Tuesday, 30 September 2014

India Taxes- Due Date Alert for the month October 2014




No
Due Date
Related to
Compliance to be made
1
05.10.2014

Service Tax
Payment of Service Tax for the Month of September 2014
2
07.10.2014

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 September 2014.

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

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

•    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of September 2014, if any

Dividend and Bonus stripping - some issue


Summary : The press can seek credit for  early amendments in the Income Tax Act regarding dividend stripping and  bonus stripping. Amendments had taken place to lengthen the period of holding of mutual funds units if one wants full benefit of tax free dividend. For bonus stripping, it appears that restrictions  are in respect of  Units of Mutual Funds and not in respect of bonus stripping in case of shares of companies.
So far dividend is concerned , based on history of relevant provisions it can be said that the dividend received by the shareholder is not exempt but it is received after non creditable TDS. Rather the scheme of 'final tax' on distribution point has made

Tolerable limit for ALP unchanged for Assessment Year 2014-15 - CBDT

CBDT has issued a notification under Section 92C of the Income-Tax Act, 1961 for Transfer Pricing and Computation of Arm’s Length Price to keeps Tolerable Limit for ALP unchaged for Assessment Year 2014-15.

Whether if assessee has sums of carry-forward losses and unabsorbed depreciation which are relatable to block period, same is to be set off against undisclosed income determined in block assessment - YES: HC

THE question before the Bench is - Whether if an assessee has sums of carry-forward losses and unabsorbed deprecitaion which are relatable to the block period, the same is to be set off against undisclosed income determined in block assessment. And the answer is YES.
Facts of the case
The assessee is a dealer in machinery relating to bore-well. A search was conducted and a block assessment was done. During the assessment, the AO imposed certain amount of tax, upon the undisclosed income. Aggrieved, the assessee approached the Settlement Commission under Section 245D. The undisclosed income for the block period was determinded at Rs.1,36,52,701/- and a tax at 60% was imposed, aggregating to Rs.81,91,620.

Import of Service - Sec. 66A - Services of repair and overhaul of aircraft performed wholly abroad - Held not taxable - commission paid to GSA's abroad in relation to business in India Whether service tax applicable u/s. 66A on services of repair and overhaul of aircrafts and in respect of commission paid to GSA's abroad

-Air India Ltd. vs. Commissioner of Service "fax, New Delhi. (2013 (30) STR 458 (Tri-Del))

?

Facts:
The Appellant, a wholly Government of India Company, engaged in the business of transportation of passengers              and goods by air appointed "General Sales Agents" (GSA) who represented them and handled their affairs in other countries for which they received commission. Appellant also received services of repair and overhaul of

Automation of Central Excise and Service Tax (ACES)

Service Tax Return (ST-3) for the period from April-14 to September-14 will be made available for e-filing by the assesses. The last date for filing the returns for the said period is 25th October, 2014. The assesses can file return online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from "DOWNLOADS" Section of ACES website. For details on how to e-file in ACES or for any other information/assistance, you may visit www.aces.gov.in or contact your jurisdictional Service Tax Officer or the nearest ACES Certified Facilitation Centres (CFCs). Please file your returns in ACES well in advance to avoid rush and inconvenience at the last moment.

Monday, 29 September 2014

No Extension for following tax assessee

The extension of tax return is only for tax assessee whose turnover is more than Rs. 1 crore and required to get tax audit.  for the following tax asssessee it is still mandatory to file the tax return before September 30, 2014 .

01.  Loss Return
02.  Claiming any kind of benefit u/s 80-IA.

Penalties under Customs Act

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


https://taxofindia.wordpress.com/2015/11/27/penalties-under-customs-act/ 



If 26AS Statement mismatch face as scrutiny - CBDT directs to AO for Asstt. Year 2015-16.

CBDT has issued a instruction No. 7/2014 dated 26th Sept., 2014, directs to AO to enquire into only AIR data/26AS mismatch issues if scrutiny is made on this basis for Fin. Year 2014-15 i.e. Asstt. Year 2015-16 under Section 143, read with Section 142 of The Income-Tax Act, 1961. The details of this notification is as under:

It has come to the notice of the Board that uring the scrutiny assessment proceedings some of the

Inadmissible CENVAT credit - Reversal before utilisation thereof and before issue of SCN- No Penalty.

CCE.,Salem vs. Crocodile India Pvt. Ltd (2013-TIOL-518-HC-MAD-CX)



Facts:
The respondent a manufacturer of readymade garments claimed inadmissible credit of Rs. 15,07,414/- and subsequently reversed the same, evidently before the issue of SCN. The department confirmed interest and penalty although the assessee did not utilise credit and reversed immediately on receipt of intimation about the error. In absence of any other intention of wrongful gain, the Tribunal set aside the levy of penalty. The revenue challenges it in this appeal.

CBDT mandates to issue even NIL TDS Certificate by deductors - 9th Amendment with New Form No. 13

As per the provisions of the Income-tax Act, 1961 (‘the Act’), CBDT has issued a notification on 24th Sept., 2014 regarding issuing of TDS Certificate to TDS Deductee. In this notification CBDT mandates to issue TDS Certificate by TDS Deductor to TDS Deductee even NIL TDS. Income Tax Department has been made 9th Amendment Rule, 2014 and amended in Rule 28AA by substitution a New Form No. 13. The Form No. 13 is an application by a person for a certificate u/s. 197 and/or 206C(9) of the Income Tax Act, 1961 for no Deduction/collection of Tax or Deduction/collection of Tax at a lower rate.

