Important points before submitting TDS statements for 4th Quarter of Financial Year 2013-14

One should take care of the following information before submitting TDS statements for 4th Quarter of Financial Year 2013-14

Payment of Taxes deducted/ collected:

• In accordance with Central Government Account (Receipts and Payments) Rules, 1983, Government dues are deemed to have been paid on the date on which the cheque or draft tendered to the bank, was cleared and entered in the receipt scroll.
• Rule 125 of Income Tax Rules, 1962 provisions for Electronic Payment of Tax by way of internet banking facility, for a Company and a Person to whom provisions of section 44AB of the Act are applicable. 

Whether income from letting out property is to be treated as business income merely because property is commercial in nature and rental is exorbitantly high - NO: ITAT

THE issue before the bench is - Whether income from letting out of property can be treated as business income and not as income from house property just because rental income was too high and the property was commercial in nature. NO is the Tribunal's answer.

Facts of the case

The AO noted that the assessee had disclosed income from house property of Rs. 104,887,980/-

File Income Tax Return for Asstt. Year 2014-15 without login on TRACE.

The Income Tax Department has developed the latest JAVA Technology ITR Forms ITR-1 (Sahaj) & ITR-4S (Subam) which have been made to make it user friendly for Asstt. Year 2014-15. This utility can be run on Windows 7.0 or above and latest Linux operating systems, where Java Runtime Environment Version 7 Update 13 (jre 1.7 is also known as jre version 7) or above is installed.

E FILING MANDATORY FROM AY 2014-15 FOR ALL TAXPAYER

Any assessee having total income of Rs. 5 Lakhs and above from AY 2013-14 and subsequent Assessment Years.

Individual/ HUF, being resident, having assets located outside India from AY 2012-13 and subsequent Assessment Years.

Taxability of Housing Societies

Taxability of Housing Societies

In general the perception is that income of Co–operative Societies is not chargeable to tax and therefore many societies do not bother to take PAN No. & file Income Tax returns. This is a wrong perception since though certain types of income of CHS are exempt there are other incomes which are chargeable to Tax.

         We now examine on a case by case basis the income which is normally earned by a Co – Operative Society’s:

Immediate Changes (Companies Act, 2013)

Sl.No.	Agenda	Brief description
1.	Stationery requirements	The Company’s (i) letterhead {business letters}, (ii) billheads, (iii) letter papers, (iv) notices; and (v) other official publications to capture these additional requirements: 1. Company’s former name(s) (since the last two years) to be reflected in the above listed documents for the next two years (since April 1, 2014), 2. Corporate Identity Number, 3. Telephone number, 4. Fax number (if any), 5. Email address, and

Hyderabad Tribunal rules on transfer pricing aspects of corporate guarantee

This Tax Alert summarizes a recent ruling of Hyderabad Income Tax Appellate Tribunal (ITAT) in the case of Four Soft Pvt Ltd, Hyderabad (Taxpayer) on transfer pricing (TP) issues arising from the issuance of a corporate guarantee to banks in favor of associated enterprises (AEs). The Taxpayer, an Indian company, provided a guarantee to a third party bank on behalf of its foreign subsidiary. The Taxpayer did not charge its subsidiary a guarantee fee for provision of such corporate guarantee. During audit proceedings, the Transfer Pricing Officer (TPO) imputed a TP adjustment of 3.75% as an arm’s length guarantee fee. The TPO determined the rate based on the commission charged by an unrelated bank for providing a bank guarantee to customers. The Taxpayer relied on the ITAT’s ruling in its own case for an earlier year to argue that the provision of a guarantee is not an international transaction to which the TP

CPC (TDS) advisory for submitting Form 24Q, Q4 TDS statements for Financial Year 2013-14

Dear Deductor,

Greetings from CPC(TDS) team.

As esteemed stakeholder of CPC(TDS), it may be noted that the due date for filing 24Q quarterly TDS statement for 4^th quarter of FY 2013-14 is approaching fast. You are advised to file TDS statements well before due date (15^thMay, 2014).

It is also requested to refer to Circular 8 of 2013 dated October 10, 2013 in the context of Tax Deduction at Source on Salary Income (attached for your reference) for Computation of Income and Manner of deductionof tax at source.

CDBT Directive On Opposing Mergers/ Amalgamations/ De-Mergers

The CBDT has issued a letter dated 11.04.2014 pointing out that in a recent case, a scheme of amalgamation was designed to seek amalgamation with retrospective effect so as to claim set-off of losses of the amalgamated company with the profits of the amalgamating company. Though the department filed an intervention application in the High Court to object to the amalgamation, the same was dismissed on the ground that the department had no locus standi in the matter. The CBDT has stated that to avoid this situation again, the procedure prescribed in this behalf vide MCA’s Circular No. 1/2014 dated 15.01.2014 (pdf) for objecting to amalgamations etc which are prejudicial to the interests of the revenue should be followed.

