Wednesday, 31 July 2013

Income tax: Deadline for filing return extended till August 5

The government today extended the last date for filing of income tax returns by five days to August 5.


The due date, which was today, has been extended in wake of "unprecedented surge" in number of I-T returns being filed electronically.

"As a measure of taxpayers' convenience, it has been decided to extend the due date of filing of returns from July 31, 2013 to August 5, 2013," the Finance Ministry said.

As per the Central Board of Direct Taxes (CBDT), there has been an unprecedented surge in number of returns being e-filed.

This year till July 30, about 92 lakh returns have been electronically filed, which is 46.8 per cent higher than the returns e-filed during the corresponding period last fiscal.

SOURCE: NDTV

Service Tax return (ST-3) for Oct,12 to March,13

The Offline Excel utility for filing half-yearly Service Tax return (ST 3) for the period 1st October, 2012 to 31st March, 2013 is now available in ACES. The same can be downloaded from http://acesdownload.nic.in/. It can also be accessed from ‘DOWNLOADS’ section of ACES website, www.aces.gov.in. The online version of the same will be made available shortly and the exact date will be intimated on ACES website. All assessees are advised to carefully read the ‘Instructions’ given in a separate sheet in the ST-3 offline excel utility before filling up the details.

Download ST3 Return Excel Utility

(For Filing ST-3 returns for Half Year Oct-Mar 2013 onwards)

India Taxes- Due Date Alert for the month August 2013


 

Sr No
Due Date
Related to
Compliance to be made
1
05.08.2013
Service Tax
Payment of Service Tax for the Month of July 2013
2
07.08.2013
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 July2013.
 
· Deposit TDS from Salaries deducted during the month of July 2013
 
• Deposit TCS for collections made under section 206C including sale of scrap during the month of July 2013, if any
 
• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of July 2013, if any
3
20.08.2013
STPI
Submission of July 2013 Softex Forms
4
20.08.2013
VAT
Payment of VAT & filing of monthly return for the month of July 2013
5
31.08.2013
Income Tax
Annual Information return under section 285BA for the financial year 2011-12 in form 61A.
6
31,08.2013
Service Tax
Filing of Service tax return for the period Oct12 to Mar13

Likely impact of GST on retail in India

 


The liberalization of the Central Government’s FDI (‘Foreign Direct Investment’) policy on retail in September 2012 was widely hoped as a step that would catalyze investment into the sector. Apart from the high profile IKEA case, results however have not entirely been on expected lines. Multi brand retail players have sought further clarity and relaxation of stringent norms before committing significant financial investment. Approvals for single brand retail trading are coming through gradually as businesses evaluate their investment strategy.

Direct Tax update - July 2013

Direct Tax

High Court


Activities of a Liaison Office confined to purchase of goods for export, not taxable under the Income tax Act, 1961


The taxpayer was engaged in the business of sale of sports goods (including apparels) and had its main office in US. From its US office, the taxpayer arranged sports goods for its subsidiaries all over the world for onwards sale to customers. The goods were manufactured on a job to job basis and the same were dispatched directly by the manufacturers. The taxpayer had set up a Liaison Office (“LO”) in India for procurement of apparels from India. While obtaining the permission for setting up the LO in India, the taxpayer stated that the LO will not undertake any activity of trading, commercial or industrial nature and will not enter into any business contracts in its own name without prior approval of the Reserve Bank of India (“RBI”). Further, amongst other things, the taxpayer also committed that all expenditure of LO will be borne by the taxpayer and the LO will not lend or borrow any money in / from India. For the relevant assessment year (“AY”), the taxpayer did not file a return of income (“ROI”) in India. A survey was conducted under section 133A of the Income tax Act, 1961 (“Act”) in the premises of the LO and the assessment proceedings were initiated wherein a nil ROI was filed.

Recover Password Procedure for e-filing Income Tax Return

It is known by everyone that new website has already been launched for e-filing of Income Tax Returns. In the last financial year 2011-12, only assessee having income 10 Lakh or more than 10 lakh are bounded to submit online return. But not from the financial year 2012-13, the limit of income has been decreased from 10 lakh to 5 lakh. It means that Now e-filing of income tax return is mandatory for those persons who have income 5 lakh or more than 5 lakh. In this way, Data punching of Assessee data is in the hand of Assessee.

E.P.F. Account transfer online w.e.f. 15th August

Employee’s provident fund organization (EPFO) announced Independence gift to Indians as online transfer of Provident fund account on changing jobs will start on 15 August. This facility will benefit around 13 lakh subscribers in India.

Earlier EPFO has started taking digital signatures of the employer as it will be a vital for system for online transfer. The department hopes a good response from the employer providing digital signatures as the success of online transfer of accounts depends on it. The department wants to launch the service of online transfer of PF account on 15 august the day of independence.

ICAI President’s Message – August 2013 – (30-07-2013)

 
It is July and our celebrations that commenced on the first of this month, are still on. All Regional Councils, Branches and Chapters of the Institute have been celebrating the foundation day of accountancy profession since July 1. However, celebrations like this also call for a careful introspection in line with the ever-increasing expectations of our society. During the CA Day celebrations in New Delhi, Shri Sachin Pilot, Union Minister of State for Corporate Affairs (I/c) acknowledged that our Institute has set high standards since its inception, and desired that the ICAI needs to intensify its efforts to upgrade the skills of accountancy professionals and be a centre of excellence in research, and that it must scale up its capacities through appropriate academic and professional tieups. He has advised us to continue being inquisitive, skeptical and vigorous in our profession. He assured that the Ministry would be our partners in these efforts. Another acknowledgement from his side that accountancy profession has come a long way with a distinguished history of guarding the integrity of financial statements of the companies, was quite

Tuesday, 30 July 2013

S. 195 TDS: Application for refund of TDS due to cancellation of contract with non-resident can be made vide s. 154 application

ITO vs. Sun Pharmaceutical Industries Ltd (ITAT Mumbai)


The assessee remitted consulting charges/fees to a Taiwan based company called ‘Scandinavian Health Ltd’ on which it did not deduct tax at source u/s 195. The AO passed an order u/s 201 & 201(1A) by which he held the assessee to be in default. The assessee filed an application u/s 154 in which it pointed out that the agreement with the Taiwanese company had been subsequently cancelled and that there was no obligation to deduct TDS as per the CBDT’s Circular No.7 of 2007