Whether when assessee has been showing certain expenditure towards 'work-in-progress' for two years but not in year of filing return because its contract was terminated, such expenditure written off in books is to be allowed - YES: HC

THE issue before the Bench is - Whether when the assessee has been showing certain expenditure towards 'work-in-progress' for two years but not in the year of filing return because its contract was terminated and bank guarantee encashed, the expenditure written off in books is to be allowed. And the answer is YES.
Facts of the case
The assessee company was awarded a contract by Madhya Pradesh Electricity Board for rehabilitation job for the Amarkantak Thermal Power Station near Jabalpur in MP. An amount of

Friday, 26 September 2014

CBDT Extends Due Date For Filing ROI For AY 2014-15 To 30.11.2014

 


Text of Press Release Issued By The CBDT:
Due Date for filing of return of Income for Assessment Year 2014-15 Extended from 30th September, 2014 to 30th November, 2014 in Specified Cases
As per the provisions of the Income-tax Act, 1961 (‘the Act’), for an assessee, who is required to obtain Tax Audit Report (TAR) under section 44AB of the Act, the due date for furnishing his return of income is 30th September of the Assessment Year.
The Central Board of Direct Taxes (‘the Board’) vide order dated 20th August, 2014 extended the
THE issue before the Bench is - Whether when assessee is born out of restructuring of an Electricity Board, the expenditure incurred on IT support to LAN, upgradation of bandwidth and for coordination with BSNL for better connectivity is to be treated as capital in nature. And the answer goes against the Revenue.


Facts of the case

The
assessee company is engaged in the business of generation, transmission and distribution of electricity in the State of Gujarat. The erstwhile Gujarat Electricity Board in a process of restructuring was demerged into seven different companies. Gujarat Urja Vikas Limited [GUVNL] was assigned the function of bulk purchase and sale of power. The return of income filed by the

Non-Extension Of ROI Due Date Will Cause 'Substantial Hardship': Bombay High Court

The Chamber of Tax Consultants vs. UOI (Bombay High Court)

Non-Extension Of due date for filing ROI will cause “substantial hardship“. CBDT must look into practical difficulties & take “just and proper” decision before 30.09.2014
The Petitioner filed a Writ Petition claiming that the action of the CBDT/ Government in issuing Notification dated 25.07.2014 to exercise the due date for filing the tax audit report u/s 44 AB but in not extending the due date for filing Income Tax Returns from 30.09.2014 to30.11.2014 was

The NTT Act “crosses the boundary” & is unconstitutional. CAs/CSs are specialists on accounts & facts and are not capable of arguing/ deciding ‘Substantial Questions Of Law’

Madras Bar Association vs. UOI (Supreme Court – Full Bench)


The Full Bench of the Supreme Court had to consider whether the National Tax Tribunals Act, 2005, which sought to take away the jurisdiction of the High Courts in tax matters was constitutional. The Full Bench has struck down the entire Act as being unconstitutional on the ground that though “tribunalization” has been allowed subject to safeguards, the NTT Act “crosses the boundary” and “encroaches the exclusive domain” of the High Courts. In the course of the judgement, the Supreme Court had to consider whether Chartered Accountants could be appointed Members of the NTT and

Gujarat HC Raps CBDT Over ROI Due Date Non-Extension Fiasco

All Gujarat Federation of Tax Consultants vs. CBDT (Gujarat High Court)

Strictures passed against the CBDT for seeking to take advantage of its own wrong and disregarding genuine hardship of taxpayers. Due date for filing ROI extended to 30.11.2014 subject to charge of s. 234A interest
The Petitioner filed a Writ Petition claiming that the action of the CBDT/ Government in issuing Notification dated 25.07.2014 to exercise the due date for filing the tax audit report u/s 44 AB but in

No service tax on amount received by service receiver towards reimbursement of expenses - Intercontinental Consultants relied upon.

Sercon India Pvt. Ltd vs. Commissioner (Adjudication) Service Tax [2013 (30) S.T.R. 454 (Delhi)]



Facts:
The revenue imposed service tax on the reimbursed expenses of Rs. 37 crore received by the petitioners against which the CESTAT granted partial relief to the petitioner with regard to amount of pre-deposit. The petitioner filed a writ petition before the High Court for waiver of deposit of the balance amount and submitted before the Hon'ble Court that, he had only

Thursday, 25 September 2014

Applicability of rate of service tax prior to introduction of Point of Taxation Rules is the rate in force as on the date of provision of service receipt of consideration in subsequent period is of no consequence.

Commissioner Of Service Tax vs. Consulting Engineering Services (I) Pvt. Ltd. 2013 (30) STR. 586 (Del)



Facts:
Services were provided prior to 14-05-2003 and the bills were also raised prior to the said date, which facts were undisputed. However, the payment was received after 14-05-2003 and thus, the revenue sought to levy tax @ 8% as applicable with effect from 14-05-2003, placing reliance on the Service Tax Rules, section 67A of the Finance Act, 1994 and Rule 4(a)(i) of Point of Taxation Rules, 2011.

REGISTRATION OF MINOR TRUST: REVISED

Trust can be formed for a minor by executing a deed for a specific period, say 21 years.
This trust can be registered under the Indian trust Act.
TAX IMPLICATION:
1 Tax implication every year during the period of trust: This private trust will be taxed at a slab rate applicable for individual provided it does not have business income.
Any business income may be taxed @ 30% or at slab rate.

How to close of Short TDS Payment Defaults using Online Correction facility - See more at: http://taxguru.in/income-tax/close-short-tds-payment-defaults-online-correction-facility.html#sthash.X6Q0Tybf.dpuf

In case there are ‘Short Payment Defaults’ in your TDS Statements due to ‘Mismatch of Challans’ you can get the default closed using Online Correction feature, which is available for TDS Statements related to Financial Year 2007-08 onwards. As you may be aware that at the time of filing TDS statements, it is mandatory to quote the challan particulars, through which TDS payments have been made. The TDS forms prescribe quoting of such challans and the underlying deductee transactions corresponding to such challans. However, it is observed that: At times, data entry mistakes are committed, while reporting tax payments in the respective TDS statements. Though CPC (TDS)

Whether interest paid to sister concern is to be disallowed merely on ground that such interest was not paid by assessee to any other parties from whom it had taken advances - NO: ITAT