Method of Converting Partnership into LLP

To convert partnership firm into limited liability partnership (LLP) one needs to comply with various requirements. The procedure for conversion of Firm into LLP is not a cumbersome process, one need to just comply with the legal & procedural formalities which are described as under –
Some of the pre-requisites for conversion are as follows –

Tax Planning On Sale of House Property

Whenever a person sells any property, he has to pay income tax on the gain he earned.  This gain is the difference between the sale price of the property and the purchase price of the property. 

As we see the property rates have multiplied in recent years, this will result in big amount of capital gain and the person will have to pay income tax on this capital gain. 

Whether profits from mere sale of open land or unused FSI as part of housing project where FSI utilization is way short of permissible limits can be said to have been derived from such project u/s 80IB(10) - NO: High Court

THE issue before the Bench is - Whether mere sale of open land or unused FSI as part of the housing project where utilization of the FSI is way short of permissible limits can be said to have been derived from such housing project. No is the answer from the Bench.

Facts of the case

A) The assessee are developers. They had developed housing projects fulfilling the conditions contained in section 80IB(10) and claimed deduction on the profits earned from sale of such

Whether initiation of re-assessment u/s 147 gets vitiated merely because AO fails to correct assessment completed u/s 143(1) by issuing notice u/s 1432(2) - NO: High Court

THE issues before the Bench are - Whether initiation of re-assessment u/s 147 gets vitiated merely because the AO fails to correct assessment completed u/s 143(1) by issuing notice u/s 1432(2) and Whether a prima facie opinion on escapement of income is good enough reason to resort to the provisions of Sec 147. And the verdict goes against the assessee.

Facts of the case

Best practices to be followed for filing Q4 TDS statements for Financial Year 2013-14

Date of communication : 10/04/2014

Dear Deductor,

CPC (TDS) is reaching out to you to ensure that the best practices are followed for filing of your Q4 TDS statements. The emphasis is on timely, correct and complete reporting for taxes deducted at source, to ensure that the deductees are able to correctly claim TDS Credits and for generating correct TDS Certificates. As the due date for filing quarterly TDS statement for 4^th quarter is approaching close, you are requested to take note of following important information before submitting TDS statements.

Whether provisions of Sec 40A(9) would hit on mere making of provision for retirement benefits to employees - NO: Madras HC

THE issues before the Bench are - Whether where a provision was made that to pay the service weightage to the employees on the eve of their retirement even if there was no sum credited to an individual account, the contribution could be termed as contribution to a fund or a trust; Whether where a mere provision for retirement benefit was made in the accounts and there being no fund, the assessee’s case would be hit by Section 40A(9) of the Income Tax Act and Whether where a provision was made in the books of account for retirement benefit based on the service weightage, and the scheme was not a recognised one, the claim would be hit by Section 40A(7)(a) of the Income Tax Act. And the verdict goes in favour of the assessee.

Immediate Compliance for Companies as Per Companies Act, 2013

These are the major immediate compliance which are to be done urgently. We are doing our study in the matter and would comeback soon for more clarifications.

Live Webcast on 12th April, 2014 from 4.00 to 6.00 PM on Big Data-Governance and Compliance

Committee on Information Technology of  The Institute of Chartered Accountants of IndiaAnnounces 

Live Webcast
On 12.04.2014 from 4.00 PM to 6.00 PM at ICAI Bhawan, BKC Mumbai
On the Topic
"Big Data-Governance and Compliance” 

Speaker : Mr. Ravikumar Ramachandran (IT Expert in relevant area)
This Webcast would be available on the link: http://icaitv.com/live/icai120414/ 
Members can also ask specific queries / questions, many of which would get answered subject to relevance and availability of time.
Those Members who will view the said Live Webcast would be eligible to claim 2 CPE Hours Credit under Unstructured Learning Activities.  To avail the CPE Hours under ULA, the members are requested to kindly fill-up the Self-declaration form which is available on the website www.cpeicai.org and send the same to their concerned Decentralized Offices.

FDI in LLP

This Regulatory Alert summarizes notification [No. FEMA.298/2014-RB]/GSR 190(E), dated 13 March 2014 namely FEM (Transfer or Issue of Security by a Person Resident Outside India) (Third Amendment) Regulations, 2014 issued by the Reserve Bank of India (RBI).

RBI has notified the guidelines in relation to the foreign direct investment (FDI) in Limited Liability Partnership (LLP). These guidelines were long overdue since FDI in LLP was permitted vide Press Note 1 of 2011 Series by Department of Industrial Policy and Promotion (DIPP) but there was no corresponding reference in the Foreign Exchange Management Act (FEMA).

