit to page” and print the forms on a good quality white paper.
  • Taxpayers may also use the Fillable forms, being made available by the department shortly.
  • The Acknowledgement copy [ITR-V Acknowledgement] to be retained by taxpayer may be printed in black & white.

How companies can copy Apple’s strategy to avoid taxes

The image of the American income tax law is of horrible and immense complexity.
how-companies-can-copy-apples-strategy-to-avoid-taxesBut it turns out that in many ways it is not that complicated. The Apple tax tactic that came in for denunciation at Tuesday’s Senate subcommittee hearing was not particularly difficult to carry out, and it seems to have been something known to some tax experts – but not to many of those whose job it is to write tax laws.
“What impresses me is the effortlessness of Apple’s international planning,” said Edward Kleinbard, a tax law professor at the University of Southern California and a former chief of staff of the Congressional Joint Tax Committee.
The planning involved setting up subsidiaries that would get the lion’s share of Apple’s profits on sales in Europe and Asia. Apple incorporated those subsidiaries in Ireland – making them exempt from immediate US taxation – and told Ireland that the subsidiaries were run from Apple’s

File your tax returns before you get tax notice

imagesFile your tax returns before you get tax notice. The Income Tax Department, encouraged by the results of letters sent to non-filers of income tax returns earlier, the finance ministry is in the process of sending 70,000 more letters to high-priority assessees who have not filed their returns, asking them to disclose their true income and pay tax in the current financial year.
The letters, being sent in two batches, follow letters sent to 1,05,000 assessees earlier, seeking reasons for not filing the return and containing the summary of information of their financial transactions. The exercise has generated revenue of over Rs 600 crore from self assessment and advance tax from

Whether when assessee has filed returns of subscriber companies and also bank statements and balance sheets in addition to confirmation letters from them, assessee can be considered to have discharged burden of proof

THE issues before the Bench are - Whether mere furnishing of the bank statements of the share subscribers without any explanation for the deposits in the accounts can meet the requirements of Section 68; Whether to establish the creditworthiness of the investors, is it necessary to know the business activities of the share-subscribers and also the repaying capacity, in case the amount has been borrowed for making the investment; Whether when the assessee has filed the income-tax returns of the subscriber companies as also their bank statements and balance

CBDT issues Advance Pricing Agreement Guidance with FAQs

 


APA (Advance Pricing Agreement) provisions were introduced in India in the 2012 Budget. Subsequently, the CBDT (Central Board of Direct Taxes) had issued a notification on August 30, 2012 detailing the rules for the functioning of APA scheme.

Click here to view the details on The Indian Advance Pricing Agreement regime

Wednesday, 22 May 2013

West Bengal Circular on Minumum payment of wages


No S. 14A/ Rule 8D disallowance without showing how assessee is wrong

DCIT vs. Ashish Jhunjhunwala (ITAT Kolkata)



In AY 2009-10, the assessee earned tax-free dividend of Rs. 32 lakhs on investments that had been made in earlier years. The assessee claimed that as he had not incurred any expenditure to earn the dividend income, no disallowance u/s 14A was permissible. The AO rejected the claim and made a disallowance by applying Rule 8D. The CIT(A) deleted the disallowance on the ground that the AO had mechanically applied Rule 8D to compute the disallowance. On appeal by the department to the Tribunal, HELD dismissing the appeal:

Issue of TDS Certificate in Form No.16A downloaded from TIN

TDS certificate in Form No.16 is to be issued annually whereas TDS certificate in Form No.16A is to be issued quarterly
Currently, a deductor has an option to authenticate TDS certificate in Form No.16 by using a digital signature. However, no such option of using a digital signature is available to a deductor for issuing TDS certificate in Form No.16A and it, therefore, needs to be authenticated by a manual signature. The Central Board of Direct Taxes (the Board) has received representations to allow the option of using digital signature for authentication of TDS certificate in Form No.16A as issuance of TDS certificate in Form No.16A by manual signature is very time consuming, specially for deductors who are required to issue a large number of TDS certificates.

Steps of Changing Registered Office of Company from one state to another

This is a enumeration of the steps of Changing Registered Office of Company from one state to another, which to our opinion will be helpful for those entrepreneurs and start up organizations who intend to shift their registered office from the existing ROC jurisdiction to another ROC jurisdiction i.e from the state in which the registered office is presently situated to a new state.
The entire process is extremely complex and time consuming, along with huge expenditure being involved. Nevertheless, let us run you down through the steps of changing registered office of company from one state to another
1. Call for a board meeting to decide on the change in the domicile clause.

