Friday, 31 July 2015

India Taxes- Due Date Alert for the month August 2015




 

Sr No
Due Date
Related to
Compliance to be made
1
05.08.2015
Service Tax
Payment of Service Tax for the Month of July 2015
2
07.08.2015
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 July2015.
 
· Deposit TDS from Salaries deducted during the month of July 2015
 
• Deposit TCS for collections made under section 206C including sale of scrap during the month of July 2015, if any
 
• Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of July 2015, if any
3
20.08.2015
STPI
Submission of July 2015 Softex Forms
4
20.08.2015
VAT
Payment of VAT & filing of monthly return for the month of July 2015
5
31.08.2015
Income Tax
Annual Information return under section 285BA for the financial year 2014-15 in form 61A.
6.
31.08.2015
Income Tax
Filing of Income tax return by Non Corporate assesse without tax audit.

Latest Procedure for Verification and Scrutiny of Service Tax Returns.

The CBEC vide its circular no 185/4/2015 dated 30th June 2015 has revised the procedure for scrutiny of the service tax returns. This is a step towards ensuring whether the self­assessment carried out by the assessees is in line with the provisions of the prevailing service tax law. A two fold procedure has been prescribed which consists of an online scrutiny of all the service tax returns and a detailed manual scrutiny of the returns of select assessees. The new procedure shall be applicable with effect from 1st August 2015. A brief about the new procedure is as below.

Whether if assessee was originally claiming Sec 10B benefits, it can claim Sec 10A benefits once it acquires a running business having entitlement for claiming deduction u/s 10A - YES: ITAT

THE issue before the Bench is - Whether if assessee was originally claiming Sec 10B benefits, it can claim Sec 10A benefits once it acquires a running business having entitlement for claiming deduction u/s 10A. YES is the answer.
Facts of the case
The assessee company had contended that CIT(A) erred in holding that assessee was not entitled to claim relief u/s 10A only on the technical ground that the claim had been made u/s

EY Alert: Social Security Agreement between India and Canada to come into force with effect from 1 August 2015

The Social Security Agreement (the “Agreement”) between India and Canada was signed on 06 November 2012. The Agreement will now come into force with effect from 1 August 2015.

The Agreement will have the following benefits:

1. For Canadian nationals working in India:
                                                                                                                         
a. Exemption from social security contributions in India
b. Early withdrawal of contributions from Provident Fund Scheme on completion of Indian assignment (if

Thursday, 30 July 2015

Advance Learning on Section 44AD (Theory)



 
 
To give relief to small assessees, the Income-tax Law has incorporated a simple scheme commonly known as Presumptive Taxation Scheme. There are two schemes, viz., the scheme of section 44AD and the scheme of section 44AE. An assessee adopting these provisions is not required to maintain the regular books of account and is also exempt from getting the books of account audited. In this advance learning we will cover the provisions of the presumptive taxation scheme provided in section 44AD.
 

43C. Special provision for computation of cost of acquisition of certain assets


.- (1) Where an asset not being an asset referred to in sub-section (2) of section 45 which becomes the property of an amalgamated company under a scheme of amalgamation, is sold after the 29th day of February, 1988, by the amalgamated company as stock-in-trade of the business carried on by it, the cost of acquisition of the said asset to the amalgamated company in computing the profits and gains from the sale of such asset shall be the cost of acquisition of the said asset to the amalgamating company, as increased by the

Understanding section 41 of the Income tax act, 1961.




 

 

The caption heading of section 41(1) is ‘Profits Chargeable to tax’. The section falls under Chapter IV –Computation of Income from Business or Profession.

 

In business there are circumstances where a person might have incurred a liability but later on he need not have to pay it for one or other reason. The Income Tax Act brings to tax such liabilities which are no more payable.  

 

Tax implications of fixed deposits

If  you are in the higher tax bracket, that is 20% or 30%, make sure that you pay the additional interest before filing your tax returns.

The biggest disadvantage of FDs is that the interest earned is subject to taxation. This eats into the returns.

Taxed as per income bracket
The interest earned on the FDs is added to the depositor's income and taxed as per income bracket. This reduces its attractiveness, especially for those in the highest tax bracket.

