Tuesday, 30 June 2015

Off-shore supply of equipment and design and drawings not taxable in India



Recently the Kolkata bench of the Income-tax Appellate Tribunal (Tribunal), in the case of a German entity, held that income earned from off-shore supply of equipment and from sale of designs and drawings was not subject to tax in India.

DON'T LOOSE SECTON 80G DEDUCTION DUE TO IGNORANCE

It had been found that tax payers are making the following payments and never claimed  section 80G deduction as they are not aware that. following are the few examples .

India Taxes- Due Date Alert for the month July 2015


 


 

Sr No
Due Date
Related to
Compliance to be made
1
05.07.2015
Service Tax
Payment of Service Tax for the Month of June 2015
2
07.07.2015
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 June 2015.
· Deposit TDS from Salaries deducted during the month of June 2015
• Deposit TCS for collections made under section 206C including sale of scrap during the month of June 2015, if any
• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of June 2015, if any
3
15.07.2015
TDS/TCS
(Income Tax)
Furnish quarterly statement of tax deducted at source (TDS) and tax collected at source (TCS) for the quarter ended June 2015 in Form 24Q / 26Q / 27Q / 27EQ.
4
20.07.2015
VAT
Payment of VAT & filing of monthly return for the month of June 2015
5
30.07.2015
TDS/TCS
(Income Tax)
Issue of TDS Certificate - Non Salary for Q1 FY 2015-15
6
31.07. 2015
Income Tax
Filing of return of income tax by non –corporate assesses
7
21.07.2015
STPI
Filing of Softex Form for the month ended June 2015

 

Decoding Secretarial Standards – Attendance

In this post, I will discuss Secretarial Standards related to Attendance at Meetings under SS – 1 and SS – 2.
Attendance registers:
Every company shall maintain separate attendance registers for the Meetings of the Board and Meetings of the Committee. [Paragraph 4.1.1 of SS – 1]
The pages of the respective attendance registers shall be serially numbered. [Background Paragraph 1 after Paragraph 4.1.1 of SS – 1]

Whether if property is sold under duress at lesser value as it was under litigation, provisions of Sec 50C cannot be mechanically applied to tax capital gains - YES: ITAT

THE issue before the Bench is - Whether if property is sold under duress at lesser value as it was under litigation, provisions of Sec 50C cannot be mechanically applied to tax capital gains. YES is the answer.
Facts of the case
The assessee is a non-resident individual, who filed his return of income electronically declaring total income at Rs. NIL. The return was selected for scrutiny assessment and, accordingly, statutory notices were issued and served upon the assessee. During the course of assessment proceedings, AO found that the assessee had sold immovable property admeasuring 1200 sq.

Sections used in manufacture of technical structures of Cap- ital Goods are eligible for credit as "capital goods

[2015] 55 taxmann.com 4 (New Delhi - CES- TAT) - Commissioner of Central Excise, Chandi- garh vs. Parabolic Drugs Ltd.
MS Pipes/Channels/Angles,  Grinders,  Bars, Structures, Plates, Shapes and Sections used in manufacture of technical structures of Cap- ital Goods are eligible for credit as "capital goods"
FACT:

Steps to be followed for taking Loan from Members by Private Companies

Steps to be followed for taking Loan from Members by Private Companies

 to Exemption Notification under the Companies Act, 2013



 
 
 

Applicability:

Applicable in case of loans from members by private limited companies with effect from 5th June,



2015. The procedure contained in this document only pertains to unsecured deposits proposed to be

accepted by a private limited company from its members.

Monday, 29 June 2015

Whether fact that objects of assessee trust may be hit by proviso to Sec 2(15), can have any bearing on grant of registration u/s 12AA - NO: ITAT

THE issue before the Bench is - Whether the fact that the objects of the assessee may be hit by the proviso to section 2(15), can have any bearing on the grant, denial or withdrawal of the registration u/s 12AA. NO is the answer.
Facts of the case
The assessee was a body set up under the Punjab Towns Improvement Act, 1922 had filed an application seeking registration u/s 12AA. However, the same was rejected by CIT on the ground that the activities of the trust as spelt out in Punjab Town Improvement Act 1922 were clearly in the nature of commercial activities, intended to earn profit and not of charitable nature.
Having heard the parties, the Tribunal held that,

CBDT Notifies “Nature Of Business Relationship” That CA Can Have To Be Eligible To Act As “Authorized Representative”

Section 288 regulates the appearance by “authorized representatives” before any income-tax authority or the Appellate Tribunal. Sub-clause (viii) of the Explanation below s. 288(2), as amended by the Finance Act 2015, provides that a chartered accountant is eligible to be an “authorized representative” provided he is not “a person who, whether directly or indirectly, has business relationship with the assessee of such nature as may be prescribed”. The CBDT has now issued a Notification dated 24.06.2015 to insert Rule 51A and to define the nature of “business relationship” which is covered by sub-clause (viii) of Explanation below sub-section (2) of section 288 of the Act.
 


