Saturday, 31 May 2014

Understanding Speculation Profit/ loss with latest case laws:


1. S. 73 of the Income-tax Act provides that any loss computed in respect of speculation business carried on by an assessee will not be set off except against the profits and gains, if any, of another speculation business. Further, where any loss computed in respect of a speculation business for an assessment year is not wholly set off in the above manner in the said year, the excess shall be allowed to be carried forward to the

India Taxes- Due Date Alert for the month June 2014




Sr No
Due Date
Related to
Compliance to be made
1
06.06.2014
Service Tax
Payment of Service Tax for the Month of May 2014. Please also make payment for use of service under reverse charge mechanism
2
07.06.2014
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 2014.
· Deposit TDS from Salaries deducted during the month of May 2014
• Deposit TCS for collections made under section 206C including sale of scrap during the month of May 2014, if any
• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of May 2014, if any
3
15.06.2014
Income Tax
Payment of first instalment of advance tax (15%) for corporate
4
20.06.2014
VAT
Payment of VAT & filing of monthly return for the month of May 2014
5
21.06.2014
STPI
Filing of Softex Form for the month ended May 2014
6
30.06.2014
VAT
Filing of Annual return in hard copy (Karnataka VAT

Can Only Wife Show Rent Even If The House Is Jointly Held With Husband?



Section 26 of the I T Act provides mechanism of assessment of income from house property in case, the house property is under joint ownership. Read the relevant provision

NOMINATION BY SECURITIES HOLDERS


Rule 7 of the Companies (Share Capital and Debentures) Rules 2014 makes detailed provision for this purpose.
Any holder of securities of a company may, at any time, nominate, in Form SH – 13, any person as his nominee in whom the securities shall vest in the event of his death.

Form 16 / Form 16A Latest PDF Generation Utility Ver. 1.3L Download from TDSCPC.

The posting had been move to another website. Please click the link below to get the access of the same. 


https://taxofindia.wordpress.com/2015/11/26/form-16-form-16a-latest-pdf-generation-utility-ver-1-3l-download-from-tdscpc/ 



Whether surplus arising on sale of agri land gives rise to agricultural income within meaning of sec 2(1A) read with Explanation (1) of Sec 2(14)(iii) and consequentially exempt u/s 10(1) - YES: ITAT Third Member

THE issues before the Bench are - Whether the transactions of purchase and sale of five pieces of agricultural land with standing crop, by way of separate conveyance deeds, beyond the prescribed distance from any municipal council, amounts to transactions on capital account or adventure in the nature of trade and Whether the surplus arising on sale of agricultural land gives rise to agricultural income within the meaning of section 2(1A) read with Explanation (1)/Section 2(14)(iii)(a) and (b) and consequentially exempt under section 10(1) of the Act. And the answers go against the Revenue.
Facts of the case

Delhi HC rules on TP aspects of intra-group service transactions


India’s High Court (HC) of Delhi, in the case of M/s Cushman & Wakefield India Private Limited (the Taxpayer), has ruled on the transfer pricing aspects of payments made for certain intra group services.
The Taxpayer had received certain liaison and coordination services from its Associated Enterprises (AEs) for which the AEs charged the Taxpayer actual costs, allocated based on an allocation key. The Transfer Pricing Officer (TPO) disallowed the payment on grounds that the Taxpayer did not establish the arm’s length nature of the same. Since the AEs charged only the actual costs without adding a profit element, the Taxpayer argued that it was not required to benchmark the transaction. The Taxpayer was of the view that

Friday, 30 May 2014

Applicability of the provisions of the Export of Services Rules, 2005 in certain situations

