S. 147: If AO contests the audit objection but still reopens to = comply with the audit objection, it means he has not applied his mind ind= ependently and the reopening is void

Raaj= ratna Metal Industries Ltd vs. ACIT (Gujarat High Court)

To satisfy ourselves, whether the reassessment proceedings have been initi= ated at the instance of the audit party and solely on the ground of audit = objections ….. On a perusal of the files, the noting made therein = and the relevant documents, it appears that the assessment is sought to be= reopened at the instance of the audit party, solely on the ground of audi= t objections. It is also found that, as such, the AO tried to sustain his = original assessment order and submitted to the audit party to drop the aud= it objections …. … if the reassessment proceedings are initi= ated merely and solely at the instance of the audit party and when the Ass= essing Officer tried to justify the Assessment Orders and requested the au= dit party to drop the objections and there was no independent application = of mind by the Assessing Officer with respect to subjective satisfaction f= or initiation of the reassessment proceedings, the impugned reassessment p= roceedings cannot be sustained and the same deserves to be quashed and set= aside

Offences under Companies Act, 2013

Protection of public interest and minorities are some of the key factors on which the Companies Act, 2013 (hereinafter referred to as the “New Act”) stresses more than anything. Hence, the new Act certifies much stricter and structured rules for offences and penalties. Many of these offences have been classified as non-bailable . Hence, it gets very important for the key decision makers of the

Can Excess TDS Be Adjusted In Coming Months?

Whether excess TDS amount remitted by a company under sec.192 can be adjusted against the TDSamount payable under the same section in the coming month.?

Whether interest payment towards delay in paying sale consideration after slump sale is effected and plant is in operation, is to be treated as revenue in nature - YES: HC

THE issue before the Bench is - Whether interest payment towards delay in paying sale consideration after slump sale is effected and plant is in operation, is to be treated as revenue in nature. YES is the answer.

Facts of the case

A) The assessee concern is a joint venture company formed by Sandvik AB Sweden and M/s. Chokshi Tubes Company Limited. The company was incorporated on 20th October 1996 with the share holding of 51% by Sandvik AB and 49% by M/s. Chokshi Tubes Company Limited. M/s.

Circular Levy of service tax on activities involved in relation to inward remittances from abroad to beneficiaries in India through MTSOs- reg

Circular No. 180/06/2014 – ST

F. No 354/105/2012-TRU (Pt.)

Subject: -  Levy of service tax on activities involved in relation to inward remittances from abroad to beneficiaries in India through MTSOs- reg.

      

            Vide circular No. 163/14/2012–ST, dated 10^th July, 2012, on the issue of  levy of service tax on the activities involved in the inward remittance it was clarified that there is

WEALTH TAX AT A GLANCE

Wealth Tax Act came into force on 1^st April 1957. It is applicable to the whole of India. Under this Act tax is charged at the rate of 1% on the amount by which the net wealth of the assessee exceeds rupees thirty lakhs on the valuation date. Only an Individual, Hndu Undivided Family and a Company are chargeable to wealth tax.As per section 45 of the Act, the following assessees are specifically excluded from the levy

CPC (TDS) Directs to TDS Deductor to follow up for Payment of "Tax Deducted" within stipulated time.

You may be aware that, in accordance with the provisions of Rule 30 of the Income Tax Rules, 1962; all sums deducted in accordance with the provisions of Chapter XVII-B of the Income Tax Act, 1961, shall be paid to the credit of the Central Government on or before seven days from the end of the month in which the deduction is made.

Whether sovereign power of State to levy tax can be extended to level of regulating conduct of a citizen to such an extent of verification that is equivalent to one which is made by police against an accused - NO: HC

THE issue before the Bench is - Whether the sovereign power of a State to levy tax can be extended to the level of regulating the conduct of a citizen to such an extent of verification that is equivalent to the one which is made by the police officials vis-a-vis a person, who committed the crime. NO is the answer.

Facts of the case

The assessees are the members of the Hindu Undivided Family, with Karta of the family being also an independent assessee. All the assesses had availed the benefit under Voluntary Disclosure of Income Scheme (VDIS) by declaring their items, which were mostly of jewellery, namely gold and

Construction of Sports Complex & Stadium- Held, construction of stadium not taxable but construction of shopping complex around stadium, taxable - Pre-deposit ordered.

ECP housing (India) Pvt. Ltd. Vs. commissioner of central Excise, Nashik (2013(30) S.T.R. 703 (Tri – Mumbai )

"Commercial & Industrial Construction Service" - Construction of Sports Complex & Stadium- Held, construction of stadium not taxable but construction of shopping complex around stadium, taxable - Pre-deposit ordered.

Facts:

The appellant entered into a contract for construction of a stadium and a shopping complex around the stadium. The Revenue contended to levy tax on whole activity under the category of "Commercial & IndustrialConstruction Service".

Held:

The levy was upheld on construction of shopping complex ordering pre-deposit of Rs. 15 lakh whereas theconstruction of a stadium was held as not a commercial or industrial construction service and thus notchargeable to service tax.

Due Date of 2nd Quarter, Utility and Does & Don't for Filing of TDS Return For A.Y. 2015-16.