Prepayment charges for closure of loan account which was taken for acquisition of property are allowable under section 24(b)

imagesIn the instant case during the assessment, the AO disallowed the assessee’s claim for deduction of prepayment charges on closure of housing loan. Further, the CIT (A) upheld the disallowance. Aggrieved assessee filed the instant appeal.
The Tribunal held in favour of assessee as under:
1) The definition of interest under section 2(28A) makes it clear that it has basically two components, firstly, the amount of interest for moneys borrowed and secondly, the amount paid by whatever name called in respect of the money borrowed or debt incurred;

WARNING: DONT USE MOBILE PHONE APPS FOR INCOME TAX RETURN

There are Mobile applications which are not approved by the Income Tax Department. Users are advised that they may not be according to Department data structure. Filers using them are doing at their own risk.
Source- Incometaxindiaefiling.gov.in

Whether money kept in escrow account for a specific purpose can be demanded by Revenue u/s 226 to clear income tax liability - NO: Delhi HC

THE issues before the Bench are - Whether money kept in escrow account is available to the assessee or the Revenue, when it is kept specifically to indemnify the purchaser of shares against any income tax liability arising on the assessee; Whether Revenue can invoke the provisions of section 226 to settle its tax demand against such held back amount, although it is clear from the language of the Share Purchase Agreement that under no circumstances would the money held in escrow be released either to the assessee company or to the Department; Whether a company can stake claim to any part of the consideration as shares in a transaction relating to sale and purchase of shares inter-se the selling shareholders and purchasers; Whether when the assessee company is neither a party to the Share Purchase Agreement or the Escrow Agreement can claim any sum from the parties to the Escrow Agreement; Whether as per section 226 of the Income Tax Act, the AO steps into the shoes of an assessee with respect to recovering sums owed to or held by the garnishee on account of the assessee; Whether section 226(3) neither confers jurisdiction nor provides a machinery for an AO to adjudicate the indebtedness of a third party to the assessee; Whether the AO has the jurisdiction to proceed u/s 226, when the third party has disputed his liability to pay any money to the assessee and Whether Income Tax Act has any provision similar to Order 21 Rule 46C of the CPC which confers jurisdiction on the AO to adjudicate the question regarding indebtedness of a third party to an assessee who disputes the same. And the assessee's writ allowed.

FAQ on Service tax on Restaurants

There is lot of Confusion regarding Services provided by Restaurants .I would like to clarify regarding certain issues:
Issue No 1 : Is the VAT imposed by States required to be included for the Purpose of Service Tax?
Answer: For the Purpose of Service Tax State VAT has to be excluded from the Taxable Value
Issue No 2: Is the Serving of Food And/or Beverages by way of Room Service liable for Service Tax?

Monday, 29 July 2013

ESOP: Being Used As A Double Edged Sword By The Department

Today, organizations realize that they have to go that extra mile to make their employees stay. Sharing their wealth and helping employees create wealth in the form of ‘Employee Stock Option Plan (ESOP)’ is one such initiative, which is gaining immense popularity in recent times.

An employee stock ownership plan (ESOP) is an employee-owner scheme that provides a company’s workforce with an ownership interest in the company. This is the latest trend in the industry. This is a very important tool in almost all industries. Where, the greatest assets are the employees and their knowledge. The organization loses on this if the employee were to leave. So in order to retain the employees they are offered direct participation in the form of shares of the company

S. 195(2) TDS: AO has no power to issue Nil TDS certificate

BIOCON Biopharmaceuticals Pvt. Ltd vs. ITO (ITAT Bangalore)





The assessee entered into a Joint Venture agreement with CIMAB SA, Cuba, to set up a JVC in India. It was agreed that CIMAB would provide technology to the JVC in consideration for which it would be allotted 49% of the equity capital of the JVC. The assessee filed an application u/s 195(2) claiming that the technology was not chargeable to tax in India and that the shares should be permitted to be allotted without TDS. The AO passed an order u/s 195(2) in which he accepted the assessee’s contention that no TDS was required to be deducted on the allotment of shares. However, later the

List of Income that is Exempt from Income Tax

There are different income which are exempted from Indian Income Tax. Since the formation of Indian Income Tax Act, 1961 government has exempted certain income from payment of Income tax. and this list of exempted income is increasing from that day. One of the few reason for creating this list is to avoid double taxation of Income, second is to give the benefit to underprivileged and third is to give benefit to government employees posted outside and foreign diplomats posted in India. One of the main Income which is exempted from Tax is Income from Agriculture and other is dividend Income in hands of Shareholder on which company pays the dividend distribution tax directly.
In the following cases Income is exempt from Income tax:-

Importance of being accurate and complete in tax returns

Filing of our income tax returns at the end of the financial year is a fundamental duty of every individual. With the latest amendment in the income tax laws, it mandatory for all individuals with income of over Rs 5 lacs to efile their income returns. It would be also worthwhile to note that that with the implementation of major systems across verticals the income tax department has already set up a system to capture relevant information from almost all quarters and cross verify the same with the income tax return submitted by you. It is thus very important to be accurate and complete while preparing your income tax return.

India tax returns: Two important changes NRIs should note this year

As always, July is the time for filing tax returns in India. As a Non Resident Indian, you would typically need to file a tax return in India if you have income that arises in India. This year, the income tax department has made two important changes that you must be aware of. These changes apply to residents as well as non residents.

Sunday, 28 July 2013

UNDERSTANDING SECTION 14A IMPACT WITH CASE LAWS PART - IV


 

We had earlier discuss in detail about the concepts of disallowance under section 14A read with rule 8D  along with various case laws earlier in two different articles. In case you want to refer, the same, please click on the link below:




Over a period of time, there are number of judgements comes from various levels of courts from different locations of India and hence it is very important to know the same for the correct treatment of section 14A disallowance.

S. 14A/ Rule 8D does not apply to short-term investments, gains from which are taxable

Sundaram Asset Management Co. Ltd vs. DCIT (ITAT Chennai)




In AY 2008-09 the assessee received tax-free dividend on its investments. The AO applied Rule 8D and computed the disallowance u/s 14A. Before the Tribunal, the assessee argued inter alia that s. 14A and Rule 8D did not apply to short-term investments as the gains arising on their transfer was chargeable to tax. HELD by the Tribunal:

Some of the investments made by the assessee are short term. Since assessee is paying capital gains tax on short term investments, Rule 8D will not apply on them and the AO is directed to recompute disallowance u/s 14A read with Rule 8D after excluding short term investments.