Circular No.111/05/2009-ST
F.No.137/307/2007-CX.4 (Pt.)
Government of India
Ministry of Finance
Department of Revenue
(Central Board of Excise & Customs)
*****
New Delhi, dated the 24th February, 2009.
Subject: Applicability of the provisions of the Export of Services Rules, 2005 in certain situations
In terms of rule 3 (2) (a) of the Export of Services Rules 2005, a taxable service shall be treated as export of service if “such service is provided from India and used outside India” Instances have come to notice that certain activities, illustrations of which are given below, are denied the benefit of export of services and the refund of service tax under rule 5 of the Cenvat Credit Rules, 2004 [notification No. 5/2006-CE (NT) dated 14.03.2006] on the ground that these activities do not satisfy the condition ‘used outside India’,-
(i) Call centres engaged by foreign companies who attend to calls from customers or prospective customers from all around the world including from India;
(ii) Medical transcription where the case history of a patient as dictated by the doctor abroad is typed out in India

FAQs – Place of Provision of Service under Service Tax

Place of Provision of Service Rules have been notified w.e.f. 1-7-2012. The following FAQs are based on various queries received on the Taxmann’s Query Board.

1. Relevance of the Place of Provision of Service Rules
What the purpose of Place of Provision of Service (POPS) rules?
As per section 66B of Finance Act, 1994, service tax is payable if service is provided in a taxable territory. ‘Taxable territory’ broadly means all States and Union territories of India (excluding J&K) plus 200 nautical miles inside the sea from baseline.
Section 66C of Finance Act, 1994 empowers Central Government to make rules to determine place where

No TDS from distribution of rental income earned by a society among its members.



Tax deducted at source (TDS) and Tax collection at source (TCS), as the very names imply aim at collection of revenue at the very source of income. It is essentially an indirect method of collecting tax which combines the concepts of “pay as you earn” and “collect as it is being earned.” Its significance to the government lies in the fact that it prepones the collection of tax, ensures a regular source of revenue, provides for a greater reach and wider base for tax. At the same time, to the tax payer, it distributes the incidence of tax and provides for a simple and convenient mode of payment.

MONEY BY COMPANY FOR PURCHASE OF ITS OWN SHARES


Conditions:
The company shall not make a provision of money for the purchase of, or subscription for, shares in the company or its holding company, for the purchase of, or the subscription for, the shares by trustees is for the

AS 15 - Employee Benefits - A Brief


This happens to be one of the most ignored topic by the examiners and hence also by the students of CA profession. But it has to be embarrassing for a qualified chartered accountant in being ignorant, unable to understand the terms used in the employment benefits disclosure in notes to financial statements of a company to which this standard applies.  This write-up is to ensure that the reader doesn’t face difficulty in understanding the said disclosures particularly in the movement of gratuity obligation.

Whether surplus arising on sale of agri land gives rise to agricultural income within meaning of sec 2(1A) read with Explanation (1) of Sec 2(14)(iii) and consequentially exempt u/s 10(1) - YES: ITAT Third Member

THE issues before the Bench are - Whether the transactions of purchase and sale of five pieces of agricultural land with standing crop, by way of separate conveyance deeds, beyond the prescribed distance from any municipal council, amounts to transactions on capital account or adventure in the nature of trade and Whether the surplus arising on sale of agricultural land gives rise to agricultural income within the meaning of section 2(1A) read with Explanation (1)/Section

Thursday, 29 May 2014

Combined Application of AS 11 & AS 16


This article deals with the combined application of AS 11 and AS 16. This article defines a situation in which the exchange difference shall be treated as both borrowing cost as per AS 16 and exchange difference as per AS 11.

In simple words the exchange difference shall be bifurcated into ‘interest portion’ (to be accounted for as per AS 16) and ‘exchange gain/loss’(to be charged to P&L as per AS 11).

Paragraph 4(e) of AS 16 deals with capitalization of interest portion of exchange difference arising from foreign currency borrowings.

NOTICE TO REGISTRAR FOR ALTERATION OF SHARE CAPITAL




According to Section 64 of the Companies Act, 2013 as discussed earlier here, Where—
(a) a company alters its share capital in any manner specified in sub-section (1) of section 61;
(b) an order made by the Government under sub-section (4) read with sub-section (6) of section 62 has the effect of increasing authorised capital of a company; or

All about Online TDS Return Correction & more without Digital Signature

CPC (TDS) provides with enhanced features, to further add to the convenience of online facility of filing corrections to the TDS Statements. With this feature, you will be able to submit Online Corrections at TRACES without even having a Digital Signature. Currently over 20,000 deductors are already using the online facility for corrections.

