S. 201 TDS: Even if the statute does not lay down a time limit, proceedings must be completed within a limited period

DIT (IT) vs. Mahindra & Mahindra Limited (Bombay High Court)

S. 201 of the Act does not prescribe any limitation period for the assessee being declared as an assessee in default. If no period of limitation is prescribed, a statutory authority must exercise its jurisdiction within a reasonable period. What should be the reasonable period depends upon the nature of the statute, rights and liabilities thereunder and other relevant

S. 37(1): Expenditure on education of director is personal expenses & not allowable deduction. Assessee mto pay costs of Rs. 50,000 to dept

Shreenath Motors Pvt. Ltd vs. CIT (Bombay High Court)

The expenditure incurred for the education of the Director of the assessee viz. Mr Krishna Kachalia was out of personal consideration and not commercial consideration. The judgement in Sakal Papers 114 ITR 256 (Bom) has been considered in D.C. Mehta v/s. ITO (Income Tax Appeal No.840 of 2012). In that case, the assessee, Mr. D. C. Mehta, an Advocate by profession claimed a deduction of Rs.22L as expenditure incurred for higher education for his daughter, Hemali. The justification for the said deduction was that she joined

CPC hauled up for harassing assessee by imposing tax of 60% on LTCG & refusing to rectify

Mohan Kant Bansal vs. ITO (ITAT Kolkata)

In the entire Income-tax Act, there is no provision charging a tax rate of 60% on long term capital gains. The Delhi High Court has issued remedial directions to improve hardships faced by tax payers while processing the e-returns at CPC, Bangalore. The Court has discussed the background that in order to fasten the processing of returns, the revenue has introduced

Delhi ITAT rules on DTAA benefit to recipient of income who is not a beneficial owner (JC Bamford)

We are pleased to release a Tax Alert which summarizes a recent ruling of the Delhi Income Tax Appellate Tribunal (ITAT) in the case of JC Bamford Investments, England (Taxpayer), wherein the issue adjudicated was whether benefit of lower rate of tax, as provided in India-UK Double Taxation Avoidance Agreement (DTAA), is available on royalty paid to a resident of UK (who is not the beneficial owner), where however, the beneficial owner of such royalty, is also a resident of UK. The ITAT ruled that the underlying purpose of a DTAA is to grant benefit to a “resident” of any of the DTAA contracting States though not to a resident of a third State. In the present case, as both, the recipient of royalty income as well as beneficial owner of such income were residents of UK, the benefit of lower rate of tax should apply to royalty income earned by the recipient.

Draft Rules under Haryana VAT for composition scheme

We are pleased to release a Tax Alert which gives an update on the on the Draft Rules vide Notification No. Web 6/H.A.6/2003/S.60/2014 dated 5 July 2014, issued by the Excise and Taxation Department of Haryana, proposing to amend the Haryana Value Added Tax Rules, 2003.

The Draft Rules propose to substitute Rule 49 relating to lump sum scheme for contractors other than developer and also insert Rule 49A which deals with lump sum composition scheme in respect of developers.

live budget 2014 live

India Budget 2014 Live.

·         Introduction of GST – No date announced.

·         Retrospective Legislation –  No action by AO as required to be verify by CBDT.

·         Advance Ruling – Non – Resident – Now to resident tax payer also- defined threshold.

·         Settlement Commission  - once in a life time

·         FDI -   25% to 49% in select sector

·         Insurance Sector – 26% to 49%.

·         49% FDI in defiance

·         Smart City – FDI  - 20K Sq Ft from 50K Sq Ft. & other changes

·         Manufacturing sector -  E commerce sale without any additional approval.

·         Bank Shares – Sale of Shares  to India.

·         PSU – More capital expenditure

·         Smart Cities – 100 Nos – 760 Cr.

·         E- Visa – Tourism – 9 Airports

·         Real Estate investment – Necessary incentives – pass through tax exemption.

·         KVP -  unbanked savings.

·         Skilled India – for youth

·         PM Krishi Yojna – 1000 Cr.

·         Clear India – Sanitation –

·         Power –

·         Senior Citizen – 60 years or above

·         EPF – Rs. 15K from Rs. 6500

·         Subsidy to disable people for the aids.

·         EPFO will launch a unified account scheme for portability of Provident Fund accounts

·         No cut in NREGA allocation

·         To print currency notes with Braille effects

·         Number of Rural & agriculture announcement for benefit of Farmers.

·         Definition of MSME to be revised for high capital ceiling

·         Steps to revive SEZ

·         'Govt to provide finance to 5 lakh landless farmers'  

·         One Demat account for all kind of securities.

·         New Accounting Standards voluntarily from 2015 & mandatory from 2016.

·         NSC  - Small Saver for girl Child

·         PPF – Amount increased to 1.5 L from 1 Lakhs

·         Unused money lying in postal schemes to be utilised

·         Six Debt recovery Tribunal will be set up.