These guidelines are a step in the right direction by the RBI to provide clarity on the reporting and valuation mechanism of the FDI in LLP. With this move more FDI will flow into LLP as majority of the investors were not comfortable with investment in LLP structure in the absence of any guidance under FEMA.

However, restriction on overseas body corporate cannot appoint/ nominate a designated partner is still a major road block for foreign investment in LLP. Further there is no clarity provided on whether the interest can be charged on the capital provided by the investor. As a process now RBI will issue a circular and may address certain aspects.

Defination of Corpus Fund in practical view

Definition of Corpus Fund

1.  The term ‘corpus’ is often confused and misunderstood. The literal meaning of the term ‘corpus’ is the main part/organ of a body. The term ‘corpus’ also denotes the sum and substance of an issue/entity. From a layman’s point of view a corpus fund should be understood as the capital of the organization ; the funds generated and kept for the existence and sustenance of the organization.

Tax Planning for Salary

Salary Concept and Definition

Normally, the term ‘Salary’ signifies the consideration for services rendered by a person. The person who renders the services is called the ‘employee’ while the person who receives the services and pays the consideration is called the ‘employer’. The expression ‘employment’ means existence of relationship of master and servant between the employer and the employee. This relationship is governed by a contract of employment whether expressed or implied which is absolutely essential in order to tax the amount so received under the head ‘Income from Salaries’. Thus, a medical practitioner, an advocate or a chartered

Whether, for purpose of Sec 80IA, the expression 'manufacture or production' also includes 'processing' in its ambit - NO: High Court

THE issues before the Bench are - Whether, for the purpose of Sec 80IA, the expression 'manufacture or production' also includes 'processing' in its ambit and Whether when the transformer oil has been purchased by the assessee from market and centrifuging had been done by centrifugal machine in order to make it usable in Transformer, it cannot be construed that due to this transformation or activity there was change in the substance and new substance or article had come out. And the verdict goes against the assessee.

Facts of the case

S. 80-IB(10): If developer does not (without just cause) develop to full extent of FSI, a part of the sale proceeds has to treated as being for sale of FSI and denied s. 80-IB(10) deduction

CIT vs. Moon Star Developers (Gujarat High Court)

For any commercial activity of construction, be it residential or commercial complex maximum utilization of FSI is of great importance to the developer. Ordinarily, therefore, it would be imprudent for a developer to underutilize available FSI. Sale price of constructed properties is decided on the built up area. It can thus be seen that given the rate of constructed area remaining same, non-utilization of available FSI would reduce the profit margin of the developer. When a developer therefore utilizes only say 25% of FSI and sells the unit leaving 75% FSI still available for construction, he obviously works out the sale price bearing in mind this special feature. Thus, therefore, when a developer constructs residential unit occupying a fourth or half of usable FSI and sells it, his profits from the activity of development and construction of residential units and from sale of unused FSI are distinct and separate and rightly segregated by the AO

The effect of s. 80-IA(9) is that s. 80-IA deduction has to be reduced for s. 80HHC deduction in all cases and not only when the combined deduction exceeds the profits

CIT vs. M/s Atul Intermediates (Gujarat High Court)

Sub-section (9) of s. 80IA is aimed at restricting the successive claims of deduction of the same profit or gain under different provisions contained in sub-chapter C of Chapter VI of the Act. This provision, therefore, necessarily impacts other deduction provisions including s. 80HHC of the Act. Nothing contained in s. 80HHC suggests that the deduction provided therein was immune from any outside influence or that the provision was impregnable by any other statute or enactment. Accepting any such theory would lead to incongruous results. Even the assessee concedes that sub-section (9) of s. 80IA would operate as to limiting the combined deductions to a maximum of the profits and gains from an eligible business of the undertaking or enterprise. If s. 80HHC contained a protective shell making it immune from any outside influence, even this effect of sub-section (9) of s. 80IA could not be applied. This would completely render the provisions of sub-section (9) of s. 80IA redundant and meaningless.

Social security agreement between India and Sweden

The social security agreement between India and Sweden was signed on 26 November 2012 and the agreement was expected to come into force in April 2014. However, to date, there has been no confirmation on the date of ratification. The delay is due to continued discussions between the Indian and Swedish authorities.

Applicability of the Companies Act 2013 to Auditor’s Report to FY 2014-15 and Onwards

As you are aware, the Ministry of Corporate Affairs, on 26^th March 2014 notified a majority of the remaining sections of the Companies Act 2013, including sections 139 to 148, relating to audits and auditors.  The Act is stated to be effective from 1^st April, 2014.
Queries are being raised by a number of members as to whether any auditor's report of a company being signed on or after 01^stApril, 2014 would be in accordance with the requirements of section 143 of the Companies Act 2013.