[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II,
SECTION 3, SUB-SECTION (ii)]
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE)
(CENTRAL BOARD OF DIRECT TAXES)
NOTIFICATION
New Delhi, the 24th June, 2015
INCOME-TAX
S.O. 1683(E).— In exercise of the powers conferred by section 295 read with sub-clause (viii) of Explanation to sub-section (2) of section 288 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 (Ninth Amendment) Rules, 2015.
(2) They shall come into force on the date of its publication in the Official Gazette.
2. In the Income-tax Rules, 1962, after rule 51, the following rule shall be inserted, namely:-
“51A. Nature of business relationship.— For the purposes of sub-clause (viii) of Explanation below sub-section (2) of section 288, the term “business relationship” shall be construed as any transaction entered into for a commercial purpose, other than, –
(i) commercial transactions which are in the nature of professional services permitted to be rendered by an auditor or audit firm under the Act and the Chartered Accountants Act, 1949 (38 of 1949) and the rules or the regulations made under those Acts;
(ii) commercial transactions which are in the ordinary course of business of the company at arm’s length price – like sale of products or services to the auditor, as customer, in the ordinary course of business, by companies engaged in the business of telecommunications, airlines, hospitals, hotels and such other similar businesses.”
[Notification No. 50/2015, F.No.142/9/2015-TPL]
(RAJESH KUMAR BHOOT)
DIRECTOR (TAX POLICY & LEGISLATION)
Note.— The principal rules were published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii) vide notification No. S.O. 969(E), dated the 26th March, 1962 and last

DCIT vs. Vodafone Essar Gujarat Limited (Gujarat High Court)

The Tribunal passed an order extending stay of recovery of demand beyond the period of 365 days. The department filed a Writ Petition to challenge the said order on the ground that in view of the third proviso to section 254(2A) of the Act, the Tribunal has no jurisdiction to extend the stay of demand beyond 365 days. HELD by the High Court dismissing the Petition:
(i) It is true that as per third proviso to section 254(2A) of the Act, if such appeal is not so disposed of

CPC(TDS) follow-up for closure of Short Payment Defaults in excess of Rupees 1 Lakh in TDS Statements filed since FY 2007-08 onwards


044/2015

Date of communication : 27/06/2015

Dear Deductor (TAN - CHEC07239B),

The Centralized Processing Cell (TDS) reached out to you on dated April 23, 2015 reminding you for the closure of Short Payment Defaults in your TDS Statements.

Friday, 26 June 2015

Decoding Secretarial Standards – Quorum

In this post, I will discuss Secretarial Standards related to frequency of Meetings under SS – 1 and SS – 2.
Quorum of Board meeting:
Quorum shall be present throughout the Meeting. Quorum shall be present not only at the time of commencement of the Meeting but also while transacting business. [Paragraph 3.1 of SS – 1]

Whether merely because assessee receives subsidy from State Govt and it sells flats at lesser costs to buyers, it becomes a charitable body - NO: ITAT

THE issue before the Bench is - Whether merely because assessee receives subsidy from State Govt and it sells flats at lesser costs to buyers, it becomes a charitable body. NO is the answer.
Facts of the case
The assessee is a Board constituted by the legislature under A.P. Housing Board Act, 1956. All along assessee had been filing its return of income treating itself as a local authority and claimed exemption u/s 10(20). However, once assessee lost the benefit of exemption after amendment of section 10(20) w.e.f. 01/04/2003, assessee made an application seeking

Allegations made on the basis of statements given by the manufacturer/dealer/supplier of goods without investigation at the end of the Assessee not sustainable.

M/s. Nidhi Metal Auto Components Pvt. Ltd. v/s, Commissioner of Central Excise, Delhi-IV [2015-TIOL-667-CESTAT-DEL667-CESTAT-DEL]
 
FACTS:

Law on taxing non-compete fee u/s 28(va) & 55(2)(a) explained

ACIT vs. Dr. B.V. Raju (ITAT Hyderabad Special Bench)


In AY 2000-01, the assessee received Rs. 11 crores pursuant to a non-compete agreement which was for 5 years. The AO held that there was a “transfer” by way of relinquishment of the assessee’s “right to manufacture” and that the same was chargeable to capital gains by taking Nil cost u/s 55(2)(a). This was reversed by the CIT (A) on the ground that the personal skills of the assessee were placed under restraint and as the said personal skills were not a “capital asset”, capital gains was not chargeable. On appeal to the Tribunal, the matter was referred to the Special bench. HELD by the Special Bench:

Thursday, 25 June 2015

Download New Income tax return for AY 2015-16.

