Sunday, 30 November 2014

India Taxes- Due Date Alert for the month December 2014



Sr No
Due Date
Related to
Compliance to be made
1
05.12.2014

Service Tax
Payment of Service Tax for the Month of November 2014
2
07.12.2014

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 November 2014.

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

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

•    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of November 2014, if any
3
15.12.2014

Income Tax
Payment of Third installment of advance tax (75%) for corporate
4
20.12.2014

VAT
Payment of VAT & filing of monthly return for the month of November 2014
5
20.12.2014

STPI
Filing of Softex Form for the month ended November 2014

Guide to the law on reopening of assessments u/s 147 of the Income-tax Act

The scope and effect of a reopening of assessment is still shrouded in mystery even after various judgments of the Supreme Court and High courts. Reassessment is one of the distinguishing weapons in the armoury of the Department, empowers the Assessing Officer to assess, reassess or recompute income, turnover etc, which has escaped assessment. A number of intricate issues crop up during the reassessment proceedings. Some of the issues are been dealt with here under:

Service of notice u/s.143(2)

Issue for consideration
Section 143 of the Income-tax Act, 1961 (‘the Act’) provides for assessment by an Assessing Officer (‘AO’) of the tax payable by an assessee for a particular assessment year. Section 143 is a purely procedural or machinery section laying down the procedures for making assessment in various contingencies. Broadly, section 143 prescribes two types of assessment — ‘summary assessment’ u/s.143(1) and ‘scrutiny assessment’ u/s.143(2).

Time Limit under income tax

  • 1. TIME LIMITS
  • 2. Intimation u/s 143(1)Intimation u/s 143(1) Intimation should be sent withinone year from the end of theFinancial year in which the Returnwas filed.
  • 3. Assessment u/s 143 / 144Assessment u/s 143 / 144 Notice u/s 143(2) is to be served onthe assessee within a period of 6months from the end of the financialyear in which the return is furnished(w.e.f. 01.04.2008)- earlier one yearfrom end of month. Order-2 Yrs from the end of therelevant Asstt. Yr. in which the incomewas first assessable(1 year & 9 monthsfor AY 2004-5 to 09-10).

Friday, 28 November 2014

CBDT releases Digital Evidence Investigation Manual

Introduction & Background
1.1. Introduction
One of the most significant and influential inventions of 20th century was the Computer. There has been a sea change in the purposes and the manner in which computers are used with advent of microprocessor technology and digital communication. The computer started with being a giant calculating machine. It then metamorphosed itself into a stand­alone personal tool for performing assorted routine tasks like word processing and accounting and then to toZaD\s FN Qork ZNvicN LI

Whether loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as ascertained liability in computation of book profit u/s 115JB - YES: ITAT

THE issue before the Bench is - Whether the loss suffered on hedging for payment of interest and repayment of principal amount of loan in foreign currency is deductible as an ascertained liability in the computation of book profit u/s 115JB.
Facts of the case


FEMA – Summary of Recent Amendments in Forex Facilities for Individuals

CBDT's Investigation Manual + Two Imp High Court Verdicts On S. 271(1)(c) And 158BD

CBDT’s Digital Evidence Investigation Manual

The CBDT has issued a comprehensive document called the “Digital Evidence Investigation Manual”. The Manual points out that the days of manual books of account and other documents are getting extinct and that most books of account and documents are maintained on digital media devices. Any worthwhile investigation of such books and documents requires proper handling and thorough analysis to ensure its integrity and evidentiary value. The Manual provides insight into the

Tax treatment of losses on sale of shares

The last few days saw the long expected correction taking place in the stock market, with share prices touching new 52-week lows. Having burned their fingers by buying shares at high prices during the boom and seeing the prices of such shares rapidly plummeting, many investors are contemplating disposing of such shares even at a loss so as to limit their losses. What is the tax treatment of such losses that they may incur?

Set off losses against other income heads


SUMMARYEveryone strives to make profits from whatever venture he/she undertakes, but in the quest for gains, the possibility of losses cant be ruled out
 

Wednesday, 26 November 2014

INVESTMENT OPTIONS







Sr.No.
Name of Investment
Who can Invest
Yield
Life/Lock-in Period
Issuer
Tax Benefits (See Notes below)
Min./Max. amount (See notes below)
Liquidity
CapitalAppreciations / Risk
Nomination / Joint Names
1Public Provident Fund (PPF)Individuals and HUFs (Now NRIs not allowed though old accounts may continue on non-repatriation basis)8% p.a. w.e.f. 1-3-2003 calculated on  monthly balance and credited annually15 years. Optional extension for block 5 years at a timeGovt. of India through Nationalised Banks and of Post Office.Sections 10 and 80C. No TDS on interest and withdrawalMin. Rs. 100 p.a. Max. Rs. 70,000 p.a.in respect of individual and minors taken together.No withdrawal till expiry of 6th F.Y.Then one withdrawal up to lower
of 50% of
the balance
at the end
of 4th
preceding
year or the
year
immediately
preceding
the year of
withdrawal.
Loan (of up
to 25% of
amount at
credit at the
end of 2
preceding
years) can
be applied
for after
2 years but
before 5 years from the end of year in which initial
subscription
is made. 
None. Accumulation of interest No RiskNomination possible except for minors