बीजेपी घोषणा पत्र

देशहित को सबसे आगे रखते हुए सबका विकास करने के लिए बीजेपी अपना घोषणा पत्र लेके आई है। इस घोषणा पत्र ने बीजेपी विरोधी दलो और भांड मीडिया को मिर्ची लगा दी है।

बीजेपी के घोषणापत्र में 100 नए शहर, एम्स और बुलेट ट्रेन।

बीजेपी ने अपने घोषणापत्र में राम मंदिर के साथ धारा 370 और समान नागरिक संहिता को भी शामिल किया है।

Few Points on Service Tax - Notification No. 25/2012

Mega Exemption from Service Tax.

The Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the following taxable services from the whole of the service tax leviable thereon under section 66B of the said Act, namely:-

1.      Services provided to the United Nations or a specified international organization;

2.      Health care services by a clinical establishment, an authorised medical practitioner or para-medics;

No Services tax on serving of food in canteen by Factory

CBEC exempts Services provided in relation to serving of food in canteen maintained by a Factory. Food or Beverages Services provided by a Canteen exempt from Service Tax

The Central Government vides Notification No. 14/2013-ST dated October 22, 2013 (“the Notification”) has amended the Notification No. 25/2012-ST dated June 20, 2012 (“the Mega Exemption Notification”).

TAX PLANNING THROUGH SETTING UP INDUSTRIAL UNDERTAKING IN NORTH-EASTERN REGION [SEC.10C

	NTRODUCTION:
	A new section 10C has been introduced w.e.f. assessment year 1999-2000 with a view to industrialise the North - Eastern Region.Tax holiday for 10 years has been conferred to industrial undertakings which begins to manufacture or produce any article or thing on or after 1.4.98 in any Integrated Infrastructure Development Centre or Industrial Growth Centre of North - Eastern Region. It is expected that the tax holiday will go a long way in developing the North - Eastern States. However, the scheme is optional. The provisions of this new section are briefly summarised in this

Whether written off loss arising out of advances extended to a sister concern, which later got amalgamated, can be claimed as capital loss - NO: HC

THE issues before the Bench are - Whether written off loss arising out of advances extended to a sister concern, which later got amalgamated, can be claimed as capital loss; Whether such advances fulfills the meaning of transfer as per section 2(47) of the Income Tax Act and Whether such advances can be alternatively shown as inter corporate deposits for claiming such capital loss. And the verdict goes against the assessee.

Facts of the case

S. 226: AO warned of contempt action for seeking to overreach ITAT’s stay order

 A. T. Kearney India Pvt. Ltd vs. ITO (Delhi High Court)

The assessee filed a stay application before the Tribunal and informed the AO about the same. Thereafter, the Tribunal heard the matter on 14.02.2014 and granted stay of the demand. Despite this, the AO attached the assessee’s bank account on 19.02.2014 and withdrew the proceeds. The assessee filed a Writ Petition to challenge the attachment. The AO defended his action on the ground that he was not present during the hearing of the stay application and

Few Points on negative list of service tax.

 The charging section of the Finance Act, 1994, Section 66B provides that service tax should be levied on all services except the services which are specified in Section 66D of the said Act. As per Section 66D of the Financial Act, 1994, Negative list of Service Tax for 2013-14 is given here which is revised as per latest budget. There are currently 17 heads of Services which are given in the “negative list”. This Negative list of service tax is very important because

Renting of Immovable Property under Positive List and Negative List regime

This is with reference to the Article titled as “Renting of Immovable Property Service” published on 20th September 2013.

The Article has been written in a casual manner without specifying that whether it is applicable to Positive List Regime or Negative List regime. I have tried to supplement following information for the benefit of readers.

TAX PLANNING THROUGH EXEMPTED INCOMES U/S 10

EXEMPTED INCOMES :

Section 10 of the Income Tax Act, 1961 contains the provisions for exemption of various incomes. All such incomes are excluded from the computation of total income of such assessee. However, agricultural income, which is exempted under section 10(1), has to be taken into account for the limited purpose of determining the rate of tax applicable to the assessee. In all other cases the exclusion under section 10 is total and absolute subject to the limits, wherever prescribed. However, as decided by Madras High Court in the case of C.I.T. v.

Leave Travel Concession (LTC) Rules and Benefits

Leave Travel Allowance (LTA) is the most common element of compensation adopted by employers to remunerate employees due to the tax benefits attached to it.    Section 10(5) of the Income-Tax Act, 1961, read with Rule 2B, provides for the exemption and outlines the conditions subject to which LTA is exempt. Here I would like to shed light on the taxability and some other interesting relevant aspects which you as a salaried employee must keep in mind.

Service Tax Return (ST-3) for Oct '13 to March'14

Service Tax Return (ST-3) for Oct '13 to March'14 period is now available for e-filing by the assessees in both offline and online version. The last date for filing the returns for the said period is 25th April, 2014. The assessees 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 any further information/assistance, you may visitwww.aces.gov.in or contact your jurisdictional Service Tax Officer. Please file your returns in ACES well in advance to avoid rush and inconvenience at the last moment.

