Thursday, 31 July 2014

India Taxes- Due Date Alert for the month August 2014

Sr No
Due Date
Related to
Compliance to be made
Service Tax
Payment of Service Tax for the Month of July 2014
(Income Tax)
· Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of July2014.

· Deposit TDS from Salaries deducted during the month of July 2014

• Deposit TCS for collections made under section 206C including sale of scrap during the month of July 2014, if any

• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of July 2014, if any
Submission of July 2014 Softex Forms
Payment of VAT & filing of monthly return for the month of July 2014
Income Tax
Annual Information return under section 285BA for the financial year 2011-12 in form 61A.

S. 271(1)(c): Relief by CIT(A) on merits (though reversed by ITAT) means claim is debatable

Salman Khan vs. ACIT (ITAT Mumbai)
The assessee, a film actor, went to Jodhpur for shoot for a Hindi movie called “Ham Sath Sath Hain”. During his stay at Jodhpur, he was implicated in criminal proceedings on the allegation that he shot a black buck, an endangered specie. He was arrested by the local police and in order to get himself released, h e had to engage lawyers. The criminal proceedings as a

S. 2(22)(e): The law laid down in Universal Medicare 324 ITR 263 (Bom) (approving Bhaumik Colour 313 ITR 146 (SB)), that s. 2(22)(e) does not apply to a non-shareholder, is good law

CIT vs. Impact Containers Pvt. Ltd (Bombay High Court)

We do not see how with this legal position and the status of the shareholder recognized in law can be ignored while interpreting Section 2 (22) (e) of the I. T. Act. Precisely, this is what has been done by this Court in the judgment rendered in the case of Universal Medicare. It is not necessary for us to make a detailed reference to the order of the Special Bench of the Tribunal in the case of Bhaumik Colour Pvt Ltd. Suffice it to hold that the view taken by this Court in the case of M/s. Universal Medicare does not require any reconsideration. We are not in agreement with Shri Gupta that the definition does not contemplate or does not stipulate any requirement of assessee being a shareholder of the assessee like the one in the present case. The view taken in the present case that the recipient/assessee was not a shareholder, thus is in consonance with the legal position noted by us hereinabove. We are of the further view that this Court merely restated this principle and which remains unaltered throughout from the case of Rameshwarlal Sanwarmal v/s CIT 122 ITR 1 (SC)

Wednesday, 30 July 2014

Straggling from the Arithmetic Mean to the Range Concept

The Minister of Finance, Mr. Arun Jaitley’s maiden budget for the year 2014-15 proposed to put rest the fiery debates questioning the tax instability in India. With tax demand of more than INR 4 Lakh Crore under dispute and litigation before various Courts and Appellant authorities, the budget proposed to make amendments to certain tax regulations in order to reduce litigation in the field of taxation, in particular – Transfer Pricing.



Q1. Whether notice is required to be issued to the assessee before initiating survey?

No, The section does not require prior notice of the survey to be given to the affected person - N.K. Mohnot v. Dy. CIT [1995] 215 ITR 275/83 Taxman 238 (Mad.).

Q2. Which are the authorities empowered to conduct a survey?

       Section 133A of the Income-tax Act, 1961 empowers the follow­ing income-tax authorities to conduct a survey:—
        (a)    Commissioner of Income-tax,
        (b)    Joint Commissioner of Income-tax,
        (c)     Director of Income-tax,
        (d)    Joint Director of Income-tax,
        (e)    Assistant Director of Income-tax,
        (f)     Deputy Director of Income-tax,
        (g)    Assessing Officer,
        (h)    Tax Recovery Officer,and
         (i)     Inspector of Income-tax, if so authorized by above persons.
       [For the purposes of section 133(5) and clause (i) of section 133(1), 133(3)].

Q3. Can survey be conducted by inspector?

       Yes, to a limited extent, if authorized by higher authority, which is authorized for survey. Otherwise the survey is illegal. (Bombay Marble Industries V ITO (2006) 100 TTJ (JD) 927 (SMC).

Changes Made in New Form 3CD.

Form 3CA, 3CB AND 3CD have been amended vide Notification No. 33/2014 effective from 25.07.2014.
Broadly speaking changes have been made with a view to have more information and analysis in standard forms. Many details will have to be furnished in comprehensive, tabular and analytical forms.


One simple solution for cost effective and efficient method to pass a resolution is by passing it by circulation. Section 175 of the Companies Act 2014 the resolution shall be circulated in draft together with all necessary papers to all directors (or members of committee) in same manner as notice. The resolution shall be passed when approved by majority of directors (or members) who is entitled to vote. When one third or more directors require that it must be decided in a meeting, it shall be decided in meeting. Every resolution passed by circulation must be noted in next board meeting and made part of minutes of that meeting. Rule 5 of these Rules adds, a resolution in draft form may be circulated to the directors together with the necessary papers for seeking their approval, by electronic means which may include E-mail or fax.


Section 188 of the Companies Act 2013 lay down provisions regarding related party transactions. This Section discusses type of related party contracts and arrangements, disclosure in board report, rendered related party contract voidable for non – ratification, recovery of any loss and provision for fines.