Decoding Secretarial Standards – Adjournment of meetings

In this post, I will discuss Secretarial Standards related to Adjournment of meetings under SS – 2.
Adjournment of Meetings:
A duly convened Meeting shall not be adjourned unless circumstances so warrant. The Chairman may adjourn a Meeting with the consent of the Members, at which a Quorum is present, and shall adjourn a Meeting if so directed by the Members. [Paragraph 15.1]

Meetings shall stand adjourned for want of requisite Quorum. [Background Paragraph 1 after Paragraph 15.1]
The Chairman may also adjourn a Meeting in the event of disorder or other like causes, when it becomes impossible to conduct the Meeting and complete its business. [Background Paragraph 1 after Paragraph 15.1]
The Chairman may adjourn a meeting:

Whether when assessee pays interest on interest, deduction for such sum is not allowable as per provisions of Sec 36(1)(iii) - YES: HC


THE issue before the Bench is - Whether when assessee pays interest on interest, deduction for such sum is not allowable as per provisions of Sec 36(1)(iii). YES is the verdict.
Facts of the case
The assessee is an individual. A return declaring income of Rs.38,590/- was filed alongwith the statement of total income, copies of trading and P/L account, balance-sheet and its annexures. The audit report was also filed u/s 44AB. The assessee had not submitted satisfactory

CBDT extends due date of filing wealth-tax return from July 31, 2015 to Aug. 31, 2015





SECTION 14 OF THE WEALTH-TAX ACT, 1957 - RETURN OF WEALTH - CLARIFICATION ON EXTENSION OF DUE DATE OF FILING RETURN OF WEALTH FOR A.Y. 2015-16
LETTER [F.NO.328/08/2015-WT], DATED 27-7-2015
In terms of Explanation to sub-section (1) of section 14 of the Wealth-tax Act, 1957, 'due date' of filing Return of wealth in relation to an assessee under the Wealth-tax Act shall be the same date as that applicable to an assessee under the Income-tax Act under the explanation to sub-section (1) of section 139 of the Income-tax Act.
2. Central Board of Direct Taxes vide order under section 119 of the Income-tax Act F.No.225/154/ 2015/ITA-II dated 10-6-2015 has extended the 'due date' for filing Return of Income for assessment year 2015-16 in respect of assessees falling under clause (c) of explanation 2 to sub-section (1) of section 139 of the Income-tax Act from 31-7-2015 to 31-8-2015. In view of the same, the 'due date' for filing Return of wealth by such assessees for assessment year 2015-16 also stands extended from 31st July 2015 to 31st August 2015.
3. This issues with the approval of Chairperson, CBDT.

Wednesday, 29 July 2015

Five Imp Verdicts On S. 271(1)(c) Penalty, S. 221 TDS Penalty, Strictures On Advocates And Top Brass Of Dept Etc


CIT vs. Dalmia Dyechem Industries (Bombay High Court)


S. 271(1)(c): The rigors of penalty provisions cannot be diluted only because a small number of cases are picked up for scrutiny. No penalty can be levied unless if assessee's conduct is "dishonest, malafide and amounting concealment of facts". The AO must render the "conclusive finding" that there was "active concealment" or "deliberate furnishing of inaccurate particulars"

Conditions under Section 271(1)(c) must exist before the penalty can be imposed. Mr.Chhotaray tried to widen the scope of the appeal by submitting that the decision of the Apex Court should be interpreted in such a manner that there is no scope of misuse especially since minuscule number of cases are picked up for

Tuesday, 28 July 2015

TAXATION OF NON RESIDENT INDIAN.

Everything you want to know about NRI Taxation
With the due dates of filing Indian income tax returns fast approaching and if you have any Income in India, you might have questions as to whether you will be treated as an NRI, whether you need to file tax return in India, by when you need to file tax return, will you get any benefit under DTAA, so on and so forth. We understand it can be quite confusing to understand the above questions. This is why, we have this easy to understand guide to help you understand what may be applicable to you and how you can complete the process.

Cost of Inflation Index



Cost Inflation Index for FY  2015-16 announced at 1024 vide notification no. Notification No. 60 /2015/F.No.142/10/2015-TPL DATED 24-07-2015
 
Financial YearCost of Inflation Index (CII)
1981 - 82100
1982 - 83109
1983 - 84116
1984 - 85125
1985 - 86133
1986 - 87140
1987 - 88150

Importance and Benefits of filing of Income Tax Return in Due Time.

There are too many silent benefits of Income Tax Return filing in due time.  Out of which, some are explained below.   After viewing below points, every assessee should file his Income Tax Return in time.