THE issue before the Bench is - Whether interest paid to sister concern can be disallowed on the ground that the assessee has not paid interest to any other parties from whom it had taken advances and further the said interest was not reflected in the Tax Audit report u/s. 44AB. NO is the answer.
Facts of the case

The
assessee is a reality developer. The assessee has paid interest of Rs.63,45,627 to its sister

Wednesday, 24 September 2014

E-Book By ICAI On Companies Act 2013 And Rules


The Institute of Chartered Accountants of India (“ICAI”) has issued a publication titled “E-Book On The Companies Act, 2013 and Rules Thereon”.
The E-Book runs into 575 pages. It contains all the sections and schedules of the Companies Act 2013 as well as the Rules notified so far. The Forms for the Rules have also been given. For easy reference, a Table has been included which contains provisions of Companies Act 2013 as notified up to date. Further,

Bangalore CESTAT decides on various issues relating to refund under Rule 5 of CENVAT Credit Rules, 2004 through common interim order in batch of appeals


This Tax Alert which gives an update on the recent common interim order passed by Bangalore CESTAT in which the Tribunal decided on various issues relating to refund claims of CENVAT credit filed under Rule 5 of CENVAT Credit Rules, 2004.
The issues dealt with in the order include eligibility of input service, denial of CENVAT credit on the basis of nexus and its correctness, non-fulfilment of conditions as per the notification prescribing conditions, limitations and safeguards in relation to such refund claims, defects in documents, etc.
This order is welcome step on the part of Tribunal which will not only help taxpayers but will also provide guiding principles to adjudicating authorities to decide the refund claims in speedy manner.

e-TDS/TCS – FVU version 4.4 from FY 2010-11 & onwards wef 23.09.2014

Key feature of FVU version 4.4
Lower/ Non-deduction Certificate number issued by Assessing Officer (in deductee details): Length of field ‘Certificate number issued by the Assessing Officer u/s 197 for non-deduction/lower deduction’ under deductee details (i.e. in Annexure I) has been restricted to 10 digits. Certificate number to be quoted only in case of lower deduction/no deduction. This validation is applicable to regular and correction (C3 & C9) statements pertaining to FY 2013-14 and onwards.

e-TDS/TCS RPU (Version 4.1) for statements from FY 2007-08 onwards wef 23.09.2014

Key features of RPU 4.1
Lower/ Non-deduction Certificate number issued by Assessing Officer (in deductee details): Length of field “Certificate number issued by the Assessing Officer u/s 197 for non-deduction/lower deduction” under deductee details (i.e. in Annexure 1) has been restricted to 10 digits. Certificate number to be quoted only in case of lower deduction/no deduction.
Amount paid/ credited (in deductee details): Value in field “Amount paid/ Credited” to
the deductee in case of Form no. 24Q should be less than or equal to 999999999.00.
Total Taxable income (in salary details – Annexure II): Value in field “Total Taxable Income” to the deductee in case of Form no. 24Q, Q4 should be less than or equal to 00.

e-TDS/TCS – FVU version 2.140 from FY 2007-08 to FY 2009-10 wef 23.09.2014

Key feature of FVU version 2.140
Amount paid/ credited (in deductee details): Value in field “Amount paid/ Credited” to the deductee in case of Form no. 24Q should be less than or equal to 999999999.00. This validation is applicable to regular and correction (C3 & C9) statements pertaining to all FYs.
Total Taxable income (in salary details – Annexure II): Value in field “Total Taxable Income” to the deductee in case of Form no. 24Q-Q4 should be less than or equal to 00. This validation is applicable to regular and C4 correction statements pertaining to all FYs.

Conversion of company into LLP - its tax implications.

The onset of Companies Act 2013 has ushered a paradigm shift in operation and management of companies. The benefits which, hitherto were available to Private Companies in the erstwhile Companies Act, have to a large extent receded. While some call it an era of greater transparency, others (particularly small corporates) feel that the new law has hampered them from operating as a body corporate. As a substitute, people have started favouring LLPs as a medium for carrying on the

Changes in E-Form w.e f. 21.09.2014


Ministry of Corporate Affairs on 21st September, 2014 has updated various E-Forms that are required to be filed under Companies Act, 2013 and rules made there under. The major changes were made pursuant to the amendment to Companies (Appointment and Qualification of Directors) Amendment Rules, 2014 which was dated 18th September, 2014. The changes to the e-forms broadly pertains to the amendment that was brought about in the Appointment and Qualification of Director Rules and for those forms which were hitherto not directly filed with the Registrar of Companies, which were

Consider extension of Due date of ITR to 30.11.2014 - AP High Court.

 In the High Court at Hyderabad for the States of Telangana and Andhra Pradesh, AIFTP –South Zone represented by Vice President for the State of Telangana and Vice President –Andhra Pradesh have filed two Writ Petition Nos. 28159 & 28672 of 2014 questioning the notification issued by the Central Board for Direct Taxes on 20-08-2014 extending the time for the audit report to 30-11-2014 as arbitrary, discriminatory and unjust and sought for a direction to consider and dispose of the representations of All India Federation of Tax Practitioners dated 05-08-2014 and 13-05-2014

CONVERSION OF PRIVATE COMPANY INTO ONE PERSON COMPANY

A private company other than a company registered under section 8 of the Act having paid up share capital of fifty lakhs rupees or less or average annual turnover during the relevant period is two crore rupees or less may convert itself into one person company by passing a special resolution in the general meeting. [Rule 7(1)]
Before passing such resolution, the company shall obtain No objection in writing from members and creditors. [Rule 7(2)]

CONVERSION OF NON – PROFITS TO FOR PROFIT COMPANY

But these companies may require to convert in a for profit company due to various region. There is a provision of conversion of non – profit company to a for profit company under the Rules 21 and 22 of the Companies (incorporation) Rules 2014.
A company registered under section 8 which intends to convert itself into a company of any other kind shall pass a special resolution at a general meeting for approving such conversion. [Rule 21(1)]

Amendment in Section 143(5)


In the case of a Government company, the Comptroller and Auditor-General of India shall appoint the auditor under sub-section (5) or sub-section (7) of section 139 and direct such auditor the manner in which the accounts of the Government company are required to be audited and thereupon the

ST - CENVAT credit of service tax was wrongly availed by one unit but utilised by two units reversed in wake of audit objections

Sharavathy Conductors Pvt. Ltd. vs. CCE, Bengaluru-I 2013 (31) STR 47 (Tri.-Bang.)