Regards,
ACES Administrator

Whether retention money is income when it is received from contractee in order to have more liquidity but against a BG on condition that guarantee will be released only after completion of work - NO: HC

THE issue before the Bench is - Whether the retention money would be the income accrued to the assessee when it is received from the contractee in order to have more liquidity but against a bank performance guarantee on a condition that the guarantee will be released only after satisfactory completion of the work upon being certified by the Engineer-In-charge and in case of any non satisfactory completion of work, it would be recovered from bank guarantee. And the answer favours the assessee.

Facts of the case

Few Points on SA Builder case law.

 CIVIL APPEAL NOS. 5811 AND 5812 OF 2006

ØDECEMBER 14, 2006

Ø  Section 36(1)(iii) of the Income-tax Act, 1961 - Interest on borrowed capital - Assessment years 1990-91 and 1991-92 - Whether borrowed fund advanced to a third party should be for commercial expediency, if it is sought to be allowed under section 36(1)(iii) - Held, yes - Assessee borrowed

What Should Be Done In Case TDS Certificate Is Not Issued?

There is a general grievance that in many cases the tax deductors do not issue TDS certificate despite the fact that many reminders are given by the deductees for such issue of certificates. Here is, what one should do in case of non issuance of TDS certificate

TDS Deduction on Mobile Tower Rent comes u/s. 194-I not u/s. 194C

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Income Tax Department had clarify that the renting of mobile tower would attract lower TDS Deductions u/s. 194-I and not u/s. 194C on the grount of Receipts from provision of passive infrastructure services to the mobile operators amount to renting and would attract lower TDS deduction under section 194-I and not under section 194C.

How to convert Form 26AS (PAN Ledger) ".TXT" file to ".XLS" file

The annual statement (Form No. 26AS) will be issued for all tax deducted and tax collected at source from FY 2005-06 onwards after the expiry of the financial year. The PAN-wise ledger account will be created after matching the information in the TDS/TCS statements filed by the deductor/collector and the details of tax deposited in banks coming through On Line Tax Account System (OLTAS).

Few Points on Comparison between India and US GAAP.

Ø  In India, GAAP standards are set by the Institute of Chartered Accountants of India(ICAI) In US, GAAP standards are set by the Financial Accounting Standards Board(FASB) & IFRS standards are set by the International Accounting Standards Committee(IASC)

The Big Debate - GAAP Vs. IFRS

IFRS and US GAAP - Similarities and Differences

What is IFRS? And what is GAAP? The main difference between IFRS and US GAAP is that GAAP is rule-based, while IFRS is principle-based. The difference mainly lies in the methodology used to evaluate an accounting treatment. Under GAAP, the research focuses more on the literature, while under IFRS the “facts pattern” is rigorously reviewed.

IFRS GAAP Differences

Difference between GAAP v/s. IFRS

GAAP v/s IFRS

GAAP (US Generally Accepted Accounting Principles) is the accounting standard used in the US, while IFRS (International Financial Reporting Standards) is the accounting standard used in over 110 countries around the world. GAAP is considered a more “rules based” system of accounting, while

TAX PLANNING FOR MINORS

With effect from Assessment Year 1993-94, the income arising or accruing to minor child is clubbed with the income of his parent having higher income with the following exceptions -

(i)

Income accruing or arising to the minor child on account of any manual work done by him, or Income accruing or arising from activity involving application of his skill, talent or specialised knowledge and experience. The child dancers, singers, dramatist, artistes performing for TV, Radio & Films, Computer operating children may be included in such categories. The wage earning or self employed children will also come in the purview of these categories.

The term “month” in s. 54E, 54EA, 54EB & 54EC does not mean “30 days” but the “calendar month”. So, the expression “within a month” means “before the end of the calendar month”

Alkaben B. Patel vs. ITO (ITAT Ahmedabad) (Special Bench)

Sections 54E, 54EA, 54EB & 54EC require the investment to be made “within a period of six months after the date of such transfer”.The subtle question is that whether the word “month” refers in this section a period of 30 days or it refers to the month only. The term ‘month’ is not defined in the Income-tax Act. Therefore, its meaning has to be understood as per the General Clauses Act, 1897 which defines the word “month” to mean a month reckoned according to the British calendar. In Munnalal Shri Kishan Mainpuri 167 ITR

Latest ITR-1 (Sahaj), ITR-2, ITR-4S & ITR-V for Asstt. Year 2014-15 & Mandatory e-filing for firms.