Whether exemption u/s 54 is restricted to a 'residential unit' and is not available to a 'residential house' having multiple floors with independent entrace - NO, it is available: ITAT

THE issues before the Bench are - Whether exemption u/s 54 is restricted to a 'residential unit' or a 'residential house' having multiple floors with independent entrace; Whether when there are two views possible on a particular issue, the view of higher authority should be given preference, even if the view taken by the lower authority is sustainable in law and Whether revision can be made on a debatable issue. And the answers go in favour of the assessee.
Facts of the case
Assessee, an individual, had filed his return declaring total income of Rs.38,851. In the annexure to ROI filed, it had also indicated that LTCG of Rs.1,01,73,965 was earned and claimed as exempt u/s 54 and 54EC, on account of investment in new flat at Rs.59,17,500 and

Tuesday, 21 May 2013

Clarification on classification of tablet computers under Customs Tariff

 


The Central Board of Excise & Customs (“CBEC”) has issued a
Circular No 20/2013-Customs dated May 14, 2013 (“Circular”) clarifying the classification of tablet computers under HSN 8471 30.

ITAT ruling on the issue of marketing intangibles

 

In an important ruling in the case of Canon India Private Limited (“Canon India”), the Delhi Divisional Bench of the Income Tax Appellate Tribunal (“Tribunal”) has laid down important principles in relation to Transfer Pricing adjustments relating to the issue of creation of marketing intangibles. In this case, the Tribunal remanded back the matter to the Transfer Pricing Officer (“TPO”) with specific instructions that Advertisement, Marketing and Promotion (‘AMP') expenditure should be benchmarked in light of guidelines laid down by the Special Bench (“SB”) in the case of LG Electronics India Limited vs. ACIT[1] (“LG India”) and Chandigarh Bench in the case of Glaxo Smithkline Consumer Healthcare Limited vs. ACIT[2] (“GSK India”). While doing so, the Tribunal has directed the TPO to exclude subsidy [received from associated enterprise (“AE”)], trade discount & volume rebates, commission and cash discount from AMP. This serves as a significant relief to majority of taxpayers facing this issue.

Clarification by Ministry of Finance in relation to challenges faced by Oil and Gas Industry in availing exemptions granted to goods imported for petroleum exploration operations

 


In view of representations from industry and field formations and, in the larger spirit of trade facilitation for Oil and Gas industry in availing and continuing with the exemptions granted to goods imported for petroleum operations, Ministry of Finance has issued Circular No 21/ 2013 – Customs dated May 16, 2013 (‘Circular’) and Notification No 28/ 2013 – Customs, dated May 16, 2013 (‘Notification 28/ 2013’).

Latest ITR I & ITR 4S for AY 2013-14

Income Tax Department has started uploading ITR-1 (Sahaj) and ITR-4S (Sugam) online or offline. It has released latest Excel Base Utility for Taxpayers to submit Annual Income Tax Return for Asstt. Year 2013-14 with new amendments. The latest amendment in Income Tax Return Forms this Excel utility is available Income tax return Sahaj(ITR-1) and Sugam(ITR-4S) online/offline with Checklist of documents and pre-requisites.
Please note that in case total income exceeds Rs. 5 lakhs, then efiling is compulsory.

Penalties & Interests on Late or non filing ITR in Assessment Year 2013-14.

Taxpayee and Tax Deductor must be aware about penalties/dues which are applicable under Income Tax Act. There are various penalties under the various provisions of the act committed by an assessee/Taxpayee. The penalties are liable under the act out of these some important penalties that are mandatory in nature while in most of the cases penalty is leviable at the discretion of the Assessing Officer (AO). The major penalties that are imposed under the act along with their nature of defaults are given as under:
1. Default: Concealment of Income or furnishing inaccurate particulars of income.
  • Minimum Penalty: 100% of tax sought to be evaded.
  • Maximum Penalty: 300% of tax sought to be evaded.