Taxpayee can revise income tax return within the given time limit

If you suddenly realize that you missed reporting an income or deduction when you filed your income tax return (ITR) for the previous fiscal, you have the option of filing a revised return. To be able to do this, you should have filed the original return before the due date, 31 July

Procedure of service tax refund/exemption to SEZ- CBEC Instructions

IT seems certain representations have been received through Ministry of Commerce raising the issue that SEZ unit or developer has to approach two authorities (the SEZ authority and with the Jurisdictional Service Tax authority) for upfront exemption under notification No. 12/2013 dated 01.07.2013.
TRU in the Finance Ministry clarifies that:

Whether when Revenue has issued restraint order against goods seized u/s 132(1), HC is right in directing official to make inventory of goods and then quash search proceedings on basis of Report submitted by official - NO: SC

THE issue before the Apex Court is - Whether when the Revenue has issued restraint order against goods seized u/s 132(1), the High Court is right in directing a particular Revenue official to make inventory of goods and then quash the search proceedings on the basis of the report submitted by the official. NO is the answer.
Facts of the case
The assessee is engaged in the manufacture of C.I. pipes, fittings and manholes and had obtained the licence under the Central Excise Act. The assessee had been filing income-tax returns regularly. On 16.2.2000 the Income Tax Department conducted a search & seizure operation on the residential and business premises of the assessee. The assessee filed a writ

Transmission tower, its parts and prefabricated building on which telecommunication equipments are erected are neither capital goods nor inputs for a telecom service provider.

Bharti Airtel Ltd. vs. CCEx, Pune-ID [2014 (35) STR 865 (Born)



FACTS:
The Appellant engaged in providing cellular telecommunication service availed CENVAT Credit of excise duty paid on tower parts, shelters/prefabricated buildings (PFB) purchased by them and treated them as capital goods from October, 2004 onwards till March, 2008. This was objected to by the department.

Before first appellate authority, Appellant contended that tower and parts of tower were the part of "Base Trans-receiver Station" (BTS)which comprises of BTS transmitter, transformers, batteries, stabilisers, antenna,

Tuesday, 25 November 2014

CPC (TDS) advice to Deductor who have not filed yet Q2 for Fin. Year 2014-15

CPC (TDS) has issued a communication to all deductors who have filed TDS Statements Q1 for Fin. Year 2014-15 i.e. Asstt. Year 2015-15 but, not filed yet for Q2 as of November 1, 2014 which is as under:

Refund and Return of TDS.

Refund of TDS :
In case of excess deduction of tax at source, claim of refund of such excess TDS can be made by the deductor. The excess amount is refundable as per procedure laid down for refund of TDS vide Circular No.2/2011 dt. 27.4.11 (which supersedes the earlier circular no.285 dt 21.10.1980 on this subject). The difference between the actual payment made by the deductor and the tax deductible at source, will be treated as the excess payment made.

All about Income Tax Refunds - FAQs

From which date the refund banker has been implemented?
The refund banker has been implemented from January 24, 2007.

In which cities the refund banker has been implemented ?
The refund banker facility is operational for non-corporate taxpayers assessed all over India.

Who will send the refund to me?
The State Bank of India (SBI) is the refund banker to the Income Tax Department (ITD). The Cash Management Product department of SBI (CMP SBI) processes the refunds under the refund banker scheme. Details of refunds are forwarded to CMP SBI by the ITD. CMP SBI processes the refunds and sends the refund intimation to the taxpayer.

All about TDS on Rent u/s. 194-I - FAQs

. What are the provisions relating to TDS on rent? From which date same are applicable?

As per the Finance Act, 1994 the provisions of TDS on rent have been introduced w.e.f. 1.6.1994. The salient feature of Sec. 194-I are as under:-

i) The provisions are applicable only in cases where the person making the payment of rent is an individual or HUF who is required to get his accounts audited u/s 44AB in the immediately preceding financial year (w.e.f. 1.6.2002) or any other person responsible for paying to a resident any income by way of rent. Prior to 1.6.2002 no individual or HUF was liable to deduct TDS from rent.

