Residential status become very challenging in the case
of individuals coming to India or going abroad for employment and for them the
challenge become double taxation of same income. In this respect given below few important
case laws which enable yourself to understand the residential status.
Tuesday, September 9, 2014
S. 145: Even if assessee is following mercantile system, income cannot be assessed, on “real income” theory, if its collection/ receipt is not certain
Maruti Securities Ltd vs. ACIT (ITAT Hyderabad)
(ii) The method of accounting, as followed by the assessee, does not create any income. The method of accounting only recognizes income. Income cannot be taxed on hypothetical basis, and it is only the real income that is to be brought to tax. When the principal itself is overdue and not collected, there is no basis for making out a case that interest income would be collectable with certainty. Even where an assessee is following the mercantile system of accounting, it is
S. 143(2)(ii): Fact that case is selected for scrutiny under CASS does not mean s. 143(2) notice & assessment order are void for non-application of mind by AO
U.P. State Industrial Development Corp (UPSIDC) vs. DCIT (ITAT Lucknow)
The entire jurisprudence in respect of tax administration such as principle of natural justice etc. are with the sole object of ensuring that the tax payer is not unduly harassed by the tax department having almighty power of state. In order to make tax administration and collection friendly to tax payer, some steps have been taken by the tax administration/Government although much work is still to be done in this regard. Some of these steps are that it is made a rule that tax returns can be filed in a paper less manner in order to improve voluntary
S. 68: Purchases cannot be treated as “bogus” only on the ground that the suppliers are not traceable
CIT vs. Nangalia Fabrics Pvt. Ltd (Gujarat High Court)
The Tribunal has found that the purchases are genuine because they are supported by bills, entries in the books of account, payment by cheque and quantitative details. The AO did not find any inflation in purchase price or inflation in consumption or suppression the production. The addition had been
S. 68: Fact that alleged supplier is not traceable and has been termed a “hawala dealer” by the VAT authorities is not sufficient to treat the purchases as “bogus”
DCIT vs. Rajeev G. Kalathil (ITAT Mumbai)
The fact that the supplier is declared as a “Hawala dealer” by the VAT department is a good starting point for making further investigation and taking it to its logical end. However, suspicion of highest degree cannot take place of evidence. The AO ought to have called for details of the bank accounts of the suppliers to find out as whether there was any immediate cash withdrawal from their account. No such exercise was done. There is nothing in the order of the
Understanding capital receipts with latest case laws: Part – III.
We had earlier discuss in detail about the
concepts of capital & revenue receipts & expenditures along with various case laws earlier
in part –I & II. In case you want to refer, the part –I & II, please
click on the link below:
The subject is still a disputed one as the line
between capital and revenue is very thin one
Terms and Conditions for using online facility for PAN verification - NSDL
I hereby state that I am duly authorized person of the entity which is desirous of availing the facility of PAN verification of Income-tax Department provided through NSDL web-site. I have read and understood the procedural guidelines and the details of the fee structure provided in the NSDL website and the terms and conditions provided hereinafter which is in respect to the usage of online facility for PAN verification provided by NSDL through its web-site and shall abide and strictly adhere with the procedural guidelines and the terms and conditions explicitly described below.
GOVERNANCE PROVISIONS FOR NIDHI COMPANIES
Rules relating to Directors [Rule 17]
The Director shall be a member of Nidhi.
The Director of a Nidhi shall hold office for a term up to ten consecutive years on the Board of Nidhi.
The Director shall be eligible for re-appointment only after the expiration of two years of ceasing to be a Director.
Where the tenure of any Director in any case had already been extended by the Central Government, it shall terminate on expiry of such extended tenure.
LOAN BY NIDHI COMPANIES
Today, we will discuss loan given by Nidhi Companies.
Loans [Rule 15]
A Nidhi shall provide loans only to its members.
The loans given by a Nidhi to a member shall be subject to the following limits, namely:.
Whether assessee is to be treated as assessee-in-default where assessee deducted tax payable by its employees but instead of remitting same in Govt account it appropriated same for its benefit - YES: HC
THE issue before the Bench is - Whether assessee is to be treated as assessee-in-default where assessee deducted tax payable by its employees but instead of remitting same in Govt account it appropriated same for its benefit. And the verdict goes against the assessee.
Facts of the case
The Assessee Company is engaged in the business and operating as a schedule passenger airline in India. A survey under Section 133A was conducted in the assessee’s premises in order to verify TDS compliance. The survey revealed that the assessee was not remitting the taxes deducted by it at source to Government account within the due dates as prescribed in the Income Tax Act, 1961.
The Assessee Company is engaged in the business and operating as a schedule passenger airline in India. A survey under Section 133A was conducted in the assessee’s premises in order to verify TDS compliance. The survey revealed that the assessee was not remitting the taxes deducted by it at source to Government account within the due dates as prescribed in the Income Tax Act, 1961.
Whether service receiver is liable to remit service tax to service provider, even in the absence of Clause to that effect in theagreement?