Facts:

In this case, CENVAT credit of service tax was wrongly availed by one unit but utilised by two units reversed in wake of auditobjections. The department sought to charge interest on the said reversal.

No TDS liability of assessee on fees charged by NR bank.

Where a foreign bank charged certain sum terming it as interest on an Indian bank in process of negotiating letter of credit on behalf of its customer i.e. assessee, and said bank recouped amount from assessee, in view of fact that assessee had privity of contract with Indian bank and amounts were also paid to Indian bank only, transaction in question could not be said to fall within meaning of section 195 and, therefore, assessee was not required to deduct tax at source while making payments of interest

Salary paid to Indian Branches Employee's by overseas HO is fully deductible.

Where assessee, a bank incorporated in Japan, paid salaries abroad to its expatriates working in Indian branch constituting PE, in view of fact that said expenditure had been incurred wholly and exclusively for Indian branch and, no part of those expenses could be allocated to any other branch by head office, provisions of section 44C did not apply to said expenditure and thus, assessee's claim for deduction of salary expenses was to be allowed.

CBDT Extends Depreciation rate by 80% on windmills and devices installed after 31st March, 2014

CBDT has issued a notification No. 43/2014 dated 16.09.2014 regarding extends 80% rate of depreciation on windmills and devices running on wind energy installed after 31-3-2014 which is as under:

Whether when assessee fails to produce PAN numbers of parties and also pays no interest on huge loans taken from them, it goes to establish that loan transactions were not genuine - YES: HC

THE issue before the Bench is - Whether when assessee fails to produce PAN numbers of parties and also pays no interest on huge loans taken from them, it goes to establish that the loan transactions were not genuine. And the verdict favours the Revenue.
Facts of the case

The
assessee filed its return of income declaring loss. The return was processed under Section 143(1) of the Act and thereafter, a notice was issued under Section 143(2) of the Act, initiating scrutiny assessment proceedings. The Assessment officer assessed the loss at a lesser amount than the one returned by the assessee. Assessing Officer made additions of unsecured loans credited in the books of account of the assessee being income from undisclosed sources under

HC Ruling on retrospective application of amendment in CCR

We are pleased to release a Tax Alert which gives an update on the recent decision of the Karnataka High Court [2014 (9) TMI 633]

Tuesday, 23 September 2014

ST - penalty under section 76

BNP Paribas Equities India P. Ltd. vs CST, Mumbai 2013 (31) STR 22 (Tri.- Mumbai.)

Facts:
In this case, the penalty under section 76 has been revised and confirmed at Rs. 200/- per day. or 2% of Service tax per month, whichever is higher.

Held:
The Tribunal held that, it is well settled law that, punishment to be given on the basis of provisions of law prevailing at the time ofoccurrence of offence. During April, 2002 to September, 2002 penalty is leviable at Rs.100/- per day which may extend to Rs. 200/- per day and adjudicating authority levied penalty at Rs.100 per day. Therefore, the Commissioner cannot go beyond provisions applicable atthe time of occurrence of offence.

CBDT to extend due date for Filing of ITR u/s. 234A to 30th Nov. 2014 directed by Gujrat High Court

The Gujarat High Court directs CBDT to extend due date for filing of ITR to 30-11-2014 subject to Sec. 234A interest.

The CBDT vide Order [F.NO.133/24/2014-TPL], dated 20-8-2014 had extended the due date for filing of tax audit report to November 30, 2014. However, the CBDT had not extended the due date for filing of the Income-tax Return ('ITR'). Consequently, many taxpayers were facing difficulty in filing of ITR without filing the tax audit reports.

CPC (TDS) communicates to deductors whose Nil TDS Deposited during Financial Year 2014.

CPC (TDS) has issued a follow up communication to all deductors regarding nil TDS deposited during FY 2014. It may be possible that either the tax may not have been deducted at source or the tax deducted may not have been deposited, within stipulated time. In such case, this may lead to Short / Late Deduction and / or Short / Late Payment Defaults. CPC (TDS) has reminded deductors about the duty of the person deducting tax and suggested them the actions that needs to be taken in case of this kind of situation.

EY Tax alert on Tribunal ruling holding separate contracts for supply of goods and services as one single composite contract liable to service tax under works contract (Gupta Energy Pvt)

We are pleased to release a Tax Alert which gives an update on the recent decision of the Mumbai Tribunal in the case of Gupta Energy Pvt. Ltd. vs. Commissioner of Customs and Central Excise, Nagpur [TS-410-Tribunal-2014-ST].

Whether Clause (d) of Sec 80IB(10), condition linked to date of approval of housing project, will not apply to any project sanctioned prior to Mar 31, 2005 - YES: HC

THE issue before the Bench is - Whether Clause (d) of Sec 80IB(10), a condition linked to the date of approval of the housing project, will not apply to any project sanctioned prior to Mar 31, 2005. And the answer goes against the Revenue.
Facts of the case
The assessee is engaged in the business as builders and developers and was following the project completion method of accounting. It had declared its income at NIL after claiming a deduction of Rs.56,27,583/- under section 80-IB(10). During assessment, the AO noticed that the assessee had claimed a deduction under section 80-IB(10) on the profit after sale of shops . The same was

Monday, 22 September 2014

Understanding Income from House Property: Vol – II.


In our part – I of House Property income ( link provided at the end of the article) we had  discuss the section with latest case laws.  In continuation given below here more recent judgments in  respect of house property income.