Latest Forms 3CA, 3CB, 3CD (Audit Report format) notified by CBDT w.e.f. 25.07.2014

The CBDT has revised Forms 3CA, 3CB, 3CD (Audit Report format) u/s. 44AB of Income Tax Act, 1961 vide Notification No. 33/2014 dated 25.07.2014. The new updated format is applicable w.e.f. 25.07.2014. The notification regarding revises Form Form 3CA, 3CB and 3CD is as under:

Whether expression 'Tax, Duty, Cess or Fee or by whatever name called' mentioned in provisions of Sec 43B brings under its sweep port dues payable by assessee to a government agency - NO: ITAT

THE issue before the Bench is - Whether the expression 'Tax, Duty, Cess or Fee or by whatever name called' mentioned in the provisions of Sec 43B brings under its sweep port dues payable by the assessee to a government agency. And the answer of the Tribunal is NO.
Facts of the case

Note on Depreciation

Section 32
Depreciation allowance is a concession - ‘Depreciation’ allowance is a concession granted by the State in the computation of income based on very many factors relevant to a wholesome fiscal administration - Parthas Trust v. CIT [1988] 169 ITR 334 (Ker.)(FB).
Depreciation, whether a notional loss towards diminution in value of assets - Depreciation represents the diminution in the value of an asset when applied to the purpose of making profit or gain. Depreciation is thus related to an asset and is a notional loss as against actual loss in sense of

CBDT clarifies allowability of profit-linked deduction to new SEZ Unit upon transfer of technical manpower up to 20%

This Tax Alert summarizes the Central Board of Direct Taxes (CBDT) Circular No. 12/2014 (the Circular) on allowability of deduction to a taxpayer in case where there is transfer of technical manpower from an existing unit of the taxpayer to its new unit under Sections 10A/10AA of Indian Income Tax Laws (ITL).
As part of eligibility conditions, the Sections provide that the unit should not have been formed by splitting up or reconstruction of a

Tuesday, 29 July 2014

Frivolous appeals by dept results in harassment to assessee & wastage of judicial time. Dept to pay costs of Rs. 1 Lakh. Costs may be recovered from, disciplinary action taken against, concerned official

CIT vs. Larsen and Toubro Ltd (Bombay High Court)
(i) We are surprised if not shocked that such appeals are being brought before us and precious judicial time is being wasted that too by the Revenue. The least and minimum that is expected from the Revenue officers is to accept and abide by the Tribunal’s findings in such matters and when they are based on settled principles of law. If they are not deviating from such principles and are not perverse but consistent with the material on record, then, we do not find justification for filing of such appeals. We have found that merely expressing displeasure orally is not serving any purpose;

Monday, 28 July 2014

Understanding TDS on International Foreign Technical Service fees paid.

As per section 195 any sum paid to non- resident by any asseseee is subject to TDS if such income is taxable in India .  Out of all the payments, Fees for technical services (FTS) is the most complex one. The Indian payer in most of the cases is required to borne the cost of TDS as foreign service services provided not agree with India TDS obligation on them. Thus TDS on

Penalty levied on non-filing of return

Appellant registered with department, did not file any ST-3 return up to September 2005 and did not pay any service tax during period April 2004 to December 2005 - demand confirmed along with interest - penalty. appellant contending that since their computer was down they could not deposit service tax and file returns; that since adjudicating authority had waived penalty u/s 76

NRIs have to make more disclosures for filing income tax returns in 2014

For filing income tax in 2014, Non Resident Indians (NRI) are now required to provide more disclosures. Previously, Double Taxation Avoidance Agreements (DTAA) relief claimed by NRI assessess at the local ward of Income Tax department was verified manually.
But from now on, the Central Processing Centre (CTC) will be auto processing the income tax returns of NRIs. Since the method is being auto processed now, more disclosures have been enabled to facilitate some additional requirements which would be required to be submitted by NRIs.

Changes made by Finance (No. 2) Bill, 2014 as passed by the Lok Sabha

1. Unlisted securities and units of MF transferred between 1-4-2014 and 10-7-2014 shall be deemed to be long-term capital assets, if held for more than 12 months:
It is proposed that unlisted shares and units of a mutual fund (other than Equity oriented mutual fund) shall be categorized as long-term capital assets only if they are held for more than 36 months. The existing provision requires holding them for a period of more than 12 months so as to categorize them as long-term capital assets.


Following committees has statutory mandate:
  1. Social Responsibility Committee
  2. Audit Committee
  3. Nomination and Remuneration Committee, and
  4. Stakeholders Relationship Committee.

Whether where partnership deed itself makes it clear that immovable property is being contributed as an item of capital as objective of firm is to carry on business in real estate, such asset can be considered as a stock in trade - YES: HC

THE issues before the Bench are - Whether where the partnership deed itself makes it clear that the property is being contributed as an item of capital as the objective of the firm is to carry on the business in real estate, such an asset can be considered as a stock in trade and Whether the market value of the property has to be taken into consideration for determining the value of property, which is allotted to the respective partners on dissolution. And the verdict goes in favour of the Revenue.
Facts of the case

Accounting for derivatives

Derivatives are financial instruments that derive their value from changes in benchmark based on stock prices, interest rates, mortgage rates, currency rates, commodity prices or some other agreed upon base. Derivative Financial Instruments (DFIs) can be either on the balance sheet or off the balance sheet and include : options contract, interest rate swap, interest rate floors, interest rate collars, forward contract, futures, etc.