Decoding Secretarial Standards – Adjournment of meetings

In this post, I will discuss Secretarial Standards related to Adjournment of meetings under SS – 2.
Adjournment of Meetings:
A duly convened Meeting shall not be adjourned unless circumstances so warrant. The Chairman may adjourn a Meeting with the consent of the Members, at which a Quorum is present, and shall adjourn a Meeting if so directed by the Members. [Paragraph 15.1]

Meetings shall stand adjourned for want of requisite Quorum. [Background Paragraph 1 after Paragraph 15.1]

Whether when Revenue initially takes approval only for a Survey but finds huge cash at assessee's premises which one of Directors fails to explain, same Survey can be converted into Search after taking further approval - YES: HC

THE issue before the Bench is - Whether when the Revenue initially takes approval only for a Survey u/s 133A but finds huge cash at the assessee's premises which one of its Directors fails to explain, the same Survey can be converted into a Search after taking due approval from competent authority. YES is the verdict.
Facts of the case
The assessee is an Indian company. It had contended that the company had been filing its income tax return regularly. For the FY 2013-14, the assessee declared a turnover of

Monday, 27 July 2015

Chennai Tribunal rules on tax withholding obligation on provision for site restoration, year-end expense provisions and roaming charges




 
This Tax Alert summarizes a recent ruling of the Chennai Tribunal (Tribunal) in the case of Dishnet Wireless Ltd. (Taxpayer), a telecom service provider, on taxpayer’s obligation to withhold taxes on (a) roaming charges paid by telecom service provider to other telecom service providers for roaming facility provided to its subscribers, (b) provision for site restoration expense and (c) year-end expense provisions.
 

A to Z about Form 16 for Salaried Employee.

What is Form 16?

If you are salaried employee in an organization, then you will get the salary after deducting tax by the employer. Therefore Form 16 is a certificate issued to you by your employer stating the Personal details of the Employee including Name, Permanent Account Number (PAN) etc , details of the salary you have earned, Perquisites that has been offered, allowances given , details of Chapter VIA deductions and the tax deducted on your salary by your Employer and paid to the government. It also has Employer details like Name, permanent account number PAN, TAN etc.

Whether if during search in assessee's premises, a locker key of another assessee is seized, market value of jewellery stored in such locker is to be added in income of searched assessee as deemed income - YES: HC

THE issue before the Bench is - Whether if during search operation in assessee's premises, a locker key of another assessee was seized, the market value of jewellery stored in such locker is to be added in the income of searched assessee as deemed income. YES is the answer.
Facts of the case
The assessee is an individual. On 19 March 1986, a search action u/s 132 was carried out by

Five Imp Verdicts On Allowability Of FX Derivatives Loss, Taxability Of Unclaimed Bogus Liabilities Etc


M/s. Majestic Exports vs. JCIT (ITAT Chennai)

Loss suffered on account of forex derivative contracts (Exotic Cross Currency Option Contracts) cannot be treated as speculative loss to the extent that the derivative transactions are not more than the total export turnover of the assessee. If the derivative transaction is in excess of export turnover, the loss in respect of that portion of excess transactions has to be considered as speculative loss because the excess derivative transaction has no proximity with export turnover
We make it clear that total transaction considered for determining this business loss from derivative

Friday, 24 July 2015

Important Information about Downloading of TDS Certificates For A.Y. 2015-16

Given below are some important information regarding downloading of TDS certificates. Refer to the following provisions of the Income Tax Act, 1961:

Downloading of TDS Certificates from TRACES made mandatory:   

In this regard, your attention is invited to the CBDT circulars 04/2013 dated 17.04.2013, No. 03/2011 dated 13.05.2011 and No. 01/2012 dated 09.04.2012 on the Issuance of certificate for Tax Deducted at Source in Form 16/16A as per IT Rules 1962. It is now mandatory for all deductors to issue TDS certificates after generating and downloading the same from “TDS Reconciliation Analysis and Correction Enabling System” or http://www.tdscpc.gov.in (hereinafter called TRACES Portal).