CONVERSION OF NON – PROFITS TO FOR PROFIT COMPANY

We have discussed incorporation of Companies including non – profits under Section 8 of the Companies Act 2013 earlier  But these companies may require to convert in a for profit company due to various region. There is a provision of conversion of non – profit company to a for profit company under the Rules 21 and 22 of the Companies (incorporation) Rules 2014.
A company registered under section 8 which intends to convert itself into a company of any other kind shall pass a special resolution at a general meeting for approving such conversion. [Rule 21(1)]

Whether interest earned on bill discounting with credit institutions is to be included in interest income u/s 2(7) - NO: High Court

THE issue before the Bench is - Whether interest earned on bill discounting with credit institutions would be included in interest income u/s 2(7). And the answer is NO.
Facts of the case
The assessee, a Government of India undertaking, was engaged in the business of general insurance. Pursuant to the return filed by assessee, an assessment order was passed u/s 8(2) computing chargeable interest at Rs.3,84,84,910/-. Subsequently, notice u/s 10 was issued and a return of chargeable interest of Rs.3,92,51,082/- was filed. By an order, AO added certain

onsite services provided by foreign subsidiaries prior to 27 February 2010 cannot be considered as export and refund of CENVAT credit not available in respect of the same

Bombay HC decides - CENVAT credit refund ineligible in respect of onsite services provided by foreign subsidiaries to overseas clients prior to 27 February 2010, as the same does not constitute “export of service”
This Tax Alert which gives an update on the recent decision of the Bombay High Court [TS-415-HC-2014(BOM)-ST]
In the instant case, the taxpayer's foreign subsidiaries / branches were providing on-site services to taxpayer's clients abroad. Revenue

S. 80-IB(10)(d): Limit on extent of commercial area of housing project inserted w.e.f. 1.4.2005 does not apply to projects approved before that date

CIT vs. M/s Happy Home Enterprises (Bombay High Court)

S. 80-IB(10) was amended by the Finance (No.2) Act, 2004, w.e.f. 01.04.2005 by insertion of clause (d) to provide that the built up area of the shops and other commercial establishments included in the housing project should not exceed five percent of the aggregate built up area of the housing project or 2000 square feet, whichever is less. In one case, the assessee’s housing project

Service Tax return (Apr-Sep 14) now available.

Service Tax Return (ST-3) for the period from April-14 to September-14 will be made available for e-filing by the assesses. The last date for filing the returns for the said period is 25th October, 2014. The assesses can file return online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from "DOWNLOADS" Section of ACES website. For details on how to e-file in ACES or for any other information/assistance, you may visitwww.aces.gov.in or contact your jurisdictional Service Tax Officer or the nearest ACES Certified Facilitation Centres (CFCs). Please file your returns in ACES well in advance to avoid rush and inconvenience at the last moment.

Friday, 19 September 2014

Non-Extension Of Due Date For Filing ROI Challenged In Bombay High Court


The Central Board of Direct Taxes (CBDT) issued Notification dated 25.07.2014 to amend the Income Tax Rules 1963 by providing for a new format of FORM No.3 CD of the particulars to be furnished by the Auditor. The CBDT also issued an order dated 20.08.2014 u/s 119 of the Act to extend the time to file the audit report u/s 44 AB of the Act in the new FORM 3 CD from 30.09.2014 to 30.11.2014.

CESTAT holds that separate contracts for supply of equipment and for erection and commissioning services is one single composite contract and liable to Service tax as works contract service


This Tax Alert which gives an update on the recent decision of the Mumbai Tribunal in the case of Gupta Energy Pvt. Ltd. vs. Commissioner of Customs and Central Excise, Nagpur.
In this case, turnkey project for setting up a power plant in India was split into two contracts, one for supply of equipments and another

Investment covered u/s 80C Income Tax

With every new year comes new joys, new wishes and new dreams coupled with new liabilities and responsibilities including the old ones. One such responsibility is financial planning for ourselves and our family for each financial year. The tax plan has always been a concern of the last minute, be it for the service or business class.

Taxation of Real Estate Development Contracts: Ready Reckoner of Case Laws

(1)Housing Projects – [S. 80IB(10)]


(i) CBDT Circular F. No. 205/3/2000/ITA II dt. 4-5-2001. CBDT has clarified that “any project which has been approved by a local authority as housing project should be considered as adequate for purpose of Section 80IB(10)”.

(ii) CIT vs. Brahma Associates (2011) 333 ITR 289 (Bom.). Section 80IB(10) allows deduction to the entire project approved by the local authority and not to a part of the project, if the conditions set out in section 80IB(10) are satisfied, then deduction is allowable on the entire project approved by the local authority and there is no question of allowing deduction to a part of the project

SERVICE OF DOCUMENTS

Section 20 of the Companies Act 2013 discussed earlier here make provision for service of documents for the purpose of this Act.
Service of documents on company
A document may be served on a company or its officer by sending it to the company or the officer at

CHANGE OF OBJECTS

A  Company, which has raised money from public and has a unutilised amount out of money so raised, shall not change its objects for which it raised the money through prospectus unless a special resolution is passed by the company.
The prescribed details in respect of this special resolution shall be published in newspapers (one in

LICENCE FOR NON – PROFIT COMPANIES

LICENSE UNDER SECTION 8 FOR NEW COMPANIES WITH CHARITABLE OBJECTS:
A person or an association of persons (hereinafter referred to in this rule as “the proposed company”), desirous of incorporating a company with limited liability under sub-section (1) of section 8 without the addition to its name of the word “Limited”, or as the case may be, the words “Private Limited”, shall make an application in Form INC – 12 along with the fee as provided in the Companies (Registration offices and fees) Rules, 2014 to the Registrar for a license under sub-section (1) of

Whether HC has discretion not to exercise its judicial review powers in writ petition filed by assessee, when conduct of assessee himself is tainted and doubtful - YES: HC

THE issue before the Bench is - Whether High Court has the discretion not to exercise its judicial review in the writ petition filed by the assessee , when the conduct of the assessee himself is tainted and doubtful. And the verdict goes against the assessee.
Facts of the case
The assessee, a famous Bollywood film producer, filed his Return of Income for the AY 1990-91, declaring a loss on account of film – ' Shehzaade ' produced by him. In his Return of Income, the assessee had disclosed his address in Mumbai. The AO served notices u/s 143(2) on several dates

Thursday, 18 September 2014

Accounting Treatment of Enhanced Provision of Gratuity

                         The pay revision of the officers and employees has been
                        carried out by the Public Sectors Insurance companies in
                        the year 2010-11 and Government by Gazette, Notification
                        dated May 24, 2010 has revised upward maximum limit for
                        Gratuity under “Payment of Gratuity Act 1972” from Rs.
                       