Recently, CBDT has issued a notification on 22nd June, 2015 as 8th Amendment in Income Tax Rule, 2015 which is effected from 1st April, 2015 with notifies simplified ITR forms and now taxpayers earning exempt income above Rs 5,000 can file ITR-1 and 4S.

Whether when assessee has exercised option of choosing AY 2008-09 as initial AY for purpose of Sec 80-IA(2), losses from such AY alone are to be brought forward as per Sec 80IA(5) - YES: ITAT

THE issue before the Bench is - Whether when assessee has exercised option of choosing AY 2008-09 as initial AY for purpose of Sec 80-IA(2), losses from such AY alone are to be brought forward as per Sec 80IA(5). YES is the answer.
Facts of the case
The assessee is a company. It had put up a wind mill unit qualifying for deduction u/s 80IA. The said unit commenced production in AY 2006-07. As per option provided by Section 80IA (2) the

Pre-deposit mandatory even in respect of orders passed prior to 06-08-2014 and appeals filed thereafter.

[2015- TIOL-576-CESTAT-KOL] M/s AI Champdany Industries Ltd., M/s. Murlidhar Ratanlal Exports Ltd. vs. Commissioner of Central Excise, Kolkatta-IV
 
 
FACTS:
The Appeals have been filed after 06-08-2014 against the orders passed prior to the amendment to section 35F of the Central Excise Act, 1944 without making pre-deposit.
HELD:

SEBI notifies processes/disclosure requirements under the Share Based Employee Benefits regulations




 

TThe Securities and Exchange Board of India (“SEBI”) introduced the SEBI (Share Based Employee Benefits) Regulations, 2014 (“New ESOP Regulations”)  on 28 October 2014 for regulating all schemes introduced by companies for the benefit of their employees involving dealing in shares (directly or indirectly) which are listed on a recognized stock exchange in India. 

Tuesday, 23 June 2015

Govt notifies new and simplified income tax return forms

The Income Tax department has notified the new set of ITR forms, including a three-page simplified one, for taxpayers to file their returns for assessment year 2015-16.
With the Finance Ministry publishing the gazette order yesterday, taxpayers and other entities can now file

Steps to file 6 Asstt. Years Income Tax Returen for Claim TDS Refund.

The details information about Income Tax Return can be filed for 6 Assessment Year to Claim TDS Refund is as under:

Missed out to claim refund for past years? We all are aware that for last 2 years, we have options to file Income Tax Return and claim our refund.    images (3)However, if claim is for beyond 2 years

Download Latest e-tutorial on RPU & FVU Ver. 1.3.

Return Preparation Utility is developed by NSDL for small deductors/collectors, however, statements exceeding 20,000 deductee/collectee records may not be prepared using this utility.

Non-functioning or non availability of this utility cannot be considered as a reason for inability to file the Statement before the last date.

Decoding Secretarial Standards – Frequency of meetings

In this post, I will discuss Secretarial Standards related to frequency of Meetings under SS – 1 and SS – 2.
Board Meetings:
The Board shall meet at least once in every calendar quarter, with a maximum interval of one hundred and twenty days between any two consecutive Meetings of the Board, such that at least four Meetings are held in each Calendar Year. [Paragraph 2.1 of SS – 1]
The Board shall hold its first Meeting within thirty days of the date of incorporation of the

Whether sum paid as lease premium has any nexus with rent of property leased to assessee and thus attracts provisions of Sec 194I - NO: ITAT

THE issue before the Bench is - Whether the sum paid as lease premium has any nexus with the market rent of the property leased to the assessee and thus attracts the provisions of Sec 194I. NO is the answer.
Facts of the case
The assessee is a private limited company and is engaged in the business of real estate

Two Imp Judgements On Validity Of S. 153A Search Assessments And Computation Of S. 115JB Book Profits


Sumanlata Bansal vs. ACIT (ITAT Mumbai) (Third Member)


S. 153A: There is no requirement to issue a notice u/s 143(2) before making an assessment u/s 153A

There is no specific provision in the Act requiring the assessment made under section 153A to be after issue of notice under section 143(2) of the Act. Learned counsel for the assessee places heavy reliance on the judgment of the Hon‟ble Supreme Court in Hotel Blue Moon v. DCIT 321 ITR 362 (SC) wherein it was held that the where an assessment has to be completed under section 143(3) read with section 158BC, notice

Monday, 22 June 2015

Understanding Taxation of Political parties.