Why do companies and LLPs need to maintain books of accounts

The Thumb Rule
Book-keeping is the art of recording business transactions in a systematic manner. Book-keeping is the art of correctly recording in books of account all those business transactions that result in the transfer of money or money’s worth.
All the persons whether they are having an individual business or partnership firms or company or LLP or HUF or even they are professionals, are always required to maintain certain books of

Failing to deposit service tax may attract arrest and imprisonment upto seven years

download. With the passage of Finance Bill 2013 last week, the Revenue department officials can now arrest a person for non-payment of collected service tax.
Earlier, the officials did not have any power to arrest a person for service tax evasion. Besides, director and manager of a company who fail to pay collected service tax can now be arrested with imprisonment for upto seven years in addition to the penalty which may extend to Rs one lakh.
This is for the first time that service tax rules have been amended to attract the Criminal Procedure Code ( CrPC) in line with customs and central excise. The Section 91, which was incorporated in this year’s Finance Bill, provides power to arrest a person for non-payment of collected service tax, by an officer not below the rank of Superintendent of Central Excise.
The Bill, which was passed on May 10, also imposes a penalty on a person or company liable to pay service tax and fails to take registration number from the government.

Whether submission of audited accounts per se would oust jurisdiction of AO to pass a direction for special audit u/s 142 - NO: HC

THE issues before the Bench are - Whether the submission of audited accounts per se would oust the jurisdiction or authority of the AO to pass a direction for special audit u/s 142; Whether when a Government company provides unsatisfactory response to the queries and the show cause notice issued u/s 142 pursuant to discrepanices noticed by the AO, a special audit is rightfully warranted; Whether there can be any violation of principle of natural justice, when the the assessee was duly served with a show cause notice, before issuing direction for special audit; Whether the expression 'accounts of the assessee' can be given a narrow interpretation,

Monday, 20 May 2013

Decision of the Delhi HC in the case of Delhi Chit Fund Association -The first judicial pronouncement pertaining to the new service tax regime

 


The Delhi HC in a recent decision examined the issue of applicability of service tax on the services rendered by the foreman in a business chit fund under the new service tax regime effective from July 1, 2012 and in this regard undertook a detailed examination of the definition of “Service”. This being the first instance where an issue under the new service tax regime has been analyzed by a judicial forum of the stature of a High Court, the observations and the approach adopted by the Delhi HC assumes immense significance

Transfer Pricing: CBDT’s Advance Pricing Agreement Guidance With FAQs

The CBDT has issued a publication titled “Advance Pricing Agreement Guidance With FAQs“. The publication seeks to increase the awareness of the taxpayers about the “Advance Pricing Agreement Scheme” which was notified on 30.08.2012 and its implementation. The publication explains the procedure to be followed by a taxpayer and the tax authorities before a taxpayer can enter into an APA. It also provides guidance on types of APAs, advantages of APAs etc



http://www.itatonline.org/info/?dl_id=1215

 

What to do when you get an income tax notice?

Do you know that your tax return may be picked for random scrutiny? It is quite possible that you receive a notice from the Income-Tax Department for old dues or ambiguous income. Sending scrutiny notice under section 143 (3) has become a style for the department to develop seriousness in people regarding tax compliances.

Notices are also served on demand of the individual after applying for a rectification petition during filing of return under section 154, most probably due to mismatch in TDS or income amount, as well as when the details required are not specified under section 143 (2) of the Income-Tax Act, 1961. The AO (Assessing Officer) can make a regular assessment after a detailed enquiry under section 143 (2).

Notice under section 143 (1) is served to the assessee regarding intimation about the calculation mistake or error in filing return or claiming excessive deduction or wrong exemption found in

More Than One Self Occupied House Property

It is very common nowadays to own more than one house property in the upper class of our society. So it’s very important to know the tax implications of owning more than one house property so that it doesn’t hit hard on taxpayers.
Let us first know about the various types of House Property. It can be categorized as Self Occupied Property (SOP), Let Out Property (LOP) and Deemed to be Let Out Property (DLOP)
Self Occupied Property: It means a house that is being occupied or is lying vacant for residential or commercial purpose, which is letting the owner to reside in that house is Self Occupied Property. The annual value of SOP is considered as nil. The only deduction that is available is towards interest on loan subject to ceiling limit of Rs.150000.
Let Out Property: If any of the house is actually let out and there is a rental income from the same, it will be taxed as LOP, based on its annual value, i.e., the actual rent or reasonable expected rent in a