All about Conso File - FAQs

1. What is a conso file?

It is the consolidated data of the statements processed (regular & correction) for the relevant Financial Year, Quarter and Form Type.

2. Why is a conso file required?

Whether character of any stock-in-trade acquired by partners of a firm changes into capital asset upon dissolution of firm, without presence of any agreement regarding such conversion - NO: HC

THE issue before the Bench is - Whether character of any stock-in-trade acquired by partners of a firm changes into a capital asset upon dissolution of the firm, without presence of any agreement regarding such conversion by the partners. And the answer is NO.
Facts of the case
The assessee is an individual. It had entered into an agreement of partnership at will with one Amruthben K Chedda on 1st Mar, 1982. The partnership deed was silent as to its assets or stock-in-trade. The said partners purchased two plots of land at Thane Dist. under a conveyance deed in their favor dated 2nd Apr, 1982 for purpose of its development. However, later they decided to dissolve the partnership and a dissolution deed dated 1st Apr, 1985 came to be executed

Whether the state has right to levy VAT on 40% of the bill amount, if the said portion is traded as service portion liable to service tax under the service Tax Law ?

Valley Hotel & Resorts vs. CCT. 58 [2014] 45 taxmann.com 377 (Uttarakhand)



The revisionist provides lodging and boarding facilities and restaurant service to its customers. On 06-06-2012, the Government of India, Ministry of Finance issued a notification amending the service tax (Determination of Value) Rules, 2006 by virtue of which 40%of the billed value to the customer, for supply of food or any other article of human consumption or any drink in restaurant, wasmade liable to service tax. Thereafter, the revisionist moved an application u/s 57 of the VAT Act, 2005, requesting not to chargeVAT on 40% billed amount to the customer, as the same has already suffered service tax. The said application was rejected bythe Commissioner, Commercial Tax, against which appeal was filed before the Commercial Tax Tribunal. The same was alsodismissed. Aggrieved thereby, the present revision was filed.

Wednesday, 17 September 2014

Overview of Pension


Pension: - As per Section 17 (1) (ii) of the Income Tax Act, 1961 pension is a payment made by the employer after the retirement/ death of the employee as a reward for past service.

Who is eligible for pension/family pension: - person himself, his/her spouse, children below 25 years old, unmarried daughter.

Due Date for ITR filing extends to 30.11.14 for IT Assessees in J&K State for A. Y. 2014-15 - CBDT.

CBDT extends due date for filing of Income Tax Return by Two months i.e. from 30.09.2014 to 30.11.2014 for Income Tax Assessees in State of Jammu and Kashmir for Asstt. Year 2014-15.

The order issued u/s. 119 of the Income Tax Act, 1961 on 16th Sept., 2014 by considering the large scale devastation in the State of Jammu & Kashmir due to heavy rains and floods.

Whether insertion of provisio to Sec 113 vide Finance Act, 2002 to levy surcharge in case of block assessment can be said to be clarificatory in nature and thereby having retro effect - NO: Supreme Court Constitution Bench

THE issue before the Bench is - Whether insertion of a provisio to Sec 113 vide Finance Act, 2002 to levy surcharge in the case of block assessment can be said to be clarificatory in nature and thereby having retro effect. NO is the decision.
Facts of the case
The assessee company is engaged in the business of real estate development and construction of residential as well as commercial properties. A search u/s 132 was conducted on the premises of the assessee and accordingly, notice u/s 158BC was issued requiring it to file return for the block period ending 10th Feb, 2000. In compliance, the assessee had filed its return and consequently, block assessment was completed u/s 158BA at a total undisclosed income of Rs.85,18,819/-. After sometime, the AO after verification of working of calculation of tax, observed that surcharge had

Whether interest received on account of enhanced compensation of acquired property by State is liable for taxation in year of receipt- YES: SC

THE issue before the Bench is - Whether interest received on account of enhanced compensation of acquired property is liable for taxation in the year of receipt.And the answer is YES.
Facts of the case
The assessees are individuals. They had inherited a land property from their father. Subsequently, a part of the said land was acquired by the State Govt. and they were accordingly paid compensation. The amount of compensation was however enhanced and additional compensation was awarded to them along with interest. Thereafter, the assessees filed their return claiming themselves to be "individual". However, the AO passed the assessment order by treating them as

S. 113 Proviso inserted by FA 2002 w.e.f. 01.06.2002 to impose surcharge in search assessments is not clarificatory or retrospective. Suresh Gupta 297 ITR 322 (SC) overruled

CIT vs. Vatika Township (Supreme Court – Full Bench)

A search and seizure operation u/s 132 was conducted on 10.02.2001 pursuant to which an assessment order for the block period from 01.04.1989 to 10.02.2000 was passed on 28.02.2002 at a total undisclosed income of Rs.85 lakhs. Tax was charged at the rate prescribed in s. 113. Subsequently, a Proviso was inserted to s. 113 by the Finance Act 2002 w.e.f. 01.06.2002 to provide for the levy of surcharge at 10%. The AO took the view that the said amendment

Tuesday, 16 September 2014

Understanding Taxation of Salary Income with latest case laws: Part- II.