Friday, 25 July 2014

Understanding International payments taxation with latest case laws - V.

Now due to section 206AA and tax residency certificates along with  online Form 15CA & 15CB  international payments become more complex along with study of DTAA. Further, there are risk of PE and other transfer pricing adjustments which may also arise in case each transaction not dealt with proper care.  In this respect, based on the nature of transactions 

Tax Impact of New Companies Act, 2013 on corporate.

With the introduction of New Companies Act, 2013, effective from April 1, 2014, it is also very important to understand that how it can effect the company taxation.  A few instances were given below which are important to corporate taxation in India.  

Last date for submit Annual Income Tax Return for Asstt. Year 2014-15 - 31st July, 2014 & ITR FAQs.

Q 1. What are the modes of filing return of income?
Return of income can be filed in paper mode or in e-filing mode. If return of income is filed through electronic mode, then the assessee has following two options:
  1. E-filing using a Digital Signature
  2. E-filing without a Digital Signature


Section 80CCC has been inserted with effect from the AY 1997-98. This section provides a deduction to an assessee (individual) for any amount paid or deposited by him in any annuity plan of LIC of India or any other insurer for receiving pension from a fund referred to in section 10(23AAB). The deduction shall be restricted to Rs. 1,00,000/-.

ITR 6 e-filing Utility for A.Y. 2014-15 released by CBDT.

Finally after a Wait of almost 4 Months CBDT has finally released ITR 6 Java Utility required for online filing of Income Tax Returns of Companies other than a company claiming exemption under section 11 for Assessment year 2014-15 i.e. Financial Year 2013-14. CBDT has Yesterday released only Java Utility, which means we have to wait more for Excel Utility.


According to Section 173(2) of the Companies Act 2013, directors may participate through:
  1. In person,
  2. Through Video Conferencing,
  3. Other Audio – visual means, as may be prescribe.

Whether when assessee fails to explain huge increase in sundry creditors and unsecured loans, additions made by AO in this regard are legally sustainable - YES: HC

THE issues before the Bench is - Whether when assessee fails to explain huge increase in sundry creditors and unsecured loans, additions made by AO in this regard are legally sustainable. And the answer goes against the assessee.
Facts of the case

assessee filed its return for the Assessment Year 2000-01 declaring loss. The case of the

Mere admission of Appeal by High Court sufficient to disbar s. 271(1)(c) penalty

CIT vs. M/s Nayan Builders and Developers (Bombay High Court)

In quantum proceedings, the Tribunal upheld the addition of three items of income. The assessee filed an appeal to the High Court which was admitted. The AO levied penalty u/s 271(1)(c) in respect of the said three items. The

Thursday, 24 July 2014


Section 191 of the Companies Act 2013 discusses payment of compensation for Director for loss of office. 
According to sub – section (1) of section 191, no director of a company shall, in connection with—
(a) the transfer of the whole or any part of any undertaking or property of the company; or
(b) the transfer to any person of all or any of the shares in a company being a transfer resulting from—

Avoide Penalties, Issue TDS Certificate on or before 30th July, 2014 of Q1 for Asstt. Year 2015-16

Now a days all TDS Deductors want to avoide every consequences arising on behalf of this matter from Income Tax Department, therefore issue TDS Certificate on or before 30th July, 2014 of Q1 for Fin. Year 2014-15 and Asstt. Year 2015-16. The Last date to issue a TDS/TCS Certificates for Q1 of Fin. Year 2014-15 is 30th July, 2014. This last/due date is applicable for all deductors who are other than the office of the Government.

PAN Lost, Damages or Correction, How to get New or Reprint Copy of PAN ?

w in India it is a very common problem and equal truth that missing or lost including Damages or Correction in PAN. Apart from this we all very well known about importance of PAN Card in our daily life. So, a person really feel anxiety if he/she has lost or has some not the PAN card he/she had. In this matter frequently asked question by many persons is that -

Whether interest is payable on refund of self assessment tax from date of assessment order till grant of refund - YES: HC

THE issues before the Bench are - Whether Self Assessment Tax has to be treated as tax paid pursuant to the order of Assessment; Whether interest is payable on refund of self assessment tax from date of assessment order till grant of refund and Whether in exercise of powers under Article 226 of the Constitution, Court can direct the statutory authorities to grant interest as outside the statute. And the verdict goes in favour of the assessee.
Facts of the case

S. 68: Primary burden is on AO to show that share application money is assessable as unexplained cash credit. AO cannot sit back with folded hands & simply reject assessee’s evidences

Mithila Credit Services Ltd vs. ITO (ITAT Delhi)

