Imp Notification By Central Government Of ‘Tolerance Range’ For Transfer Pricing Cases For AY 2015-16

The Ministry of Finance has issued a Notification dated 29.10.2015 in which it is stated that where the variation between the arm’s length price determined under section 92C and the price at which the international transaction or specified domestic transaction has actually been undertaken does not exceed one percent of the latter in respect of wholesale trading and three percent of the latter in all other cases, the price at which the international transaction or specified domestic transaction has actually been undertaken shall be deemed to be the arm’s length price for Assessment Year 2015-2016

FAQ ON Swachh Bharat Cess

Impact of imposition of Swachh Bharat Cess on various services: FAQs


Finance Act 2015 had provided provision for levy and collection of Swachh Bharat Cess (SBC) under section 119 of the Finance  Act, 2015 at a rate not exceeding two percent on the value of services. The levy was to become effective from the date to be notified by the Government.  The objective of behind introducing SBC was to fund for Government’s flagship program of Swachh Bharat. Incidentally, it was also seen as precursor to introduction of GST where rate of tax is expected to be substantially higher than current rate of service tax.

Increase in service tax rate in India.

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (i)]

GOVERNMENT OF INDIA
MINISTRY OF FINANCE
(DEPARTMENT OF REVENUE) 

New Delhi, the 6^th November, 2015

 

Notification No. 22/2015-Service Tax

G.S.R. ---(E).- In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) read with sub-section (5) of section 119 of the Finance Act, 2015 (20 of 2015), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts all taxable services from payment of such amount of the Swachh Bharat Cess leviable under sub-section (2) of section 119 of the said Act, which is in excess of Swachh Bharat Cess calculated at the rate of 0.5 percent. of the value of taxable services:

Provided that Swachh Bharat Cess shall not be leviable on services which are exempt from service tax by a notification issued under sub-section (1) of section 93 of the Finance Act, 1994 or otherwise not leviable to service tax under section 66B of the Finance Act, 1994. 

This notification shall come into force from the 15^th day of November, 2015.

 [F.No. 354/129/2015 - TRU]

 

(K. Kalimuthu)
Under Secretary to the Government of India

Whether change in method of stock valuation can be denied merely on basis that it had resulted into losses for assessee company in year of such change in method of stock valuation - NO: ITAT

THE issue is - Whether change in method of stock valuation can be denied merely on basis that it had resulted into losses for assessee company in year of such change in method of stock valuation. NO is the answer.

Facts of the case

The assessee is an investment and finance company. The return of income for the year under consideration was filed by it on 30.11.2006 declaring a loss. AO noticed that there were no

Whether sum paid for transfer of industrial plot can be treated as understated on basis of sale instance of a residential plot - NO: Supreme Court

THE issue before the Bench is - Whether consideration paid for transfer of an industrial plot of land can be treated as understated, on the basis of sale instance of a land which is in a residential locality. NO is the answer.

Facts of the case

The assessees are real estate investment companies. Vidarbha Engineering Industries i.e., assessee No. 2 holds on lease, three plots of land at Nagpur, which was received from the

GST Challenges in India

Industry and large sections of the media have been seduced into believing that the GST will alter the economic landscape of India and usher in a benign, assessee-friendly tax regime. Indeed, in its traditional or classical form, a GST would have been enormously beneficial. But the Indian avatar, unfortunately, suffers from at least seven deadly defects.

First, one of the main benefits that the new GST regime promises is a reduction of multiple taxes. But the truth is just the opposite. Article 246A now confers power on Parliament and every state legislature to levy goods and service tax. Thus, we are likely to have one parliamentary law and about 28 state laws that levy GST. And there is no constitutional requirement that all the state laws be uniform. The GST Council can only “recommend” a model law but nothing prevents each state from going its own way. The VAT experience is testimony to this. Such multiple levies by Parliament and the states, if not in harmony, will have disastrous consequences.

 

INTRODUCTION TO GST IN INDIA - A CONCEPT NOTE

1.Introduction 
The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014, seeks to amend the Constitution of India to facilitate the introduction of Goods and Services Tax (GST) in the country. The proposed amendments in the Constitution will confer powers both to the Parliament and the State legislatures to make laws for levying GST on the supply of goods and services on the same transaction.

Whether for computing book profit u/s 115JB(2), expenditure incurred in relation to exempt income is to be disallowed by invoking Sec 14A read with Rule 8D - NO: ITAT

THE issue is - Whether for computing book profit u/s 115JB(2), expenditure incurred in relation to exempt income is to be disallowed by invoking Sec 14A read with Rule 8D. NO is the answer.

Facts of the case

Assessee company is engaged in the business of manufacturing of S.S. Billets, Angles, Flat Bars, Channels, S.S.Wire Rods etc. During the year under consideration, the assessee company derived income of Rs.28,19,03,964/- from Business & Profession after claiming deduction of Rs.1,20,36,43,184/- u/s 10B and Rs 67,03,000/- u/s 80G of the Act.

