Implication of Advance Pricing Agreement (APA)

The Finance Act’ 2012 has introduced Section – 92 CD relating to the Advance Pricing Agreement (APA) which came into force w.e.f. 1^st July’ 2012. An Advance Pricing Agreement is an agreement between the taxpayer and the tax authority on the pricing of future related party transactions. The Taxpayer and the tax authority agrees on the method to be used for determing the Arm Length Price (ALP) of the International transaction for a certain future period.

Scope and Objective of an Advance Pricing Agreement :-

Advance Pricing Agreement can be applied for various international transactions, like purchase or sale of raw materials, finished goods, providing services, financing arrangements, transfer and use of

CONCEPT OF PERMANENT ESTABLISHMENT

 

A RESERCH BY MANISH AGARWAL

 

·         What is Permanent Establishment meaning for a tax professional.

     

With the globalization of world economies, the concept of Permanent  Establishment (PE) has gained significant magnitude both in India and worldwide  due to its direct impact on the tax revenue generated by a Country. The PE  concept is a measuring tool to determine the right of a country to tax the  profits of an enterprise which is resident of another country and is generally used in parlance of cross border business and taxability of the income  generated.

Cost of Inflation Index

Cost Inflation Index for FY  2013-14 announced at 939 vide notification dated 6-6-2013.
 

Financial Year	Cost of Inflation Index (CII)
1981 - 82	100
1982 - 83	109
1983 - 84	116
1984 - 85	125
1985 - 86	133
1986 - 87	140
1987 - 88	150
1988 - 89	161
1989 - 90	172
1990 - 91	182
1991 - 92	199
1992 - 93	223
1993 - 94	244
1994 - 95	259
1995 - 96	281
1996 - 97	305
1997 - 98	331
1998 - 99	351
1999 - 00	389
2000 - 01	406
2001 - 02	426
2002 - 03	447
2003 - 04	463
2004 - 05	480
2005 - 06	497
2006 - 07	519
2007 - 08	551
2008 - 09	582
2009 - 10	632
2010 - 11	711
2011 - 12	785
2012 - 13	852

Senior Citizens do not have to pay advance tax if they have no Business Income:-

Senior Citizens do not have to pay advance tax if they have no Business Income:-
This article is for the senior citizens who are facing confusions about whether they are liable to pay Advance Taxes. Some people might have created confusions into your mind regarding the fact that whether you are liable to pay your taxes in advance or not. This article  would try to  describe the Tax Rule regarding this in simple terms.
Section 207 of the Income Tax Act captures that Advance Tax does not need to be paid if an Individual Resident Indian-

Whether even if one business is closed, unabsorbed depreciation from said business can be set off against other business income - YES: ITAT

THE issues before the Bench are - Whether the commission expenses paid to agent for sale of property which the assessee could not prove, is liable to be disallowed; Whether even if one business of the assessee is closed, the unabsorbed depreciation from the said business can be set off against other business income and Whether the subsidy received to the assessee, which was not directly attributable to any fixed assets, is correctly treated as capital receipt. And the answers go in favour of the assessee.

Facts of the case

Government treads with caution, issues clarifications on FDI retail policy

 

 

The Union Government[1] issued its much awaited clarification late last evening with regard to FDI policy in multi brand retail trading (“MBRT”).

Transfer pricing provisions not applicable to investment in foreign subsidiary

In a recent ruling in the case of Vijai Electricals Ltd. (“Taxpayer”), the Hyderabad Bench of the Income-tax Appellate Tribunal (“Tribunal”), has held that an investment made in a foreign subsidiary  is not an international transaction within the meaning of section 92B of the Income-tax Act, 1961 (“Act”) and accordingly, transfer pricing provisions are not applicable. 

Legal Requirements for Formation of A Hindu Undivided Family (HUF)

 1) CAPITAL & MEMBERS : –
... For A HUF to be created , major requirements are the capital and persons. Capital can be in the form of ancestral property, assets gifted by relatives and friends, or received by the HUF through a will. The minimum no. of members required is two, who can be a husband and wife. Both the spouse can create a family and constitute a HUF.

