Saturday, 28 January 2017

India Taxes- Due Date Alert for the month February 2017


Due Date
Related to
Compliance to be made


Service Tax
Payment of Service Tax for the Month of January 2017


(Income Tax)
·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of January 2017.
·        Deposit TDS from Salaries  deducted during the month of January 2017
•   Deposit TCS for collections made under section 206C including sale of scrap during the month of January 2017, if any
•    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of January 2017, if any


Payment of VAT & filing of monthly return for the month of January 2017

Filing of Softex Form for the month ended January 2017

Whether additions can be made on account of investment merely on basis of statement of original owners, in absence of evidences to show transfer of sale consideration - NO: HC

THE ISSUE IS - Whether an addition can be made on account of investment in property, merely on basis of statement of the original owners, when there is no evidence to show transfer of any sale consideration. NO is the verdict.  

Thursday, 26 January 2017

How to Reduce E TDS Demand

In case you are received notices from Income tax department in respect of  TDS demand, then please contact us for the immediate solution. Our contact email id is and contact number is 8970769696.


Sachin Tendulkar wins capital gains case; ITAT rules merely because he availed services of Portfolio Manager, gains from share transactions do not become business income

THE issue before the Bench is - Whether the mere fact that assessee has availed services of a Portfolio Manager, is sufficient to consider gains arising out of transactions entered into by him as business income. NO is the answer.
Facts of the case
The assessee, an Individual, had shown in his return long term capital gains and loss on sale of shares. Further, short term capital gains and short term capital loss were also shown in the return filed. The AO noted that assessee had been disclosing capital gain from sale of shares every year in past and that purchase/sale of shares and units of mutual funds was managed by Portfolio Managers. It had also noted that assessee had engaged the services of Portfolio Managers to carry out the transactions of sale-purchase of shares for which huge amount of PMS charges were paid. According to AO, it was not an ordinary thing for a normal investor. Thus, AO issued show cause notice to assessee asking him to explain as to why profits on sale of shares/ unit should not be treated as 'business income’ as against the

Saturday, 21 January 2017

SC : Loose paper-sheets "irrelevant, inadmissible" evidence; Rejects investigation plea in Sahara/Birla case

SC dismisses petition filed by Shanti Bhushan & Prashant Bhushan, seeking constitution of Special Investigation Team, directing investigation of the allegedly incriminating material seized in CBI/tax department raids conducted on Birla & Sahara group of companies; Mr. Bhushan argued that during the raids, e-mails and excel sheets were found that showed payment of cash to several important 'public' figures; Apex Court cites ratio in V.C. Shukla/Jain Hawala diaries case, wherein the court held that entires in loose papers/sheets are irrelevant and not admissible under Sec. 34 of Evidence Act and only where entries are in books of accounts/regularly kept, those are admissible; Further cites V.C. Shukla ratio to drive home the point that entires in books of account alone shall not constitute sufficient evidence to implicate a person since the same is only "corroborative" evidence; SC observes that the judiciary ought to be cautious while ordering investigation against any important constitutional functionary/officers in the absence of "prima facie reliable/legally cognizable material" which are not supported by 'other circumstances'; Holds that "..... In case we do so, the investigation can be ordered as against any person whosoever high in integrity on the basis of irrelevant or inadmissible entry falsely made, by any unscrupulous person or business house that too not kept in regular books of accounts but on random papers at any given point of time."; As for Sahara raids, SC refers to Settlement Commission order dated November 11, 2016 wherein the Commission recorded a finding that transactions noted in the documents were not genuine and did not attach any evidentiary value to the pen drive, hard disk, computer loose papers, computer printouts; SC concludes " ... it would not be legally justified, safe, just and proper to direct investigation, keeping in view principles laid down in the cases of Bhajan Lal and V.C. Shukla.":SC 

CBEC proposes Master Circular on SCN, Adjudication & Recovery; Invites comments by Feb 15

CBEC proposes Master Circular on Show Cause Notice, Adjudication and Recovery, consolidating 85 Circulars of Central Excise; Said Master Circular intends to compile relevant legal and statutory provisions on the subject, and seeks comments / suggestions by February 15; Draft Master Circular is divided into 4 parts wherein Part I deals with Show Cause Notice related issues, Part II deals with issues related to Adjudication proceedings, Part III deals with closure of proceedings and recovery of duty, while Part IV deals with miscellaneous issues (such as service of decisions, orders, summons, de novo adjudication, and refund of pre-deposit); Master Circular lays down inter alia structure of Show Cause Notice – (a) introduction of the case, (b) legal frame work, (c) factual statement & appreciation of evidences, (d) discussion, facts and legal framework, (e) discussion on limitation, (f) calculation of duty and other amounts due, (g) statement of charges, and (h) authority to adjudicate, and reiterates that once the amount is paid, no coercive action shall be taken for recovery of balance amount during pendency of appeal proceedings before appellate authorities; Circular also states that refund of pre-deposit need not be subjected to process of duty refund u/s 11B of Central Excise Act, and same shall be paid with interest irrespective of whether the appellate order is proposed to be challenged by Dept. or not; Lists down the 82 Circulars which shall stand rescinded and 3 Circulars that would remain operative : CBEC 