 
The income tax law prevalent in India has shown a kind and compassionate treatment. Section 13A of the Income-tax Act, 1961 confers tax-exemption to recognized political parties for income from house property, income by way of voluntary contributions, income from capital gains and income from other sources. In other words, only income under the head salaries and income from business or profession are chargeable to tax in the hands of political parties in India. These political outfits can enjoy the above-said tax-exemption if they maintain proper books of accounts and other documents along with a record of contributions in respect of donations to the party in excess of Rs 20, 000.

Though order of pre-deposit is complied belatedly but for the reason not attributable to gross negligence of the appellant, the appeal may be restored

Shri Shanmugar Service vs. Commissioner of Central Excise (Ap- peals), Madurai. [2015] 37 STR 976 (Mad.)
 
Though order of pre-deposit is complied belatedly but for the reason not attributable to gross negligence of the appellant, the appeal may be restored.
FACTS:
The appellant paid full pre-deposit belatedly because of fault of former advocate and

Whether TUF is a capital receipt and assessee is not entitled to Sec 80IA benefits on it - YES: ITAT

THE issue before the Bench is - Whether TUF is a capital receipt and assessee is not entitled to Sec 80IA benefits on it. YES is the answer.
Facts of the case
The assessee is engaged in the business of manufacturing knitted garments. During assessment, the AO disallowed deduction under section 80IA on sale of carbon credit, TUF interest subsidy receipt and generation loss compensation receipt. The AO while completing the assessment restricted the deduction under section 80IA on the windmill profits. However, the

CIT(A) Must Pass Appellate Order Within 15 Days Of Hearing: CBDT


 


The CBDT has issued an Instruction dated 19th June 2015 directing that all Commissioner of Income Tax (Appeals) should issue appellate orders within 15 days of the last hearing. It is stated that this directive shall also be applicable to orders passed by the CIT (Administration)/ CCIT as regards matters within their purview under varied Sections of Income Tax Act such as Sections 80G, 264, 263 or Orders under Rule 86 of Second Schedule and under other allied direct taxes. The CBDT has directed all officers to ensure strict compliance of the directive and has warned that any lapse on this account shall be viewed adversely
 
Notice in writing of every Meeting shall be given to every Member of the company. Such Notice shall also be given to the Directors and Auditors of the company, to the Secretarial Auditor, to Debenture Trustees, if any, and, wherever applicable or so required, to other specified persons. [Paragraph 1.2.1 of SS – 2]
In the case of Members, Notice shall be given at the address registered with the Company or depository. In the case of shares or other securities held jointly by two or more persons, the Notice shall be given to the person whose name appears first as per records of the Company or

Clarification regarding Repayment of Deposits

MCA vide its circular dated  June 18, 2015 has clarified on repayment of deposits accepted before commencement of Companies Act, 2013.

Key highlights of the circular are as follows:

  1. The deposit holder is free to file application to Company Law Board against the Company which has failed to repay the deposits.
  2. The Company can file an application  to Company Law Board for extension of time in making repayment of deposits.
  3. Companies can repay deposits accepted under the Companies Act, 1956 as per terms on which such deposit were accepted. There is no need to pre pay them.
  4. Registrar of Companies has power to prosecute the Companies which have defaulted on repayment of deposits whether under the Companies Act, 1956 or the Companies Act, 2013.

Friday, 19 June 2015

Long-term Capital Loss On Tax Exempt Shares Can Be Set-Off Against Taxable Gains: ITAT Mumbai


Raptakos Brett & Co. Ltd vs. DCIT (ITAT Mumbai)


S. 10(38), 70(3): Though the LTCG on sale of equity shares (subject to STT) is exempt from tax u/s 10(38), the long-term capital loss on sale of such shares can be set-off against the taxable LTCG on sale of another asset

Implementation of the CIT(A) module in the new Income Tax Business.

Recently CBDT has been issued a circular regarding implementation of the CIT (A) module in the new Income Tax Business Application (ITBA), which is as under :
GOVERNMENT OF INDIA
Ministry of FinancelDepartment of Revenue
Central Board of Direct Taxes
North Block, New Delhi-110001
Tele: 011-23094788011-23094788 Fax : 011-23093020
16th June, 2015


D.O.No.279/misc/93/2015-SOCITO


Dear

Sub:- Implementation of the CIT(A) module in the new Income Tax Business application (ITBA).