The e-filing submission of 2nd Quarter TDS Return last date is 15th October, 2014 for Fin. Year 2014-15. While submitting your e-Return of 2nd Quarter TDS/TCS for Asstt. Year 2015-16, it can be check before submission of 2nd Quarter Statement that the TDS Return can be done with proper FVU or RPU Version which suggest by TIN-NSDL or prepare by a professional or expert. File TDS returns for Quarter 2 of FY 2014-15 by 15th October 2014.For Government deductors due date is 30.10.2014. TDS return filing date for second quarter of FY 2014-15 falls due on 15th October 2014. Deductors are required to file TDS returns before it to avoid late filing fees or penalty. However keeping in view all such things some suggestions are given below :

Whether mere fact that broker through whom assessee had purchased shares was banned by SEBI much after transactions of assessee had taken place, there is any merit in AO's opinion to treat the same as not genuine - NO: ITAT

THE issue before the Bench is - Whether mere fact that the broker through whom the assessee had purchased shares was banned by the SEBI much after the transactions of the assessee had taken place, there is any merit in the AO's opinion to treat the same as not genuine. And the answer goes against the Revenue.

Facts of the case

The assessee company is in the business of manufacture and sale of drilling, mining, construction tools and accessories. It declared a total income of Rs. 2,18,460 and claimed exemption of long term capital gain to the extent of Rs.24,87,000. Assessee had purchased 20,000 shares of AIC for a consideration of Rs.1,00,400 through a broker M/s. V.K. Singhania & Co., Kolkata. The share certificates in physical form were submitted to the said AIC for transfer and received back. These

Taxing Foreign Income of Company

Taxation of foreign income entails the taxation by one country of income that its residents earn in another country. In the early stages of development every country has to depend to some extent on foreign capital and foreign technicians for the industrial development of the country. The government of India also has been extremely anxious to attract foreign capital and technical know-how. To attract these, certain tax concessions have been granted to foreign investors and technicians and the government has plans to offer still more concessions in the near future. The foreign investors may be

Limited Liability Partnership FAQs

NATURE OF LIMITED LIABILITY PARTNERSHIP (LLP)

1. Concept of “limited liability partnership”

• LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.
• The LLP can continue its existence irrespective of changes in partners. It is capable of entering into contracts and holding property in its own name.
• The LLP is a separate legal entity, is liable to the full extent of its assets but liability of the

CPC (TDS) communicates to Bank for Non reporting of 15G/H transaction

CPC (TDS) has issued a communication to banks regarding non reporting of 15G/H transaction in contravention of rule 31A (4) of Income Tax Rules read with section 200 of Income Tax Act. CPC (TDS) has requested banks to ensure the details of 15G/H transactions from their source data and raise Flag “B” in the original TDS Statements. It has also requested them to ensure submission of correction statements for previous quarterly TDS statements of the branches.

Senior officers of the department summoned and strictures passed for ‘Irresponsible conduct’ of filing an appeal on a point which is admittedly covered against the department by a judgement of the Supreme Court

CIT vs. Reliance Infrastructure Ltd (Bombay High Court)

The department conceded before the Tribunal that the issue in the appeal was covered in favour of the assessee by the judgement of the Supreme Court in CIT v/s Tulsyan NEC Ltd 330 ITR 226 (SC). However, despite this, the department filed an appeal before the High Court to challenge the order of the Tribunal. HELD by the High Court:

Vodafone Transfer Pricing Verdict: High Court Mocks Dept’s 'Unique' Interpretation Of Law

Vodafone India Services Pvt. Ltd vs. UOI (Bombay High Court)