Whether if sum invested in bank to earn interest is not due to any Member of Society, such income is attributable to business of banking and is eligible for Sec 80P(1) benefits - YES: HC

THE issue before the Bench is - Whether if sum invested in bank to earn interest is not due to any Member of Society, such income is attributable to business of banking and is eligible for Sec 80P(1) benefits. YES is the verdict.
Facts of the case
The assessee is a Cooperative Society registered under the provisions of Section 7 of the

Karnataka High Court rules Tax Authority cannot disallow weighted deduction for R&D expenditure approved by DSIR (Tejas Networks)

We are pleased to release a Tax Alert which summarizes a recent decision of the Karnataka High Court (HC) in the case of Tejas Networks Ltd. (Taxpayer) on the issue of weighted deduction under the Indian Tax Laws (ITL) for scientific research and development (R&D) expenditure.  

Report of the Select Committee tabled in the Rajya Sabha

We are pleased to release a GST News Alert on the Report of the Select Committee of Rajya Sabha.

The Constitution (122nd Amendment) Bill, 2014 (Bill) was passed by the Lok Sabha on 6 May 2015. As demanded by the Opposition, the Union Finance Minister had referred the Bill for review to the Select Committee of the Rajya Sabha.

Thursday, 23 July 2015

Government issues Notifications to restrict benefit in respect of CVD exemption for certain goods under exemption notifications, to domestic manufacturers.




 

This Tax Alert summarizes the  Central Excise notification nos. 34/2015, 35/2015 and 36/2015 dated 17 July 2015 amending certain Notifications that provide exemption / concessional rate of duty under Central Excise. These Notifications have been further amended vide Notification Nos. 37/2015, 38/2015 and 39/2015 dated 21 July 2015..

Government issues Notifications to restrict benefit in respect of CVD exemption for certain goods under exemption notifications, to domestic manufacturers

We are pleased to release a Tax Alert summarizing Central Excise notification nos. 34/2015, 35/2015 and 36/2015 dated 17 July 2015 amending certain Notifications that provide exemption / concessional rate of duty under Central Excise. These Notifications have been further amended vide Notification Nos. 37/2015, 38/2015
and 39/2015 dated 21 July 2015.

Social Security Agreement between India and Austria to come into force with effect from 1 July 2015

The Social Security Agreement between India and Austria was signed on 4 February 2013. The Agreement has now come into force with effect from 1 July 2015.

The Agreement will have the following benefits:

Overseas Direct Investment



What is Overseas Direct Investments (ODI)


Overseas Direct Investments or "Direct investment outside India " means investment by way of contribution to the capital or subscription to the Memorandum of Association of a foreign entity or by way of purchase of existing shares of a foreign entity vide market purchase or private placement but shall not include portfolio investments.
WHAT ARE THE ROUTES/APPROACHES CAN A INDIAN RESIDENT MAKES INVESTMENT ABROAD

One-time Compliance Opportunity under The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015

The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015  contains stringent provisions to deal with black money. The Act seeks to levy tax on undisclosed assets held abroad by a person who is a resident in India at the rate of 30 percent of the value of such assets, provides for a penalty equal to 90 percent of the value of such assets and also provides for rigorous imprisonment of three to ten years for wilful attempt to evade tax in relation to an undisclosed foreign income or asset. 

Placing and Filing of Financial Statements of Foreign Subsidiaries

Indian Ministry of Corporate Affairs on 21st July 2015 came out with another clarification in form of General Circular 11 of 2015.
According to clause (a) of fourth proviso to Section 136(1), every company having a subsidiary or subsidiaries shall,—
(a) place separate audited accounts in respect of each of its subsidiary on its website, if any;
(b) provide a copy of separate audited financial statements in respect of each of its subsidiary, to any shareholder of the company who asks for it.

Adjudication Order served on 'kitchen boy' of assessee, is not proper service - SC

IN this case, the assessee lost at every stage - the Assistant Commissioner, the Commissioner (Appeals), the CESTAT and the High Court, but finally succeeded in the Supreme Court.
The Department served the Adjudication Order dated 30.3.2012 on the ‘Kitchen boy' of the assessee on 3.4.2012. The assessee came to know about this order only on 26.7.2012, when the Department came calling to recover the ‘arrears'. He filed an appeal with the Commissioner (Appeals) on 22.8.2012, but the Commissioner (Appeals) dismissed the appeal as time barred,

Whether an amount advanced for purchase of machinery but later being converted into guarantee is to be treated as revenue loss if deal fails to materialise - NO: ITAT

THE issue before the bench is - Whether an amount advanced for purchase of machinery but later being converted into guarantee is to be treated as revenue loss if the deal fails to materialise. NO is the answer.
Facts of the case
The assessee is a company which is engaged in the business of manufacturing and sale of Beer. It filed return for relevant AY. The assessee company had issued a letter of intent to M/s. Alfa

Tuesday, 21 July 2015

Website Compliances under New Companies Act.