Whether when assessee is school certificate examination body, mere hike in fees to general surplus would exclude it from ambit of Sec 10(23)(vi) - NO: HC

THE issues before the Bench are - Whether when the assessee is a school certificate examination body, a mere hike in fees to general surplus would exclude it from the ambit of Sec 10(23)(vi); Whether a provision of service in the nature of charity would not cease to be charitable only because it entails receiving a charge for the same and Whether merely because the funds of the assessee may not have been utilized in the best possible manner cannot lead to a conclusion that they have not been applied to the object for which the assessee has been established. And the

Clarifications from Indian Provident Fund Office on limiting contributions on INR 6,500 per month

On 27 May 2014, the Indian Provident Fund Office has issued a circular clarifying that an employer cannot be forced to contribute towards Provident Fund beyond the statutory ceiling (presently, INR 6,500 per month) as specified under the Provident Fund law.

The circular is based on a 2011 Supreme Court ruling wherein the court held that an employer paying Provident Fund in excess of statutory liability, as per it own scheme, can, at any time discontinue the same.

The circular is a welcome step as it may allow an employer to limit Provident Fund contribution on INR 6,500 per month where the contribution was made on full monthly pay earlier.

However, such an option may not be available where there is an agreement with the employee to contribute on full monthly pay.

The employers and their employees may opt to take advantage of the 2011 Supreme Court ruling and the circular. In such cases, it is essential that the terms of employment with the employees and the other facts are analysed to determine the applicability of the said ruling and the circular

Wednesday, 28 May 2014

Understanding Dividend Stripping under section 94 of Income tax with latest case laws:


The applicable section in respect of income stripping is given below with analysis.
 Avoidance of tax by certain transactions in securities.
3294. (1) Where the owner of any securities (in this sub-section and in sub-section (2) referred to as “the owner”) sells or transfers those securities, and buys back or reacquires the securities, then, if the result of the transaction is that any interest becoming payable in respect of the securities is receivable otherwise than by the owner, the interest payable as aforesaid shall, whether it would or would not have been chargeable to income-tax apart from the provisions of this sub-section, be deemed, for all the purposes of this Act, to be the income of the owner and not to be the income of any other person.

Checklist that can simplify filing of income-tax return

Taxing Issues

It’s that time of year when you have to start thinking about filing your income tax returns. And you may be slightly worried about how to go about it.

The last date for filing your personal tax return for the financial year 2013-14 is July 31. To save yourself from the hassle of last-minute preparation and filing, it is advisable to do it in advance. Here’s a checklist you can consider in order to enjoy a smooth tax return filing experience:

I. SPECIAL PROVISION FOR PAYMENT OF TAX BY CERTAIN COMPANIES UNDER SECTION 115 JB:



1.        The provisions of this section apply with effect from 01/04/2001 i.e., Assessment year 2001-02
2.       It modifies the existing scheme of taxation i.e. levy of MAT u/s 115JA
3.       Basis of Charge:
If tax payable on normal income is lower than 7.5% of book profit then the tax payable will be 7.5% of book profit.   (now it is 18.5%)

Complete Procedure to Download TCS Certificates in Form 27D from TRACES

CPC(TDS) has provided a feature of downloading Form 27D, the Tax Collection Certificate for Deductees forming part of TCS Statements, filed in the form of 27EQ.