Neither the capital receipts received by the Petitioner on issue of equity shares to its holding company, a non-resident entity, nor the alleged short-fall between the so called fair market price of its equity shares and the issue price of the equity shares can be considered as income within the meaning of the expression as defined under the Act.
The assessee, an Indian company, issued equity shares at the premium of Rs.8591 per share aggregating Rs.246.38 crores to its holding company. Though the transaction was reported as an “international transaction” in Form 3 CEB, the assessee claimed that the transfer pricing provisions did not apply as there was no income arising to it. The AO referred the issue to the TPO without dealing with the preliminary objection. The TPO held that he could not go into the issue whether income had arisen or not because his jurisdiction was limited to determine the ALP. He held that the assessee ought to have charged the NAV of the share (Rs. 53,775) and that the difference between the NAV and the issue price was a deemed loan from the assessee to the holding company for which the assessee ought to have received 13.5% interest. He accordingly computed the adjustment for the shares premium at Rs. 1308 crore and the interest thereon at Rs. 88 crore. The AO passed a draft assessment order u/s 144C(1) in which he held that he was bound u/s 92-CA(4) with the TPO’s determination and could not consider the contention whether the transfer pricing provisions applied. The assessee filed a Writ Petition challenging the jurisdiction of the TPO/AO to make the adjustment. The High Court directed the DRP to decide the assessee’s objection regarding chargeability of alleged shortfall in share premium as a preliminary issue. Upon the DRP’s decision, the assessee filed another Writ Petition. HELD by the High Court allowing the Petition:
(1) A plain reading of Section 92(1) of the Act very clearly brings out that income arising from a International Transaction is a condition precedent for application of Chapter X of the Act.
(2) The word income for the purpose of the Act has a well understood meaning as defined in s. 2(24) of the Act. The amounts received on issue of share capital including the premium is undoubtedly on capital account. Share premium have been made taxable by a legal fiction u/s 56(2)(viib) of the Act and the same is enumerated as Income in s. 2(24)(xvi) of the Act. However, what is bought into the ambit of income is the premium received from a resident in excess of the fair market value of the shares. In this case what is being sought to be taxed is capital not received from a non-resident i.e. premium allegedly not received on application of ALP. Therefore, absent express legislation, no amount received, accrued or arising on capital account transaction can be subjected to tax as Income (Cadell Weaving Mill Co. vs. CIT 249 ITR 265 approved in CIT vs. D.P. Sandu Bros 273 ITR 1 followed);
(3) In case of taxing statutes, in the absence of the provision by itself being susceptible to two or more meanings, it is not permissible to forgo the strict rules of interpretation while construing it. It was not open to the DRP to seek aid of the supposed intent of the Legislature to give a wider meaning to the word ‘Income';
(4) The other basis in the impugned order, namely that as a consequence of under valuation of shares, there is an impact on potential income and that if the ALP were received, the Petitioner would be able to invest the same and earn income, proceeds on a mere surmise/assumption. This cannot be the basis of taxation. In any case, the entire exercise of charging to tax the amounts allegedly not received as share premium fails, as no tax is being charged on the amount received as share premium.
(5) Chapter X is invoked to ensure that the transaction is charged to tax only on working out the income after arriving at the ALP of the transaction. This is only to ensure that there is no manipulation of prices/consideration between AEs. The entire consideration received would not be a subject-matter of taxation;
(6) The department’s method of interpretation indeed is a unique way of reading a provision i.e. to omit words in the Section. This manner of reading a provision by ignoring/rejecting certain words without any finding that in the absence of so rejecting, the provision would become unworkable, is certainly not a permitted mode of interpretation. It would lead to burial of the settled legal position that a provision should be read as a whole, without rejecting and/or adding words thereto. This rejecting of words in a statute to achieve a predetermined objective is not permissible. This would amount to redrafting the legislation which is beyond/outside the jurisdiction of Courts.
(7) In tax jurisprudence, it is well settled that following four factors are essential ingredients to a taxing statute:- (a) subject of tax; (b) person liable to pay the tax; (c) rate at which tax is to be paid, and (d) measure or value on which the rate is to be applied. Thus, there is difference between a charge to tax and the measure of tax (a) & (d) above;
(8) The contention that in view of Chapter X of the Act, the notional income is to be brought to tax and real income will have no place is not acceptable because the entire exercise of determining the ALP is only to arrive at the real income earned i.e. the correct price of the transaction, shorn of the price arrived at between the parties on account of their relationship viz. AEs. In this case, the revenue seems to be confusing the measure to a charge and calling the measure a notional income. We find that there is absence of any charge in the Act to subject issue of shares at a premium to tax.
(9) W.e.f. 1 April 2013, the definition of income u/s 2(24)(xvi) includes within its scope the provisions of s. 56(2) (vii-b) of the Act. This indicates the intent of the Parliament to tax issue of shares to a resident, when the issue price is above its fair market value. In the instant case, the Revenue’s case is that the issue price of equity share is below the fair market value of the shares issued to a non-resident. Thus Parliament has consciously not brought to tax amounts received from a non-resident for issue of shares, as it would discourage capital inflow from abroad.
(10) Consequently, the issue of shares at a premium by the Petitioner to its non resident holding company does not give rise to any income from an admitted International Transaction. Thus, no occasion to apply Chapter X of the Act can arise in such a case.

Bombay HC rules on the applicability of TP provisions to issue of shares to associated enterprises

A recent controversy faced by some taxpayers in India has been on whether transfer pricing (“TP”) provisions are attracted when shares are issued by an Indian company to its Associated Enterprise (“AE”) and whether issuance of shares at a price lower than the fair market value can result in a TP adjustment in the hands of the Indian company.

The Bombay High Court (“HC”) has pronounced today (10 October 2014) a much awaited and anticipated ruling on this matter in one of the taxpayers involved in litigation. The TP issue under consideration by the HC was whether the consideration for issue of shares to an AE should be computed based on the arm’s length price (“ALP”) and if the shares are issued for less than ALP can the difference be taxed as income in the hands of the taxpayer who issued the shares.

The HC in this case examined the nature of share issue transaction and ruled in favour of the taxpayer and held that since there is no ‘income’ arising out of ‘share issue’ transaction under general provisions of the tax law, TP provisions are not applicable. A detailed alert on the above judgment will follow shortly.

Internal movement of iron ore 'within' mining area - no movement of cargo outside mining area - Held, not classifiable under "Cargo Handling Service"

 Dilip Construction vs. Commissioner of Central Excise (2013 (30) STR 668 (Tri-Del))

Facts:

The Appellant was engaged in the activity of movement and transportation of iron ore within the mining area on which the revenue proposed to levy tax under the category of "Cargo Handling Service".

Know more about Income Tax Deductions and Exemptions both are different.

Income tax return can be filed by an individual taxpayer in form ITR-1 where the total income consists of the following income:

• “Salaries” or income in the nature of family pension or
• “Income form house property”, where assessee does not own more than 1 house property and does not have any brought forward loss under the head; or
• “Income from other sources”, except winnings from lottery or income from race horses and does not have any loss under the head.

1. It is Provided that the ITR-1 form cannot be used by the person who:
(a) is a resident, other than not ordinarily resident in India within the meaning of sub-section (6) of

Income Tax Deduction u/s. 10A / 10AA on new SEZ unit raises from 20% to 50%.

CBDT has issued a circular No. 14/2014 dated 8th October, 2014 to relaxes limit on existing manpower so transferred in new SEZ units; raises limit from 20% to 50%, CBDT clarify that allow-ability of deduction under section 10A/10AA on transfer of Technical Man-power in the case of software industry.

Apart from this new circular, CBDT has issued a Circular No. 12/2014 dated 18th July, 2014 to clarify that mere transfer or re-deployment of existing technical manpower from an existing unit to a new SEZ unit in the first year of commencement of business will not be construed as splitting up or reconstruction of an existing business, provided the number of technical manpower so transferred does not exceed 20 per cent of the total technical manpower actually engaged in developing software at any point of time in the given year in the new unit.