Whether when goods are loaded on ship and title with risk is passed on to assessee as per contract, assessee can claim deduction for loss if goods are not received - YES: HC

THE issues before the Bench are - Whether where the goods have been given in shipment and title of goods along with the risk has been passed on to the assessee in terms of a contract, the assessee will be said to be at loss if such goods are not received by him and Whether where the assessee has exhausted all the methods to recover the losses he incurred during previous year on account of loss of goods in transit and has not claimed deduction on those losses in the previous year, he cannot be denied from claiming deduction on the said losses in the subsequent year if such loss was not written off. And the verdict favours the assessee.

Whether when assessee has received certain services and also accepted claims for same, such expenditure is not allowable u/s 37(1) merely because provisions were made close to AY and bills were not received - NO: HC

THE issue before the Bench is - Whether provisions for network repair and maintenance and credit verification cost and provision for consultancy charges and provision for car hiring charges are disallowable as a contingent liability where the services had actually been performed and liability was accepted by the assessee and the amounts represented ascertained liabilities and were shown as "provisions" as the services were rendered close to the assessment years and relevant bills were not received. And the answer favours the assessee.
Facts of the case

Without ISD registration, CENVATcredit cannot be transferred.


Facts:
The appellant had a registered office at Mumbai which transferred the input credit to its manufacturing unit at Mangalore sans registration as an Input Service Distributor (ISD) and department denied the same as Mumbai office was not registered as ISO. The Appellant submitted that this was a minor defect and as such, the substantive benefit of CENVAT

Friday, 21 November 2014

Solution of message "Application is down for planned maintenance", when any Taxpayee User login to TRACES.


Solution when any Taxpayee login to TRACES, and get the message i.e. "Application is down for planned maintenance". which is as under :

The cookies on your browser may be using the cached data to display this message and you may need to clear the cookies and reload the website. Steps to clear cookies are given below. You can clear cookies by pressing 'Ctrl+Shift+Del' (Control+Shift+Delete) keys on your keyboard together.

Step-by-step instructions for different browsers are given below:

Whether when assessee receives refundable advance as per MoU for joint development of land, such sum is capital receipt, not taxable in hand of assessee - YES: ITAT

THE issue before the Bench is - Whether when assessee receives refundable advance as per MoU for joint development of land, such sum is capital receipt, not taxable in hand of assessee. YES is the answer.
Facts of the case
The assessee is a partnership firm and is carrying on the business as builder and developer. It carries on its business activities in Mumbai and Jaipur. The partners are D and P. The revenue

CBEC clarifies that time limit of six months applicable for CENVAT availment does not apply to re-credit of such CENVAT



This Tax Alert on the recent circular No. 990/14/2014-CX-8 dated 19 November 2014 issued by CBEC clarifying the doubts raised by trade and industry in respect of recently introduced time limit provisions for availment of CENVAT credit.

Key amendments approved by SEBI in its meeting based on the press release of 19 November 2014



Securities and Exchange Board of India (‘SEBI’/ ‘Board’) in its meeting held on November 19, 2014 approved some significant amendments in ‘Prohibition of insider trading regulations’, ‘Listing agreement’, ‘Delisting of Equity Shares Regulations’, ‘Mutual Funds regulations’ etc.

Amendments to respective regulations are yet to be notified/ released.  The complete implications could be ascertained once the amendments are released.

Thursday, 20 November 2014

Availment of Cenvat credit on Inputs/ Input Services after six months

CBEC clarification regarding availment of Cenvat credit on Inputs/ Input Services after six months Background: The CBEC vide Notification No. 21/2014-CE (NT), dated July 11, 2014 (Applicable w.e.f September 1, 2014) [Notification No. 21], has amended Rule 4(1) and Rule 4(7) of the Cenvat Credit Rules, 2004 (the Credit Rules) to fix a time limit of six months from the date of issuance of any of the documents specified in Rule 9(1) thereof, for availment of the Cenvat Credit on Inputs and

Whether when assessee facing Customs duty evasion charge deposits certain sums as per High Court's bail order, same cannot be construed as penal in nature till the time adjudication is pending - YES: ITAT

THE issue before the Bench is - Whether when the assessee facing Customs duty evasion charge deposits certain sums as per High Court's bail order, the same cannot be construed as penal in nature till the time adjudication is pending. And YES is the answer of the Tribunal.
Facts of the case

Delhi High Court rules toll roads constructed under BOT arrangement as “building” (Moradabad Toll Road)

We are pleased to release a Tax Alert which summarizes a recent ruling of the Delhi High Court (HC) in the case of Moradabad Toll Road Co. Ltd. (Taxpayer) on the eligibility to claim tax depreciation on development of toll road under Build-Operate-Transfer (BOT) arrangement under the Indian Tax Laws (ITL). The HC considered the specific definitions of the terms, “building,” and “plant” under the ITL, whereby “building” has been defined to include roads within its fold, whereas, the term “plant” specifically excludes building from its ambit. The HC concluded that by implication, definition of “plant” excludes roads. Even otherwise, to qualify as “plant,” the functional test, i.e., usage as a tool or an apparatus in the business is to be satisfied. As the toll road does not satisfy the functional test, the same will not qualify as “plant.” Accordingly, the Taxpayer is not entitled to claim tax deprecation on road as plant (i.e., tax depreciation at the rate of 25%) but as building (i.e., tax depreciation at the rate of 10%).