The Companies Act, 2013 and the Companies Rules, 2014 does not mandate a company to maintain a website. However, upon happening of certain prescribed events, it provides for certain disclosures to be made mandatorily on the website of the company, if any website is maintained by the said company. In some cases, the “if any” option is not available to the company concerned under the Act. For companies whose equity is listed, SEBI has made it mandatory as per the equity listing agreement to maintain a functional and updated website with effect from April 2011.
The following are the disclosures prescribed under the said Act & Rules.
Information Pertaining to Registered Office [Section 12(3)(c)]:Every Company must get its website address, if any, printed on its letterheads, business letters, billheads, letter papers and in all its notices and other official publications.
Change of Object for raising money through Prospectus [Section 13(8)(i)]: A company which has raised money by issuing prospectus and has still some unutilised amount of the money so raised, shall not change its objects for which it raised money through the prospectus unless a Special Resolution is passed by the company. The details of such a resolution as may be prescribed shall be published on the Website of the company,if any, indicating there in the justification for such change.
Unpaid Dividends [Section 124(2)]: A company after transferring the amount of unpaid dividends to a separate bank account of “Unpaid Dividend Account” will have to prepare a statement containing the shareholder’s names, their last known addresses, and the unpaid dividend to be paid to them on the company’s Website, if any.
Corporate Social Responsibility [Section 135(4)(a)]:The Board of every company having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more or a net profit of rupees five crore or more during any financial year, shall after taking into account the recommendations made by the Corporate Social Responsibility Committee, approve the Corporate Social Responsibility Policy for the company and disclose contents of such Policy in its report and also place it on the company's website, if any, in such manner as may be prescribed under the Rule 9 of the Companies (Corporate Social Responsibility Policy) Rules, 20I4
Placing of financial statements and other documents of a listed company on the website [Section 136(1)(a)]: A listed company shall also place its financial statements including consolidated financial statements, if any, auditor’s report and all other documents required by law to be attached thereto, on its website, which is maintained by or on behalf of the company. The third proviso to this section provides that every company having a subsidiary or subsidiaries shall publish separate audited accounts in respect of each of its subsidiary on its website, if any.
Vigil Mechanism in Audit Committee for Listed Companies and other Prescribed Companies[Proviso to Section 177(10)]: The vigil mechanism under sub-section (9) of Section 177 pertaining to setting up of an Audit Committee shall provide for adequate safeguards against victimisation of persons who use such mechanism and make provision for direct access to the chairperson of the Audit Committee in appropriate or exceptional cases. Provided that the details of establishment of such mechanism shall be disclosed by the company on its website, if any, and in the Board’s report.
Compromises, Arrangements and Amalgamation[Proviso to Section 230(3)]:A notice of meeting ordered by the Tribunal for the purpose of Compromise and Arrangements must be served upon the Creditors or class of Creditors, Shareholders or Debenture holders and other members. Such notice should also be published on the Website of the Company, if any. [Rules not notified]
Code for Independent Directors [Schedule IV(IV)(6)] : The terms and conditions of appointment of independent directors shall also be posted on the company’s website
Noticeof candidature of a person for directorship:
Rule 13(2) of the companies (Appointment and Qualification of Directors) Rules, 2014
The company shall, at least seven days before the general meeting, inform its members of the candidature of a person for the office of a director or the intention of a member to propose such person as a candidate for that office - by placing notice of such candidature or intention on the website of the company, if any
Notice of resignation of director:
Rule 15 of the Companies (Appointment and Qualification of Directors) Rules, 2014
The Company shall within thirty days from the date of receipt of notice of resignation from a director, intimate the Registrar in Form DIR-12 and post the information on its website, if any.
Form and particulars of advertisement or circulars:
Rule 4(3) of the Companies (Acceptance of Deposits) Rules, 2014
Every company inviting deposits from the public shall upload a copy of the circular on its website, if any.
Variation of terms of contracts referred to in the prospectus or objects for which prospectus was issued:
Rule 7(3) of the Companies (Prospectus and Allotment of Securities) Rules, 2014
The notice shall also be placed on the web-site of the company, if any.
Other compliances for conversion of section 8 companies to any other kind:
Rule 22(1)(b) of the Companies (Incorporation) Rules, 2014:
The Company shall, within a week from the date of submitting the application to the Regional Director, publish a notice at its own expense, and a copy of the notice in Form No. INC. 19, shall be sent forthwith to the Regional Director and the said notice shall be published on the website of the company, if any, and as may be notified or directed by the Central Government.