ISSUE OF SHARES ON PREFERENTIAL BASIS

Where at any time, a company having a share capital proposes to increase its subscribed capital by the issue of further shares, such shares may be offered to any persons, if it is authorised by a special resolution, either for cash or for a consideration other than cash, if the price of such shares is determined by the valuation report of a registered valuer subject to such conditions as may be prescribed [Section 62(c) of the Companies Act, 2013]. These persons may include equity shareholders of the company referred to in clause

Whether ITAT has inherent jurisdiction to decide question of law whether a former Member of Tribunal can practice before Benches - NO: ITAT Spl Bench

THE issues before the Bench are - Whether the ITAT has inherent jurisdiction to decide the question of law whether a former Member of the Tribunal can practice before its Benches; Whether when the Allahabad HC has decided the question of law, it is not prudent for the Special Bench not to follow the same particularly when there is no dissenting order from any other High Court and Whether an opinion given by the Attorney General can be construed as the direction of

Tuesday, 27 May 2014

Understanding section 80 IB deduction in respect of real estate companies.

THANKS FOR 10 LAKHS HITS.

Background:-Section 80-IB (10) of the Act is aimed at promoting construction of housing projects, so as to address the problem of shortage of dwelling units. The predominant objective of this incentive provision, therefore, is to encourage better availability of the dwelling units for low and middle class segment of the society. Section 80-IB(10) of the Act provides that the assessee engaged in developing and building housing projects shall be entitled to claim hundred per cent (100%) deduction of the profit derived in the previous year from such housing projects if the under mentioned conditions are satisfied:

ISSUE OF EMPLOYEE STOCK OPTIONS



According to Section 62 of the Companies Act 2013 as discussed earlier here, where a company having share capital propose to increase its subscribed share capital by issue of further shares, such shares maybe offer to employees under a scheme of employees’ stock options to special resolution passed by company and subject to such conditions as may be prescribed.
A company, other than a listed company which is not required to comply with Securities and Exchange Board of India Employee Stock Option Scheme Guidelines shall not offer shares to its employees under a

How To Get Relief From Double Taxation?


In case , one earns income which suffers tax outside India, the Income Tax Act has clear provision of relief from such double taxation. The relevant provision are contained in section 90 and section 91 of the I T Act.
Section 90 is applicable for the cases when the tax has been paid in a country with which

Who enjoys exemption on pension amount

There are however, different rules for different categories of people receiving different amounts of pension. Some of these are exempted from Income Tax, but most of them do not enjoy any exemptions. The provisions of the TDS as stated in Section 192 are application to the pension as it is viewed as an income.

Whether reassessment of escaped income without any express finding or direction can be made under explanation (2) to Sec 153(3) - YES: HC

THE issues before the Bench are - Whether reassessment of the escaped income without any express finding or direction can be made under explanation (2) to Section 153(3) and Whether when the opening stock value is increased, the closing stock will necessarily be enhanced in the preceding year. And the verdict goes in favour of the Revenue.
Facts of the case

The AO held that the closing stock could not be valued without taking into account the work in

Reimbursements - High Court decision requires substantiating ALP

here the snapshot of the recent Delhi High Court (HC) decision in the case of Cushman and Wakefield (India) Pvt. Ltd.[TS-150-HC-2014(DEL)-TP], wherein the High Court has set aside the Income tax Appellate Tribunal's (ITAT) order and observed that in case of reimbursements, bench marking with similar transactions is necessary. Some key observations flowing from this ruling are as follows.

ITAT Special Bench Declines To Consider Whether Ex-Member Can Practice Before It

Nanubhai D. Desai vs. ACIT (ITAT Ahmedabad – Special Bench)
(Majority view) Special Bench has no jurisdiction to consider whether an ex-Member of the ITAT can practice before it. (Dissenting view) Special Bench is duty bound to answer the question. On merits, Ex-Member cannot be disbarred from practice before it
Shri. Deepak R. Shah was appointed an Accountant Member of the ITAT on 29.11.2001 and was confirmed on 29.11.2003. He resigned on 01.04.2010. Rule 13-E in the ITAT Members (Recruitment and Conditions of Services)

In absence of specific allegation in the SCN for levy of penalty for a specific purpose, no penalty can be levied.

