HAPPY SAPTAMI

 

LOST YOUR PAN CARD. WHAT TO DO?

PAN card or Permanent Account Number card is an essential document for most us, not just for the purpose of filing tax returns but many of us, use it as a form of identification, as well. So, it goes without saying that losing your PAN card can leave you feeling tensed and restless. But, there's no reason to fret, as getting a reprint or a new card, in case you never had one, is as easy as a click of a button.

Here are the steps to apply for a PAN card online:

TDS returns due date for 2nd quarter is 15th October 2013 – Things to Keep in mind while filing

 

As the due date of filing of quarterly TDS statement for second quarter of FY 2013-14 is approaching fast, you are advised to file TDS statement well before due date (15th October for Non Government deductors and 31st October for Government deductors). You are requested to make note of the following facts before filing the quarterly TDS statement:

Whether an income accrues once it becomes due but it must necessarily be accompanied by a corresponding liability of other party to pay the same - YES: Supreme Court

THE issues before the Bench are - Whether an income accrues once it becomes due but it must necessarily be accompanied by a corresponding liability of the other party to pay the same; Whether when the assessee, an exporter, earns entitlements under the DEPB and the Advance Licnece, such entitlements do not become an income in the hand of the exporter unless it does actual import of raw materials and it also becomes a liability for the Customs to allow the same and Whether when an income accrues but there is no corresponding liability for the same, such income is only hypothetical. And the verdict goes against the Revenue.

Facts of the case

Whether expenditure incurred towards channel placement charges for broadcasting of channel on desired bands can be construed as expenditure for sales promotion or publicity - NO: ITAT

THE issues before the Bench are - Whether expenditure incurred towards channel placement charges for broadcasting of channels on the desired bands is in the nature of sales promotion or publicity; Whether such payments attracts the levy of FBT and Whether channel placement charges made to third parties meets the requirement of employer-employee relationship between the assessee and such recipient. And the verdict partly goes in favour of the assessee.

Facts of the case

Supreme Court lays down principles on evaluating “real” accrual of income for levy of tax

 

This Tax Alert summarizes a recent ruling of the Supreme Court of India (SC) in the case of Excel Industries Ltd. (Taxpayer) wherein the issue was whether the benefit of entitlement granted against export obligation to make duty-free imports of raw materials is taxable in the year in which the export is made or in the year in which the duty-free import is made.

While ruling on this aspect, the SC observed that an income is taxable under the Indian Tax Laws (ITL) if (a) the income is “due”; (b) there exists a corresponding liability on the other party to pay such sum; (c) there exists a “real”, and not a “hypothetical”, income; and (d) there is a plausibility of realization of benefits by the taxpayer in realistic and practical point of view. Real income can be said to have accrued for the purposes of taxation under the ITL once all these tests are satisfied.

As no “real” income but only a “hypothetical” income accrued to the Taxpayer in the tax year of export, the same would not be taxable in the said year but in the year in which the import is made and entitlement is actually exploited.

The present ruling lays down the key principles for evaluating when an income is said to accrue for the purposes of taxability under the ITL. The ruling reiterates that it is only a real income, and not hypothetical income, which can be taxed in India. Further, for real income to accrue under the ITL, the income should be due; there should be a corresponding liability to pay; and there is a plausible realization of such income in a realistic and practical view point. In case these tests are not satisfied, there can be no accrual of real income but hypothetical income and, accordingly, there can be no levy of tax under the ITL.

The decision of the SC, which is the highest judicial forum in India, is binding on the lower Courts/ Tribunals.

CENVAT credit availed on invoices issued in the name of Head Office, not registered as Input service distributor

 

M/s RAIL TEL CORPORATION OF INDIA LTD Vs CST, (CESTAT, KOLKATA) (2013-TIOL-1490-CESTAT-KOL)

Facts of case:

Appellant has availed CENVAT Credit on the invoices raised in the name of their Head Office, but utilized by their regional offices. The appellant has fairly stated that the Head Office was not registered as an Input Service Distributor under the relevant Service Tax Rules, 1994.

Held:

Applicant had availed the CENVAT Credit on the invoices in the name of their Head Office, whereas the Head Office was not registered as an Input Service Distributor, as required under the relevant provisions of CENVAT Credit Rules, 2004. Accordingly, procedure has not been followed by the Applicant in availing CENVAT Credit on the input invoices raised in the name of Head Office. Hence, CESTAT has directed to deposit Cenvat credit availed by appellant.

Whether during adjudication u/s 263, CIT can bring new materials into picture to prove that order of AO is erroneous - NO: Delhi HC

THE issues before the Bench are - Whether inadequate inquiry made by assessing officer would render the order erroneous, so as CIT can exercise its power u/s 263; Whether commissioner u/s 263 can initiate proceedings on the basis enquiries, in matters or orders which are already concluded; Whether CIT can issue show cause notice merely on the basis that, AO exercising its quasi judicial powers has concluded a matter differently; Whether CIT can remand a matter to AO to decide whether the findings recorded are erroneous; Whether during adjudication u/s 263, CIT can bring new materials into picture to prove that order of AO is erroneous and Whether notice u/s 263 can be raised merely on suspicion basis.And the verdict goes against the Revenue.

Facts of the case

FAQs regarding e-mails & Notices issued by Income Tax Departments.