Whether assessee is eligible for deduction u/s 54EC, even if investment made in relavant AY was not within six months from handing over of possession to developer by virtue of JDA - NO: ITAT

THE issue before the Bench is - Whether assessee is eligible for deduction u/s 54EC, even if investment made in the relavant AY was not within six months from handing over of the possession to the developer by virtue of joint development agreement. And the answer is NO.

Facts of the case

The assessee is an HUF consisting of Mr. S.R. Madhavan, as kartha of the joint family. The assessee had entered into a joint development agreement (JDA) with M/s Sumanth & Co. Chennai

CESTAT order disposing stay application and holding that CENVAT reversal formula prescribed in Rule 6(3A) of CENVAT Credit Rules should be applied on total input servicws

This Tax Alert which gives an update on the recent stay order of Mumbai CESTAT in the case of Thyssenkrupp Industries (I) Pvt. Ltd. V. Commissioner of Central Excise, Pune [2014-TIOL-1825-CESTAT-MUM].

The issue dealt with in this order was whether the formula as prescribed in Rule 6(3A) of the CENVAT Credit Rules, 2004 for reversal of CENVAT credit should be applied to total CENVAT credit taken on input services received by the taxpayer or it should be only applied to CENVAT credit on common input services.

CESTAT decided in favor of Revenue and ordered pre-deposit, holding that the formula prescribed needs to be applied on total CENVAT credit taken on all the input services received by the taxpayer and accordingly, reversal for the purposes of Rule 6(3) needs to be done.

Draft Bill - “Road Transport and Safety Bill 2014” - Review and Suggestion

Hope you are all aware that Ministry of Road Transport and Highways, Govt of India has released Draft bill for“Road Transport and Safety Bill 2014” and requested for review and suggestions from public.

Please revisit this page for updated versions.

http://morth.nic.in/index2.asp?slid=1479&sublinkid=940&lang=1

Any suggestions or comments can be emailed on the following address:

rtsbill2014-morth@nic.in

For efficient email handling, please include the following in the Subject:

“Suggestions for the Road Transport and Safety Bill”

Premature payment of sales-tax deferral loan by paying an amount equal to the net present value of the deferred tax by which the entire liability to pay tax/loan stood discharged is not a "benefit" taxable u/s 41 (1)

CIT vs. McDowell & Co Ltd (Karnataka High Court)

As per an incentive scheme announced by the Government of Maharashtra, the assessee entered into an agreement to avail the benefits under deferral/1993 scheme which provides for deferment of payment of taxes. This agreement not only determined the eligibility of the assessee but also laid down the terms and

New Services available on Traces.

Found following new services available at Traces.

01.   Individual verification of PAN.

02.   Mandatory Validation of 197 Certificate.

03.   Request for refund. – presently disabled.

04.   Mandatory declaration for non filing of E TDS return.

05.   Online correction of ETDS return.

06.   Online replacement of challans.

07.   Inbox

08.   Download CSI File.

new notification - Delegation of powers of CBEC under rule 3 of Service Tax Rules, 1994

NOTIFICATION

No. 21/2014-SERVICE TAX

New Delhi, the 16^th September, 2014

   25 Bhadrapada 1936 Saka

           

G.S.R    (E).- In exercise of the powers conferred by section 37A of the Central Excise Act, 1944 (1 of 1944), read with section 83 of the Finance Act, 1994 (32 of 1994), the Central Government hereby delegates the powers of the Central Board of Excise and Customs under rule 3 of the Service Tax

No need to submit Boarding Pass for T.A. Claims by Employee - Circular

Ministry of Personnel, Public Grievances and Pensions, Department of Personnel & Training has issued a circular regarding T.A. Claim. As per this circular no neet to submit bording pass while Travelling Allowance claims to the department by the Central Government Employee. The details of this circular is as follows:

What are changes in Service Tax w.e.f. 1st Oct., 2014 ?

By the latest amendment in Serve Tax Act, there are so many little changes takes place w.e.f. 01st October, 2014 for the fin. Year 2014-15. All the changes' summery are as under :

E PAYMENTMandatory E-payment for every assessee;

CHANGE IN INTEREST RATEOLD :- @18% P.A.

NOW, INTEREST WILL BE CHARGED BASED ON DELAY IN TIME
DELAY FOR FIRST SIX MONTH @ 18%

Whether insurance premium paid by one brother on life of other can be considered as legitimate business expenditure when brothers execute common power of attorney in favour of each other, mutually authorizing other to, in his absence, take care of business activity - NO: ITAT

THE issue before the Bench is - Whether insurance premium paid by one brother on the life of other can be considered as legitimate business expenditure when the brothers execute a common power of attorney in favour of each other, mutually authorizing the other to, in his absence, take care of business activity. And the verdict goes against the assessee.

Facts of the case

The assessee is engaged in the business of manufacturing of cloth in his proprietary concern. His brother runs his proprietary business in the same trade from the same business premises. Both the brothers executed a (common) power of attorney in favour of each other, mutually authorizing the other to, in his absence, take care of the business activity, including acts incidental thereto. Keyman Insurance policy stood taken by each on the life of the other, treating him as an

Whether when a membership card-holder of stock exchange gets shares on demutualisation of Exchange in new entity, such conversion of shares amounts to transfer and any capital gains liability arises - NO: HC

THE issues before the Bench are - Whether when a membership card-holder of a stock exchange gets shares on demutualisation of the exchange in the new entity, any capital gains liability arises and Whether such conversion of shares amounts to transfer. And the answers go against the Revenue.