Summary on USE Tax at USA

Ø  Use is applicable when there is no sales tax levied

Ø  Mostly applied to purchase made outside the state, but used within the state

Ø  Also applied for purchase of exempted goods or services, if used for taxable manner

Ø  The value of the goods/ services is the base for USE tax. It includes, transportation, interest cost etc.

Whether when assessee pays huge premium on investment in shares of its subsidiaries, the same can be treated as disguised loan - Case remanded: ITAT

THE issues before the Bench are - Whether when the assessee had paid a huge premium on its investment in the share capital of its subsidiaries, the Revenue is justified to treat the amount of share premium as a disguised loan and Whether when the assessee had claimed section 10A exemption, and not excluded communication expenses incurred in foreign exchange in providing the technical services outside India, the Revenue is justified to reduce these charges from the export turnover and not the total turnover. The primary question is remanded to the AO.
Facts of the case

S. 14A/ Rule 8D: Interest on loans for specific taxable purposes to be excluded

ACIT vs. Best & Crompton Engineering Ltd (ITAT Chennai)



In AY 2009-10, the assessee contended that in computing the disallowance to be made u/s 14A and Rule 8D(2)(ii), the interest on bank loans and term loans taken for specific taxable purposes had to be excluded. The AO rejected the claim though the CIT(A) accepted it. On appeal by the department to the Tribunal, HELD:

Mumbai ITAT rules that blueprints, to be used in future, satisfy the test of ‘make available

 
This Tax Alert summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) in the case of Sargent & Lundy LLC, USA (Taxpayer) on the issue of whether provision of blueprints i.e., technical designs and plans, satisfies the test of ‘make available’ and, accordingly, taxable as fees for included services (FIS) under the India–US Double Taxation Avoidance Agreement (US DTAA). The ITAT ruled that the services rendered by the Taxpayer was technical in nature, in the shape of technical plans, designs etc., which enabled the payer to use the same in future without recourse to the Taxpayer. As the payer is enabled to use the blueprints on its own without any recourse to the Taxpayer, the services satisfy the test of ‘make available’ as stipulated under the US DTAA and, thus, taxable in India.

Friday, 26 July 2013

No s. 271(1)(c) penalty even for unsustainable/ non-debatable claims if there is disclosure in the return


 Though the income from the transfer of units of a mutual fund is exempt u/s 10(33), the assessee claimed a deduction for the loss of Rs. 3.08 crores suffered by him on transfer of US 64 units. The AO disallowed the loss on the ground that the exemption in s. 10(33) applied to a loss as well and imposed penalty u/s 271(1)(c). The CIT(A) confirmed the penalty. On appeal by the assessee, the Tribunal allowed the appeal on the ground that as the assessee had disclosed the details with the return, he had not filed inaccurate particulars of his income and that the making of a wrong claim / incorrect claim did not attract penalty u/s 271(1)(c). On appeal by the department to the High Court,

Though s. 36(1)(v) requires direct payment to the gratuity trust fund, payment to the LIC Group Gratuity Scheme is also allowable


The assessee set up a gratuity fund which was duly approved by the CIT. However, instead of making payment to the fund directly, the assessee paid an amount of Rs. 50 lakhs as initial contribution and an amount of Rs. 5 lakhs as annual premium to the Life Insurance Corporation (“LIC”) pursuant to the group Life Assurance Scheme framed by the LIC for the benefit of the employees of the assessee. The AO disallowed the claim for deduction on the ground that payment towards the gratuity fund was not made to an approved gratuity fund and was not allowable u/s 36(1)(v). The CIT(A), Tribunal and High Court (257 ITR 39 (Mad)) upheld the assessee’s claim on the basis that the payment to LIC under the Group Life Assurance Scheme was for the exclusive benefit of the employees of the assessee under the policy issued by it and tha...t the conditions stipulated in s. 36(1)(v) had not been violated. On appeal by the department to the Supreme Court, HELD dismissing the appeal:

Whether when assessee, an SSI with value of plant worth less than Rs 1 Cr, excludes costs of spares, Revenue is justified to take aggregate value of all equipments to deny assessee Sec 80IB benefits - NO: ITAT

THE issues before the Bench are - Whether when the assessee, claiming to be a small scale unit, with value of plant and machinery under Rs 1 crore, had excluded the cost of equipments such as tools, jigs, dies, moulds and spare parts for maintenance and the cost of consumable stores while determining value of its plant and machinery, the Revenue is justified to take the aggregate value of plant and machinery of the business as a whole to disqualify the assessee as a small scale unit and make a disallowance of the deduction claimed under section 80IB and Whether when the assessee had paid royalty to its AE for knowhow imparted to the assessee at the rate of 5 per cent of the net ex-factory selling price, which was a small fraction of the assessee’s turnover, the Revenue is justified to disallow the royalty payment. And the verdict partly goes in favour of the assessee.

I-T - Whether when assessee pays huge premium on investment in shares of its subsidiaries, the same can be treated as disguised loan - Case remanded: ITAT

THE issues before the Bench are - Whether when the assessee had paid a huge premium on its investment in the share capital of its subsidiaries, the Revenue is justified to treat the amount of share premium as a disguised loan and Whether when the assessee had claimed section 10A exemption, and not excluded communication expenses incurred in foreign exchange in providing the technical services outside India, the Revenue is justified to reduce these charges from the export turnover and not the total turnover. The primary question is remanded to the AO.

Thursday, 25 July 2013

Planning to save tax? Here are some investment options to benefit you

Planning to save tax will certainly be one of the key objectives for any person and particularly this time of the year should be ideal for taking any such measures. It is certainly, not prudent to wait till the fag end of the financial year to think about saving tax given that we may tend to miss and realise later by which time, it may not be possible to do any planning.

Awareness regarding e-filing of Income Tax Return.

We are again at the tax filing time of the year and the due date of July 31 is just a few days away. It is mandatory for individuals to file the return electronically if the taxable income exceeds Rs 500,000. It is important to furnish the information accurately for speedy and error-free processing. As most of us tend to file the return at the last minute, there are greater chances of minor errors while filing the returns electronically. Some of the important considerations for error-free tax filings are outlined below.