In the part – I, instances were provided what kind of income is being taxed under the head salary. The link for part- I is given below at the end of the article.  In respect of continue to obtain more information  in respect of taxation of salary, given below more recent judgments.

Exemption for Income Tax of Medical Benefits as Treamtnet, Diseases and Hospitality

77[Exemption of medical benefits from perquisite value in respect of medical treatment of prescribed diseases or ailments in hospitals approved by the Chief Commissioner.
3A. (1) 78[In granting approval to any hospital other than a hospital for Indian system of medicine and homoeopathic treatment for the purposes of sub-clause (b) of clause (ii) of the proviso to sub-clause (vi) of clause (2) of section 17], the Chief Commissioner shall satisfy himself that the hospital is registered with the local authority and fulfils the following requirements, namely :—

A useful Hand Book for TDS/TCS Deductor or Collector by CPC for Asstt. Year 2015-16

The TDS - Centralized Processing Cell has been published a Hand Book for TDS Deductor or TCS Collector which is very useful for Asstt. Year 2015

SHIFTING OF REGISTERED OFFICE OUTSIDE STATE

 
Any alteration relating to place i.e. state of registered office shall take effect only after approval by the Central Government. The Central Government shall dispose of the application for approval of shifting of registered office from one state to another within sixty days. This alteration should have consent of the creditors, debentures – holders, and other persons concerned with the company. The company should have made sufficient provision for the discharge of all its debts and obligations or

Whether when assessee makes investments to pick up controlling stake in company after FIPB approval, entire expenditure related to such investment is to be attributed to earning of dividend, and warrants disallowance u/s 14A - NO: HC

THE issue before the Bench is - Whether when the assessee makes investments in shares to pick up controlling stake in an Indian company after taking approval of FIPB, the entire expenditure related to such investment is to be attributed to investments made for earning dividend, and is to be disallowed u/s 14A. And the answer is NO.
Facts of the case
The assessee company is a subsidiary of Holderind Investments Ltd., Mauritius which was formed for making downstream investments in cement manufacturing ventures in India. While filing its return, the assessee had declared cumulative losses for both the A.Ys 2007-08 and 2008-09. The assessee had also declared revenue receipts, including interest from FDRs and profit from sale of fixed assets, and claimed administrative and miscellaneous expenses

Monday, 15 September 2014

Download e-Book - "Guidance Note on Tax Audit u/s. 44AB" for Fin. Year 2013-14 and onwards

The “Guidance Note on Tax Audit u/s 44AB of the Income Tax Act, 1961” is amongst one of the important guidance issued by ICAI and is referred not only by our Chartered Accountants but also by assessing officers and in various judicial forums. It was brought out in the year 1985 immediately after the introduction of tax audit provisions and has been revised regularly to guide members in discharging their obligations in a timely and effective manner.

All about Revised return under section 139(5) of Income Tax Act, 1961

An assessee who is required to file a return of income is entitled to revise the return of income originally filed by him to make such amendments, additions or changes as may be found necessary by him. Such a revised return may be filed by the assessee at any time before the assessment is made. There is no limit under the income tax Act in respect of the number of time for which the return of income may be revised by the assessee. However, if a person deliberately files a false return he will be liable to be imprisoned under section 277 and the offence will not be condoned by filing a revised return.

SHIFTING OF REGISTERED OFFICE

this post we will discuss, shifting of Registered office –
  1. Within same city, town or village, or
  2. Out side same city, town or village but within same state.
Notice and verification of change of situation of the registered office
In case of change in registered a notice of change duly verified shall be given to Registrar within fifteen days of such change. [Section 12(4)]

Whether assessee providing HR Services like recruitment of manpower for foreign clients is entitled to Sec 10A benefits - YES: HC

THE issue before the Bench is - Whether assessee providing HR Services like recruitment of manpower for foreign clients is entitled to Sec 10A benefits. And the answer is YES.
Facts of the case
The assessee M/s ML Outsourcing Service P Ltd filed NIL return. During assessment the AO disallowed the claim under Section 10A and held that the net profit of Rs.88,49,972/- should be brought to tax by denying exemption under Section 10A of the Act. One of the reasons given by the Assessing Officer to disallow the claim was that the assessee was rendering services as an

Friday, 12 September 2014

Understanding Trust with latest case laws : Part – II.


The concept of trust is still a mystery to the taxpayer due to its complexities. The concept had been explained in the part-1. (link provided at end) where the taxpayer can get the knowledge on trust. However, for practical purpose, it is also important to know the latest judgements which has been announced by various High courts and ITAT of India  in respect of public trust.

S. 254(1): Unnecessary remand by the ITAT causes prejudice and amounts to a failure to exercise jurisdiction

Coca-Cola India Private Limited vs. ITAT (Bombay High Court)

The Tribunal should not have refused to consider and decide the issue relating to service charges, more so, when an identical view taken by it earlier has not found favour of this Court. This Court repeatedly reminded the Tribunal of its duty as a last fact finding authority of dealing with all factual and legal issues. The Tribunal failed to take any note of the caution which has been administered by this Court and particularly of not remanding cases unnecessarily and without any proper direction. A blanket remand causes serious prejudice to parties. None benefits by non-adjudication or non-consideration of an issue of fact and law by an Appellate Authority and by wholesale remand of the case back to the

TRACES advice to Deductors to make TDS Payment in One Challan

As per the records of the Centralized Processing Cell (TDS), it has been observed that you have used multiple challans in a month, for payment of Tax Deducted.