[2014] 41 taxmann.com 260 (Bangalore -CESTAT) Inbox Air Products ltd. vs. CCE, Hyderabad



Facts:
The appellant had one manufacturing unit (Unit-i) and one service providing unit (Unit-II). Unit-I took the CENVAT credit on certain input services though it was not eligible to do so. This credit was, in fact, meant for Unit-II. The irregular availment of CENVAT credit by Unit-I was noticed by the department,

Monday, 26 May 2014

TAX PLANNING BY CONVERSION OF FIRM INTO A COMPANY


NECESSITY :
Sometimes, in view of the expansion of the business, multiple increase in turnover and need for getting finances from the financial institutions or through public, it may be advisable to convert an existing business, which is being carried out in the status of a partnership firm into a company. In brief, the following are the benefits of doing the business as a company :
i)limited liability of the shareholders,

INSTRUMENT OF TRANSFER

  1. Rule 11 of the Companies (Share Capital and Debentures) Rules 2014 describe detail procedure.

    An instrument of transfer of securities held in physical form shall be in Form SH – 4 and every instrument of transfer with the date of its execution specified thereon shall be delivered to the company within sixty days from the date of such execution.

Important guidelines laid down regarding procedure for promotion of ITAT Members to avoid arbitrariness. Suggestion made that there should be a mechanism to oversee the quality of orders passed by ITAT Members

R. P. Tolani vs. UOI | Sunil Kumar Yadav vs. UOI (Delhi High Court)

Shri. R. P. Tolani & Shri. S.K. Yadav, Judicial Members of the ITAT, filed a claim before the Central Administrative Tribunal (“CAT”) challenging their non-appointment as Vice-Presidents at the time that four other Members (S/Shri. K.L. Karwa, O.K. Narayanan, Bhartvaja Shankar & G.C. Gupta) were appointed Vice Presidents. While several contentions were raised before the CAT (including that the appointment of Vice-President was by way of direct recruitment, rather than promotion, and, therefore, the obligation to reserve

Saturday, 24 May 2014

Wealth Tax



Assessees Liable to Wealth Tax (Section 3)
Wealth Tax is charged for every assessment year in the hands of individuals, HUFs and all companies (private as well as public) on the net wealth as on 31st March.
The following assessees are specifically excluded from the levy of Wealth Tax:

ISSUE AND REDEMPTION OF PREFERENCE SHARES


Rules 9 of the Companies (Share Capital and Debentures) Rules 2014 explain procedure for issue and redemption of preference shares supplemented by Rule 10 thereof.
Issue of Preference Shares:
A company having a share capital may, if so authorised by its articles, issue preference shares subject to the following conditions, namely:-
(a) The issue of preference shares has been authorized by passing a special resolution in the general

Resident assessee can claim losses incurred from house property located abroad in return filed in India

IT/ILT: An option is available to the resident-assessee to file return of income either under the Indian tax laws or under the treaty - If assessee files the return of global income in India, the Revenue is bound to give effect to such return - Therefore, losses from house property located abroad was to be included in the income of resident-assessee

No disallowance u/s 14A & Rule 8D can be made if the assessee does not have tax-free income & no claim for exemption is sought

CIT vs. Cortech Energy Pvt. Ltd (Gujarat High Court)

In AY 2009-10, the assessee had investments in tax-free securities on which it had earned no income. It claimed that as there was no tax-free income, no disallowance u/s 14A read with Rule 8D could be made. However, the AO & CIT(A) rejected the claim. On appeal, the Tribunalaccepted the claim by relying on CIT vs. Winsome Textile Industries Ltd 319 ITR 204 (P&H) and held that as the assessee had not claimed any exemption, no disallowance

Friday, 23 May 2014

Procedure for refund of tax deducted at source under section 195 to the person deducting tax -Amendment to Circular No.7/2007


CBDT CIRCULAR NO-07/2011, Dt: September 27, 2011
Amendment to Circular No.7/2007 regarding Procedure for refund of tax deducted at source under section 195 to the person deducting tax-reg.
1. Kindly refer to the above subject.
The Board had issued Circular No.7/2007 and 23.10.2007 laying down the procedure for refund of tax deducted at source under section 195 of the Income Tax Act, 1961 to the person deducting tax at source

Transaction Based Report available at TRACES for NRI Deductees.