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INCOME-TAX (FOURTH AMENDMENT) RULES, 2014 - AMENDMENT IN RULE 12 & SUBSTITUTION OF FORMS SAHAJ (ITR-1), ITR-2, SUGAM (ITR-4S) AND ITR-V

NOTIFICATION NO.24/2014 [F.NO.142/2/2014-TPL]/SO 997(E), DATED 1-4-2014

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central

Whether, after 18 years of the Search conducted, documents obtained under RTI Act can be relied upon for establishing that no notice u/s 143(2) was issued - YES: HC

THE issue before the Bench is - Whether document obtained under Right to Information Act for establishing the non issuance of notice u/s 143(2) can be accepted as an evidence, although there has been a lapse of 18 years since the search was first conducted. And the answer favours the assessee.

Few Points on New Companies Act, 2013.

Ø  100 Sections notified in September 2013.

Ø  183 sections notified on March 25, 2014.  All effective from April 1, 2014.

Ø  With effect from April 1, 2014, every company, private limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or net profit of Rs 5 crore, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility activities. The CSR activities should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the 2013 Act. Contribution to any political party is not considered to be a CSR activity and only activities in India would be considered for computing CSR expenditure

VOLUNTARY WINDING UP (Companies Act, 2013)

As we discussed as per section 270 of the Companies Act, 2013, the winding up of a company may be either –

1. by the Tribunal; or
2. Voluntary.

CIRCUMSTANCES IN WHICH COMPANY MAY BE WOUND UP VOLUNTARILY (SECTION 304):
A company may be wound up voluntarily,—

1. if the company in general meeting passes a resolution requiring the company to be wound up voluntarily:
   1. as a result of the expiry of the period for its duration fixed by its articles, or
   2. on the occurrence of any event in respect of which the articles provide that the company should be dissolved; or
   3. the company passes a special resolution that the company be wound up voluntarily.

MCA further notifies major sections of Companies Act, 2013; effective from April 1, 2014

SECTION 1 OF THE COMPANIES ACT, 2013 - ACT - ENFORCEMENT OF - NOTIFIED DATE FROM WHICH SPECIFIED PROVISIONS OF SAID ACT SHALL COME INTO FORCE

NOTIFICATION NO. SO 902(E) [FILE NO.1/15/2013-CL.V], DATED 26-3-2014

In exercise of the powers conferred by sub-section (3) of section 1 of the Companies Act, 2013 (18 of

Various Rules under Companies Act 2013 notified

2014 31.03.2014 Chapter XIII- The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.



2014 31.03.2014 Chapter XIV- The Companies (Inspection, Investigation and Inquiry) Rules, 2014.

The Companies Act, 2013: Impact on auditors and audit firms

When the draft rules relating to the Companies Act, 2013, were first rolled out, Zenobia Aunty’s auditor friends were shell-shocked. Typically, it is just the annual audit season that gets them down; else they are a more cheerful lot than their counterparts – those poor tax practitioners who battle it out in tax offices and tribunals.


What was the reason for their dismay? Well, rotation of auditors had been proposed not just for listed companies but for all companies, including private companies irrespective of its size. “If rotation of auditors is to ensure shareholder protection by ensuring a ‘comfort-level’ doesn’t develop between the auditor and the Company over the years, what is the logic of extending rotation to private companies?,” queried a young chartered accountant.

An overview of CSR Rules under Companies Act, 2013

The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014.

S. 10(2A): CBDT Issues Important Circular On Taxability Of Firms And Partners

The CBDT has issued Circular No. 08/2014 dated 30.03.2014 to deal with the controversial topic as to whether, if the income of the firm is Nil on account of an exemption under Chapter III or deduction under Chapter VI-A of the Act, the partners will also be entitled to claim exemption u/s 10(2A) of the Act with respect to their share in the profits of the firm. The CBDT has clarified that the term “total income” in s. 10(2A) includes income which is exempt or deductible under various provisions of the Act. It is stated that the income of a firm is taxable only in the hands of the firm and can under no circumstances be taxed in the hands of the partner. The CBDT has made it clear that the entire income credited to the partners’ account in the firm would be exempt from tax in the hands of the partners, even if the firm is also not chargeable to tax on account of an exemption or deduction 

IMMEDIATE/IMPORTANT CHANGES W.R.T COMPANIES ACT, 2013

The following details are required to be printed in all business letters, bill heads, letter
papers and all notices and other official publications:
a. Name of the Company ,
b. Address of Registered Office,
c. Corporate Identity Number (CIN),
d. Telephone Number, Fax Number, if any,
e. E-mail and Website addresses, if any

BEWARE: PROPOSED DTC 2013 AUTHORISED CS & CMA TO SIGN TAX AUDIT & OTHER REPORTS

Tax Audit and other tax certificate  under the Income Tax Act is currently allowed to be conducted only by the Chartered Accountant but Proposed Direct Tax Code 2013 allows Tax Audit not only by Chartered Accountant but also by Company Secretaries and Cost Accountants. Clause 88 of the Proposed Direct Tax code prescribes who needs to get the book audited under the direct tax code 2013 and it further says that the same needs to be audited by an accountant. The Term accountant is been defined in Clause 320(2) which says that accountant means Chartered Accountants , Company Secretaries , Cost Accountants any person having such qualifications

Reconciliation of Income As Per Profit & Loss A/C And Income

Reconciliation of income as per profit & loss a/c and income as per TDS certificates whose credit claimed in the same year

It must be noted that as per the provisions of section 199 of the Income Tax Act, 1961, the credit of TDS should be granted to the assessee only when corresponding income has been offered for taxation in the same corresponding assessment year in which the claim of the TDS is granted to the assessee. 