Whether Sec 80-IA allows Revenue to look backward and find out if there is any loss of earlier years and bring forward notionally even though same were set off against other income - NO: HC

THE issue before the Bench is - Whether Sec 80-IA allows Revenue to look backward and find out if there is any loss of earlier years and bring forward notionally even though same were set off against other income. NO is the answer.
Facts of the case
The assessee had claimed deduction u/s 80-IA of the Income Tax Act for all the eligible business undertakings for the assessment years in question and for the subsequent years as well. The assessee contended that it had exercised its option u/s 80-IA and since all the losses of the u

Mumbai Tribunal rules on set off of long-term capital loss on sale of STT paid equity shares

We are pleased to release a Tax Alert which summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (Tribunal) in the case of Raptakos Brett & Co. Ltd. (Taxpayer) wherein the Tribunal ruled that long-term capital loss (LTCL) arising on sale of equity shares, which has been subject to securities transaction tax (STT), can be set off against long-term capital gain (LTCG) arising on sale of land, in spite of the fact that the

MCA Clarification on Deposits Accepted prior to 1.4.2014

MCA has issued General Circular No 9 dated 18th June, 2015 containing Clarification on repayment of deposits accepted by the companies before the commencement of the Companies Act, 2013 under section 74 of the said Act.

Thursday, 18 June 2015

Once it is proved that service tax is not passed on to the customer, refund shall be granted.

Rites Ltd. v/s Commissioner Of C. Ex. & Cus., Service tax [2015] 37 STR 967 (AP)
.
 
FACTS:
The petitioner, a Government of India undertaking made payment of service tax on a non-taxable service inadvertently. Refund claim filed was partly disallowed as it was time

How ELSS (A Tax Saving Scheme of Mutual Funds) can be your best tax saving option.


Investors are perpetually debating should they invest to generate returns or should they invest to save taxes? The answer to this is rather simple, you could do both. While investing in a tax saving product you could also look into the rate of returns the product will yield in future. Equity Linked Savings Scheme (ELSS) is a uniquely advantageous scheme. While there are many schemes that are offered to save taxes, ELSS can also be used for wealth generation as it invests heavily in Equities to ensure the desired long term yields.

Why reject the Correction TDS Statement or TDS Return by TDS (CPC) ?

There are a few seasons to reject the corrected TDS Statement or TDS Return by TDSCPC, which are as under :

TAN is not valid as per data at TDSCPC

Whether when there were no enabling provisions u/s 200A, no fee u/s 234E could have been levied for delay in filing TDS returns - YES: ITAT

THE issue before the Bench is - Whether when there were no enabling provisions u/s 200A, no fee u/s 234E could have been levied for delay in filing TDS returns. YES is the answer.
Facts of the case
Pursuant to the delay in filing of TDS returns by the assessee, the AO during processing of the return, raised a demand by way of intimation issued u/s 200A, for levy of fees u/s 234 E for delayed filing of TDS statement. On appeal, the CIT confirmed the order of AO.

Discretionary Trust - Whether when sum credited is claimed to be from source situated outside India, onus falls on AO to prove that assessee has earned income outside India - NO: ITAT

THE issue before the Bench is - Whether when sum credited is claimed to be from a source situated outside India, onus falls on AO to prove that assessee has earned income outside India. NO is the answer.
Facts of the case
The assessee is an individual. AO had noted that the assessee had credited in his capital account a sum of Rs 4 crores. When questioned, it was explained by the assessee that the assessee had received a sum of one million US Dollars from one Trust named White Label Trust which was registered out of India and the assessee had produced a certificate from the Trustee HSBC Republic Trust Company (BVI) Limited, in which the said company certified as the Trustee

Stay Order should be passed only after hearing the appellant and considering the merits put forth.

[2015] 37 STR 963 (Ker.) E. M. Mani Constructions Pvt. Ltd. vs. Commr. Of C. Ex., Cus. & S.T., Cochin
Stay Order should be passed only after hearing the appellant and considering the merits put forth.
FACTS:
During the hearing of stay application, the learned counsel for the appellant was not present and adjournment was requested. However, the Tribunal proceeded with the hearing and

Features of forthcoming release of TDS/TCS - Return Preparation Utility (RPU) Version 4.4 (VB based) and Version 1.2 (Java based) and TDS/TCS - File Validation Utility (FVU) (Version 4.7 and 2.143)


 
It is proposed to release new version of NSDL e-Gov TDS/TCS – Return Preparation Utility (RPU) and File Validation Utility (FVU) tentatively on 19th June, 2015. Details of which are given below:-

 

Tuesday, 16 June 2015

Important Directive Of ITAT President Regarding Filing Of Appeals And Seeking Adjournments

It may be recalled that the Hon’ble President of the ITAT had passed orders dated 14th May 2015 and 20th May 2015 with regard to the filing of appeals and the seeking of adjournments. The Order with regard to the seeking of adjournments required the adjournment applications to be filed at least three weeks in advance and to be accompanied with an affidavit.
The Members of the Bar met the Hon’ble President and apprised him of the practical difficulties that would arise from the said orders.
Pursuant to the said representation of the Bar, the Hon’ble President has passed an order dated 16th June 2015 in which it is stated that the said two orders dated 14th May 2015 and 20th May 2015 are held in abeyance until further orders.
We are thankful to the Hon’ble President for his action in the matter.