ISSUE OF SWEAT EQUITY SHARES




Rule 8 of the Companies (Share Capital and Debentures) Rules 2014 laid down procedure for issue of sweet equity shares.

All about Income Tax Return Forms ITR-1 to ITR-7 For Asstt. Year 2014-15.


Income Tax Department has issued various Tax Return Forms to file Annual Income Tax Return depend upon Income & Status of Assessee. The Detailed information regarding Income Tax Return forms are as follows:

ITR 1 (Sahaj) :
Who can use this form ?

S. 147: Reopening, even within 4 years, solely on the basis of a clarificatory retrospective amendment is not permissible

Sadbhav Engineering Ltd vs. DCIT (Gujarat High Court)

In Katira Construction 352 ITR 513 (Guj) it was held that the Explanation to s. 80IA(4) was purely explanatory in nature and did not mend the existing statutory provisions. If an Explanation is added to a statute for the removal of doubts, the implication is that the law was same from the beginning and the same is further explained by way of addition of the Explanation. Therefore, it

S. 147: Strict guidelines laid down to streamline procedure for reopening of assessments

Sahkari Khand Udyog Mandal Ltd vs. ACIT (Gujarat High Court)

(ii) It can thus be seen that there are four important stages once the AO issues notice for reopening of the assessment. Such stages are: (i) the assessee if he so wishes, may demand the reasons recorded by the AO after filing return in response to notice u/s 148 of the Act, (ii) the AO supplying such reasons to the assessee, (iii) the assessee raising objections to the

Law laid down on when an isolated transaction can be regarded as an “adventure in the nature of trade” and the taxability of agricultural land situate beyond municipal limits

Smt. Supriya Kanwar vs. ITO (ITAT Jodhpur – Third Member)

In view of difference of opinion between the Judicial Member and the Accountant Member, the Third Member had to consider two questions: (i) whether transactions of purchase and sale of five pieces of agricultural land with standing crop, by way of separate conveyance deeds, amounts to transactions on capital account or adventure in the nature of trade? & (ii) whether the surplus arising on sale of the agricultural land was “agricultural income” within the meaning of s. 2(1A) read with Explanation (1)/Section 2(14)(iii)(a) and (b) & consequently exempt u/s 10(1)? HELD by the Third Member:

Whether when assessee commits to supply certain product more than plant capacity and finally resorts to purchases from sister unit and third party to meet obligations, any disallowance of part of sale price on ground of being excessive is warranted - NO: ITAT

THE issues before the Bench are - Whether when assessee commits to supply certain product more than its plant capacity and finally resorts to purchases from sister concern and a third party to meet its obligation, any disallowance of part of sale price on ground of being excessive is warranted and Whether AO is justified in rejecting books of account without pointing out any defects in the books maintained by the assessee. Ruled in favour of assessee.
Facts of the case

Thursday, 22 May 2014

Section 285BA - Annual Information Return


Authorising ‘agency’ for receiving Annual Information Returns on behalf of Commissioner of Income-tax (Central Information Branch) under section 285BA, read with rule 114E - In exercise of powers conferred under sub-section (1) of section 285BA of the Income-tax Act, 1961 (43 of 1961) read with Notification No. 182/2005/F.No. 142/44/2003-TPL, dated 11-7-2005, notifying the amended

Income-tax planning: Is it a crime or is it legitimate

A question that commonly crops up in the minds of the tax paying public of India is with reference to Tax planning and the theme which comes in the mind is whether income-tax planning is legitimate or is it a crime.
Well the fact remains that the country needs money to fund its developmental programmes and one of the sources of such money is by way of payment of income-

Taxpayers liable to TDS/TCS are advised to furnish their correct PAN with their Deductors.

All tax deductors / collectors are required to file the TDS / TCS returns in Form No.24Q (for tax deducted from salaries), Form No.26Q (for tax deducted from payments other than salaries) or Form No.27EQ (for tax collected at source).