To begin, select the appropriate return form, based on the streams of income. For instance, ITR-1 (Sahaj) is applicable for individuals with salary income, income from other sources and income/loss from one house property. ITR-2 is applicable if you have capital gains/loss, income from more than one house property, foreign assets, brought forward losses, exempt income of more than Rs 5,000 etc.


Wednesday, 24 July 2013

DUE DATE EXTENDED FOR FILING RETURNS IN RESPECT OF ASSESSEES RESIDING OR ASSESSED IN STATE OF UTTARKHAND


 --------------------------------------------------------------------------------

SECTION 119 OF THE INCOME-TAX ACT, 1961 - INCOME-TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF DUE DATE FOR FILING RETURNS OF INCOME REQUIRED TO BE FURNISHED BY 31-7-2013 TO 31-10-2013 IN RESPECT OF ASSESSEES RESIDING OR ASSESSED IN STATE OF UTTARKHAND

ORDER [F. NO. 225/117/2013/ITA.II], DATED 23-7-2013
Considering the large-scale devastation due to recent natural clamity in the State of Uttarakhand, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income-tax Act, 1961, hereby extends the 'due-date' for filing Returns of income required to be furnished by 31st July, 2013 to 31st October, 2013, in respect of income-tax assessees residing or assessed in the State of Uttarkhand

Grant of Family Pension and Gratuity to the eligible member of the family of any employee/pensioner



Press Information Bureau
Government of India
Ministry of Personnel, Public Grievances & Pensions
23-July, 2013 16:55 IST
Grant of Family Pension and Gratuity to the eligible member of the family of any employee/pensioner
Family pension is payable to the family of a Government employee or pensioner after his death. Difficulties in payment arise when a Government Servant or pensioner goes missing. Clarificatory instructions have recently been issued by the Central Government for payment of benefits in such cases.

Whether role of Audit parties is to point out factual mistakes and not to advise AO on legal matters - YES: ITAT

THE issues before the Bench are - Whether role of the Audit parties is to point out factual mistakes and not to advise the AO on legal matters and Whether, if an AO, reopens the assessment on the legal advice of the audit party, it cannot be held as the formation of an independent opinion for the purpose of section 147. And the verdict goes against the Revenue.
Facts of the case

Salaried with total income upto Rs. 5 lakh also to FIle IT return for A.Y. 2013-14

CBDt has vide its press release dated 22.07.2013 clarified that exemption from filing return of income for salaried employees having total income upto Rs. 5 lakhs including income from other sources upto Rs. 10,000/- was only for assessment year 2011-12 and 2012-13 respectively. The exemption was given considering ‘paper filing of returns’ and their ‘processing through manual entry’ on system.
However, this year the facility for online filing of returns has been made user-friendly with the advantage of pre-filled return forms. These E-filed forms also get electronically processed at the central processing centre in a speedy manner. Hence, the exemption provided during the last two years is not being extended for assessment year 2013-14.

Finally CBDT Releases ITR 6 for e-filing for AY 2013-14 / FY 2012-13

CBDT has released ITR 6 for e-filing or Online filing of Income tax Return to be used by a company, other than a company claiming exemption under section 11 for Assessment year 2013-14 or Financial Year 2012-13. The ITR-6 can be downloaded from the following website :- https://incometaxindiaefiling.gov.in/
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

Tuesday, 23 July 2013

Services provided to SEZ units/Developers- N. No. 12/2013-ST

The Central Government has issued new Notification for service tax concessions in respect of service provided to SEZ units/Developers vide Notification No. 12/2013-ST Dated 01/07/2013.


According to the said Notification, if the service provider providing any service to SEZ Unit/Developer without charging any service tax, then they should obtain a copy of authorization for said specified services in Form A-2 granted by Service Tax Department to the said SEZ Unit/Developer.


Ensure that the service provided to SEZ unit/Developer is mentioned in the said authorization. If the service provided is not mentioned in authorization then, service tax is required to be levied and said SEZ unit/Developer can claim refund of service tax paid.

Mistakes to Avoid while filing online income tax return

downloadAs human beings, we are accustomed to not act until the eleventh hour. Hence, the same behavior is reflected while filing our tax returns. 99% of the mistakes occur because we wait for 31st July and grumble about the system if we are unable to file our returns.
Through this article, we try to address the common mistakes, their implications and steps to avoid them:
1) Details of Exempt Income: Dividend Income from Indian Companies, long term capital gain on securities, etc. are exempt income and not chargeable to tax. There is a misconception to not disclose details of such income in the returns. Remember that the brokerage house or investment company

Whether when assessee purchases a ready made property it will be entitled to claim Sec 54 benefits for cost of improvement incurred even after purchase of Unit - YES: ITAT

THE issues before the Bench are - Whether when the assessee purchases a ready made property it will not be entitled to claim Sec 54 benefits for the cost of improvement incurred after purchase of the Unit and Whether it is rational to presume that no capital expenditure can be incurred once the assessee moves into a newly-purchased property for habitation. And the verdict goes in favour of the assessee.
Facts of the case
The assessee is a retired salaried employee. The assessee sold his house property for a consideration of Rs 1,50,86,452, and, after deducting indexed cost of acquisition which worked

Whether contents of a pendrive seized during a Search and its print-outs constitute good enough reasons to assume jurisdiction u/s 147 - NO: ITAT

THE issues before the Bench are - Whether the contents of a pendrive seized during a Search and its printouts constitute good enough reasons to assume jurisdiction u/s 147 and make additions; Whether the reasons for reopening the assessment recorded on the basis of these contents can be held to be valid and Whether, for valid assumption of jurisdiction to frame a reassessment u/s 147, a proper and valid service of notice u/s 148 on assessee is mandatory requirement and violation thereof will result in quashing of the reassessment proceedings. And the verdict goes against the Revenue.
Facts of the case

Abrupt Withdrawal Of MAT And DDT Benefits To SEZ Valid – HC

Issue- Petitioners have prayed to declare the newly inserted proviso to Section 115JB(6) and 115-O(6) of the Income Tax Act in the second schedule to the Special Economic Zones Act 2005 as ultra vires, arbitrary, unfair and violative of Article 14 of Constitution of India.
Held- Legislature can never be precluded from exercising its legislative power by resort to the Doctrine of Promissory Estoppel. Since it is an equitable doctrine, it must yield when equity so requires. The courts would decline to enforce this doctrine if it results in great hardship to

Monday, 22 July 2013

Service tax applicability on reimbursment of expenses

19th April, 2006.