Where is my Tax Refund.

Income Tax Department in Latest circular No 9 has guided on how an assessee who has failed to file return and claim Refund can now make an application and get Refund due up to last 6 Assessment years Most of Assessee land up paying Tax as it is Deducted at Source (TDS) in various option from TDS in Bank Interest, TDS in Income from Commission, TDS on Professional Fees etc. Many time Assessee Fail to File Return and TDS remain unclaimed. The Assessee Can only file return for last 2 years and claim refund if any due and not beyond that. In case he missed to file return within prescribe timeline he has no choice other than to forget his refund claim. Now with this new Circular Every Assessee who has failed to file return and claim Refund can make an application and get the Refund. Income Tax Department has tried to solve the hardship faced by many. We need to see the Manner and speed with which it is

Circular about claiming of Non-deposit of Tax Credit (TDS).

Recently, CBDT has been issued a circular regarding Non-deposit of Tax Deducted at Source on 01st June, 2015 vide circular No. 275/29/2014-IT-(B). In this circular  CBDT has mentioned that as per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. The issued CBDT Circular is as under:

Duties of Deductor and rights of Tax Payers.

Most Taxpayers or Deductor does not know about their duties, therefore, the duties of person deducting tax at source and the rights of the tax payers has been given below:

Decoding Secretarial Standards – Notice of Board Meetings

In this post, I will discuss Secretarial Standards related to Notice of a board meeting under SS – 1 issued by Institute of Company Secretaries of India.
Notice in writing of every Meeting shall be given to every Director

Whether when payment is made on account of legal obligation, it does not trigger provisions of Sec 194C - YES: ITAT

THE issue before the bench is - Whether when the payment is made on account of legal obligation, it does not trigger the provisions of Sec 194C. YES is the answer.
Facts of the case
The assessee is a public trust set up under Punjab Towns Improvement Act, 1922. A TDS survey was carried out on the premises of the assessee on 4th February 2010 and 5th February 2010. During this survey, it was noted that the assessee was making payments to Punjab Water

Interest is not payable with respect to duty required to be debited in the CENVAT Credit


Oil and Natural Gas Corporation Ltd. vs. commissioner of central Excise and Service Tax, Surat. [2015-TIOL-402-CESTAT-AHM402-CESTAT-AHM]
Interest is not payable with respect to duty required to be debited in the CENVAT Credit Account provided sufficient balance was available in the CENVAT Account.
FACTS:
The Appellant made making cash payment of service tax on monthly basis, however part of the tax required to be debited from the CENVAT Account was paid on a quarterly basis,

Monday, 15 June 2015

Imp Verdicts On S. 194C TDS, S. 234E TDS, Charities Regn, RTI Disclosure


Sibia Healthcare Private Limited vs. DCIT (ITAT Amritsar)


S. 234E: Prior to the amendment to s. 200A w.e.f. 01.06.2015, the fee for default in filing TDS statements cannot be recovered from the assessee-deductor

Section 200A was amended by the Finance Act 2015 with effect from 1st June 2015 to provide that in the course of processing of a TDS statement and issuance of intimation under section 200A in respect thereof, an

Excess payment made by one unit under its separate registration cannot be regarded as taxes paid for and on be- half of other unit having different

Tops Security Ltd vs. Commissioner of Central Excise and Service Tax. [2015] 54 taxmann.com 355 (Ahmedabad -CESTAT)
In absence of any evidence, excess payment made by one unit under its separate registration cannot be regarded as taxes paid for and on be- half of other unit having different registration.

Kaldarshika is an Almanac

Commissioner of Central Excise, Nagpur vs. Media World Enterprises. [2015-TIOL-375-CESTAT-MUM]

Kaldarshika is an Almanac, meaning a book, is excluded from the purview of taxable service of sale of space for advertisement being “print media”.

Saturday, 13 June 2015

CBDT provides clarifications on APA rollback provisions



Provisions relating to Advance Pricing Agreements (APAs) were introduced in the Indian Income-tax Act, 1961, with effect from 1 July 2012, vide Finance Act, 2012. These provisions did not then include rollback provisions.  The provision to provide for a rollback mechanism was brought into the Act vide Finance Act 2014, with effect from 1 October 2014. Thereafter, in March 2015, the Central Board of Direct Taxes (CBDT) announced detailed rules explaining the rollback provisions, and the procedure for giving effect to them.