Directions to raise standard of revisionary order u/s. 264 for CIT by CBDT

CBDT has passed an order u/s. 264 dated 16.05.2014. CBDT seeks to raise standard of revisionary orders under sec. 264; releases directions for the purposes to CIT. To detailed information read the following instruction :

SHARE CERTIFICATES AND RELATED BOOKS



We have discussed Section 46 of the Companies Act, 2013 which deals with Share Certificates earlier here.
Rule 7 of the Companies (Share Capital and Debentures) Rules 2014 makes detailed provision for this purpose.
All blank forms to be used for issue of share certificates shall be printed and the printing shall be done only on the authority of a resolution of the Board. The blank form shall be consecutively machine-numbered. The

Whether a gratuitous one-time settlement amount paid by licensor to licensee out of goodwill gesture, at time of termination of agreement, but not under any contractual obligation can be treated as revenue receipts - NO: HC

THE issue before the Bench is - Whether a gratuitous one-time settlement amount paid by licensor to the licensee out of goodwill gesture, at the time of termination of the agreement, but not under any contractual obligation can be treated as revenue receipts. And the answer goes in favour of the assessee.
Facts of the case
The assessee had entered into an agreement in 1995 with Beiersdorf AG., (BDF) a German

No s. 14A & Rule 8D disallowance if there is no tax-free income

CIT vs. Shivam Motors (P) Ltd (Allahabad High Court)


In AY 2008-09, the assessee claimed that no s. 14A & Rule 8D disallowance could be made on the ground that (i) the assessee had not earned any tax-free income during the year and (ii) the assessee had sufficient surplus fund and borrowed funds were not utilized for making the tax-free investments. The AO rejected the claim and made a disallowance though the CIT(A) and Tribunal (included in file) deleted it on the basis that no s. 14A disallowance could be made in the absence of tax-free income. The Tribunal noted the judgement inCheminvest 121 ITD 318 (Delhi) (SB) (which holds that s. 14A disallowance has to be made even if there is no

Wednesday, 21 May 2014

Exposure Draft of the Accounting Standard for Local Bodies

Dear Sir/Madam,
Sub:    Exposure Draft of the Accounting Standard for Local Bodies (ASLB) on 'Financial Reporting under the Cash Basis of Accounting' for public comments.
As you would kindly be aware that the Institute of Chartered Accountants of India (ICAI), in the year 2005, constituted the Committee on Accounting Standards for Local Bodies (CASLB) with the primary objective of

TAX PLANNING FOR MARRIAGE EXPENSES

MARRIAGE EXPENSES - POWERS OF I.T. AUTHORITIES
In the recent past the Income Tax Department has been concentrating on collecting information with regard to expenses on marriage as well as other expenses by utilising power under section133A of the Income Tax Act. It has been a matter of controversy between the I.T.Department and the person incurring the expenses as to quantum of expenses actually incurred. It becomes yet more difficult as such inquiries may lead to the investigation about the source of the money spent. In practical life one must appreciate that the department's suspicion is not always unfounded.

ISSUE OF RENEWED OR DUPLICATE SHARE CERTIFICATE


According to Section 46 discussed earlier here, a duplicate certificate of shares may be issued, if such certificate —
(a) is proved to have been lost or destroyed; or
(b) has been defaced, mutilated or torn and is surrendered to the company.

Latest amendment in PAN Card Application with mother's Name w.e.f. 16.05.2014.

CBDT gives option to individuals to show mother's name on PAN card; notifies revised forms 49A and 49AA by this latest amendment notification dated 16th My, 2014. PAN Card application prcedure has been changed w.e.f. 03.02.2014. Now, every PAN applicant has to submit self-attested copies with Identity Proof (POI), Address Proof, (POA) and Date of Birth Proof (DOB) documents and also produce original documents of such POI/POA/DOB documents, for verification at the counter of PAN Facilitation Centres.