The Department is presently having two email solutions enabled for its officers. First one is web based email system having domain name ‘@incometaxindia.gov.in’. This can be accessed anytime anywhere through internet. The second email system is Lotus Notes based system having domain name ‘@incometax.gov.in’ which can be accessed only on the computers connected to Departmental net work. There are different eligibility criteria for these email systems.

Service Tax Penalty can be waived off wherein there was no mala fide intention to avoid taxes

When the service tax department has become very stringent in light of additional power of arrest been given, this ruling should come handy for genuine assessee, wherein they could not collect and pay service taxes due ignorance of laws prevalent.

Supreme Court Lays Down Important Law On Accrual Of Income

CIT vs. Excel Industries Ltd (Supreme Court)

(i) Q whether income has accrued must be considered from a realistic & practical angle (ii) If Dept has accepted adverse verdict in some years, it cannot be allowed to challenge verdict in other years (iii) disputes as to the year of taxability with no/ minor tax effect should not be raised by Dept

Tough regulations' on retail -- finding an opening to invest

Much has been said on the actual impact that the retail foreign investment policy has had, since it was announced last year. Some traction has been seen on the single brand side, while multi brand retailers have chosen to sit on the sidelines. The overall feeling seems to be that the policy is 'tough', the political environment uncertain and a cautious wait and watch approach is wise in the current circumstances. This wait will only get longer as India goes through general elections next year and MNCs wait to see the new government’s direction with respect to retail trade.

SEBI approves draft SEBI (Foreign Portfolio Investors) Regulations, 2013

With a view to rationalising foreign portfolio investments by Foreign Institutional Investors (FIIs), Non Resident Indians (NRIs) and other foreign investors, the Securities and Exchange Board of India (SEBI) had formed a ‘Committee on Rationalization of Investment Routes and Monitoring of Foreign Portfolio Investments’ (Committee) under the Chairmanship of Shri K.M. Chandrashekar. The Committee submitted its report to the SEBI on 12 June 2013.

Considering the provisions of SEBI (FII) Regulations, 1995, current prevailing framework for Qualified Foreign Investors (QFIs) and the recommendations of the Committee, the SEBI has approved the draft SEBI (Foreign Portfolio Investors) Regulations, 2013 (FPI Regulations)

Additional Economic Substance requirement in Mauritius

 

As part of its commitments to ensure that only companies that are properly controlled and managed in Mauritius are issued a Tax Residency Certificate (“TRC”) – which is now a legal pre-condition for a company to avail of the beneficial provisions of the Tax Treaty between India and Mauritius, the Financial Services Commission (“FSC”) in Mauritius has made amendments to specify economic substance requirements that Category 1 Global Business Companies (“GBC 1 Companies”) will have to comply with.

Taxability of ESOPs

Companies mostly startups follow Employee Stock Option Plan (ESOP) to get the interest of the employees going and to keep them motivated. This was newly introduced to benefit both the company and the employees of the company.

ESOP is an option given to the employees of the company to purchase the company’s shares at a discounted price than the present market price. This option is generally given to high-ranking employees of the company. There is a Lock-in-period involved wherein after the expiry of the vesting period the shares can be exercised. The price paid to purchase the shares is termed as cost of acquisition of the share.

CBEC CLARIFCATION ON SERVICE TAX - RESTAURANTS

CBEC has issued Circular No. 173/8/2013 on 07/10/2013 giving three vital clarifications in relation to Restaurant Services. These are summed up below:
...

Whether it is imperative that in order to fall under residuary clause 'general public utility', a charitable institution has to be funded by voluntary contributions - NO: Delhi HC

THE issues before the Bench are - Whether in order to discern whether an activity is business, trade or commerce, profit motive is determinative and a critical factor; Whether when the propelling motive of a concern is 'general public good', it can be said it is working for profit; Whether in case an assessee carries on charitable activity under the residuary head 'general public utility', it would be considered as business; Whether it is imperative that in order to fall under the residuary clause 'general public utility', a charitable institution has to be funded by

GAAR rules notified

The introduction of General Anti Avoidance Rules (“GAAR”) in the Income Tax Act, 1961 (the “Act”) has been relatively swift from the time GAAR was first proposed in the Direct Taxes Code, 2010 (“DTC”). Under the provisions of the Act, GAAR will take effect from April 1, 2015in respect of which, the working rules (the “Rules”) have now been notified[#_edn1][i]. The notification of the Rules may signify the Government’s intent to implement GAAR without any further deferral.

Important communication from CPC(TDS)

Dear Deductor,

You are the esteemed stakeholder of CPC(TDS). As the due date of filing of quarterly TDS statement for second quarter of FY 2013-14 is approaching fast, you are advised to file TDS statement well before due date (15th October for Non Government deductors and 31st October for Government deductors). You are requested to make note of the following facts before filing the quarterly TDS statement:

SEBI notification dated 03 October 2013 permitting pre-emptive rights and put-call options

 

This alert summarizes the notification dated 3 October 2013 issued by SEBI. The recent notification rescinds notification number S.O. 184(E) dated 1 March, 2000 which restricted call and put options on the basis that such arrangements did not qualify as permitted spot delivery contracts or as legal and valid derivative contracts as per section 18A of SCRA.

The recent notification permits contracts for pre emption rights and options in shareholder agreements, subject to certain conditions.