Revised regulatory Framework for Non-banking Finance Companies

The Reserve Bank of India (RBI) has, on 10 November 2014, issued the revised regulatory Framework for Non-banking Finance Companies (NBFCs) with a view to streamlining the regulations for the said sector.

The rationale behind the revised framework, as explained by the RBI, is to harmonise the regulations across deposit taking NBFCs and NBFCs with large asset sizes and to some extent bring them in line with the regulations applicable to banks. A lighter regulatory framework has been introduced for NBFCs that are not perceived to be posing significant risks to the financial system.

Wednesday, 19 November 2014

Deadline for sending the Income Tax Return Verification (ITR-V) for 2013-14 is 30th Nov., 2014

November 30 is the deadline for sending the income-tax returns verification (ITR-V) for 2013-14, as it will be four months or 120 days since July 31, the deadline to file IT returns. And if you don't send your ITR-V till then, your returns will be considered not filed. ITR-V is an acknowledgement of the returns filed.

Whether any interference is required by HC when assessee-trust has been imparting education and fees approved by AICTE are being utilised to create educational infrastructure - NO: HC

THE issue before the Bench is - Whether any interference is required by the High Court when the assessee-trust has been imparting education and the fees approved by the competent authority are being utilised to create educational infrastructure. NO is the HC's answer.
Facts of the case
The assessee is a trust registered u/s 12A. It had filed its return disclosing its total loss at Rs.3,96,54,653/- and claimed exemption u/s 11. However, the AO completed the assessment u/s 143(3) determining the total income at Rs.03,06,53,610/-. The AO had also disallowed

Three Important Judgements On S. 153A/ 153C, s. 194LA TDS And S. 80-IA

ACIT vs. Inlay Marketing Pvt. Ltd (ITAT Delhi)

S. 153A/ 153C: Entire law on recording of satisfaction by the AO and limitation period explained
(i) It must not be lost sight of that s. 153C of the Act and 158BD of the Act are draconian in nature when accounts of the person or entity other than the person searched are reopened automatically and revenue gets authority to assessee or reassess assessment of six assessment years preceding previous year in […]


Sales Tax Tribunal on BOT projects and HC ruling on toll rolls constructed under BOT

Maharashtra Sales Tax Tribunal rules BOT Project for road construction to be Works Contract
  
This Tax Alert summarizes the recent ruling of Maharashtra Sales Tax Tribunal in the case of M/s. Ashoka Infrastructures V. State Of Maharashtra.
The issue before the Tribunal was whether the contract undertaken by the assessee on “Build, Operate and Transfer” (BOT) basis could be said to be works contract and whether the assessee can be construed as a “dealer” in the context of the provisions of Maharashtra Sales Tax on Transfer of Property in Goods involved in

Update on India’s Social Security Agreements with Australia and Japan

Social Security Agreement between India and Japan:

The Social Security Agreement between India and Japan was signed on 16 November 2012. The Agreement was expected to enter into force in December 2014. However, it seems that the entry into force of the Agreement may be delayed due to continued discussions between the Japanese and Indian authorities

Important Transfer Pricing Verdict On CUP Method And Retro Effect To Rule 10AB

Toll Global Forwarding India Pvt Ltd vs. DCIT (ITAT Delhi)

CUP method can be applied by a comparing a pricing formulae, rather than the pricing quantification in amount. Rule 10AB inserted w.e.f. 01.04.2012 is beneficial in nature and so retrospective w.e.f. 01.04.2002
The assessee followed the 50:50 business model of sharing residual profits in equal ratio with the service provider at the other end of the transaction i.e. at the consignee’s end in the case of export transaction and at consigner’s end in the case of import transaction. This is a standard practice in the Industry. Even […]

Tuesday, 18 November 2014

CBDT has increased Bank FDR limit to Rs. 150000 u/s. 80C

CBDT has issued a notification on 13th November, 2014 regarding increasing limit of Bank FDR upto Rs. 150000/- u/s. 80C. This Scheme is call as the Bank Term Deposit (Amendment) Scheme, 2014. This amendment shall be effected from 13th Nov., 2014. The amended notification is as under :

Clarification on Revised Settlment Scheme - Assessment deemed to be concluded when order is made and not when served

CBDT has issued a circular regarding Settlement Application - Assessment deemed to be concluded when order is made and not when served on 17-11-2014 which is as under :

Chapter XIX-A of the Income-tax Act, 1961 contains provisions relating to settlement of cases by the Income-tax Settlement Commission (ITSC). The provisions contained in the said chapter were amended by Finance Act, 2007 and a Revised Settlement Scheme was put in place. Explanatory Circular No. 3/2008 dated 12.03.2008 issued by CBDT vide para 61 (comprising sub paras 61.1 to 61.17) deals with Revised Settlement Scheme.