Subsequent to the Rules being notified, the CBDT received several requests for clarifications regarding certain matters.  To address these, the CBDT has now issued clarifications in a Question and Answer format.  

The Law On Deductibility Of Expenditure Incurred For An “Unlawful Purpose”

The law on deductibility of expenditure incurred for an illegal purpose has had a long history with the Courts & Tribunals taking a practical view of the matter & upholding the assessee’s claim. Though the Explanation to s. 37(1) was inserted to supersede these judgements, there is still scope to argue that some types of unlawful expenditure are deductible, says the author, and makes good his contention by reference to several case laws
Section 37 of the Income Tax Act, 1961 (the “Act”) has been a source of numerous disputes between the department and the taxpayer.  For the sake of convenience, the sub-section with explanation thereto is quoted below:

Friday, 12 June 2015

Whether Survey proceedings are to be termed as arbitrary even if it is conducted after issuing authorisation u/s 133A(b) and presenting same before commencing survey - NO: ITAT

THE issue before the Bench is - Whether Survey proceedings are to be termed as arbitrary even if it is conducted after issuing authorisation u/s 133A(b) and presenting same before commencing survey. NO is the answer.
Facts of the case
The assessee is engaged in the business of woolen textiles. During assessment, the AO observed that the assessee had filed e-return declaring total income of Rs. 7,16,770/-. The case thereafter was processed u/s 143(1) and transferred from ITO, Ward-2, Beawar to ACIT, Circle-2, Ajmer. Subsequently, a survey u/s 133 was conducted at the business premises of

Defective SCN - Dept cannot be allowed to fill up lacunae in an open remand: High Court

IN a Communication to the TARC, President of the CESTAT Justice Raghuram observed that show cause notices often record conclusions, instead of allegations.
Show Cause Notices are usually issued with ultimate apathy, usually at the last moment when time has run out. Usually the department gets a favourable remand order from higher appellate authorities to rectify their lapses. But for once they faced a different situation in the Madras High Court.
More than 50 Show Cause Notices were issued to several contractors who were engaged in

Pre-deposit - Prima Facie, the value of flats allotted to the land owner by the assessee-builder to be determined based on the gross amount charged by the service provider to provide similar service to any other person- Rule 3 of Valuation Rules is applicable

Southern Properties & Promoters v/s Commissioner of Central Excise, (Service Tax) Coimbatore. [2015] 54 taxmann.com 116 (Chennai -CESTAT)
 
Pre-deposit - Prima Facie, the value of flats allotted to the land owner by the assessee-builder to be determined based on the gross amount charged by the   service provider to provide similar service to any other person- Rule 3 of Valuation Rules is applicable.
FACTS:

Thursday, 11 June 2015

RBI Master Circulars for NBFCs


RBI has issued the Master circular (compiling upto date circulars / notifications issued by RBI from time to time) dated 11th June 2015 in respect of the followings –

EXEMPTION TO GOVERNMENT COMPANIES

On 5th June 2015, Ministry of Corporate Affairs a draft notification to be published in Official Gazette announcing some exemption to Not for profit Companies.
As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.

Non-Deposit of TDS - No Direct Demand against Assessee

WHEN somebody deducts TDS from you but does not deposit it with the Government, what is your remedy? You will get deduction for TDS only if it figures in the Form 26AS Statement. All your pleas and proof that TDS has been deducted will not cut ice with the Department.
CBDT has received grievances from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter-XVII of the Income-tax Act, 1961 but has failed to deposit the same into the Government account leading to denial of credit of such deduction of tax to these taxpayers and consequent raising of demand.
As per Section 199 of the Act credit of Tax Deducted at Source is given to the person only if it is paid to the Central Government Account. However, as per Section 205 of the Act the assessee shall not be called upon to pay the tax to the extent tax has been deducted from his income where the tax is deductible at source under the provisions of Chapter-XVII. Thus the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively.
Section 205 reads as: Bar against direct demand on assessee. Where tax is deductible at the source under the foregoing provisions of this Chapter, the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income.
The CBDT wants this to be brought to the notice of all assessing officers so that if the facts of the case so justify, the assessees are not put at any inconvenience on account of default of deposit of tax into the Government account by the deductor.
 