Notification No.12/2006-Service Tax

G.S.R. (E).– In exercise of the powers conferred by clause (aa) of sub-section (2) of section 94 of the Finance Act, 1994 (32 of 1994), the Central Government hereby makes the following rules, namely:-

Transfer Pricing: Companies with extreme turnover like Infosys are not comparable

CIT vs. Agnity India Technologies (Delhi High Court)


 



The assessee, a wholly owned subsidiary of Bay Packets Inc., USA, was engaged in the business of development of software for the parent company in the field of telecommunications. To determine the arms' length price, the TPO & DRP took Infosys Technologies as a comparable. On appeal by the assessee, the Tribunal (included in file) held that the assessee was not comparable with Infosys as Infosys was a large and bigger company in the area of development of software and the profits earned by it cannot be benchmarked or equated with the assessee's results. One of the aspects pointed out by the Tribunal was that Infosys' turnover was Rs. 9,028 crores while that of the assessee was only Rs. 16.09 crores. On appeal by the department to the High Court, HELD dismissing the appeal:

Taxpayee can save tax by 6 ways in Asstt. Year 2013-14

Income tax filing due date is getting closer. However, quite a lot of tax filers are still not aware of all the deductions that could be availed of. It is always good to be updated on the latest tax deductions. It helps one in maximizing the tax deductions, hence minimizing the tax to be paid. Let us now look at some of the latest sections available for tax deduction from FY 2012-13 onwards.

Section 80CCG
Popularly known as RGESS or Rajiv Gandhi Equity Savings Scheme, this section has been introduced in order to push the in-flows into the Indian capital markets. It is also the first time that an equity investment has been allocated a section in the tax deductions page. Equity investments over 1 year are exempt from tax, though. This investment is only for the first time equity investors with income up to Rs. 12 lakh. Maximum investment allowed is Rs. 50,000 with 50 per cent deduction allowed for the invested amount.

Exchange Rate effective from 19/07/2013

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, PART-II, SECTION 3, SUB-SECTION (ii), EXTRAORDINARY]


GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

S. 80-IB/80-IC: Subsidies that reduce the cost of production have a direct nexus with, and are "derived from", the industrial undertaking

CIT vs. Meghalaya Steels Ltd (Gauhati High Court)
 

The assessee set up an industrial undertaking which was eligible for deduction u/s 80-IB/ 80-IC. It received transport subsidy, interest subsidy, power subsidy and insurance subsidy pursuant to a scheme of the Government which was claimed to be eligible for deduction u/s 80-IB/80-IC. The AO & CIT(A) relied on Pandian Chemicals 262 ITR 278 (SC), Sterling Foods 237 ITR 579 & Liberty India 317 ITR 218 (SC) and rejected the claim on the ground that these subsidies were not "derived from" the undertaking as their immediate source was the Government's scheme and not the undertaking. However, the Tribunal allowed the claim on the ground that the subsidies reduced the corresponding expenses incurred and had a direct nexus with the manufacturing activities of the assessee. On appeal by the department to the High Court, HELD dismissing the appeal:

Friday, 19 July 2013

S. 194-I TDS: Lease premium paid to MMRDA is not "rent"

ITO vs. Wadhwa & Associates Realtors (ITAT Mumbai)

The assessee executed a lease deed with MMRDA pursuant to which it obtained a plot of land at Bandra Kurla Complex on a long-term lease. The assessee paid MMRDA Rs. 950 crore as lease premium. The AO held that the said lease premium was in the nature of rent and that the assessee ought to have deducted TDS thereon u/s 194-I. He held the assessee to be in default and demanded tax of Rs. 314 crore. This was reversed by the CIT(A) on the ground that lease premium could not be equated with rent. On appeal by the Department to the Tribunal, HELD dismissing the appeal:

Salaried Employee, How to split Salary Income Section-wise?


I would like to share this important information for salaried employee who paid or deduct Tax as TDS and submit Income Tax Return annually. Normally Salaried employee does not know all sections of Income Tax related with Form No. 16. and thus they are in trouble after furnishing Annual Return to Income Tax Department. Salary Income classified into 6 parts.

Whether when assessee issues shares to employees without the premium price under ESOP, the same is to be construed as short capital receipt - NO: ITAT Special Bench

THE issues before the Bench are - Whether when assessee issues shares to employees without the premium price under ESOP, the same is to be construed as short capital receipt and Whether when the company does not pay anything to its employees, but incurs obligation of issuing shares at a discounted price on a future date, it is not a deductible expenditure u/s 37(1). And the verdict partly goes in favour of the assessee.

Whether once Commissioner while excersing his revisional powers has stated that non-initiation of penalty proceedings by AO does not warrant any interference, hands of AO are tied on invoking penalty on remand - NO:HC

THE issues before the Bench are - Whether once the Commissioner while excersing his revisional powers has stated that non-initiation of penalty proceedings by the AO does not warrant any interference, the hands of the AO is tied on invoking the penalty provisions on remand; Whether such penalty proceedings cannot be initiated, although the assessee was later found to have made bogus claims and concealed income during such fresh assessment; Whether

Guidelines for Weighted Deduction @ 150% of Expenditure Incurred on skill Development U/s. 35CCD

To Promote Skill Development Direct Taxes Incentives Given; Guidelines for Weighted Deduction @ 150% of the Expenditure Incurred on skill Development Under Section 35ccd of the Income-Tax Act, 1961 Issued
1. The National Manufacturing Policy (NMP) 2011 proposed to provide inter alia, the following direct taxes incentives to promote skill development:
“Weighted deduction of 150% of the expenditure (other than land or building) incurred in Public Private Partnership (PPP) projects for skill development in manufacturing sector in separate facilities in coordination with National Skill Development Corporation (NSDC).”
2. As a follow-up of NMP, the Finance Act, 2012 inserted a new Section 35CCD in the Income-tax Act, 1961(‘the Act’) which provides that for computing business income, a company shall be allowed

Thursday, 18 July 2013

ITR Description

Dear Taxpayee I would like to share some important information regarding Filing of Annual Income Tax Return in Asstt. Year 2013-14 as per Income Tax Department amendment updated Income Tax Form (ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4S (Sahaj) and ITR-4). Every year Income Tax Department has been changed ITR Form and thus Taxpayee always in difficulty to submit their Annual Return. Therefore, an important information of ITR with full description is as follows:

Guidelines for preparing income tax return for AY 2013-14

The due date for filing personal tax returns for the financial year 2012-13 is July 31. Taxpayers need to be aware of various points while filing their returns. Filing incorrect details may result in interest, penalty or delay in refunds. These points can help you file your return correctly.