2. Para 61.2 of Circular No.3 of 2008 reads:-
“61.2 under the existing provisions, an assessee may make an application to the Commission at any

Whether when each beneficiary contributes money to assessee - Trust for earning higher returns, it can be said that beneficiaries have come together to form an AOP - NO: ITAT

THE issue before the Bench is - Whether when each beneficiary contributes money to the assessee-Trust for earning higher returns, it can be said that the beneficiaries have come together to form an AOP for the purpose of Income Tax. NO is the Tribunal's answer.
Facts of the case
The assessee is a trust constituted under an instrument for investing the funds of the contributors in those fields where the returns are high. It had filed its return as an AOP, declaring NIL income. During assessment proceedings, the AO taxed the income of the assessee

Mumbai Tribunal regards installation and commissioning of supplied equipment as “assembly” services, not taxable as fees for technical services


  
This Tax Alert summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (Tribunal) in the case of M/s Bennet Coleman & Co. Ltd.  (Taxpayer) on the issue of taxability of various services involved in connection with installation and commissioning of equipment, which also included training services provided by a foreign company. This was examined both under the provisions of the Indian Tax Laws (ITL) and the India-Switzerland Double Taxation Avoidance Agreement (DTAA).

Five Imp Verdicts On S. 271(1)(c) Penalty, S. 2(47) Capital Gains Transfer

Mitsu Industries Ltd vs. DCIT (Gujarat High Court)

S. 271(1)(c): In the absence of a clear-cut finding by the AO as to whether it is a case of 'concealment' or 'furnishing inaccurate particulars', penalty cannot be levied
it is incumbent upon the AO to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income have been furnished by the assessee. In the absence of a clear-cut finding reached by the AO, and, on that ground alone, the order […]

Monday, 17 November 2014

Company Law Settlement Scheme, 2014 (CLSS-2014) extended to 31st Dec., 2014

Ministry of Corporate Affairs, Government of India has issued General Circular No. 44/2014 dated 14th Nov., 2014 regarding extension of date of Company Law Settlement Scheme, 2014 i.e. CLSS-2014.

Govt. Deductors for "Mismatch in BIN" reported in TDS Statements - CPC (TDS)

Centralized Processing Cell (TDS) has observed substantial cases of mismatch in Book Identification Number (BIN) in Quarterly TDS Statements

As you may be aware that at the time of filing TDS statements, it is mandatory:

Section 195 – No TDS on reimbursement of expenses for supply of data

Briefly stated facts are that the assessee claimed deduction for Rs.6,88,12,554/- and Rs.23,78,781/- being amount payable to EYGS LLP and Ernst & Young LLP, UK respectively towards reimbursement of costs for providing access to system & management audit methodology updates, knowledge updates through web etc. assistance in development of common programs and policies, endeavoring to ensure that professional and to other people resources are available to assist the firm or its clients in all jurisdiction. But the AO disallowed both these amounts claimed by way of

Whether undisclosed income revealed post-search inquiry can be assessed within scope of block assessment, although time for filing return for such assessment year has not expired as on date of search - YES: HC

THE issue before the Bench is - Whether undisclosed income revealed post search inquiry can be assessed within the scope of the block assessment, although the time for filing return for such assessment year has not expired as on the date of the search. And the answer is YES.
Facts of the case
The assessee publishes a daily newspaper “Herald”. Consequent to a search warrant issued under Section 132 of the Income Tax Act, executed on 01.11.1999 and 02.11.1999, the Deputy Commissioner of Income Tax, made block assessment for the period 01.04.1989 to 01.11.1999. Income generated by the said Unit was claimed as exempted in return for the AY 1999-2000, and in block assessment return as income of new industrial undertaking exempt u/s 80 IA. It

Tax depreciation on goodwill arising in M&A deals – is it a settled position?

Strategic acquisition of a target by paying more than the company’s book net worth is fairly common in Mergers & Acquisitions (M&A) deals. The amount of the purchase price that exceeds the value of the identified assets acquired is typically referred to as goodwill.

