Thursday, 29 June 2017

OECD claims tax transparency progress but near 'empty' tax haven list disappoints some

OECD releases outcome of "Fast-Track review process" to assess transparency standards of countries in the run-up to the G20 Summit scheduled on July 7-8; OECD states that "The latest results of the Fast Track review show that progress has now been made by most jurisdictions in meeting the international tax transparency standards"; Only one jurisdiction, Trinidad and Tobago, rated as “Non-Compliant” against the Exchange of Information on Request (EOIR) standard, while six jurisdictions viz. Anguilla, CuraƧao, Indonesia, Marshall Islands, Sint Maarten, and Turkey have been rated as “Partially Compliant”; OECD Release says "In the last 15 months, the significant changes made by jurisdictions towards meeting the EOIR standard have led to upgrades in the overall ratings of 17 jurisdictions..."; Panama and the United Arab Emirates have received upgraded rating of 'Largely Compliant'; OECD clarifies that the outcome of the "fast-track review" is a provisional rating and the jurisdictions which have received improved provisional ratings will undergo a full peer review under the second round of reviews; India has been rated as "compliant" while countries like Singapore, Mauritius, Cyprus, Liechtenstein, Luxembourg have been rated as "Largely Compliant" in the first round of Global Forum reviews; NGO Tax Justice Network sharply criticises the OECD announcement as undermining the progress that has been achieved over the last few years, terms it " disheartening to see the OECD fall back into the old pattern of creating ‘tax haven’ blacklists on the basis of criteria that are so weak as to be near enough meaningless..."  

Sunday, 25 June 2017

Comparable sales instances of commercial properties is no deciding factor in determining valuation of residential flat: HC

THE ISSUE BEFORE THE COURT IS - Whether comparable sales instances of commercial properties can be a deciding factor in determining valuation of a residential flat. NO is the verdict.
Facts of the case:
The Revenue preferred the present appeal challenging the order, whereby the ITAT had deleted the addition made by AO u/s 69B of I-T Act, of Rs.1,06,18,870/- ignoring the comparable prevailing rates of the properties of the same locality and the valuation report of the said property obtained from the DVO as per Section 55A.
On appeal, the HC held that,
++ it has been observed by the Tribunal that the comparable sales instances produced on record are of commercial properties and the property in question is a residential flat. The explanation given by the assessee has been considered by the Tribunal. The assessee has given explanation that after 1981, the said property was lying vacant, the property was ill-reputed inasmuch as the Municipal Corporation had issued notice u/s 52 of the MRTP Act for illegal possession. The agreement of sale is also produced on record. The initial burden is upon the Revenue. The explanation given by the assessee is required to be considered objectively. Considering the explanation given by the assessee, the Tribunal has arrived at a reasonable and plausible conclusion

Saturday, 17 June 2017

HC : Sandvik ratio applicable only to CBDT's 'wanton' delay, not for delayed refund claim

Meghalaya HC allows Sec. 244A interest on TDS refund  to assessee-deductee (a co-operative bank) for AYs 2000-01 to 2003-04, but rejects ‘interest on interest’ claim; With respect to TDS on assessee’s interest income wrongly deducted by certain Central, State organisations (despite being exempt u/s. 80P), assessee made TDS refund claim with interest before CBDT u/s. 119(2)(b) which was rejected; HC allows assessee’s interest on refund claim u/s. 244A  relying on SC ruling in Tata Chemicals Ltd. and P&H HC ruling in National Horticulture Board, but holds that in view of Sec. 244A(2),  interest be allowed from the date of making petition to CBDT and not before; Referring to factual matrix, HC holds that “the delay in claiming refund, from the date it should have been claimed for the relevant AYs and until 26.02.2008 (i.e date of filing petition before CBDT) for each of the four AYs, is squarely attributable to the petitioners alone”;   HC further rejects assessee’s compensation claim in the form of 'interest on interest', distinguishes its reliance on SC ruling in Sandvik Asia Ltd., notes that assessee therein was made to wait for refund of interest for decades and was hence greatly prejudiced for inordinate delay on the part of the Revenue;  Notes that in present case, the initial long delay (prior to making application before CBDT) was attributable to the petitioners themselves, further observes that " the question is as to whether the present one had been a case of wanton or intentional inaction on the part of the respondents to the extent that further compensation in the form of interest over interest be allowed? In our view, the answer is in the negative.";  With respect to assessee’s TDS refund  claim, HC allows the same despite non-verification from concerned deductors relying on Allahabad HC ruling in Rakesh Kumar Gupta , takes note of the TDS certificates submitted by assessee.:HC 

Saturday, 3 June 2017

Deduction of Interest expense under income tax.

Deduction of expenses incurred for earning business income is spelt out in the Sections 30 to 36 of Income Tax Act, 1961. Under Section 36 of Income Tax Act, 1961, there are number of deductions available subject to the conditions laid down. In this discussion, we would take up Section 36(1)(iii) of the Income Tax Act, 1961 and analyse the provision therein from all facets, which will make us understand the deduction in a comprehensive way. In the vortex of legal pronouncements, we will analyse few case laws as well, which throw light on the grey areas that are not captured or construed in the tax legislation.