S. 54/54F deduction allowable for purchase of multiple independent house units

CIT vs. Syed Ali Adil (Andhra Pradesh High Court

The assessee offered long term capital gains on sale of property and claimed s. 54 deduction on the ground that he had purchase two adjacent residential flats. The AO held that the deduction could not be given for both flats on the ground that they were independent units, separated by a strong wall. The CIT(A) and Tribunal allowed the claim on the basis that s. 54 deduction was available for purchase of multiple flats, even if the flats were on different floors. On appeal by the department to the High Court, HELD dismissing the appeal:

 

Capitalization And Amortization Of Software Cost

 

In general, the software industry is viewed as having several sectors, including packaged applications (shrink-wrapped software); operating systems for individual and networked computers; administration tools for networks; enterprise software for large-scale data handling; and customized software to meet specific company and industry requirements. The software industry is unique, and its special characteristics should be understood by the accountant practicing in this field. Only with a clear understanding of the industry can the accountant properly apply the software industry’s specialized accounting practices.
Through this post I discuss about capitalization and amortization of software cost.

This discussion assumes that the reader has some familiarity with computers, computer hardware, and computer software, and provides the information necessary to allow the accountant to actively participate in discussions affecting the accounting treatment of events occurring in the subject business.

Authorised Signatories for Filing of Return u/s 140 of the Income Tax Act

Income Tax return must be signed by the authorised person.
The Return of Income shall be signed-
1)   In case of an Individual:
(i)   By the individual himself
(ii)  Where the individual is absent from India , then by the individual himself or by any other person duly authorised by him
(iii)  In case where he is mentally incapacitated , then by his legal guardian or any person competent to act on his behalf.
(iv)  If for any other reason the individual is not able to sign , then by any person duly authorised by him.
Points to be Noted: In case of (ii) and (iv) above, the person signing the return should have a valid

Real Estate Bill 2013

Real Estate Bill to Protect the Interest of the Consumers and Promote Fair Play in Real Estate Transactions

The Real Estate (Regulation and Development) Bill, 2013, approved by the Union Cabinet yesterday is a pioneering initiative to protect the interest of consumers, to promote fair play in real estate transactions and to ensure timely execution of projects. This was stated by Sh. Ajay Maken, Union Minister of Housing & Urban Poverty Alleviation (HUPA) while addressing the media persons here

Rate of exchange of conversion of each of foreign currency e.e.f. June 07, 2013

Notification No. 59/2013-Customs (N.T.)  , DATED THE 6^th June, 2013

S.O.       (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.54/2013-CUSTOMS (N.T.), dated the 16^th  May, 2013 vide number S.O.1121(E), dated the 16^th May, 2013, except as respects things done or omitted to be done before such super session, the Central Board of Excise and Customs hereby determines that the rate of

Delay in filing appeal due to CA’s fault is bona fide & must be condoned

Y. P. Trivedi vs. JCIT (ITAT Mumbai)


The assessee filed an appeal before the Tribunal which was delayed by 496 days. In the application for condonation of delay, the assessee claimed that he had handed over the papers to his Chartered Accountant and that the latter had mixed up the papers with other papers in his office which led to the delay. The department opposed the application on the ground that there was “gross negligence” on the part of the assessee and that sufficient cause for the delay was not explained. HELD by the Tribunal:

 

Now Banks issued Acknowledgement of Form-15H/15G.

RBI has been issued a notification No. RBI/2012-13/516, DBOD.No.Leg.BC.100/09.07.005/2012-13 dated 31.05.2013 for issuing acknowledgement of Form No. 15H/15G to customers who did not want TDS Certificate against interest Income.  Read the following notification.