Under the Indian tax laws, as “Goodwill” does not expressly find a mention in the list of intangible assets that qualify for depreciation, a tax payer’s claim of depreciation on goodwill has been a matter of debate with the Income-tax authorities for a considerable time with

Friday, 14 November 2014

Important Verdicts On Capital Gains/ Transfer, S. 14A/Rule 8D Disallowance And S. 271(1)(c) Penalty

CIT vs. C. Sugumaran (Madras High Court) 

S. 2(47)(vi): A Power of Attorney which does not enable enjoyment of property does not result in a "transfer". CBDT Circular No.495 dated 22.9.1987 reads more into s. 2(47)(vi) than warranted

(i) There is no transfer to or enabling enjoyment of property in favour of the assessee in any manner and therefore, sub-clause (vi) of Section 2(47) of the Income Tax Act does not get attracted. Clause 21 of the power of attorney, which has been already referred to supra, clearly reveals that no consideration was […]

Whether if loan is taken from friend and repayment of same is made in cash within same FY, it can be assumed that such loan is for business exigency and not of undisclosed income - YES: HC

THE issues before the Bench are - Whether in case a loan was taken from friend and repayment of the same was made in cash within the same financial year, it can be assumed that such taking of loan is for business exigency and it is not a case of undisclosed income and Whether the genuineness of the transaction to meet the immediate necessity can be accepted by the Tribunal in the quantum appeal and that would amount to reasonable cause in terms of Section 273B. And the verdict goes in favour of the assessee.

S. 194A TDS Circular Struck Down + Eminent Tax Lawyer Charged S. 271(1)(c) Penalty + Two Important Verdicts

S. 271(1)(c) Penalty Of Rs. 56.67 Cr Levied On Abhishek Manu Singhvi 


Eminent Senior Advocate Abhishek Manu Singhvi, who has appeared in several landmark income-tax cases such as Vodafone, has been assessed to undisclosed income of Rs. 91.95 crore by the Income Tax Settlement Commission. Penalty of Rs. 56.67 Cr u/s 271(1)(c) has also been levied. The addition has been made inter alia in respect of the […]


Bombay High Court denies depreciation on the road constructed under BOT arrangement(North Karnataka Expressway)

We are pleased to release a tax alert which summarizes a recent ruling of the Bombay High Court (HC) in the case of North Karnataka Expressway Ltd. (Taxpayer)  on the eligibility of claiming tax depreciation on development of roads under a Build-Operate-Transfer (BOT) arrangement under the Indian Tax Laws (ITL). Considering the various provisions of the National Highways Act, 1956 (NHA) which deal with development of roads, the HC ruled that the ownership in such roads vests only with the Government of India (GOI). Merely because the road is built, maintained, managed and operated by the Taxpayer would not vest the ownership therein, and GOI would continue to be the owner thereof. Consequently, in the absence of ownership, depreciation under the ITL is not admissible to the Taxpayer.

Karnataka HC judgment on VAT on sale of demo cars

We are pleased to present a Tax Alert on the Karnataka High Court decision in the case of M/s. Mandovi Motors Pvt. Ltd. vs The State of Karnataka  [2014-VIL-329-KAR].In this revision petition, the Karnataka High Court has upheld the review order of the Karnataka Appellate Tribunal.

Delhi HC quashes CBDT Circular on withholding of tax on interest accruing on Court deposits with banks (UCO Bank)

We are pleased to release a Tax Alert which summarizes a recent ruling of the Delhi High Court (HC) in the case of UCO Bank (Bank) on the issue of tax withholding on interest accruing on fixed deposits placed with banks in the name of Registrar/ Prothonotary/ Senior Master of the Court (Court official), pursuant to any Court order during the pendency of litigation on claim/compensation (Court deposits).

Thursday, 13 November 2014

Income-tax (11th Amendment) Rules, 2014 – Amendment in Rules 2C, 2CA, 11AA, Form 10A, Form 56 and Form 56D

NCOME TAX NOTIFICATION NO 61/2014, Dated: November 10, 2014 S.O. 2874 (E). – In exercise of the powers conferred by section 295 read with sub-clauses (iv), (v), (vi) and (via) of clause (23C) of section 10, clause (aa) of sub-section (1) of section 12A and clause (vi) of sub-section (5) of section 80G of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income tax Rules, 1962, namely:-1. (1) These rules may be called the Income-tax (11th Amendment) Rules, 2014. (2) They shall come into force from the date of their publication in the Official Gazette. 2. In the Income-tax Rules, 1962, -(A) in rule 2C, -(i) in sub-rule (1), the following proviso shall be inserted, namely:-“Provided that on or

MCA extends due date of Filing Form CRA-2 to 31st January, 2015

General Circular No. 42/2014 has been notified by MCA on November 12, 2014 in relation to matters relating to the Companies (Cost Records and Audit) Rules, 2014. Due to delay in availability of Form CRA-2 on MCA website, the date of filing of the said form without late penalty/fee has been extended to January 31, 2015. Those companies who have filed Form 23C for

Penalty order passed U/S 271C for non-deduction of TDS, beyond period of 6 months from date of reference for imposition of penalty would be barred by limitation

Recently, ITAT Jaipur Bench in M.D.S. Universityvs. Assistant Commissioner of Income-tax held that, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later, the penalty U/S 271C cannot be imposed.