Tax laws for Non finance people.

Tax laws are like a web. The more you try to understand it, you find more getting tangled into. For a layman it is very difficult to memorize all the provisions of Income Tax due to its vast coverage and twists in all the provisions. Therefore, taxpayers many times find themselves in trouble. Although it is not possible for every assessee to go through all the provisions, still all must have basic knowledge.   eight-ways-family-can-help-you-save-tax-legally

We here bring A TO Z OF INCOME TAX PROVISIONS AT A GLANCE:

Decoding Secretarial Standards – Conduct of Poll

In this post, I will discuss Secretarial Standards related to Conduct of Poll under SS – 2.
When a poll is demanded on any Resolution, the Chairman shall get the validity of the demand verified and, if the demand is valid, shall order the poll forthwith if it is demanded on the

Tax exemptions ignored by taxpayers.


Most taxpayers are familiar with the tax deductions under Sec 80C and 80D. But there are several other deductions that a taxpayer can avail. We list out a few.

Home loan processing fee and other charges

Home loan customers are aware of the tax benefits on the loan interest and principal repayment. But even the processing fees qualifies for deduction under Section 24. "The processing fees and other charges are considered as interest and can be claimed as a deduction," says Vaibhav Sankla, Director, H&R Block. This even includes the prepayment charges.

Whether power bestowed on AO having jurisdiction under Ss 153C or 158BD is identical and when no incriminating material is seized during search, AO's action is invalid - YES: HC

THE issue before the Bench is - Whether power bestowed on AO having jurisdiction under Ss 153C or 158BD is identical and when no incriminating material is seized during search, AO's action is invalid. YES is the answer.
Facts of the case

Five Imp Verdicts On Bogus Purchases, Penalty, Cash Credits, Loose Paper Additions Etc


Shoreline Hotel Pvt. Ltd vs. CIT (ITAT Mumbai)


Bogus purchases: Manner of computing profits in the case of bogus purchases by an assessee who is not a dealer in the goods but has consumed the goods in his business explained

As per our considered view, since the purchases so made were not sold by the assessee, the AO was not justified in estimating 15% profit on such bogus purchases. However, such bogus purchases/expenses were going to reduce the assessee’s profits by the equal amount of such expenses and not only by 15% as taken by the AO. It was not a case where purchases so made were actually sold by the assessee. Where assessee is found to have sold the goods out of the bogus purchases, under those circumstances it is reasonable to estimate profit out of such sales so as to make appropriate addition. However, in the instant case the assessee was engaged in the business of hotel wherein the expenditure alleged to be incurred on plumbing, electrical items, furniture, printing and stationary etc appears to have reduced directly the profit earned by assessee

 

India Sign US FATCA


India signs the Inter-Governmental Agreement with the United States of America to implement Foreign Account Tax Compliance Act to promote transparency on tax matters
 
Foreign Account Tax Compliance Act (FATCA) was enacted in 2010 by the Government of the United States of America (GO US) with a view to combat tax evasion by U.S. citizens and residents through the use of offshore accounts.
 
FATCA requires financial institutions (i.e. Banking and Insurance companies, Custodial Institutions, Asset Management Companies, etc) across the globe to share information about the financial accounts (i.e. depository account in case of Banks, insurance/ annuity contract in case of insurance companies, custodial account in case of custodial institutions, etc) held by U.S. citizens and residents, with the Internal Revenue Service (IRS) of the United States of America (USA).
 
T

Monday, 20 July 2015

HOW TO FILE RTI.