·         To change tax laws governing FIIs, whose managers based abroad. Proposes extending 5% withholding tax to all bonds 

·         Number of Sports Announcements.

·         Number of Announcement for North East.

Tax Proposal

·         No Change in Tax Rates.

·         Personal income tax exemption till 2.5 Lakhs. – less than 60 years.

·         Senior Citizen – 3 Lakhs

·         No Change in cess.

·         80 C now become 1.5 Lakhs.

·         Self- Occupied interest to Rs. 2 lakhs. 

·         Infrastructure & Real estate trust

·         Investment allowance @15% > 25 Crore. – till 3 years.

·         Investment linked allowance extended to two sector.

·         10 Year new holiday for Power sector.

·         FII  - Big investor – Portfolio  - Capital gain –

·         Foreign Dividend – 15%  continue.

·         APA – ………………………..

·         TP – range determination concept

·         Use of Multiple year data.

·         M Fund – Capital gain – 20% from 10% . ( 12 M to 36 Month)

·         DDT – Under review.

·         Direct Tax Code.   

·         No Benefit for IT Sector.

Indirect  Tax

·         Custom – basic custom duty reduced for some oil  & Others.

·         Baggage Rule  - Rs. 40K.

·         Excise -  Number of Relief.

·         Service Tax.  – Negative list – Advertisement changes

                   Exemption – withdrawn

                        Some Exemption – Tour operator.

-       Social Sector – loading & unloading of cotton

-       Life insurance  upto 50K

-                

·          

Summary of India Finance Budget 2014 .

SN	Section	Amendment Made	Impact
1	Rate of Personal tax	Limit increased by Rs. 50,000/-. Now tax rate for Individual below 60 yrs age is 0-2.5 Lakh – Nil 2.5 – 5 Lakh – 10% 5 – 10 Lakh – 20% Above 10 Lakh – 30%	Positive
2	80C	Investment deduction Limit increased to Rs. 1.5 Lakhs	Positive
3	24	Interest on self occupied home loan increased to 2 Lakh	Positive
4	115-O	Dividend Distribution Tax – increased to 17.65% from 15% w.e.f 1.10. 2014	Negative
5	112	Long term capital gain on Debt oriented M Fund increased to 20%	Negative
6	32AC	Additional depreciation @ 15% on new P&M exceeds Rs. 25 Crore	Positive
7	80-IA	Extension of tax holiday to power sector	Positive
8	35AD	Deduction in respect of capital expenditure on specified business	Positive
9	194LC	Concessional rate on tax@ 5% on overseas borrowings without PAN	Positive
10	115BBD	Tax @ 15% on foreign dividend income	Positive
11	2(14)	Investment made by FII in India is Capital asset	Negative
12	51	Advance for transfer of capital asset is taxable	Negative
13	10(10D)	TDS @ 2% on payment  received from insurance companies	Negative
14	37(1)	No Allow ability of CSR Expenses	Negative
15	40(a)(i)	Disallowance restricted to 30%	Positive
16	48	Definition of Cost Inflation index linked to Inflation	Positive

Draft Rules on establishment of Maharashtra check posts and generation of electronic waybills

We are pleased to release a Tax Alert regarding establishment of check posts and electronic generation of waybills in the State of Maharashtra. The Draft Rules announced recently have been issued vide a Notification No. VAT 1514 / CR 80 /Taxation-1 dated 23 June 2014 that seeks to amend the Maharashtra Value Added Tax (MVAT) Rules, 2005 and have been circulated in the public domain for comments and discussion purposes until July 25, 2014.

Tribunal admits contents of LinkedIn profiles of employees as additional evidence for PE determination of employer (GE )

We are pleased to release an alert which summarizes a recent interim order of Delhi Income tax Appellate Tribunal (Tribunal) in case of one of the entities of the GE Group.

The issue before the Tribunal was on admission as additional evidence, the information gathered from LinkedIn profiles of certain employees of the GE Group by the Tax Authority for determining whether the concerned GE Group entity, through its offices or through its Indian affiliate i.e. GE India Industrial Pvt. Ltd. (Indian affiliate), constituted Permanent Establishment (PE) in India.

SMALL SHAREHOLDERS DIRECTORS

A listed company may have one director elected by such small shareholders in such manner and with such terms and conditions as may be prescribed. [Section 151]

“Small shareholders” means a shareholder holding shares of nominal value of not more than twenty thousand rupees or such other sum as may be prescribed.

Rule 7 of the companies (Appointment and Qualification of Directors) Rules 2014

A listed company, may upon notice of not less than one thousand small shareholders or one-tenth of

Action to be taken for producing Invalid/Non-available or Wrong PANs consistently while submitting TDS Statement - CPC (TDS).