Whether assets or cash seized u/s 132 is adjustable against any existing liability, including advance tax payable - NO: ITAT

THE issue before the bench is - Whether the assets or cash seized u/s 132 of the Act is adjustable against the amount of any "existing liability" under the Act which does not include "advance tax" payable in accordance with the provisions of Part 'C' of Chapter XVII of the Act. And NO is the answer.
Facts of the case

Mumbai Tribunal rules on taxation of offshore unaccounted money



This Tax Alert summarizes a recent ruling  of the Mumbai Income Tax Appellate Tribunal (Tribunal) in the case of Mohan Manoj Dhupelia (Taxpayer) and relatives. This ruling is the first in relation to the list of Indians with secret bank accounts in Liechtenstein obtained by India from Germany. The Tribunal, ruling in favor of the Tax Authority, held that the undisclosed bank account of the discretionary trust in Liechtenstein constituted undisclosed income of the Taxpayer who was one of the beneficiaries of the discretionary trust. 

Wednesday, 12 November 2014

CBDT issues further Guidelines on Income Tax Scrutiny & Appeals

F. No. 279/Misc./52/2014-(ITJ) GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE CENTRAL BOARD OF DIRECT TAXES NEW DELHI OFFICE MEMORANDUM Dated: November 7, 2014 Sub: Further steps towards a non-adversarial tax regime-reg. On several occasions the Finance Minister has emphasised the need for furthering a non-adversarial tax regime. A non-adversarial tax regime cannot be achieved without concerted endeavour at each level, especially at levels where the public interaction is high. Though the Central

Whether provisions of Section 14A are attracted when investment is made by assessee in foreign subsidiary and dividend received on such investment is not tax free as per Section 10 - YES: ITAT

THE issue before the Bench is - Whether provisions of Section 14A are attracted when investment is made by assessee in foreign subsidiary and dividend received on such investment is not tax free as per Section 10. And the answer goes against the assessee.
Facts of the case
The assessee had claimed certain amount as exempt income under section 10 but no

Four Important Verdicts On Eligibility Of Firm To Indo-UK DTAA, 50C, House Property + CIT(A) Power

P & O Nedlloyd Ltd. & Ors vs. ADIT (Calcutta High Court)

Though a firm is not a "person" under UK law, it is so under the Indian law. Consequently, the firm is eligible for exemption under the India-UK DTAA. The department's contention that the firm is not eligible for benefits under the DTAA is not acceptable
(i) It is the other objection regarding attempt on the part of the Revenue to subject the said partnership to taxation on the ground its income was not saved from the charge of income tax by the India-UK Treaty, that the Revenue has not been able to overcome. In dealing with such objection it is […]

Tuesday, 11 November 2014

Understanding Carry forward of losses with latest case laws : Part – II.

Every taxpayer is knowing the importance of carry forward of losses and in this respect, we had provided a detailed description in the part – I. the link of same is given below for your kind reference.


In respect of continuation of understanding the subject, given below more decision of various high courts and ITAT in  respect of carry forward of loss.

Whether where money is paid by flat buyer & same remains outstanding, excess payment over & above sum paid by original buyer due to incapability to purchase flat is to be treated as interest as per Sec 2(28A) - YES: ITAT

THE issue before the Bench is - Whether where money has been paid by the flat buyer and the same remains as outstanding with the assessee, the payment of excess amount over and above the amount paid by the original buyer necessitated due to incapability of the original buyer to purchase the flat is to be treated as interest as per Sec 2(28A) and the same is liable to TDS u/s 194A. And the verdict favours the Revenue.
Facts of the case
A) The assessee company is engaged in the business of erection of machineries and equipments. It had entered into a contract with M/s Kone Elevators for erection and

Important ITAT Verdict On Black Money In Foreign Bank A/cs + Bogus Purchases + New Law Minister

New Law Minister Is An Experienced Administrator Capable Of Solving Woes

Shri. Sadananda Gowda has practiced as a Public Prosecutor and is well aware of the problems plaguing the judiciary. In his previous roles, he has demonstrated a strong desire to solve problems. We are confident that he will spearhead important changes in the Judiciary.
The Bar Association shall shortly approach the Hon’ble Law Minister with a request that the following long-standing issues raised by the Bar be addressed at the earliest:

Mohan Manoj Dhupelia vs. DCIT (ITAT Mumbai)