For Deductor's convenience, CPC(TDS) has established processing logic in the system that can accept a Single Challan for reporting of Tax Deposited in following circumstances :

VERIFICATION OF REGISTERED OFFICE

According to Section 12 of the Companies Act 2013, the company shall have on and from the fifteenth day of its incorporation and all time a registered office for all communication purpose. The company shall furnish verification of its registered office within a period of thirty days of its incorporation.
According to Rule 25 of the Companies (incorporation) Rules 2014,
The verification of the registered office shall be filed in Form INC – 22 along with the fee.
There shall be attached to said Form, any of the following documents, namely—

Whether when excise duty is payable at time of clearance of finished goods or debonding from warehouse, any addition is warranted in relation to valuation of closing stock on last day of accounting year - NO: HC

THE issue before the Bench is - Whether when excise duty is payable at the time of clearance of finished goods or debonding from warehouse, any addition is warranted in relation to valuation of closing stock on the last day of the accounting year. NO is the answer.
Facts of the case

Thursday, 11 September 2014

Point of Taxation rules changes w.e.f October 1, 2014

As per existing Rule 7 of the Point of Taxation Rules, 2011, the point of taxation is respect of persons required to pay tax as recipients of service under reverse charge mechanism is the date on which payment is made. However, the first proviso of said Rule mandates that where the payment is not made within a period of six months of the date of invoice, the point of taxation shall be determined as if this Rule did not exist, i.e., we need to fall back on Rule

Prime Minister's National Relief Fund u/s. 80G.

The Prime Minister's Office has issued notice on 22th August, 2014 regarding collection of huge fund in Prime Minister's National Relief Fund to helps undecided circumstances and get relief u/s. 80G of Income Tax.

Prime Minister's National Relief Fund (PMNRF) was constituted in January, 1948 to assist displaced persons from Pakistan. The resources of the PMNRF are not utilized primarily to render immediate

Duties of person deducting tax at source and rights of tax payers

The duties of person deducting tax at source and the rights of the tax payers has been given below:

Duties of person deducting tax at source

Deduct Tax at Correct Rate and deposit in Government Account – Sec 200


Every person responsible for deducting tax at source shall at the time of payment or credit of income, whichever is earlier, verify whether the payment being made is to be subject to deduction of tax at source. If it is so, he must deduct such tax as per the prescribed rates. Further he is required to deposit such tax deducted in the Central Government Account within the prescribed time as specified in Rule 30.

COST AUDIT


According to Rule 4 of the Companies (Cost Record and Audit) Rules 2014, cost audit shall be applicable –
  • Every company engaged in a strategic industry and covered under sub-clause (b) of clause (A) of rule 3 shall be required to get its cost records audited in accordance with these rules.
  • In the case of a multi-product or a multi services company specified in sub-clause (b) of clause (B) and sub-clause (b) of clause (C) of rule 3, the requirement for cost audit shall apply to a product or a service for which the individual turnover (from such specific product or such

Whether when assessee company is mainly engaged in earning profits from purchase and sale of shares, dividend income is merely incidental to holding of such stocks and thus, is chargeable to tax as income from other sources - YES: HC

THE issue before the Bench is - Whether when the assessee company is mainly engaged in earning profits from purchase and sale of shares, dividend income is merely incidental to holding of such stocks and thus, is chargeable to tax as income from other sources u/s 56(2). And the verdict goes in favour of the assessee.
Facts of the case
The assessee concern is in the business of purchase and sale of shares and also derives income from dividend, commission and interest. For the AY 1992-93, assessee had filed a return showing nil income. It had showed income from dividend, commission and interest under the head "profits & gains from business or profession". AO had not accepted the submission of assessee and while

Wednesday, 10 September 2014

AO’s action of giving effect to a quashed s. 263 revision order termed “assault on rule of law” & “contempt of court”

DCIT vs. SAP Labs India Pvt. Ltd (ITAT Bangalore)

By the by, we are very much astonished to observe that the AO has passed a revised assessment order even after knowing that the revision order passed by the CIT has been set aside by the Tribunal. The action of the AO could be treated as assault on the rule of law. His action amounts to contempt of court as well. The Revenue could have preferred to file an appeal before the High Court against the order of the Tribunal setting aside the revision order passed by the CIT. If such an appeal has been already filed, well and good. Otherwise,

S. 263: TPO’s acceptance of ALP shows two views are possible & CIT has no jurisdiction to revise assessment

CIT vs. SAP Labs Pvt. Ltd (Karnataka High Court)

On the day the reference was made by the AO to the TPO, there was no return pending for consideration by him and therefore, the very reference was bad. Even otherwise, the said Transfer Pricing Authority did not find fault with the adjudication of determining arms length price by the Assessing Authority. In those circumstances, the CIT committed an error in exercising his power u/s 263 and the Tribunal was justified in interfering with the said order.

AO needs approval from CBDT in resspect of fresh cases having retrospective amendment.

A High Level Committee Constituted for Considering the Proposals for Assessment of Income arising or accruing before 1st April, 2012 on Account of Retrospective Amendments to the Provisions Related to Indirect Transfer
The Finance Minister Shri Arun Jaitley in his Budget Speech on 10th July, 2014 had made an announcement that all fresh cases arising out of the retrospective amendments of 2012 in respect of indirect transfer and coming to the notice of Assessing officer will be scrutinized by a High Level Committee to be constituted by Central Board of Direct Taxes (CBDT) before any action is initiated in

CPC (TDS) reminder - whose TDS Return Q1 Fin. Year 2013-14 and not filed Q1 Fin. Year 2014-15 yet.

If you are not required to submit the relevant statement, you are requested to submit a declaration by taking appropriate action as suggested under "Action to be taken" in this communication. Otherwise, your urgent attention is invited to relevant CBDT Circulars and provisions of the Income Tax Act, mandating filing of TDS Statements and Issuance of TDS Certificates downloaded from TRACES.

APPLICABILITY OF COST AUDIT RULES

The Companies (Cost Record and Audit) Rules 2014 shall be applicable from the date of its publication in official gazette of India and published in official gazette on 1st July 2014 (Notificiation is dated as 30th June 2014).
Applicability of Cost Record [Rule 3]:
For the purpose of sub-section (1) of section 148 of the Act, the following class of companies,

FAQ on PAN CARD



-       What is PAN?
Permanent Account Number (PAN) is a ten-digit alphanumeric identifier, issued by Income Tax Department. Each assessee (e.g. individual, firm, company etc.) is issued a unique PAN.