For the sake of reference, the relevant portion of section 199 of the Income Tax Act, 1961 is reproduced below:

“Any deduction made in accordance with the foregoing provisions of this Chapter and paid to the Central Government shall be treated as a  payment of tax on behalf of the person from whose income the deduction was made, or of the owner of the security or depositor or owner of property or of unit-holder or of the shareholder, as the case may be, and credit shall be given to him for the amount so deducted on the production of the certificate furnished under section 203 in the assessment made under this Act for the Assessment Year for which such income is assessable.”

Whether when assessee had related party deals & also failed to furnish bifurcated expenses incurred on SEZ and non-SEZ projects, resorting to Special Audit cannot be faulted with in such a case - YES: Delhi HC

THE issue before the Bench is - Whether when assessee had huge related party transactions and also failed to furnish bifurcated expenses incurred on SEZ and non-SEZ projects, resorting to Special Audit provisions cannot be faulted with in such a case. And the answer favours the Revenue.

Facts of the case

The assessee is a real estate developer engaged in creation, execution and sale of residential

Procedure for issuance of Lower/Nil TDS Certificate

• Every finance professional are making estimated accounts of the company and based on that you can also prepare the estimated computation of total income assuming same adjustments as done for the previous year.

• Determine the expected tax liability of the company

Few Points on Direct Tax Code 2013

KEY CHANGES IN THE REVISED DIRECT TAXES CODE 2013

Ø  An indirect share transaction will be liable to be taxed in India if 20% of the assets are based in India.

Ø  New tax slab introduced; individuals earning more than Rs10 crore a year to be taxed at 35%.

Ø  No changes in other tax slabs for individuals; age for senior citizens relaxed to 60 years from 65 years.​

Ø  Levy an additional 10% tax on the recipient of dividend payments if the dividend income exceeds Rs1 crore.

Ø

Revised Form 15G & 15H

The Income Tax department has been modified the Form No. 15G & 15G as per amended notification No. 11/2013 [F.NO.142/31/2012-SO(TPL)]/SO 410(E) Dated 19.02.13 for the assessment year 2013-14. The New Form No. 15G & 15H is applicable to all Taxpayee who do not want TDS Deduction on their Income or other under section 203 of the Income-tax Act, 1961.

Latest amendment in ITR Form ITR-5 & ITR-7 w.e.f. 01.04.2014

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Income Tax Department has issued a latest notification regarding amendment in ITR Forms. By this notification some words are amended as 4th Amendment Rules, 2014 by Income Tax Department. which is as under:

Whether, for purpose of benefits u/s 80IB(10), area of rear courtyard enclosed by walls of a residential unit is to be taken into account to compute built up area - NO: Bombay HC

THE issues before the Bench are - Whether the area of the rear courtyard enclosed by walls of a residential unit is to be taken into account to compute built up area for the purpose of Sec 80IB(10) benefits; Whether in case there is no construction activity on the area of the courtyard which is open to the sky, it can still be included to compute the built-up area u/s 80IB and Whether the Tribunal can inquire into and get measured the courtyard which is not included in the built-up area and which is not the lis between the parties. And the verdict favours the assessee.

Few Points on Deemed Dividend.

Ø  Applicable only for closely held company i.e only private limited companies.

Ø  Include Foreign Company  - refer Gautam Sarabhai v CIT (52 ITR 921).

Ø  Not include Notional or book entry. There must be actual outflow of cash. Refer, GR  Govinda Raju v CIT 90 ITR 13.

Ø  Not include share application  money.

DEEMED DIVIDEND A DETAILED ANALYSIS OF SECTION 2(22)(e) OF THE INCOME TAX ACT, 1961 AND IT’S LEGAL IMPLICATION:-

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Tax Planning for Spouse

OLD VERSION REPUBLISHED.

NEW TAX REBATE FOR WOMEN :

The Finance Act, 2000 has introduced a new section 88C (w.e.f. assessment year 2001-02) which confers tax rebate upto Rs.5000 for resident women assessees below the age of 65 years at any time during the relevant previous year. This rebate is available to women irrespective of their source of income. Even, this rebate is available against tax on Long Term Capital Gains. Thus, all women assessees should take full benefit of the rebate. [It may also be noted that in case of assessees (both male and female), having attained the age of 65 years during the relevant previous year, a tax rebate of Rs.15,000 (w.e.f. Assessment Year 2001-02) is available under section 88B, which is popularly known as Rebate for senior citizens.]