Information received by the AO that the assessee is a beneficary in a "discretionary" trust set up in Liechtenstein can form the basis of assessment of undisclosed income in the assessee's hands. Argument that the trust is "discretionary" and that the amount has not "accrued" to him or that the documents are "not corroborated" is not acceptable
(i) There is no substance in the assertion of the assessee that the reopening of assessment was bad, without following the due process of law or violation of principle of natural justice. The assessment was reopened because a tax-evasion petition (TEP) has been received from CBDT that the assessee is a beneficiary of Ambrunova Trust […]

Ganpatraj A Sanghavi vs. ACIT (ITAT Mumbai)

Purchases cannot be treated as bogus solely on the ground that suppliers are not traceable if the assessee has paid by a/c payee cheques and produced the income-tax and sales-tax documents and bank statements of the suppliers

(i) A perusal of the orders passed by the tax authorities would show that they have suspected the genuineness of the purchases only for the reason that the above said five parties were not available in the given addresses. It is pertinent to note that the AO himself, during the course of remand proceedings, have […]

Monday, 10 November 2014

CBDT instruct to Officers to avoid to ask non-related questions regarding assessment without any basis.

CBDT has issued a Press Release regarding asks officers not to make high-pitched assessments without any basis and to file appeals on merits only which is as under :

Government of India
Ministry of Finance
Department of Revenue
Central Board of Direct Taxes
7thNovember, 2014

PRESS RELEASE

In its constant endeavour towards a non-adversarial tax regime, the Central Board of Direct Taxes(CBDT) has issued instruction dated 7thNovember, 2014 to its field offices. Emphasis has been laid on cleanliness in office, punctuality, timeliness in appointment and avoiding unnecessary adjournments. Though less that 1% of returns filed are selected for scrutiny, this area of work has

CENVAT credit on transportation of waste generated in processing of iron ore is eligible - Rule 3(5) of CCR not applicable to 'input service'

Seven Star Steel Ltd. Vs. Commissioner of central Excise, Coustoms & S.T. – BBSR –II- 2013 (30) S.T.R. (Tri – Kolkata )



Facts:
The appellant engaged in the manufacture of sponge iron availed CENVAT credit of GTA service in respect of iron ore fines generated in the process of screening and were in the nature of unavoidable waste which fetched some price when sold in the market. The

Saturday, 8 November 2014

Understanding exemption from Capital Gain – Part – II.


There is lot of importance of exemption available under section 54 from Long term capital gain  and same had been discussed in part –I. The link of the same is given below for your kind reference.
Given below provided more recent judgments in respect of exemption under section 54 which will enable yourself with more knowledge on the subject.
·         Agricultural Land: For the purpose of determining capital gain on the sale of Agricultural l

Levy of Service tax on services provided by AC restaurants and hotels held to be unconstitutional by Kerala HC



This Tax Alert deals with the recent Kerala High Court decision in the case of UoI & Ors. vs. Kerala Bar Hotels Association & Ors. [TS-501-HC-2014-(KER)-ST].

The issue before the Division Bench in this writ appeal was whether the Parliament is competent to impose tax on the services provided by an air-conditioned restaurant and services provided by hotels, inns etc. in relation to providing of accommodation.

Four Important ITAT Verdicts On S. 153C vs. 143(3) Assmnt, S. 271(1)(c) Penalty + Transfer Pricing

Jasjit Singh vs. ACIT (ITAT Delhi)

S. 153C: Date of receiving seized documents is the "date of initiation of search" and six years period has to be reckoned from that date. An assessment order passed u/s 143(3) instead of u/s 153C is void
A search in the case of Koutons took place on 19.02.2009 (AY 2009-10). The documents belonging to the assessee which were found during the search were handed over to the AO having jurisdiction over the assessee on 16.06.2009 (AY 2010-11). The date of ‘initiation of search’ in the case of the

CBDT notifies Income Tax officers on whom CITs can exercise powers related to TDS

NOTIFICATION NO. 57/2014, Dated: November 3, 2014
In exercise of the powers conferred by sub-sections (1) and (2) of section 120 of the Income-tax Act, 1961 (43 of 1961) and in supersession of the notification of the Government of India, Central Board of Direct Taxes number S.O.881(E), dated the 14th September, 2001 published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 14th September, 2001, except as respects things done or omitted to be done before such supersession, the Central Board of Direct

Avoid lengthy questionnaires without due application of mind – CBDT to its Officers

Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes 7thNovember, 2014 CBDT Issues Instructions to Its Field Offices Regarding Endeavour Towards a Non-Adversarial Tax Regime; Emphasis on Cleanliness, Punctuality, Timeliness in Appointment, Avoiding Unnecessary Adjournments Among Others In its constant endeavour towards a non-adversarial tax regime, the Central Board of Direct Taxes (CBDT) has issued instruction dated 7th November, 2014 to its field offices. Emphasis has been laid on cleanliness in office, punctuality,