Facts of the case

The assessee company was engaged in business of shares and stock trading and broking. It was a member of Bombay Stock Exchange. The membership of BSE was purchased in the FY 1998-99 for total consideration of Rs.97,51,000/-. The return of income was filed on 30th November, 2006

Interest on NPAs, even if credited to the Profit & loss account, is not chargeable to tax

The Solapur District Central Co-op. Bank Ltd vs. ACIT (ITAT Pune)

While constructing its Profit & Loss Account to arrive at its net Profit or Loss, a Co-operative Society is required to show interest accrued/accruing on amounts of Overdue Loans separately. This is precisely what has been done by the assessee in the present case. The aforesaid requirement of the manner of construction of Profit & Loss Account, prescribed under the Rules of the

As the UOI has continued the process of appointment of Tribunal Members without amending the Rules, the Petitioner, who was wait-listed in 2007, deserves to be considered for appointment within 30 days

Inturi Rama Rao vs. UOI (Supreme Court)

The Selection Committee finalized a list of 18 persons, 13 for the post of Accountant Member and 5 for the post of Judicial Member. The Petitioner, Inturi Rama Rao, was placed in a ‘Waiting List’ appointment as Accountant Member. The Select List was approved by the Appointment Committee of the Cabinet (ACC) and 11 vacancies of Accountant Members were filled up whereas 5 vacancies of Judicial Members were also filled up. Two vacancies of Accountant Members remained vacant as the two candidates who were selected were not cleared by the Vigilance. The Petitioner, who was in the Waiting List, perceived a right to be appointed against one of the vacant posts of Accountant Member. As appointment was not forthcoming, the Petitioner moved the Central Administrative Tribunal. Appropriate relief was granted by the CAT. The order of the CAT was affirmed by the Delhi High Court. However, the appeals filed by the UOI against the said order of the CAT and High Court were allowed by the Supreme Court on the ground that there was a difference between the main list of selected candidates and the wait-listed candidates. As appointments of the candidates in the main list (16 in number) had already been made, the Supreme Court thought it proper not to affirm the directions for appointment of the wait-listed candidates as made by the CAT and the High Court. It accepted the contentions made by the UOI that further appointments would be made only after amendment of the Rules pertained to the eligibility of the candidates. However, as the amendment to the Rules has not been effected till date and instead, the UOI initiated fresh selection process in the year 2013 on the basis of the unamended Rules and the selection process was completed and the appointments are awaited, the Petitioner filed a fresh Writ Petition. HELD by the Court allowing the Petition:

What we find is that notwithstanding the statement made on behalf of the Union of India before this Court that vacancies in the future will be made only after the amendments in the Rules are carried out, the Union of India has initiated a process to make further appointments without amending the Rules. If persons eligible under the then existing Rules which are in force even today are to be considered for appointment, surely, the petitioner, who is a wait-listed candidate, will also have to be considered for appointment by consideration of his entitlement for appointment as in the year 2007 when the appointments on the main-list were made and the two vacancies arose giving rise to the issue of operation of the waiting list. What follows from the above is that even accepting the order dated 17.11.2011 passed by this Court, in view of the subsequent facts and events that have occurred, namely, action of the Union of India in resorting to a fresh process of selection and appointment without amendment of the Rules, the right of the petitioner to be considered for appointment on the basis of his position in the Waiting List has once again come to fore which needs to be resolved by an appropriate order. We, therefore, allow this writ petition and direct consideration of the case of the petitioner for appointment on the basis of his position in the Waiting List against one of the two vacancies that had arisen on account of two of the candidates in the merit list not having been granted the vigilance clearance. This will be done by the concerned Authority within 30 days from the date of receipt of a copy of this order.

There is a perceptional difference in the operative force of section 271(1)(c) vis-à-vis section 158BFA(2). The charge against the assessee u/s 158BFA(2) could be, why they failed to compute true disclosed income out of the seized material.

Mohd. Khasim vs. ACIT (ITAT Bangalore)

On a comparative study of the scheme of assessment of undisclosed income for the purpose of block period, penalty impossible u/s 271(1)(i)(c) and penalty impossible on the undisclosed income in the block period, we find that income for the block period has to be determined on the basis of material seized during the course of search. This material was to be supplied to the assessee before he could be asked to submit his return in response to the notice issued u/s 158BC

Stay of demand in high-pitched assessments should be considered as per observations in Soul v. DCIT 323 ITR 305 (Delhi)

Charu Home Products Pvt. Ltd vs. CIT (Delhi High Court)

The learned counsel for the petitioner has also taken us through the instruction No. 96 of 1969 as well as instruction No. 1914 of 1993. We have also examined the decision of this court in the case of Soul v. DCIT: 323 ITR 305 (Delhi) and, in particular, paragraph 8 thereof where the above mentioned two instructions have been considered as also the earlier decision of this court in Valvoline Cummins v. DCIT: 307 ITR 103 (Delhi). Considering the same, we feel that it would be appropriate if the ACIT reconsiders the application of the petitioner for stay in the light of the observations contained in the said decision [Soul v. DCIT (supra)]. This is so because according to the petitioner the assessment is a high pitched one inasmuch as it is approximately 17 times of the returned income.

Submission of PAN of Rented Owned premises to get House Rent Allow. Expemption from Income Tax.