(i) Even if the reopening is sustained, the primary burden that income has escaped assessment is on the shoulder of the AO and after discharging this burden only, the onus shifts to the shoulder of the assessee. There are two types of cases. One in which the AO carries out the exercise which is required in law and the other in which the AO ‘sits back with folded hands‘ till the assessee exhausts all the evidence or material in his possession and then comes forward to merely reject the same on the presumptions. On facts, nothing has been brought on record by the AO to substantiate his serious allegation that these two entries are accommodation entries which was the sole ground and basis for reopening;
G.K. Consultants Limited vs. ITO (ITAT Delhi)
S. 147: Retracted statement cannot form the basis of reopening. Protective assessment without substantive assessment is not permissible
(ii) The AO has not made any specific allegations against the assessee. He intended to make a protective assessment on the assessee. However, while there can be a substantive assessment without any protective assessment, there cannot be a protective assessment/addition without a substantive assessment/addition. As no substantive assessment/addition was made in the hands of Subodh Gupta, the protective reassessment assessment on the assessee is not permissible (M.P. Ramachandaran 32 SOT 592 (Mum) & Suresh K Jajoo 39 SOT 514 (Mum) followed)

Fee received for “foreign exchange deal matching system services” constitutes “royalty”under Article 12 of India-UK DTAA & s. 9(1)(vi)

Reuters Transaction Services Ltd vs. DDIT (ITAT Mumbai)

The assessee is facilitating its clients to use its system and application programming interface which is subscriber interface for use with the related services including Auto quote service. The assessee is also providing the equipment with pre-loaded software to its subscribers and network used for

Wednesday, 23 July 2014

S. 43B covers employees’ contribution to Provident Fund & deduction is allowable if paid before due date for filing ROI

CIT vs. Hindustan Organics Chemicals Ltd (Bombay High Court)

On a plain reading of the second proviso to s. 43B, it is clear that the assessees – employers were entitled to deductions only if the contribution to any fund for the welfare of the employees stood credited on or before the due date given in the relevant Act. However, because the second proviso created difficulties for the assessees – employers, an amendment was inserted vide Finance Act, 2003 with effect from 1st April 2004 to delete the second proviso to s. 43B and to amend the first proviso to provide that the deduction would be allowed if the amount was paid on or before the due date for furnishing the

Loss on account of depreciation in value of securities held as stock is not notional & is allowable as a deduction

CIT vs. HDFC Bank Ltd (Bombay High Court)

A method of accounting adopted by the taxpayer consistently and regularly cannot be discarded by the Departmental authorities on the view that he should have adopted a different method of keeping the accounts or on valuation. Financial institutions like bank, are expected to maintain accounts in terms of the RBI Act and its regulations. The form in which, accounts have

Did you check your CIBIL report ?

Do you have any idea, that someone is spying on your Financial behaviour? This might come as a small shock to you that your home loan or personal loan or XYZ loan application will be rejected because of some mistakes you are doing today? Yes, if you are misusing your credit taking capacity, you are being

Interest of PPF for Fin. Year 2014-15 is 8.7% P.A.

The Interest rate for Fin. Year 2014-15 is 8.7% which is notified by Central Government for Public Provident Fund. This is notified rate of Interest on Subscriptions made to the fund on or after 01.04.2014 and balances at the credit of subscriber. This Interest rate is as for the Fin. Year 2013-14.

Budget 2014 - Amendments made in TDS provisions

The Indian Income Tax Act’1961 provides for chargeability of tax on the total income of a person on an annual basis. The concept of TDS requires that the person, on whom responsibility has been cast, is to deduct tax at the appropriate rates, from payments of specific nature which are being made to a specified recipient. The deducted sum is required to be deposited to the credit of the Central Government. Every p

Rates of Gold & Silver up to 31.03.2014 required for valuation of Jewellary for filing wealth tax return

Valuation of Jewellery
Jewelry Includes:
1. Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones, and whether or not worked or sewn into any wearing apparel.


According to Rule 4 of the Companies (appointment and Remuneration of Managerial Personnel) Rule 2014, a company may pay a sitting fee to a director for attending meetings of the Board or committees thereof, such sum as may be decided by the Board of directors thereof which shall not exceed one lakh rupees per meeting of the Board or committee thereof. For Independent Directors and Women Directors, the sitting fee shall not be less than the sitting fee payable to other directors.

Whether in case of sale and lease-back deal where sales tax was paid, depreciation can be diallowed merely because Central Excise papers treat machinery as 'not for sale' - NO: HC

THE issues before the Bench are - Whether in a case of sale and lease-back deal where sales tax was paid, depreciation can be diallowed merely because the Central Excise papers treat the machinery as 'not for sale' and Whether the rental income earned from leasing of such assets is to be treated as business income. And the verdict goes in favour of the assessee.
Facts of the case

Tuesday, 22 July 2014

Important points for Budget 2014 only for corporate

Service Tax.
·         Works contracts – Now 70% is taxable 
·         Variable rate of interest for delayed payment of service tax.
·         w.e.from 1.10. 2014 Commission agent or consignment agent now covered under service tax.
·         Point of Taxation under reverse Charge – payment date or three month of invoice whichever is earlier.