CPC (TDS) has issued a reminder communication to all deductors regarding invalid/non available PANs. CPC (TDS) further suggest to all deductors that action to be taken for consistently while submitting TDS Statement Q4 (2012-13), Q1 (2013-14), Q2 (2013-14) & Q3, 2013-14. The issued communication has been given below:

ST - Condonation of delay for “sufficient cause

Hindustan Unilever Ltd v. CCE [2014]45 GST 667 (HC Gauhati)

Facts of case:

Assessee’s appeal before Tribunal was delayed by 95 days-Tribunal denied condonation of delay on ground that application was vague and date chart explaining day was not furnished

Whether when assessee files estimate of income showing NIL advance tax liability on basis of loss returns of previous years it attracts penal provisions of Sec 273(2)(c) - NO: HC

THE issue before the Bench is - Whether when assessee files estimate of income showing NIL advance tax liability on basis of loss returns of previous years it attracts penal provisions of Sec 273(2)(c). NO, says the High Court.

Facts of the case

The appellant is a Public Limited Company, engaged in the manufacture and sale of synthetics

Note on section 14A.

Section 14A read with rule 8D is the most trouble making section under Income tax act for Indian corporates.   However following the Daga Capital case laws number of judgments comes  where it has been held that in case tax payer is not having any exempted income during the year,  then their cannot be any dis-allowance under section 14A of the Income tax act, 1961 and the same was a relief to number of holding companies.  

However , after the introduction of circular no.  5/2014 dated February  11, 2014 where it has been clarified by the CBDT that earning of exempted income is no necessary for invoking section 14A the situation again become painful to the corporates.  For this, the remedy is that  

Challenging the Indian Revenue Authorities: The Binding Value of Circulars Issued in Violation of Taxing Statutes

The implementation of taxing provisions must be in accordance with law, implying conformity not only with statutory provisions, but also with the overarching constitutional requirement that taxes recovered from the public must have the force of the authority of the law. In this view, the power conferred upon administrative authorities, particularly in the context of the orders, instructions and directions issued by those established under taxing statutes, is of great consequence. While the need to define with clarity the powers conferred upon the Central Board of Excise and Customs, or the Central Board of Direct Taxes, is undisputed, this determination becomes all the more crucial in light of the objective of ensuring certainty to tax-payers.

A guide for understanding the salary and taxation laws of Saudi Arabia

One of the major points of discussion while working in the Kingdom of Saudi Arabia is the prevailing salary and taxation laws. Here is brief lowdown on the various essentialities of the same.

Saudi Arabia is a famous expat destination. Also known as the Kingdom of Saudi Arabia, it is the largest Arab country in West Asia in terms of area and the second largest Arab nation in the world after Algeria. The country is known for its vast oil reserves and therefore, is the largest oil exporter in the world. Saudi Arabia’s hegemony in the global oil and petroleum sector makes it one of the 20 most powerful countries according to the National Power Index.

Rate of exchange w.e.f. July 4, 2014 [No.49(N.T.)]

GOVERNMENT OF INDIA

MINISTRY OF FINANCE

DEPARTMENT OF REVENUE

CENTRAL BOARD OF EXCISE AND CUSTOMS

Notification No.49/2014-Customs (N.T.)

Dated the 3^rd July, 2014

12 Ashadha, 1936 (SAKA)

S.O. (E). – In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in super session of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No.47/2014-CUSTOMS (N.T.), dated the 19^th June, 2014 vide number S.O.1565(E), dated 19^th June, 2014, except as respects things done or omitted to be done before such supersession, the Central Board of Excise and Customs hereby determines that the rate of

MCA eForms

[As updated till July 5, 2014]

Mapping of e-forms prescribed under the Companies Act, 2013 with e-forms prescribed under Companies Act, 1956
NOTE:-Form-wise date of last version change is available below. Please ensure that you have downloaded the latest version for filing.

Approval Services (Headquarters)

Description	e-Form with Instruction kit	Form Version updated on
Form for filing application or documents with Central Government	Form CG-1	28-Apr-2014

Approval Services (Regional Director)

Higher limits for issuing tax notices for unreported investments, consumption

New Delhi
July 1, 2014

In a move to raise the quality of tax assessments and to reduce avoidable disputes, the income tax department has substantially raised the monetary limit for scrutinising high value investors and spenders who do not file tax returns. The move is part of an action plan prepared by the department to reduce tax disputes while ensuring a 19% growth in direct tax receipts in 2014-15.
The department would therefore consider issuing notices this fiscal to individuals with aggregate savings bank

WOMAN DIRECTOR

The Companies Act 2013 has gone miles towards its social justice objectives. This includes woman director, independent director and small shareholders directors. 

. The companies (Appointment and Qualification of Directors) Rules 2014 further elaborate these provisions.

Women Director:

Rule 3 of the companies (Appointment and Qualification of Directors) Rules 2014 elaborate the provision of second proviso of sub – section (1) of Section 149 of the Act. The following class of companies shall