Employees in receipt of House Rent Allowance (HRA) from the employer are eligible for exemption if they are staying in a rented accommodation & paying the rent. While working out deduction of tax at source (TDS) of employee, the disbursing authorities (or employer) should satisfy themselves about the rent payment by insisting the production of evidence of actual payment of rent before granting exemption towards HRA or any portion thereof from the total income. Income Tax

Whether, for the purpose of claiming Sec 10B benefits, it is necessary to obtain approval of STPI authority - YES: HC

THE issue before the Bench is- Whether, for the purpose of claiming Sec 10B benefits, it is necessary to obtain approval of the STPI authority. And the answer goes against the assessee.

Facts of the case

The assessee company, incorporated in 2003, was engaged in software development. It had started business operations from January, 2004. The assessee prepared accounts for the period

Interest on bill discounting facility is exempt from Service tax and interest earned on overdraft and cash credit facility would attract CENVAT credit reversal

This Tax Alert summarizes the decision of the Kolkata Tribunal in the case of UCO Bank, Kolkata v. Commissioner of Service tax, Kolkata [TS-439-Tribunal-2014-ST].

In this case, the assessee, a Public Sector Undertaking bank, was engaged in the provision of lending services as well as bill discounting facilities during the relevant period.

The revenue raised a demand for Service tax on interest in relation to bill discounting facility and also sought to recover an amount

A strict procedure has to be followed for service by affixture. If done improperly, the notice and the resultant assessment order are null and void.

Sanjay Badani vs. DCIT (ITAT Mumbai)

(i) As per sub-section (1) of section 282, the notice is to be served on the person named therein either by post or as if it was a summons issued by Court under the Code of Civil Procedure, 1908 (V of 1908). The relevant provision for effecting of service by different modes are contained in rules 17, 19 and 20 of Order V of CPC. Rules 17, 19 and 20 of Order V of CPC lay down the procedure for service of summons/notice and, therefore, the procedure laid down therein cannot be surpassed because the intention of the legislature behind these provisions is that strict compliance of the procedure laid down therein has to be made. The expression after using all due and reasonable diligence’ appearing in

Consulting Engineer Services - Reimbursement of expenses - Held, extended period not invokable as there is bonafide belief backed by CBEC's clarification and Tribunal decisions

Scott Wilson Kirkpatrick India Pvt. ltd. vs. Commissioner of Central Excise, Jaipur. 2013 (30) STR 652 (Tri-Del)

.

Facts:

The appellant provided services of Consulting Engineer to National Highways Authority of India (NHAI) and received certain consideration in the form of reimbursements. As per revenue, the said consideration formed part of the value of service and hence levied tax, interest and penalty. In support of their view, they relied onMett. Macdonald Ltd. vs CCE 2006 (2) S.T.R. 524 (Tri.- Del) and Shri Bhagavathy Traders vs. CCE, Cochin-2011- TIOL-1155-CESTAT-BANG-LB. The appellant relied on CBEC Circulars B.43/5i97-

Important decision on Penalty

New Holland Tractors (India) Pvt. Ltd vs. CIT (Delhi High Court)

The High Court decided the merits against the assessee. However, while deleting the levy of penalty u/s 271(1)(c), the High Court has made important observations:

(i) We have had the advantage of penning the judgment in the appeal preferred in relation to the quantum proceedings and have held that the assessee was

Use of Technology as evidence.

Suvarna Rahul Musale vs. Rahul Prabhakar Musale (Bombay High Court)

In dealing with a matrimonial matter involving the question whether the evidence of the estranged wife residing in the USA could be recorded via video-conferencing, the Bombay High Court has sent the clarion call that there is a need for us to change our mind-set and embrace technological advancements:

Registration of hypothecation of Motor Vehicles under Companies Act, 2013

Introduction
Hypothecation is a method of creation of security of movable property. However, the goods so hypothecated continue to be in the possession of the owner, that is the borrower. Hence, it is a way of creating security without delivery of title or possession and as in the literal sense of term, the lender is ‘hypothetically’ in control of the property.
The only point of distinction between pledge and hypothecation is that in case of pledge, the beneficial possession of goods is transferred to the lender whereas in hypothecation, possession remains with the owner. Hypothecation is merely an extended form of pledge which allows the lender to retain possession in trust for himself. Though there is no doubt that the creditor’s right to take possession or sell the goods directly for the purpose of recovering his dues continues to remain in

Whether collection of innovative ideas and development of academic gadgets for nursery school can be construed as technical knowhow and thus, depreciation is allowable - NO: ITAT

THE issue before the Bench is - Whether collection of innovative ideas and development of academic gadgets for a nursery school can be construed as technical knowhow and thus, depreciation is allowable. And the answer is NO.

Facts of the case

The assessee, engaged in the business of running preparatory schools on its own and through franchisees, filed its return of income declaring loss of Rs.97,49,680/-. During the year the assessee had acquired running business of Little Kingdom Edutech Ltd. and had acquired total assets worth Rs.5 crores against which Rs 50 lacs shares were allotted to Little Kingdom Edutech Ltd. From the details of assets acquired, AO noticed that there was an asset of Rs.4,75,00,000/- under the head "Technical Know-how", on which the assessee had claimed depreciation @ 25% amounting to Rs.1,18,75,000/-.