Two way Income Tax benefits of Children's Education Loan with extended limit for Asstt. Year 2015-16.

 It is most important part to take Income Tax Relief by two way on only "Children's Education Loan". Now, a days the Education cost is rising continuously.

It’s a matter of concern for all of us. One relief is the tax benefit provided for spending on children’s education. The Income Tax Act provides a direct deduction on account of fees paid for the education of dependent children. The act also provides for deduction on account of interest on loans taken for higher education of children.

Important Instruction to file Wealth Tax Return in Form-BB

Income Tax Department has published an Instructions for filing up Return of NET WEALTH (Form-BB) which are helps while filing of Net Wealth Tax Return in Form-BB. The all detailed instructions are as follows:


Section 196 of the companies Act 2013 deals with appointment of certain managerial personnel namely; Managing Director, Whole time Director and Manager. Remuneration of these managerial personnel is discussed in Section 197 read with Schedule V of the Companies Act 2013. Section 203 of this Act further deals with appointment of certain other managerial personnel along with managerial personnel already discussed in Section 197.
According to Rule 3 of the Companies (appointment and Remuneration of Managerial Personnel) Rule, 2014, A company shall file a return of appointment of a Managing Director, Whole Time Director or

Whether when MAT liability of assessee is found out only because of alertness of AO, levy of penalty u/s 271(1)(c) is legitimately warranted - YES: HC

THE issue before the Bench is - Whether when the MAT liability of the assessee is found out only because of the alertness of the AO, the levy of penalty u/s 271(1)(c) is legitimately warranted. And the HC's answer is YES.
Facts of the case
The assessee company runs a hotel business. It filed its return disclosing "nil" income. It had admitted income from business at Rs.1,51,92,970/- and the same was set off with carried forward loss of the earlier years. In the course of the scrutiny proceedings, it was seen that the assessee

Whether a contract of maintenance can be held as divisible if material portion and service portion is separately mentioned in the Contract between the parties? Held, yes.

Balaji Tirupati Enterprises vs. CCE. [2014] 43 42 (New Delhi – CES TAT)

In this case, the issue before the Tribunal was that in terms of works contract of repair of transformers, whether the goods deemed to be sold in the execution of works contract were liable for Service Tax.

The Tribunal on the perusal of the Works Order executed by the Appellant with the power supply authorities categorically observed that, both parties to the contract were conscious of the terms

Monday, 21 July 2014

Redesignate NRE account on returning to India

I have a fixed deposit (FD) with a bank in a non-resident external (NRE) account. In case I return to India before maturity of the FD, do I have to pay income tax on this? If so, how will it be calculated?
Upon your return to India, you will have to re-designate your NRE account as a resident account or the funds held in the account may be transferred into a resident foreign currency (RFC) account (if you are

Employee P.F. Ceiling Limit increased by Rs. 8500/- i.e. from Rs. 6500/- to Rs. 15000/- for Fin. Year 2014-15.

The Hon'ble Union Minister of Finance in the Budget Speech of 2014-15 has announced enhancement in statutory wage ceiling for enrollment under the EPF and MP Act, 1952 to Rs. 15000/- per month from the current maximum of Rs. 6500/- per month. On this ground Central Board of Trustees’, Employees' Provident Fund (CBT, EPF) has been issued a circular regarding enhancement of wage ceiling from Rs. 6500/- to Rs. 15000/- per for Fin. Year 2014-15. This amendments related to the Employees’ Provident Fund Scheme, 1952 (EPF), Employees’ Pension Scheme, 1995 (EPS) Employees’ Deposit Linked Insurance Scheme, 1976 (EDLI) for implementing increase in wage ceiling to Rs. 15,000/- and Minimum Pension of Rs. 1,000/- - issues and modalities.

How get another copy (reprint ) of PAN card lost ?

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

•Clarification on matters relating to Related Party Transactions [Circular No. 30]

There is a clarification from MCA in respect of related parties transaction. This will provide some relief to the operation of company. The link of notification is given below and the analysis of the same will be provided very shortly.


Section 105(2) of the Companies Act, 2013 says in every notice calling a meeting of a company, there shall appear with reasonable prominence a statement that member entitled to appoint a proxy and a proxy need not be a member. Prominent question on ‘proxy’ is where the institution of proxies stands under new corporate law regime.

Whether disallowance u/s 14A can exceed total administrative expenditure debited by assessee in Profit & Loss account - NO: ITAT

THE issue before the Bench is - Whether disallowance under section 14A can exceed the total administrative expenditure debited by the assessee in the Profit & Loss account. And the answer goes against the Revenue.
Facts of the case

assessee is a non–banking financial company deriving interest income from money lending and income from investment. The assessee had shown short term capital gain and long term capital gain from the sale of shares. The assessee, during the course of assessment proceedings, in response to the show cause notice, filed details submissions with regard to the overall

Saturday, 19 July 2014

Income Tax deduction on your children’s education u/s. 80C and 80E of the Income Tax Act, 1961

The cost of educating our children is rising consistently. It’s a matter of concern for all of us. One relief is the tax benefit provided for spending on children’s education. The Income Tax Act provides a direct deduction on account of fees paid for the education of dependent children. The act also provides for deduction on account of interest on loans taken for higher education of children.