Acknowledgement by banks at the time of submission of Form 15-G / 15-H

As you are aware banks are not required to deduct TDS from depositors who submit declaration in Form 15-G/15-H under Income Tax Rules, 1962. However, it has been brought to our notice that despite submission of Form 15-G/15-H by customers, banks are deducting tax at source, at times, causing inconvenience to customers resulting in a number of complaints.  Such instances arise because either the forms are misplaced or a track is not kept of forms received in the branches.

2. The matter has been examined by us in consultation with Indian Banks’ Association (IBA). With a view to protect interest of the depositors and for rendering better customer service, banks are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability and customers will not be put to inconvenience due to any omission on part of the banks.

 

 

How to tackle the Notice u/s 139-9 Defective Return

Nowadays it has been noticing that the IT department is sending Notices for defective returns u/s 139(9) to so many assesses. In this article we would guide you on the necessary steps to be taken if you have got a Notice u/s 139(9). All returns whether filed electronically or manually are now paperless returns. No document is required to be attached along with the return form and therefore section 139(9) is no more relevant. In this context, Section 139C has been introduced which is discussed as under-
Paperless Returns:-
It is mandatory for the companies and individuals, HUFs and partnership firms subject to tax audit

•Agreement between India and Gibraltar for exchange of information with respect to taxes to come into effect from 11th March, 2013

Read the notification on the below given link.

http://www.caalley.com/itax13/ITcir.pdf

FAQ ON TDS ON PURCHASE OF PROPERTY

As per Finance Bill of 2013, TDS is applicable on sale of immoveable property wherein the sale consideration of the property exceeds or is equal to Rs 50,00,000 (Rupees Fifty Lakhs). Sec 194 IA of the Income Tax Act, 1961 states that for all transactions with effect from June 1, 2013, Tax @ 1% should be deducted by the purchaser of the property at the time of making payment of sale consideration. Tax so deducted should be deposited to the Government Account through any of the authorised bank branches.

Facility for furnishing information regarding the transaction of sale of immoveable property and payment of TDS thereof is available on this website.

Whether when certain income of an 'intimately connected' assessee is held to be taxable in hand of another assessee, reassessment beyond six years cannot be initiated without affording an opportunity to the another assessee - YES: Delhi HC

THE issues before the Bench are - Whether when certain income of an 'intimately connected' assessee is held to be taxable in the hand of another assessee, reassessment beyond six years cannot be initiated without affording an opportunity to the petitioner; Whether a finding in respect of a different year can also be used for the purposes of invoking the provisions of Section 150; Whether when opportunity of being heard is not provided to an assessee in case of reopening, the assessment of any other person can be reopened u/s 150, on such basis and Whether in such case, deeming fiction would remain unaffected and assessment can be reopened beyond time limit of six years also. And the verdict goes in favour of the assessee.

Facts of the case

Whether when an undertaking employs workers of sister concern and has total control over him regarding the work done, deduction u/s 80I can be availed by undertaking - YES: Delhi HC

THE issues before the Bench are - Whether the requisite conditions of sec. 80-I are to be satisfied only in first year or in all the assessment years in which the deduction u/s 80I is claimed; Whether the activity of printing carried out by the assessee constituted profits and gains derived by the assessee from an industrial undertaking within the meaning of section 80I; Whether the assessee could claim deduction u/s 80-I in respect of Units, even though it did not employ 10 or more workers on its rolls; Whether when an undertaking employs workers of sister concern and has total control over him regarding the work done, deduction u/s 80I can be denied to such undertaking; Whether the industrial undertaking which undertakes job work are entitled to claim deduction u/s 80-I; Whether the term ‘manufacture’ and ‘produce’ can be assigned similar meaning in context of section 80I deduction; Whether the benefit of Section 80-I should be denied to the assessee as the units have been formed by splitting up of the business of the assessee; Whether in order to test the independence of two undertakings, the criteria of analyzing their work style is the only decisive one and Whether  in case there is a material change in justifying the revenue to take a different view, the earlier view which has been settled and accepted of a several years can  be disturbed. And the verdict went in favour of