Closure of MCA Portal till 13th April,2014

The arrival of Companies Act,2013 is marked with the constant upheavals in the MCA portal. This has made it really difficult for professionals to continue with their existing filings. We are facing problems downloading and uploading the forms, pulling out master details, etc.
Problems were no less, when came as a bolt from the blue, the latest notification from the MCA. As per this notification, the e-filings of the forms will be temporarily suspended from 01st April, 2014 to 13th April, 2014 due to the closure of the MCA portal. This is owing to the fact that a large number of Sections (183

No TDS deducted from salary, no need to issue Form-16 to Employee

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This is the common demand regarding issuing of Form-16 by Employer to Employee, even if Employer not deduct any Tax from drawn salary. What shall happen when Employee want's Form-16 for the same. In such situation Employer not liable to issue Form-16 to Employee. Form 16 is a certificate of TDS and in your case it will not apply. However your employer must issue a salary statement. TDS Certificate (Form-16) is not applicable to such employee whose tax (any amount) not deducted during current Financial Year. If the Employee deduct any amount of Tax during Financial Year, Form-16 will be issued to Employee u/s. 203 of Income Tax Act.

Delhi Tribunal rules on Service PE trigger on account of deputation and principles for examining “effectively connected” with PE (JC Bamford Excavators)

We are pleased to release a Tax Alert which summarizes a recent ruling of the Delhi Income Tax Appellate Tribunal (Tribunal) in the case of JC Bamford Excavators Ltd. (Taxpayer) on the tax implications arising from grant of use of intellectual property rights (IPRs) and provision of services of personnel by the Taxpayer to a wholly-owned Indian subsidiary, under the India-UK Double Taxation Avoidance Agreement (DTAA), as well as the Indian Tax Laws (ITL). The Tribunal held that consideration for grant of use of IPRs was taxable as royalty in India. It was held that activities of inspection and testing by employees of the Taxpayer were undertaken to ensure that quality of the licensed products adhered to the specifications/global standards, which was in the interest of the Taxpayer. Such activities would amount to stewardship activities and would not give rise to a permanent establishment (PE) in India. Furthermore, technical assistance was rendered to the Indian subsidiary by

REVISED Direct Taxes Code 2013

The Finance Ministry has released a revised and comprehensive “Direct Taxes Code 2013″. The said Code contains several significant changes with far-reaching implications to the law and practice of income-tax. The Code also seeks to make the law more simplified and comprehensible. There is specific emphasis in the Code on measures to tax tax evasion. The Finance Ministry has also issued a paper highlighting the salient features of the Direct Taxes Code 2013

S. 158BC/ 158BD: Law on how & when “satisfaction” has to be recorded by AO to attain jurisdiction over non-searched person explained

CIT vs. Calcutta Knitwears (Supreme Court)

A search u/s 132 was carried out in the premises of the Bhatia Group on 05.02.2003 and certain incriminating documents pertaining to the assessee firm were found. The assessment on the Bhatia group was completed on 30.03.2005. Thereafter, on 15.07.2005, the AO recorded his “satisfaction” that the seized papers revealed the undisclosed income of the assessee and the

Whether assessee-Trust would lose exemption for entire income even if there is one instance of application or use of income or property of Trust directly or indirectly for benefit of any prohibited person - YES: Delhi HC

THE issues before the Bench are - Whether the trust would lose exemption in respect of its entire income even if there is one instance of application or use of the income or property of the trust directly or indirectly for the benefit of any prohibited person; Whether where assessee-trust pays advance to the extent of 95 per cent of cost of property purchased to prohibited person without taking possession and without concluding a proper sale deed even after one year from the date of deal and then cancelling the deal and getting the advance back without interest would amount to violation of section 13(1)(c)(ii) read with section 13(2)(a) and Whether it would amount to

Whether in case of a Survey u/s 133A, if a statement is recorded on oath it loses its evidentiary value - NO: Bombay HC

THE issues before the Bench are - Whether in case of a Survey u/s 133A, if a statement is recorded on oath it loses its evidentiary value; Whether if a statement is to be retracted it is necessary for the assessee to prove that the statement made was not correct; Whether if the allegation of the statement being recorded in the middle of the night is to stick against the Revenue, the assessee is required to substantiate the same by producing evidence; Whether the affidavit filed by the assessee indicating its intention to only estimate its income in loose papers so that some medical equipments could be taken on loan, can be construed as afterthought unless some evidence is furnished and Whether in case of a professional, receipts can be treated as income. And the verdict goes against the assessee.