Salary Perquisites u/s. 17(2) for Salaried Employee.

Perquisites mean any casual emoluments, fees or profit attached to an office in addition to salary and wages. In simple words, it’s a personal advantage. It does not cover a mere reimbursement of any expenditure incidental to the employment.


Sub – Section (1) of Section 170 of the Companies Act 2013 mandate that every company shall keep at its registered office a register containing such particulars of its directors and key managerial personnel as may be prescribed, which shall include the details of securities held by each of them in the company or its holding, subsidiary, subsidiary of company’s holding company or associate companies.

Whether, based on subsequent decision of Supreme Court which was not available at time of decision given by Tribunal, rectification application u/s 254(2) is maintainable - YES: HC

THE issues before the Bench are - Whether, based on a subsequent decision of the Supreme Court which was not available at the time of decision given by the Tribunal, a rectification application u/s 254(2) is maintainable and Whether in the event of closure of a firm, stock of the said firm would be carry forward to the newly formed company, at cost only. And the verdict goes against the Revenue.
Facts of the case

Whether service would be applicable on the toll collection on highways under the category of business auxiliary service? Held, no

Patel infrastructure pvt. Ltd. vs. CCE, Rajkot (2014 (33) STR 701 (Tri- Ahmd)

The Appellant collected toll charges from the users of high ways. The department demanded service tax under business auxiliary services on the entire collection of toll. The appellant relied upon the judgement in Interpol India Consultants(P) Ltd -2011(24) STR611 (Tri-Delhi)and contended non-applicability of service tax on toll collections.

Chennai ITAT rules that gift by corporates is valid in law and exempt from capital gain tax

This Tax Alert summarizes a recent ruling of Chennai Income Tax Appellate Tribunal (ITAT) in the case of Redington (India) Ltd. (Taxpayer) on the issue whether transfer of shares of subsidiary to its step down subsidiary by way of gift is valid and whether the same is taxable under the provisions of the Indian Tax Laws (ITL). The ITAT ruled that gift by corporates is valid in law and presence

Thursday, 17 July 2014

Whether penalty u/s. 76 would be leviable where service tax was deposited along with interest before issuance of show cause notice?

Sen Brothers vs. CCE, Bolapur (2014(33) STR 704 (Tri – Kolkata)

Whether penalty u/s. 76 would be leviable where service tax was deposited along with interest before issuance of show cause notice? Held, no

Bombay HC rules on time limit for withholding tax proceedings

This Tax Alert summarizes a recent ruling of the Bombay High Court (HC) in the case of DIT v. Mahindra and Mahindra Ltd. (Taxpayer) on the issue of time limit for the Tax Authority to initiate action against the payer for default in withholding tax.
In absence of specific time limit prescribed under the Indian Tax Laws (ITL), jurisprudence is divided on time limit for initiating withholding tax proceedings. While some High Courts have held that proceedings should be initiated within a reasonable time (viz. four years from the end of relevant tax year), some other High Courts have held that there is no time limit for initiating such proceedings. It

Budgetry changes affecting non-resident taxation

Income of FIIs from transaction in securities to be treated as capital gains:
There have been litigations involving characterization of income of FIIs from purchase and sale of securities - whether the same represents business income or capital gains. Apparently, this uncertainty has also kept away the fund managers from setting up base in India. Accordingly, the Finance( No 2) Bill, 2014 proposes to amend the definition of capital asset in section 2(14) of the Act to make it clear that investments by FIIs in securities in accordance with SEBI regulations will be treated as capital asset and income arising from transfer of such securities will be treated as


According to Section 168 of the Companies Act 2013 A director may resign from his office by giving a notice in writing to the company and the Board shall on receipt of such notice take note of the same and the company shall intimate the Registrar in such manner, within such time and in such form as may be prescribed and shall also place the fact of such resignation in the report of directors laid in the immediately following general meeting by the company. A director shall also forward a copy of his resignation along with detailed reasons for the resignation to the Registrar within thirty days of resignation in such manner as may be


The Finance Act, 2000 has introduced a new section 88C (w.e.f. Assessment Year 2001-02) which confers tax rebate upto Rs.5,000 for resident women assessees below the age of 65 year at any time during the relevant previous year. This rebate is available to women irrespective of their source of income. Even, this rebate is available against tax on Long Term Capital Gains. Thus, all women assessees should take full benefit of the rebate. [It may also be noted that in case of assessees (both male and female)

Facilitating Investment linked incentives and foreign borrowings

THE Finance (No.2) Bill 2014, in an attempt to boost manufacturing sector, has proposed amendments granting additional allowance at 15% of the value of the new plant and machinery to small manufacturing industries as well under section 32AC of the Income tax Act, 1961 ("the Act"). Further, investment linked incentives (allowance of capital investment) available to certain specific industries, under section 35AD of the Act, is proposed to be extended to two more

Service Tax relief for SEZ in Budget 2014

IN terms of Notification No.12/2013-ST from 1st July 2013 SEZ's were provided exemption, whether upfront or by way of refund of service tax paid on Specified Input Services meant for use in Authorized Operations (AO). This has done away with the requirement of submission of original invoices as well as the Certificate from the Statutory Auditor. There were other minor changes on the positive side as well.
However the mandatory Authorisation in Form A-2 to be issued by Central Excise (CE) Authorities even after the Development Commissioner (DC) of SEZ issued the Form A-1 became a sore point.