Avail the Benefit of Intermediate Default Communications and Avoid Intimations from CPC (TDS)


Date of communication : 18/07/2015

Dear Deductor,

As you may be aware by now that the Centralized Processing Cell (TDS) is informing you of PAN and Challan Errors, through an Intermediate Communication, during processing of Original Quarterly TDS Statements, before Defaults are finally computed and Intimations are generated.
On receipt of the above communication, you are encouraged to take corrective action within 7 days of receipt of such communication. With this, you will be able to avoid PAN Errors and Intimations from CPC (TDS) on account of Short Payment and Short Deduction Defaults in the relevant TDS Statement.
Central point of the process:
·

Bank Guarantee

INTRODUCTION:Bank Guarantee means a comfort, which is being given by issuing bank, to a party (Beneficiary in whose favour the guarantee is issued) of losses or damages if the Client (on whose behalf the guarantee is being issued) fails to complete or conform to the terms of agreement.

Whether if sale of development rights is recognized on accrual basis as per terms of agreements entered into with customers, every receipt is to be treated as income - NO: HC

THE issue before the Bench is - Whether if sale of development rights is recognized on accrual basis in the financial year in accordance with the terms of the agreements entered into with the customers, every receipt can be treated as income of the assessee. NO is the answer.
Facts of the case
The assessee firm is in the business of developing land for commercial, residential, retail, industrial parks, information technology parks, SEZ, etc. During AY 2007-08, it had filed its return of income, which was subjected to scrutiny assessment. AO observed that the assessee in

Six Imp Verdicts On TDS Disallowance + Transfer Pricing + Taxing Fees For Technical Services Etc


R. W. Promotions P. Ltd vs. ACIT (Bombay High Court)


Reliance on statements of third party without giving the assessee the right of cross-examination results in breach of principles of natural justice

There has been a breach of principles of natural justice in as much as the Assessing Officer has in his order placed reliance upon the statements of representatives of M/s Inorbit and M/s Nupur to come to the conclusion that claim for expenditure made by the appellant is not genuine. Thus the appellant was entitled to cross examine them before any reliance could be placed upon them to the extent it is adverse to the appellant

 

Friday, 17 July 2015

Marketing and other support services not taxable as FIS where ‘make available’ test is not satisfied; where dependent agent PE is remunerated at arm’s length, no further amount is taxable



Recently, the Bangalore bench of the Income-tax Appellate Tribunal, upheld the following two principles in the case of the USA based taxpayer -  
  • The ‘make available’ test for taxability of fees for included services (FIS) was not satisfied unless there was a transfer of technology involved in rendering of technical services by the service provider to the service recipient.
Where a permanent establishment (PE) had been remunerated on arms’ length basis, no further income could be attributed to it and brought to tax in India.

Whether when assessee is in business of marketing bulk drugs and one of its ventures runs into losses, it can be deemed to be new enterprise and same is to be treated as capital expenditure - NO: HC

THE bone of contention is - Whether when assessee is in business of marketing bulk drugs and one of its ventures runs into losses, it can be deemed to be a new enterprise and the same is to be treated as capital expenditure. NO is the verdict.
Facts of the case

234E TDS: Imp Verdict Of ITAT On Power Of AO To Recover Fee Prior To 01.06.2015 Amendment


G. Indhirani vs. DCIT (ITAT Chennai)


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 while processing the s. 200A statement. However, the AO is entitled to pass a separate order u/s 234E to levy the fee within the limitation period

The Assessing Officer has exceeded his jurisdiction in levying fee under Section 234E while processing the statement and make adjustment under Section 200A of the Act. Therefore, the impugned intimation of the lower authorities levying fee under Section 234E of the Act cannot be sustained in law. However, it is made clear that it is open to the Assessing Officer to pass a separate order under Section 234E of the Act levying fee provided the limitation for such a levy has not expired

Thursday, 16 July 2015

Understanding International payments with latest case laws


Let us analyze some of the judicial pronouncement in respect of International payments.  
01.       Compensation :  Compensation paid by the Satyam to the applicant, a non-resident company as per terms of settlement agreement for severing their business relationship, deficiency in the patents assigned to the applicant by Satyam and for grant of perpetual world wide royalty fee license by the applicant on all its patents is c

Relaxation of additional fees and extension of last date of in filing of forms MGT­7 and AOC­4 upto 30/11/2015.

Recently, Ministry of Corporate Affairs (MCA) has issued General Circular No. 10/2015 dated 13/07/2015 regarding Relaxation of Additional Fees and Extention of last date of in filing of Forms MGT-7 (Annual Return) and AOC-4 (Financial Statement) under the Companies Act.  Earlier, MCA has clarified vide General Circular 8/2014 dated 04/04/2014 that provision of the Companies Act, 2013 relating to financial Statements, auditors report and border's report shall apply in respect of financial years commencing after 1st April, 2014 Form AOC-4 or AOC-4 XBRL (Format of filing of Financial Statment) shall, as applicable, have to be used for filing of such statement for financial years commencing on or after 1st April, 2014.  Attention is also invited to this Ministry's General Circular 22/2014 dated 25/06/2014 wherein it has been clarified that MGT-7 (Form of Annual Return) shall apply to annual Returns in respect of Financial Years ending after 1st April, 2014.