Choose the correct form: Different forms available for tax filing are ITR-1 (Sahaj), ITR-2, ITR-3, ITR-4S (Sugam) or ITR-4. The form selection is dependent on your source of income. For example, if you have rental income from two houses or capital gains, ITR-2 would be applicable. However, if you have only salary income and certain other incomes, then ITR-1 is applicable.

Exemption given in s. 43(5) to derivatives from being treated as "speculative transaction" not available to Expl to s. 73

CIT vs. DLF Commercial Developers Ltd (Delhi High Court)



In AY 2007-08 the assessee suffered a loss of Rs. 4.92 crore on account of transactions in derivatives. It claimed that as the Explanation to s. 43(5) inserted by the Finance Act 2005 w.e.f. 1.4.2006 exempted derivatives from the ambit of a "speculative transaction", the loss from trading of derivatives was not a speculative loss and could not be disallowed. The AO & CIT(A) rejected the contention and held that the Explanation to s. 73 was independent of s. 43(5) and the said loss had to be treated as a speculation loss. However, the Tribunal held that derivative transactions were separate from trading in shares and that the Explanation to s. 73 will not be applicable. On appeal by the department, HELD reversing the Tribunal:

Wednesday, 17 July 2013

S. 10A/10B: CBDT Circular On Set-Off Of Eligible Unit Profits Against Ineligible Unit Loss

Synopsis:

The CBDT has issued a Circular dated 16th July 2013 giving its view on the controversial issue as to whether the profit of a unit eligible for deduction u/s 10A/ 10B has to be first set-off against the loss suffered by an ineligible unit before computing the available deduction u/s 10A/10B. The CBDT has expressed the view that as s. 10A/10B is now a "deduction" provision, first, the income/loss from various sources i.e. eligible and ineligible units, under the same head have to be aggregated in accordance with s. 70 of the Act and thereafter, the income from one ahead has to be aggregated with the income or loss of the other head in accordance with section 71 of the Act. If after giving effect to

ESOP discount (difference between market price and issue price) is a deductible expenditure at the time of vesting of the option. An adjustment has to be made if the market price is different at the time of exercise of the option

Biocon Ltd vs. DCIT (ITAT Bangalore Special Bench)




The assessee framed an Employee Stock Option Plan (ESOP) pursuant to which it granted options to its employees to subscribe for shares at the face value of Rs. 10. As the market price of each share was Rs. 919, the assessee claimed that it had given a discount of Rs. 909 which was allowable as a deduction as 'employee compensation. Though the options vested equally over four years, the assessee claimed a larger amount in the first year than was available under the SEBI guidelines. The AO & CIT(A) rejected the claim on the ground that there was no "expenditure". On appeal to the Tribunal, the issue was referred to the Special Bench. HELD by the Special Bench:

Analysis on taxability on charity / charitable trust under old and current provisions of Service Tax

                  
1. Provisions for Charity / Charitable trust before 1.7.2012:
As per section 65(105)(zzze) services provided to its member by any club or association in relation to provision of services, facilities or advantages for a subscription or any other amount would be taxable service.
Further, as per section 65(25aa) “Club or association” means any person or body of persons providing services, facilities or advantages, primarily to its members, for a subscription or any other amount, but does not include—any person or body of persons engaged in any activity having objectives which are in the nature of public service and are of a charitable, religious or political nature.

Small individual investors whose income is below taxable limit - not require to disclose PAN u/s 206AA

                  
The introduction of Section 206AA compelled the banks and financial institutions to insist their customers to furnish PAN. This caused unnecessary hardship to senior citizens, small business-women and poor illiterate people whose income was below taxable limit to obtain PAN and furnish the same to banks.
This is a welcome judgment from Hon’ble Karnataka High Court relieving small individual investors whose income is below taxable limit from the hardship of obtaining and furnishing PAN in order to rescue their interest income from being subjected to tax deduction at source. An individual does not need to file return of income under Section 139 of the Act if his total income is below taxable limit. Section 139A exempts the person whose total income is below taxable limit from obtaining PAN. Further, no deduction of tax is to be made, if the aforesaid person files declaration in the prescribed form (Form 15G) with the banks and financial institutions in which he/she has deposited money.

Whether when assessee is restrained by court from sale of factory land till labour case is settled, any advance taken from a real estate developer can be subjected to capital gains even before land user change permission is granted - NO: Bombay HC

THE issues before the Bench are - Whether when the assessee is restrained by the court from sale of the factory land till the labour case is settled, any advance taken from a real estate developer can be subjected to capital gains even before the land user change permission is granted by the municipal authorities and Whether when the assessee's Board had decided to treat the factory land as stock-in-trade, the same is to be treated as merely paper entry for lack of construction activities. And the answers go against the Revenue.

Tuesday, 16 July 2013

No s. 271(1)(c) penalty leviable in a case where assessee agreed to additions to buy peace

CIT vs. Manjunatha Cotton and Ginning Factory (Karnataka High Court)



The High Court had to consider whether penalty u/s 271(1)(c) can be levied in a case where the assessee agrees to an addition made by the AO so as to buy peace of mind. HELD by the High Court:

Merely because the assessee agreed for addition does not lead to the inference that the said addition is on account of concealment if the assessee has offered an explanation which is not found to be false. The mere fact that the assessee agreed to pay tax and did not challenge the assessment order does not mean that his conduct is mala fide. The following principles apply:

When Should Costs Be Capitalized? [Case Study]

It is not surprisingly, my post about Capitalization and Amortization of Software Cost been gaining lots of reaction and questions on the ground [through email], particularly from software companies or accountants who take care of a software company. Despite that software industry is considered as a dynamic business, cost capitalization is one an old—constant debate in the accounting world. Back to the question; when should cost be capitalized? AOL is a good example to helps to showcase the judgment involved in, and potentially significant effects of, management decisions aimed at determining whether costs incurred should be capitalized or expensed.
In this post, I am going to answer the questions. With extensive life case studies come along with this post, I believe it gives a better understanding about cost capitalization concept and practices. It is not only about AOL, as I said, lots of real-life examples. Enjoy!