Whether if Revenue declines to grant exemption u/s 10(23C)(vi), such denial automatically leads to refusal of registration u/s 12AA - NO: HC

THE issues before the bench are - Whether if the exemption under Section 10 (23C)(vi) is declined, it would amount to refusal of registration under Section 12AA and whether registration u/s 12A can be denied without recording the reasons for satisfaction that the activities of assessee are not genuine or are not being carried out in accordance with the objects of the trust or the institution. And the verdict goes against the Revenue.

Wednesday, 16 July 2014

Tax Calculation Method with exemption Allowances & Perquisites, Deductions u/s. 80C & Others for Asstt. Year 2015-16

After Indian Union Budget-2014, Income Tax Exemption regarding Allowances & Perquisites, Deductions u/s. 80C & Others with Tax Calculations for Asstt. Year 2015-16 for Individual Taxpayers are as under :

Some Exempted Receipts /Special allowances & Perquisite which are not chargeable to tax are
Exempted Receipts -

Three Benefits in Budget-2014 for Individual Taxpayers.

The Finance Minister had announced rising Tax Exemption Limit for individual Taxpayers by Rs. 50000/- for Male and Female as well Pensions in Budget - 2014. With this increasing exemption they can get relief in Tax of Rs. 5150.00 whose Taxable Income below Rs. 500000/- annually. This is a great benefit for Individual Taxpayers.

Twenty Four Frequently Asked Questions On Employees Provident Fund (EPFO ) Answers For You!

These are the twenty four answers on FAQs given on EPFO site. Read and enrich yourself
1) Who will be covered by the Pension Scheme?
Every member of the ceased Family Pension Scheme 1971 and anyone who joins any covered establishment on or after 16-11-95 is compulsorily to join this scheme, provided his/her salary/wage is less than Rs. 6500/- per month at the date of appointment. ( now Rs. 15000).


Appointment of directors for this blog post does not include re – appointment of directors as such. But surely provisions are different only on compliance with Section 160 of the Companies Act 2013.
When an appointment of a director is proposed, the process starts with Notice of candidature under Section 160.

Whether facts relating to AY 2005-06 can be assumed to be known to Revenue when it came to be known only in AY 2009-10 that interest on which deduction was claimed u/s 57 was infact related to home loan - NO: HC

THE issues before the Bench are - Whether facts related to AY 2005-06 were already known to the Revenue when it was only during the assessment proceedings of AY 2009-10 it was revealed that interest expenditure on which deduction was claimed u/s 57 was infact related to home loan; whether the theory of consistency can be applied, when each assessment is a separate assessment unit; whether the obligation of the assessee to comply with the provisions of the

Tuesday, 15 July 2014

More Points on India Budget 2014. - Income Tax

Ø  Introduction of Investment & Real estate trust with single point of taxation

Ø  Section 80-IA benefit extended to Slurry pipeline for transportation of Iron ore & Semiconductor water fabricator manufacturing unit.

Latest Amendments in Budget-2014 which effects on TDS Compliance u/s. 40(a(ia))

There are Three major amendments in Budget-2014 effected on TDS Compliances u/s. 40(a(ia)) regarding disallowances to 30% of the amount of expenditure claimed. These amendments will take effect from 1st April, 2015 and will, accordingly, apply in relation to the assessment year 2015-16 and subsequent years means these amendments are applicable in Financial year 2014-15 onwards which is as under:

Budget 2014 - All Service Tax Amendments with notification.

The Hon'ble Finance Minister Mr. Arun Jaitley had placed an Union Budget 2014-15 on 10th July, 2014, while presenting Budget Finance Minister introduced the Finance (No.2) Bill-2014, In this Finance Bill-2014 Finance Minister amendments made in Chapter V of Service Tax. The services sector has been ensure to its stability and continuity. The Finance Minister further carry with some little changes which has been made in Service Tax by limited figers. These all changes in previous Service Tax a set of notifications are as under:

Cancellation or surrender or Deactivation of DIN

Rule 11 of the Companies (Allotment and Qualification of Directors) Rules 2014 talk about cancellation or surrender or deactivation of Director Identification Number (DIN).
The Central Government or Regional Director (Northern Region), Noida or any officer authorised by the Regional Director may, upon being satisfied on verification of particulars or documentary proof attached with the application received from any person, cancel or deactivate the DIN in case -
(a) the DIN is found to be duplicated in respect of the same person provided the data related to both the DIN shall be merged with the validly retained number;

Changes in DIN particulars

Change is truth of life and life always moves on. This may result in change in particulars specified in Director Identification Number records.
Rule 12 facilitate intimation of these changes in particulars in DIN records.
Every individual who has been allotted a Director Identification Number under these rules shall, in the event of any change in his particulars as stated in Form DIR – 3, intimate such change(s) to the Central

Whether when assessee fails to produce any proof towards claim that goods inventorized at time of Survey also included goods received from customers, such claim is to be construed as afterthought - YES: ITAT

THE issue before the Bench is - Whether when the assessee has failed to produce any proof towards its claim that the goods inventorized at the time of survey also included the goods received from its customers for remodeling, such a claim is to be construed as an afterthought. And the answer goes against the assessee.
Facts of the case

Friday, 11 July 2014

Tax Proposal for employees in Budget 2014.