Whether, to avail deduction u/s 80I, profits of marketing division can be treated as part of overall profits with respect to industrial undertaking eligible for such deduction - YES: HC

THE issue before the Bench is - Whether, to avail deduction u/s 80I, profits of marketing division can be treated as part of overall profits with respect to industrial undertaking eligible for such deduction. YES is the answer.
Facts of the case

Wednesday, 15 July 2015

Decoding Secretarial Standards – Voting in General Meeting

 


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In this post, I will discuss Secretarial Standards related to Voting in General Meeting under SS – 2.
Proposing a Resolution:
Every Resolution shall be proposed by a Member and seconded by another Member. [Paragraph 7.1 of SS – 1]

No more manual refunds by Tax officer.

AST Instruction No. 136
DIRECTORATE OF INCOME TAX (SYSTEMS)
ARA Centre, Ground Floor, E-2, Jhandewalan Extension,
New Delhi-110055
F.No.   DGIT(S)/DIT(S)-3/AST/Manual Refunds/85/2015-16 Dated: 10/07/2015
To
All the Pro Chief Commissioner of Income-tax1 Chief Commissioner of Income Tax
All the Commissioner of Income-Tax(CO)
Sir/Madam,
Sub: Restriction on Issuance of Manual Refunds by Assessing Officers: Reg.

Five Imp Verdicts On Validity Of Search Assessments + S. 54 Deduction For Purchase vs. Construction Etc


CIT vs. M/s Mechmen (Madhya Pradesh High Court)


S. 153C: Even if the AO of the searched person and of the "other person" (i.e. the assessee) is the same, the proper satisfaction has to be recorded before assuming jurisdiction over the assessee. Failure to record satisfaction renders the assessment order null and void

The fact that incidentally the Assessing Officer is common at both the stages would not extricate him from recording satisfaction at the respective stages. In that, the Assessing Officer is satisfied that the items referred to in Section 153C belongs or belong to a person (other than the person referred to in Section 153A), being

Tuesday, 14 July 2015

Manual of generating EVC while filing tax return.


CBDT vide Notification No. 2/2015 prescribes  Electronic Verification Code (EVC) for electronically filed Income Tax Return as an alternative mode of verification. EVC would verify the identity of the person furnishing the return of income.  More details of the Notification can be checked at the following link :-


The Manual Covers   e-Verification of Income Tax Returns in following Circumstances and provides

ITR-V filing date for A.Y. 2013-14 extended to 31st October 2015

The date for filing ITR-V for returns e-Filed for A.Y 2013-14 (filed on or after 1st April 2014 till 31st March 2015) and for A.Y 2014-15 (filed on or after 1st April 2014 till 30th June 2015) extended till 31st October 2015 -
 

Whether when assessee sells SIM cards to distributor, he is not paying any commission and in that case no income accrues or arises in hands of distributor - YES: ITAT

THE issue before the Bench is - Whether when the assessee sells SIM cards to distributor, he is not paying any commission and in that case no income accrues or arises in the hands of the distributor. YES is the verdict.
Facts of the Case
The assessee, engaged in the business of providing mobile telephone services, was subjected to a survey operation on its business premises, during which it was noted that the assessee sells "pre-paid vouchers, of various face value, to its distributors, at a rate lower than its face value".

Monday, 13 July 2015

Electronic Verification Code (EVC) for electronically filed Income Tax Return



F No. 1/23/CIT(OSD)/E-filing – Electronic Verification/ 2013-14 Government of India Ministry of Finance Central Board of Direct Taxes Directorate of Income Tax (Systems) Notification No. 2/2015 New Delhi, 13th of July 2015 Subject: Electronic Verification Code (EVC) for electronically filed Income Tax Return. Explanation to sub rule (3) of Rule 12 of the Income tax Rules 1962, states that for the purposes of this sub rule “electronic verification code” means a code generated for the purpose of electronic verification of the person furnishing the return of income as per the data