Capital gains - Whether for the purpose of computing relief, assessee is required to first take recourse to Sec 70(3) and then only look at Sec 54EC - NO: Madras HC

THE issues before the Bench are - Whether for the purpose of computing relief, the assessee is required to first take recourse to Sec 70(3) and then only look at Sec 54EC and Whether provisions of Sec 54EC specify any particular nature of transfer of long-term capital asset. And the verdict goes against the Revenue.
Facts of the case

CBDT Directive Regarding Past Adjustment Of Refunds

Synopsis:

Pursuant to the judgement of the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273, the CBDT has issued Instruction No. 06/2013 dated 10th July 2013 stating that in cases where returns have been processed by the CPC, Bengaluru and refunds have been fully or partly adjusted against the past arrears while passing or communicating the order under Section 143( I) of the Act, without following the procedure under Section 245 of the Act, the AO must issue a notice to the assessee and pass an order u/s 245 after considering the reply. It has been directed that the procedure must be carried out by 31st August, 2013 positively.

Monday, 15 July 2013

Taxpayers to get unique number for complaints

Taxpayers having grievances regarding their income tax refunds and tax computations will now get a unique acknowledgement number with an assurance that their complaint will be resolved within two months.

The newly introduced number will not add to confusion and will be different from the existing unique numbers issued by the I-T department to taxpayers, like the PAN, TAN and unique transaction number (UTN), authorities said.

PDF Convertor Utility NEW Ver.(1.2L) to generate Form-16/16A For A.Y. 2013-14 from TRACES.

It is observed from the new https://www.tdscpc.gov.in (TRACES) that TDS Dedeductor have face the problem when they generate Form 16/16A in bulk form i.e. more than 1000 then the TDS Certificate or Form 16/16A at a time therefore Income Tax Department advised to All Deductors to download PDF Converter Utility V1.2L again. This new version will works on or after 23rd March, 2013. The TDS Deductor/Deductee 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. Text file is password protected and password will be ''.


S. 132B: Implications Of Seized Cash Not Being Treated As Advance Tax

Finance Act, 2013 has inserted Explanation 2 to section 132B which reads as under:-
“For the removal of doubts, it is thereby declared that the “existing liability’’ does not include advance tax payable in accordance with the provision of part C of chapter XVII ”.

Section 132B of the Income Tax Act prescribes the provisions regarding the application of seized assets including cash seized during the course of income tax search conducted u/s 132 or requisitioned or 132A of the Act. It prescribes, inter alia, that the seized assets/cash can be utilized for the purpose of recovery and adjustment of the amount of any existing tax liability and the amount of the liability determined on completion of the assessment in pursuance to search u/s 153A.

A Treatise On The Law Of Reopening Of Assessments

The assessing officer is empowered under section 147 of the Income Tax Act, 1961 to assess or reassess the income escaping assessment. This is popularly known as ‘reopening of the assessment’.

In following cases, it would be deemed that income chargeable to tax has escaped assessment:

- Where no return is furnished for the relevant A.Y.
- Where return has been furnished but assessment is not done and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;
- where the Assessee has failed to furnish a report in respect of any international transaction which he was so required under section 92E
- where an assessment has been made, but—
- income chargeable to tax has been underassessed ; or
- such income has been assessed at too low a rate ; or
- such income has been made subject of excessive relief under this Act ; or
- excessive loss or depreciation allowance or any other allowance under this Act has been computed.

Sunday, 14 July 2013

Whether when assessee receives subsidies like transport, power, insurance & interest, they go to reduce expenses of Industrial Undertaking eligible for Sec 80IB benefits - YES: HC

THE issues before the Bench are - Whether transport subsidy, power subsidy, insurance subsidy and interest subsidy, received by the assessee, are allowable for computation of deduction u/s 80IB of the Act; Whether the amount of these subsidies would go on to reduce the expenses incurred under that particular head and the resultant profits and gains of the business of Industrial Undertaking would be eligible for deduction u/s 80IB of the Act and Whether the subsidies are inter-linked, inter-laced and having a direct nexus with the manufacturing activities of the assessee, which are inseparable from the expenditure incurred by the assessee on account of transportation, purchase as well as sales of the business of the assessee are allowable for deduction u/s 80IB. And the verdict goes in favour of the assessee.
Facts of the case

ICAI requests members to share difficulties being faced in e-filing of tax audit reports

Direct Taxes Committee of ICAI requests members to share difficulties being faced in e-filing of tax audit reports. – (12-07-2013)
As the members are aware, the Direct Taxes Committee of ICAI makes suitable representations to the Central Board of Direct Taxes or other appropriate bodies on various issues arising out of direct tax laws from time to time which are brought to the notice of the Committee by the members. Recently, it has been brought to the notice of the Committee that certain difficulties are being faced by members in e-filing of tax audit reports, i.e., Form No. 3CA/3CB & 3CD.

To address the issues being faced, ICAI proposes to submit a detailed representation to appropriate authorities. In order to cover the issues comprehensively, we request the members to share the difficulties being faced by them while filling or uploading the tax audit reports at dtc.memoranda@icai.in preferably by 20th July, 2013. Timely response will enable us to share the issues with the concerned authorities so that best possible solutions to the issues can be worked out.

Taxation of Bonus Shares

Section 45- charging section for capital gains:
Section 45 is charging section. Various sub-sections of this section provide for charging of any profit or gains and in some specified exceptions even ‘capital value’ is also deemed to be capital gain taxable under the head.
There are different provisions for computation of capital gains in case of short-term capital assets, long-term capital assets, depreciable assets, slump sale, and for additional compensation when original compensation was assessed, etc.