CBDT Letter No. 275/29/2014-IT-(B)., Dated: June 01 2015

Whether breakage loss arising from an item which can be recyled and reused, is to be disallowed merely on ground that assessee had not claimed such loss in preceding AY - NO: ITAT

THE issue before the Bench is - Whether breakage loss arising from an item which can be recyled and reused, is to be disallowed merely on ground that assessee had not claimed such loss in preceding AY. NO is the answer.
Facts of the case
The assessee is a company engaged in the business of manufacturing of figured and wired glass at Nashik. It had filed its return of income on 31-10-2005 declaring total income of

No Coercive Tax Recovery From Payee For TDS Default By Payer: CBDT


The CBDT has issued a letter dated 1st June 2015 stating that grievances have been received by the Board from many taxpayers that in their cases the deductor has deducted tax at source from payments made to them in accordance with the provisions of Chapter XVII of the Income-tax Act but has failed to deposit the same into the Government. The CBDT has pointed out that under section 205 of the Act, the assessee shall not be called upon to pay the tax to the extent that tax has been deducted from the income. It has emphasized that the Act puts a bar on direct demand against the assessee in such cases and the demand on account of tax credit mismatch cannot be enforced coercively. The CBDT has asked all assessing officers not to put the assessees to any inconvenience on account of the default of tax info into the Government account by the deductor

 

Two Imp Verdicts Of The ITAT


Preimus Investment And Finance Ltd vs. DCIT (ITAT Mumbai)

S. 37(1): Even if no business is carried, the expenditure incurred to maintain the corporate entity has to be allowed as a deduction
There is no doubt that the assessee is a corporate entity. Even if it is not carrying on any business activity it has to incur some expenditure to keep up its corporate entity. Therefore expenditure incurred by it has to be allowed
 

Wednesday, 10 June 2015

EXEMPTION TO NON PROFIT COMPANIES

On 5th June 201, Ministry of Corporate Affairs a draft notification to be published in Official Gazette announcing some exemption to Not for profit Companies.
As there is no effective date is announced in the Notification, this notification shall come into effect on the date of its publication in the Official Gazette.
The Notification is issued in exercise of power conferred by Clauses (a) and (b) of Sub – section (1) and sub – section (2) of 462 read with Section 8 of the Companies Act, 2013. A copy of this notification has been laid in draft before both Houses of Parliament as required by sub-section (2) of

New Guidelines on condoning delay in filing returns involving refund claims - CBDT

Recently CBDT has been issued a circular regarding Condonation of delay in filing refund claim and claim of carry forward of losses under Section I I9(2)(b) of the Income-tax Act which is as under :

Service Tax- Service portion in works contract

National Building Construction Corporation Ltd. v/s Commissioner of Central Excise & Service Tax, Raipur. [2015] 54 taxmann.com 244 (New Delhi- CESTAT)
Service Tax- Service portion in works con- tract -liable to service tax prior to 01-06-2007- abatement cannot be denied merely because- value of free supplies are not included in the gross value of services.

Whether if it is proved that interest paid on borrowed capital was directly attributable to acquisition of business, it can still be assumed that loan was for acquisition of mutual funds also - NO: HC

THE issue before the Bench is - Whether if it is proved that interest paid on borrowed capital was directly attributable to acquisition of business, it can still be assumed that loan was for acquisition of mutual funds also. NO is the answer.
Facts of the case

No Service tax on NON AC Restaurant.


Tuesday, 9 June 2015

Services available at CPC Portal.

Dear Tax Payer,
Sub: Greetings from Central Processing Centre, Bengaluru
The following online services are available at the e-filing website of the Income Tax Department for returns filed

CBDT Directive For Expeditious Disposal Of S. 154 Rectification Applications During FY 2015-16

 


The CBDT has addressed a letter dated 5th June 2015 expressing concern that the rectification applications u/s 154 filed by the taxpayers before the field officers are not being dealt with promptly. It is pointed out that the Citizen’s Charter of the Department requires that applications for rectification are to be disposed of within two months from the end of the month in which application is received. The CBDT has directed that all rectification applications that were received up to 31″ March 2015 should be disposed of on or before 20th June 2015. It I stated that the Income-tax

CBDT Clarification Regarding Prosecution of Tax Evaders With Stringent Action

 

The CBDT has issued a press release stating that the news in the media that the CBDT has told its officers to go beyond raids and searches to target tax evaders is not correct. It has been clarified that effective and stringent action will be taken only in known and big cases of tax evasion to demonstrate to the large number of compliant tax payers that the tax laws are just and fair and to encourage voluntary tax compliance

Interpretation Techniques of DTAA

A treaty may be said to be a formally concluded agreement between two or more independent nations. The Oxford Companion to Law defines a treaty as “an international agreement, normally in written form, passing under various titles (treaty, convention, protocol, covenant, charter, pact, statute, act, declaration, concordat, exchange of notes, agreed minute, memorandum of agreement) concluded between two or more states, on subject of international law intended to create rights and