Bhagwati Security Services (Regd.) vs. UOl, BSNL [2014] 45 taxmann.com 217 (Allahabad)
FACTS
Petitioners entered into agreement with respondent No.2, i.e., BSNL
टैक्स-फ्री इनकम के 6 तरीके
इनकम टैक्स की चोरी गैरकानूनी है, लेकिन इससे बचना नहीं। यहां बता रहे हैं कुछ ऐसे तरीके जिनसे आप कानूनी तौर पर अपने इन्वेस्टमेंट पर हुई आमदनी पर टैक्स चुकाने से बच सकते हैं :
1. नॉन-वर्किंग वाइफ के जरिए इन्वेस्टमेंट
अगर आप अपनी वाइफ को कुछ रकम गिफ्ट करते हैं, तो उस पर कोई टैक्स नहीं लगता। हालांकि, अगर इस पैसे को इन्वेस्ट किया जाता है, तो यह आपकी इनकम में जुड़ जाएगा। सेक्शन 60 के तहत यह प्रविजन टैक्स चोरी रोकने के लिए है। अगर आपकी इनकम पर टैक्स लगता है, तो क्या वाइफ के नाम पर इन्वेस्टमेंट से फायदा होगा? हां। यह सिर्फ पहली बार आपकी इनकम में जुड़ती है।
Monday, September 8, 2014
Failure to deduct TDS or pay TDS then Assess in Default u/s. 201
If the deductor fails to deduct TDS or fails to pay TDS then he shall be considered as Assesse in default u/s 220 & 221 for interest & penalty.
This section applies only in case of default in PAYMENT and not delay in PAYMENT.
This section applies only in case of default in PAYMENT and not delay in PAYMENT.
Whether five independent flats in multi-storey construction can be considered as single residential unit for purpose of claiming exemption u/s 54F - YES: HC
THE issue before the Bench is - Whether five independent flats in a multi-storey construction can be considered as a single residential unit for the purpose of claiming exemption u/s 54F, without considering the intention of the legislature to restrict the reinvestment to only one more residential unit under Section 54F and Whether the phrase "a residential house" can be assumed in plural connotation for the purpose of reinvestment of capital gain for claiming exemption under Section 54F. And the verdict favours the assessee.
Whether when there is no willingness on part of developer to perform his part of contract, it will still be treated as transfer of capital asset u/s 2(47)(v) - NO: ITAT
THE issue before the Bench is - Whether when there is no willingness on part of the developer to perform his part of the contract, it will still be treated as a transfer of capital asset u/s 2(47)(v). NO is the answer.
Facts of the case
The assessee company is engaged in real estate business. It had filed its return, declaring income at Rs. 2,97,79,960. A search was conducted and consequently a notice u/s 153A was issued. In response to the said notice, assessee filed his return showing the same income as was declared
Whether mere taking of CENVAT credit facility without actually using it, would carry interest as well as penalty prior to 17-03-2012
CCE vs. Strategic Engineering (p.) Ltd. [2014] 45 taxmann.com 541 (Madras)
?
FACTS
The respondent was a manufacturer of fibre glass and some other products. During the relevant period (prior to amendment in Rule14 of CCR w.eJ.17-03-2012), the respondent took CENVAT credit facilities erroneously and also reversed the same beforeutilisation. The question of law raised before the High Court was, whether a mere taking of CENVAT credit facility without actually using it, would carry interest as well as penalty
Carry Forward of Business Losses
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Introduction
It is an inherent feature of a tax system that collects tax on profits but does not provide full
relief for losses (i.e. does not pay out an equivalent ‘negative tax’ on negative profits) that
provision needs to be made to allow unrelieved losses to be carried over and offset against
past and future profits if manifest inequity is to be avoided1. A rational system of taxation
has to take due cognizance of losses suffered by a taxpayer. That’s why there are specific
Friday, September 5, 2014
Is activity of teaching by non-affiliated colleges taxable under "commercial training or coaching service"?
Union ofIndia vs. Kasaragod District Parallel College Association ( 2014 (34)_STR 3~7 (Ker.)
FACTS
Association of Parallel Colleges filed a writ petition challenging constitutional validity of levy of service tax treating parallel colleges as "commercial training and coaching centers." The learned Single Judge had held that provisions of the Act authorising levy of service taxon Parallel Colleges was arbitrary and vocative of Article 14 of The Constitution of India, also that there was no difference betweenregular colleges and Parallel Colleges. It was also clarified that the judgment was rendered on peculiar facts of the case which wasapplicable only to the petitioners and the section was not declared as unconstitutional.
FILE NIL TDS RETURN ONLINE
This article is applicable to all persons having the TAN No. (for TDS deduction purposes)
Currently, if there is no TDS to be deducted, no action is taken in terms of filing TDS return for the particular quarter.
Due to this practice of non-intimation, the Income Tax department has been finding it diificult to differentiate between the following two types of deductors.
DEPOSITS BY NIDHI COMPANIES
In this post we will discuss deposits accepted Nidhi companies.
Branches [Rule 10]
A Nidhi may open branches, only if it has earned net profits after tax continuously during the preceding three financial years.
A Nidhi may open up to three branches within the district.
If a Nidhi proposes to open more than three branches within the district or any branch outside the district, it shall obtain the prior permission of the Regional Director and intimation is to be given to the Registrar about
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