Friday, 12 July 2013

No s. 271(1)(c) penalty even if explanation unproved if it is not disproved by AO

Saket Agarwal vs. ITO (ITAT Delhi)



The assessee had a cash credit of Rs. 7.33 lakhs in his books. He also claimed agricultural income of Rs. 1 lakh. He offered an explanation on both issues which was not accepted by the AO. He accordingly surrendered both amounts to tax to buy peace. The AO imposed penalty u/s 271(1)(c) which was confirmed by the CIT(A). Before the Tribunal, the assessee claimed that the additions were made on “voluntary surrender” and to avoid further litigation and to buy mental peace and that the same could not be considered as furnishing of inaccurate particulars of income or concealment of income. HELD by the Tribunal allowing the appeal:


Nine Options to Save Income Tax except 80C



It's that time of the year again when one needs to begin calculating their tax liabilities. However, before you do so, remember to analyze the various sections of tax deductions under the Income Tax Act as tax planning does not end with Section 80C. (Calculate your tax liability here)

80D:

Tax deduction under section 80D qualifies for mediclaim policies. The premium, which is paid for medical insurance policy for self and family members to protect them from sudden medical expenses, comes under this section. The maximum amount allowed for exemption annually for self, spouse and dependent parents/children is Rs. 15,000. In case of a senior citizen, the maximum amount extends up to Rs. 20,000. If you are paying the premium for your parents (whether dependent or not), you can

Tax Return Two important changes NRIs should note this year



As always, July is the time for filing tax returns in India. As a Non Resident Indian, you would typically need to file a tax return in India if you have income that arises in India. This year, the income tax department has made two important changes that you must be aware of. These changes apply to residents as well as non residents.

1: Mandatory efile if taxable income over Rs 5 lakh
Until last year, that is, for tax returns until financial year 2011-2012, it was mandatory to efile returns where the taxable income was over Rs 10 lakh. This year, the limit has been further reduced. If you had taxable income in India that exceeded Rs 5 lakh in 2012-13, you must efile your tax returns.

You can either do it yourself using online efiling portals or take the help of assisted tax preparers. The income tax department provides a free method to upload your tax return online. If you are looking for a more user friendly approach, paid efiling portals might be a good choice. Many of these paid service providers do offer special packages for NRIs.

If you are not comfortable doing the entire filing by yourself, you can choose to go to assisted preparers. You can get professional advice along with help with efiling your tax return.

2: Match your tax credits
From this year, the Income Tax department has introduced a system by way of which you can match your income tax credits with your actual tax return. The tax credit statement is available in the form of Form 26AS.

"This statement provides details of all taxes deducted on your behalf or paid by you during the year. What you file in your tax return must match exactly with the details on Form 26AS. If there is a mismatch, you will get a show cause notice from the Income Tax department seeking clarification," explains Ankur Sharma, CEO of Taxspanner.com.

He adds, "There can be two reasons why there is a mismatch. First, on the part of the tax deductor. He may have misquoted the PAN number or may have made a delayed deposit of the tax deducted. In such case, you would need to contact the tax deductor and ask him to rectify the error. The other reason could be that you have entered incorrect details while filing your tax return. You can easily rectify this error by matching it with your Form 26AS."

Form 26AS contains:
Details of tax deducted on behalf of the taxpayer by deductors -Details of tax collected on behalf of the taxpayer by collectors -Advance tax/self assessment tax/regular assessment tax, etc. deposited by the taxpayers -Details of paid refund received during the financial year -Details of the high value transactions in respect of shares, mutual fund etc.

This statement is generated through a valid Permanent Account Number (PAN). For NRIs, important income sources that would be reflected in Form 26AS include interest on NRO bank deposits and other bonds, capital gains on sale of securities on an Indian stock exchange, tax deducted, if any on rental income or sale of property etc.

You can access your Form 26AS in several ways. You can view the form on the Income Tax website - https://incometaxindiaefiling.gov.in. You must register at the portal and click on 'View Tax Credit Statement (From 26AS)' in "My Account". The facility is available free of cost.

Capital gains - Whether when assessee transfers agricultural land to an AOP, such transfer is valid only if there is an agreement between the assessee and AOP - YES: HC

THE issue before the Bench is - Whether when the assessee transfers its agricultural land to an AOP, such transfer is valid only if there is an agreement between the assessee and the AOP. And the verdict goes in favour of the Revenue.
Facts of the case
The assessee's case was selected for scrutiny on the basis of information received that the assessee had sold an immovable property for Rs 39 lakh. The assessee contended that he had an agricultural land which land and land situated in the vicinity were declared as industrial

Issue(s)/ Suggestion(s) in Service Tax Voluntary Compliance Encouragement Scheme

Dear Member,

As you would be aware, Service Tax Voluntary Compliance Encouragement Scheme, 2013 (STVCES) has been introduced by the Finance Act, 2013 to encourage the voluntary compliance and broaden the tax base in Service Tax.

In this regard, Central Board of Excise & Customs had invited ICAI in an open house organised on July 5, 2013 with trade and industry to address various doubts/concerns for the smooth implementation of the scheme. In the said Open house, ICAI has submitted various suggestions collated from the expert(s) in the field of Indirect Taxes. The copy of the same is enclosed for your reference.

Further, CBEC has asked for further issues /doubts/ concerns on STVCES, 2013. Accordingly, you are requested to send us issues(s)/and suggestion(s) (other than enclosed) on the scheme at suggest.idtc@icai.inlatest by July 15, 2013.


Sincerely Yours

CA. Sanjay Agarwal
Chairman,
Indirect Taxes Committee
The Institute of Chartered Accountants of India
ICAI Bhawan
A-29, Sector-62,
Noida (U.P.) - 201309,
India , Email us at : suggest.idtc@icai.in
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Thursday, 11 July 2013

Whether surrendered income has to be quantified on basis of incriminating material found during search or on basis of any other evidences collected during assessment - ruled against Revenue: ITAT

THE issues before the Bench are - Whether addition made by the Assessing Officer merely on the basis of statement u/s 132(4) can be sustained in the absence of any evidence, material or recovery of any movable or immovable assets at the time of search to corroborate the disclosure made by the assessee and Whether the surrendered income has to be quantified on the basis of the incriminating material found during the search or on the basis of any other evidence collected during the assessment proceedings. And the verdict goes against the Revenue.

Revised Guidance Note on Tax Audit

ICAI has released the Revised Guidance Note on Tax Audit u/s 44AB of the Income-tax Act, 1961- Revised 2013 Edition on 09th July 2013. The last edition of this Guidance Note was brought out in the year 2005. Thereafter, a number of amendments were made in the Income-tax Act, 1961 which had a great bearing on tax audit reporting requirements and was followed by the issuance of supplementary guidance a couple of times. Also, due to unstinted efforts of ICAI, the Government has permitted uploading of tax audit report in the e-filing portal. In order to update and guide the members about the developments taken place in past few year, the Direct Taxes Committee of the Institute of Chartered Accountants of India has revised the said Guidance Note.