Foreign Travelling expenditure of Managing Director and his wife

When the board of directors of the assessee had thought it fit to spend on foreign tour
of the accompanying wife of the managing director for commercial expediency for
reasons reflected in its resolution , it was not with in the province of the income tax
authority to disallow such expenditure. There was resolution of company authorizing

S. 271(1)(c): Non-offering of stamp duty/DVO value as consideration for capital gains does not attract penalty if facts are on record

CIT vs. Fortune Hotels and Estates Pvt. Ltd (Bombay High Court)

The Tribunal finding that the case was not one of furnishing inaccurate particulars of income or of concealment inasmuch as there was a registered sale deed and the consideration was mentioned therein cannot be faulted. Also, the DVO determined the value at a figure from that of the stamp value. The larger question posed for consideration as to whether s. 271(1)(c) penalty can apply to deemed income is left open for consideration in an appropriate case

S. 244A(1)(b): Refund of Self-Assessment tax is also entitled to interest

CIT vs. Indian Oil Corporation Ltd (Bombay High Court)

In view of the judgement of the Madras High Court in Cholamandalam Investment and Finance Ltd 294 ITR 438 (Special Leave Petition dismissed by the Supreme Court) and Sutlaj Industries Ltd 325 ITR 331 (Del) and the fact that there is nothing contrary, the Appeal of the department is dismissed.

INCOME TAX PROVISION FOR CHARITABLE TRUSTS

Any income which comes from property held under any trust or institution which works for charitable or religious purposes is exempt from income tax point of view if the 85% of the income is spent on the charitable or religious purposes. If the amount spent on the religious and charitable purpose goes short to 85%, the shortfall is taxable under income tax act.

Extension of Due date of deposit of TDS / TCS for September 2014

The Central Board of Direct Taxes has issued an order to extend the last date of deposit of tax deducted at source/tax collected at source during the month of September, 2014 from 7th October, 2014 to 10th October, 2014 without entailing any consequential interest. However, the due date for filing of TDS/TCS statements for the 2nd Quarter of the F.Y. 2014-15 shall remain the same. The Press Release issued by CBDT is as follows :- F.No. 385/10/2014-IT(B) Government of India

S. 68 Helps Nail Jayalalitha’s Corruption Cash Credits

The Hindu has made available a copy of the judgement of John Michael Cunha J. in the case of State vs. Selvi. J. Jayalalitha (pdf). The judgement exposes the intricate arrangements that were made to launder the huge amount of cash credits that were received by J. Jayalalitha (former Chief Minister of Tamil Nadu) from alleged corrupt means. The judgement also raises disturbing questions as to the role of the auditors of the front companies in seeking to camouflage the true nature of the transactions. A few passages from the judgement are noteworthy.

Refund of Service tax paid on marketing services of foreign service provider uls 66A as Business Auxiliary Services - Whether 'input service'

Syntel In- ternational Pvt. Ltd. vs. C.C.Ex. Pune. (2013 (30) STR 679 (Tri-Mumbai)

Facts:

The Appellant provided customized software Development service, renting of immovable property services etc. They engaged a company registered in SA to market/sell software services developed by them. For this service, they paid consideration to the foreign service provider and discharged service tax liability on reverse charge u/s. 66A. As these services were used in providing exported

Transportation of empty containers from CFS to factory of exporter held to be "In relation to export goods" and thus eligible for refund under Notification NO.41/2007.

Commissioner of Central Excise, Customs & Service Tax, Visakhapatnam vs. R.A.K. Ceramics India Pvt. Ltd. (2013 (30) STR 609 (Tri-Bang.)

Facts:

A manufacturer of ceramic tiles cleared such goods for export as well as for home consumption. It incurred freight for transport of goods by road which also included transportation of empty containers from CFS to the respondent's factory and claimed refund vide Notification No. 41/2007-S.T against freight towards export. After allowing the refund claim, the amount representing transportation of empty containers from CFS to the factory was demanded back treating it as erroneous and contending that such services are

How Salaried class get benefited by Modi First Budget.

The new Indian government announced its tax rules for the current financial year. But very few announcements were made by new government which could provide relief to salaried class people. The first and the most important amendment was in the tax slab. Although there is no change in the existing tax rate yet new Government had increased the minimum limit from ₹ 2,00,000 to ₹ 2,50,000. There were no changes in the tax slab from last 2 years in tax slabs. In the past, this limit

Financial Ratios

Liquidity Analysis Ratios

Current Ratio

		Current Assets
	Current Ratio =	------------------------
		Current Liabilities

Quick Ratio

		Quick Assets
	Quick Ratio =	----------------------
		Current Liabilities

Importance of October-2014 for TDS/TCS & others

Due date for deposit of TDS for the period July 2014 to September 2014 when Assessing Officer has permitted quarterly deposit of TDS under Section 192, 194A, 194D or 194H is 7th October, 2014

On 15th October, 2014 is the date for Quarterly statement of TDS/TCS deposited for the quarter ending September 30, 2014 (applicable in all cases of TDS/TCS except when tax is deducted by an office of the Government).

Whether penalty is warranted even in case where tax is paid to buy peace with the Revenue - NO: HC

THE issues before the Bench are - Whether penalty is warranted even in a case where tax is paid to buy peace with the Revenue and Whether when the assessee runs a small school and maintains no books, detection of some additional income during the Survey must necessarily lead to imposition of penalty after the Tribunal confirms the additions. And the verdict goes against the Revenue.