HC : ‘Swad’ candy manufactured using prescribed formulae, taxable as ayurvedic medicine, not confectionery

HC holds ‘Swad’ candy as an ayurvedic medicine and not confectionary, thereby taxable at 6% under Rajasthan Sales Tax Act; Rejects Revenue contention that since ‘Swad’ candy is freely available at shops other that medical stores, it cannot be said to be a medicine and hence, taxable at 10%; States that any drug for prevention of disease or disorder in human beings or animals, and manufactured exclusively in accordance with the formulae prescribed in authoritative books, can be said to fall within the definition of a “drug”; Applying common parlance test and taking note of the ingredients, HC states that ‘Swad’ cannot be said to be a toffee, as one takes the same in case of a stomach disorder or for digestion purposes; States that “merely because it is available in a tea stall or a betel shop or other various places where confectionery items are sold, does not change the character of an item”, while noting that no evidence or authoritative material has been put on record by Revenue so that it can be said to be a confectionery item and not a drug : Rajasthan HC

IMP ITAT Judgements

ACIT vs. Veer Gems (ITAT Ahmedabad)

S. 92A Transfer Pricing: Important law explained on meaning of expression "associated enterprise". The mere fact that an enterprise has de facto participation in the capital, management or control over the other enterprise does not make the two enterprises "associated enterprises" so as to subject their transactions to the rigors of transfer pricing law

HC : MODVAT credit reversible when final product cleared under purchaser's duty remission claim

HC directs reversal of input credit against clearance of aluminium castings under claim of duty remission by buyer for use in specific industrial process, in terms of Chapter X r/w Rule 57C of Central Excise Rules 1944; Notes Adjudicating Authority’s finding that assessee was reversing credit initially but resorted to jugglery subsequently, and since goods cleared under Chapter X procedure had not suffered any duty payment, MODVAT credit was reversible; Rejects assessee’s contention that choice of buyer to either claim MODVAT credit of duty paid or claim remission doesn’t make the goods exempt or chargeable to nil rate of duty; Relies on Kirloskar Oil Engines decision wherein it was held that MODVAT Credit in respect of inputs, which have been used in manufacture of final product that is fully exempted from whole of excise duty, is not available; States that since assessee had cleared goods without payment of duty, the case was covered by aforesaid decision, thus credit taken on aluminium ingots (inputs) was incorrect : Bombay HC

HC: Upholds deletion of unexplained income u/s 68 absent intensive investigation by AO

Delhi HC dismisses Revenue’s appeal for AY 2001-02, upholds deletion of sums brought to tax by the AO u/s 68; Notes that the assessee had furnished large amounts of materials (including PAN and ITR) before the AO to evidence the genuineness of identity/ transactions and creditworthiness of the share applicants/creditors, further notes that the AO had conducted the “perfunctory” inquiry by deputing an inspector to the premises; Thus accepts assessee’s plea that absence of these parties, after 7/8 years, ipso facto couldn’t have led the AO to conclude that the parties were fictitious or non-existent; Opines that the AO should have carried out a more intensive investigation into the records to actually discern the volume of trade/commerce of the parties and their inability, if any, to invest the amounts; Separately on noting that the approval granted by the CIT(A) was done “in a ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer” holds that the CIT did not in fact record satisfaction u/s 151 for reopening assessment u/s 147/148

Monday, 9 January 2017

CBEC prescribes registration & online tax payment procedure for non-taxable OIDAR service providers

CBEC prescribes procedure for registration & online payment of service tax in respect of online information & database access or retrieval services rendered by non-taxable territory assessees; Such assessees are required to fill and submit Form ST-1A, whereupon Registration Certificate in Form ST-2A shall be generated automatically; For payment purposes, taxpayer / assessee must have internet banking account in one of 7 prescribed foreign banks which include BNP Paribas, HSBC, Standard Chartered and Bank of America; Payment shall be routed through replica of EASIEST e-Payment portal, where assessee needs to select following Accounting Codes – 0153 for service tax on OIDAR, 0154 for interest and 1333 for penalties thereon, 1509 for payment of KKC, 1510 and 1512 for interest and penalties thereon respectively, and 1493 for SBC, 1494 for interest and 1496 for penalties thereon; Using the EASIEST web portal, assessee can view / download GAR-7 challan evidencing payment of service taxes : CBEC