The summary of India budget impact only in respect of Income tax for employees is given below
1. Increase of Basic exemption limit: Major expectation of increase in basic exemption limit has been given in the budget; the limit has been increased from Rs.2 lakhs to Rs. 2.50 lakhs for

Stymying FIAT decision cleverly eased out - Rule 6 of Valuation Rules, 2000 amended

THE Supreme Court in the case of CCE, Mumbai vs. Fiat India (P) Ltd. 2012-TIOL-58-SC-CX held that where products were sold at considerable losses for an unduly long period of time for the purpose of market penetration, the transaction value cannot be accepted for the purpose of levy of excise duty. The review petitions filed by Fiat were also dismissed 2012-TIOL-110-SC-CX.
The Supreme Court in its order dated 29.08.2012 also emphatically held that merely because the assessee had not sold the cars to the related person and the element of flow back directly

Commission Agent now covered under Service Tax

ONE of the important amendment in the Place of Provision of Service Rules, 2012 (PPS) is the change in the definition of the term "intermediary", with effect from 01.10.2014.

Existing Definition:

CIRCULAR No. 178/4/2014 ST Dt. 11.07.2014 has been issued to clarify the manner of distribution of credit by Input Service Distributor.


The malady which necessitated the issue of this circular can be explained as under.

The relevant provision, which led to doubts was,

"credit of service tax attributable to service used by more than one unit shall be distributed pro rata on the basis of the turnover of such units during the relevant period to the total turnover of all its units, which are operational in the current year, during the said relevant period”

Explanation 3. - For the purposes of this rule, the ‘relevant period' shall be, -


IN what could be termed a draconian development, Rule 4(1) of the CENVAT Credit Rules, 2004 is proposed to be to amended with effect from September 1, 2014 to provide that the manufacturer or the service provider should avail of CENVAT credit of the duty paid on inputs or the service tax paid on input services, within 6 months from the date of the relevant document specified in Rule 9(1) of the CCR, 2004, eg. Invoice. The proviso to Rule 4(7), in terms of which, the service recipient who has taken CENVAT credit on the basis of the receipt of the documents referred to rule 9(1) of the CCR, 2004 is required to reverse the credit if the payment is not made within 3 months of the date of the input invoice, etc. stands.

Service Tax Key Changes in Budget 2014


Budget 2014 has introduced numerous changes with respect to Service Tax. These changes are discussed in a chronological order (i.e. changes applicable from 11th July 2014, changes applicable from date of assent to Finance Bill, changes applicable from the date of notification after assent to Finance Bill, 1 st September 2014 and 1 October 2014) in the ensuing paragraphs:-


S. 147: In view of the verdicts of the Supreme Court in GKN Driveshafts & Chhabil Dass Agarwal a s. 148 notice & order on objections cannot be challenged in a Writ Petition
The Court had to consider whether an order passed by the AO on the objections of an assessee can be assailed before the Court under Article 226 of the Constitution of India. HELD by the High Court in the negative:

Thursday, 10 July 2014

Whether when assessee files estimate of income showing NIL advance tax liability on basis of loss returns of previous years it attracts penal provisions of Sec 273(2)(c) - NO: HC

THE issue before the Bench is - Whether when assessee files estimate of income showing NIL advance tax liability on basis of loss returns of previous years it attracts penal provisions of Sec 273(2)(c). NO, says the High Court.
Facts of the case
The appellant is a Public Limited Company, engaged in the manufacture and sale of synthetics

CBDT Revises Monetary Limit For Filing Appeals To ITAT, High Court And SC

The CBDT has issued Instruction No 5/2014 dated 10.07.2014 whereby, with a view to reducing litigation, the monetary limits for filing of appeals by the Department before Income Tax Appellate Tribunal, High Courts and Supreme Court, have been upwardly revised.

S. 54/54F: Two flats, even though acquired under different agreements & from different sellers, are one residential unit if there is a common kitchen

CIT vs. Devdas Naik (Bombay High Court)

The department’s argument that the law laid down by the Tribunal in ITO v/s Sushila M. Jhaveri 107 ITD 327 (Mum)(SB) and confirmed by this Court in CIT v/s Raman Kumar Suri (Income Tax Appeal No.6962 of 2010, decided on 27.11. 2012) on the availability of exemption u/s 54 is applicable only when the house purchased is a single unit and not where two flats, one acquired in the assessee’s name and another jointly in the names of the assessee and his