Facts of the case

The assessee is an individual who had established a small private school. A search was conducted

India Taxes- Due Date Alert for the month October 2014

No	Due Date	Related to	Compliance to be made
1	05.10.2014	Service Tax	Payment of Service Tax for the Month of September 2014
2	07.10.2014	TDS/TCS (Income Tax)	·        Deposit TDS for payments of Salary, Interest, Commission or Brokerage, Rent, Professional fee, payment to Contractors, etc. during the month of September 2014. ·        Deposit TDS from Salaries  deducted during the month of September 2014 •   Deposit TCS for collections made under section 206C including sale of scrap during the month of September 2014, if any •    Deliver a copy of Form 15G/15H, if any to CCIT or CIT for declarations received in the month of September 2014, if any

Dividend and Bonus stripping - some issue

Summary : The press can seek credit for  early amendments in the Income Tax Act regarding dividend stripping and  bonus stripping. Amendments had taken place to lengthen the period of holding of mutual funds units if one wants full benefit of tax free dividend. For bonus stripping, it appears that restrictions  are in respect of  Units of Mutual Funds and not in respect of bonus stripping in case of shares of companies.

So far dividend is concerned , based on history of relevant provisions it can be said that the dividend received by the shareholder is not exempt but it is received after non creditable TDS. Rather the scheme of 'final tax' on distribution point has made

Tolerable limit for ALP unchanged for Assessment Year 2014-15 - CBDT

CBDT has issued a notification under Section 92C of the Income-Tax Act, 1961 for Transfer Pricing and Computation of Arm’s Length Price to keeps Tolerable Limit for ALP unchaged for Assessment Year 2014-15.

Whether if assessee has sums of carry-forward losses and unabsorbed depreciation which are relatable to block period, same is to be set off against undisclosed income determined in block assessment - YES: HC

THE question before the Bench is - Whether if an assessee has sums of carry-forward losses and unabsorbed deprecitaion which are relatable to the block period, the same is to be set off against undisclosed income determined in block assessment. And the answer is YES.

Facts of the case

The assessee is a dealer in machinery relating to bore-well. A search was conducted and a block assessment was done. During the assessment, the AO imposed certain amount of tax, upon the undisclosed income. Aggrieved, the assessee approached the Settlement Commission under Section 245D. The undisclosed income for the block period was determinded at Rs.1,36,52,701/- and a tax at 60% was imposed, aggregating to Rs.81,91,620.

Import of Service - Sec. 66A - Services of repair and overhaul of aircraft performed wholly abroad - Held not taxable - commission paid to GSA's abroad in relation to business in India Whether service tax applicable u/s. 66A on services of repair and overhaul of aircrafts and in respect of commission paid to GSA's abroad

-Air India Ltd. vs. Commissioner of Service "fax, New Delhi. (2013 (30) STR 458 (Tri-Del))

?

Facts:

The Appellant, a wholly Government of India Company, engaged in the business of transportation of passengers              and goods by air appointed "General Sales Agents" (GSA) who represented them and handled their affairs in other countries for which they received commission. Appellant also received services of repair and overhaul of

Automation of Central Excise and Service Tax (ACES)

Service Tax Return (ST-3) for the period from April-14 to September-14 will be made available for e-filing by the assesses. The last date for filing the returns for the said period is 25th October, 2014. The assesses can file return online or use the offline utility by downloading the latest version from http://acesdownload.nic.in/ or from "DOWNLOADS" Section of ACES website. For details on how to e-file in ACES or for any other information/assistance, you may visit www.aces.gov.in or contact your jurisdictional Service Tax Officer or the nearest ACES Certified Facilitation Centres (CFCs). Please file your returns in ACES well in advance to avoid rush and inconvenience at the last moment.

No Extension for following tax assessee

The extension of tax return is only for tax assessee whose turnover is more than Rs. 1 crore and required to get tax audit.  for the following tax asssessee it is still mandatory to file the tax return before September 30, 2014 .

01.  Loss Return

02.  Claiming any kind of benefit u/s 80-IA.

Penalties under Customs Act

The posting had been move to another website. Please click the link below to get the access of the same. 


https://taxofindia.wordpress.com/2015/11/27/penalties-under-customs-act/ 

If 26AS Statement mismatch face as scrutiny - CBDT directs to AO for Asstt. Year 2015-16.

CBDT has issued a instruction No. 7/2014 dated 26th Sept., 2014, directs to AO to enquire into only AIR data/26AS mismatch issues if scrutiny is made on this basis for Fin. Year 2014-15 i.e. Asstt. Year 2015-16 under Section 143, read with Section 142 of The Income-Tax Act, 1961. The details of this notification is as under:

It has come to the notice of the Board that uring the scrutiny assessment proceedings some of the

Inadmissible CENVAT credit - Reversal before utilisation thereof and before issue of SCN- No Penalty.

CCE.,Salem vs. Crocodile India Pvt. Ltd (2013-TIOL-518-HC-MAD-CX)

Facts:

The respondent a manufacturer of readymade garments claimed inadmissible credit of Rs. 15,07,414/- and subsequently reversed the same, evidently before the issue of SCN. The department confirmed interest and penalty although the assessee did not utilise credit and reversed immediately on receipt of intimation about the error. In absence of any other intention of wrongful gain, the Tribunal set aside the levy of penalty. The revenue challenges it in this appeal.

CBDT mandates to issue even NIL TDS Certificate by deductors - 9th Amendment with New Form No. 13

As per the provisions of the Income-tax Act, 1961 (‘the Act’), CBDT has issued a notification on 24th Sept., 2014 regarding issuing of TDS Certificate to TDS Deductee. In this notification CBDT mandates to issue TDS Certificate by TDS Deductor to TDS Deductee even NIL TDS. Income Tax Department has been made 9th Amendment Rule, 2014 and amended in Rule 28AA by substitution a New Form No. 13. The Form No. 13 is an application by a person for a certificate u/s. 197 and/or 206C(9) of the Income Tax Act, 1961 for no Deduction/collection of Tax or Deduction/collection of Tax at a lower rate.