Download ITR-2 JAVA utility for Asstt. Year 2014-15

The Income Tax Department has developed the latest JAVA base ITR Forms utility. ITR-1 (Sahaj) and ITR-4S (Subam) JAVA base utility has been already provided by Income Tax Department for Asstt. Year 2014-15. After successful results, now ITR-2 in JAVA utility has provided to Taxpayee who are Individuals & HUFs not having Income from Business or Profession for Asstt. Year 2014-15. This utility can be run on Windows 7.0 or above and latest Linux operating systems, where Java Runtime Environment Version 7 Update 13 (jre 1.7 is also known as jre version 7) or above is installed.

Whether provisions of Sec 179 will apply in case where project runs into losses due to earthquake and FIs restructure debt and permit sale of property and creditors being proportionately paid out of such sale proceeds and when payments were made, assessment order was still pending - NO: HC

THE issue before the Bench is - Whether provisions of Sec 179 will apply in a case where project runs into losses due to earthquake and FIs restructure debt and permit sale of property and creditors being proportionately paid out of such sale proceeds and when payments were made, assessment order was still pending. And the HC's answer is NO.
Facts of the case

Valuation -Cost of spare parts sold by an Authorised Service Station, whether as sale simplicitor or under the composite contract, is not to be included in taxable value, if sale price of sales tax/Vat is separately shown




Facts:
The Appellant, an authorised service agent for Hyundai Motor cars undertook maintenance/service of motor cars. It also supplied spare parts of these vehicles. During the course of scrutiny of the records, it was noticed that the Appellant was selling spare parts for motor vehicles during the course of providing repair services on which it was paying VAT. However, the value of these spare parts was not included in the consideration received for repair services and Service tax liability was not discharged on the value of such spare parts.

Tuesday, 20 May 2014

6 Income Tax Deductions You Don't know about



Studying the Income Tax Act of India is a frightening task for many people. Most of the individuals are aware of some of the most common tax deductions available to them. However they do not take advantage of the several benefits hidden in the complex clauses of the Act. , There are many other deductions apart from the familiar deductions like 80C and 80D. Listed below are some little-known tax benefits that can help you save a considerable amount in taxes every year.

CERTIFICATE OF SHARES



A certificate, issued under the common seal of the company, specifying the shares held by any person, shall be prima facie evidence of the title of the person to such shares. We have discussed Section 46 of the Companies Act, 2013 dealing with share certificates earlier here.
Issue of Share Certificates:
Where a company issues any share capital, no certificate of any share or shares held in the company shall be

AUDIT REPORTS UNDER THE INCOME-TAX ACT


SectionRuleFor WhomIn Form No.
12A(b)17BPublic charitable or religious Trusts or Institutions whose income exceeds Rs. 50,000 before exemption.10B
33ABA(2)5ADAssessees claiming deduction in respect of Deposits under Site Restoration Fund Account/Scheme.3AD
35D(4)6ABAssessees other than Cos. or Co-op. Societies claiming amortisation of certain preliminary expenses.3AE
35E(6)–do–Assessees other than Cos. or Co-op. Societies claiming deduction for expenditure on prospecting etc. of certain minerals.3AE
44AB6GAssessees carrying on business/profession whose Turnover/Gross Receipts exceeds Rs. 40 lakhs (Rs. 10 lakhs for profession) or profit & gains are deemed to be u/s. 44AD/44AE/44AF and assessee has claimed lower profits than specified in those sections.

Whether when assessee-Trust fails to produce any of donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68 - NO: HC

THE issues before the Bench are - Whether when the assessee-Trust fails to produce any of the donors contributing to building fund, such sums are to be treated as unexplained credit u/s 68; Whether the exemption u/s.11(1)(a) is allowable only on income derived from property held under Trust wholly for charitable or religious purposes and Whether in case the amounts received from the third party has been accounted and utilized for charitable purposes by the assessee trust, but the assessee has failed to disclose the names and addresses of the donors as well as the mode of payment, it is entitled for deduction u/s 11. And the verdict favours the assessee.