S. 147: High Court Warns Dept Of Dire Consequences For Harassing Taxpayers With Frivolous Reopening Of Cases

Pr CIT vs. Samcor Glass Ltd (Delhi High Court)

S. 147/ 148: Dept warned not to harass taxpayers by reopening assessments in a mechanical and casual manner. Pr CIT directed to issue instructions to AOs to strictly adhere to the law explained in various decisions and make it mandatory for them to ensure that an order for reopening of an assessment clearly records compliance with each of the legal requirements. AOs also directed to strictly comply with the law laid down in GKN Driveshafts 259 ITR 19 (SC) as regards disposal of objections to reopening assessment
The Court is of the view that notwithstanding several decisions of the Supreme Court as well as this Court clearly enunciating the legal position under Section 147/148 of the Act, the reopening of assessment in cases like the one on hand give the impression that reopening of assessment is being done mechanically and casually resulting in unnecessary harassment of the Assessee
 

Real Estate Developers and Section 43CA

The provision was introduced in order to counter act the various decisions of high courts where it was held that provisions of Section 50C is not applicable when the seller holds the land or building or both as a capital asset. However, there are certain practical issues difficulties that arose due to the section

IFRS – 2: Share-based Payment

Share-based payments (SBPs) under IFRS 2 is being talked about and its impact is considered to be very complex.
Below are some basic pointers relating to the standard but please remember these points are to assist with the process of understanding the standard and it is not a substitute to reading and understanding the standard.

Real Estate Developers and Section 43CA

The provision was introduced in order to counter act the various decisions of high courts where it was held that provisions of Section 50C is not applicable when the seller holds the land or building or both as a capital asset. However, there are certain practical issues difficulties that arose due to the section

No TDS on reimbursment of expenses.

Citation of the Case:  Luxmi Rice Mills vs. ITO (ITAT Delhi), Income tax (Appeal) no. 1497 of 2015, Date of Judgment: 29/10/2015

Brief of the Case

ITAT Delhi held In the case of Luxmi Rice Mills vs. ITO that there is no TDS liability on the assessee on account of reimbursement of expenses. In the present case, the assessee reimbursed the expenses to the bank and the bank ought to have deducted the TDS when there was a contract in between the bank and the NBHC, but there was no contract between the assessee and NBHC. Therefore, provisions of section 40a (ia) were not applicable as the assessee was not required to deduct TDS u/s 194C on the reimbursement of the expenses.

Whether it is necessary for AO, at stage of recording satisfaction u/s 153C, to conclude that seized assets which belong to another person represent any undisclosed income - NO: HC

THE issue before the Bench is - Whether it is necessary for the AO, at the stage of recording the satisfaction u/s 153C to conclude that seized assets which belong to another person represent any undisclosed income. NO is the answer.

Facts of the case

The assessee is a company dealing in securitites. Search and seizure operations were undertaken u/s 132 in the case of Sh. B.K. Dhingra, Smt. Poonam Dhingra and M/s Madhusudan

Imp Verdicts On Penalty, Revision And Reopening

 

Sarita Kaur Manjeet Singh Chopra vs. ITO (ITAT Pune)

 

Scope of Explanation 5A to S. 271(1)(c) on deemed concealment despite income having been offered in the search return explained

The deeming provisions of Explanation 5A under section 271(1)(c) of the Act are applicable to all the searches initiated under section 132 of the Act on or after first day of June, 2007. Reading the said provisions of the Explanation 5A to section 271(1)(c) of the Act, it is noted that the person is deemed to have concealed

Kerala HC held that the penal proceedings cannot be initiated in absence of determination of sales under the Kerala VAT Act

We are pleased to release a Tax Alert on the recent decision of the Kerala High Court regarding initiation of penal proceedings in absence of determination of sales under the Kerala Value Added Tax Act (KVAT).

The assessee was engaged in facilitating transactions relating to sale and purchase of the products through its online portal. Being an online service provider it was registered under Service tax law.

Designated Securities

The Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulations 2015 was notified on 2^nd September 2015 and will come into force from 1^st December 2015. In this post we will discussion definition of Designated Securities.

Designated Securities

“

Whether mere failure of assessee to explain source of cash deposits in books of account can lead to an inference that such income had escaped assessment - NO: HC

THE issue is - Whether mere failure of an assessee to explain the source of cash deposits in its books of account, can lead to an inference that such income of assessee had escaped assessment. NO is the answer.

Facts of the case

The assessees are engaged in the travel agency business. During concerned year, the Assessee , i.e., Indo Arab, filed its return for AY 2002-2003 declaring a total income of

CBDT issues a Press Release clarifying concessional tax rate of 5% on rupee denominated bonds for nonresidents

 

This Tax Alert explains a recent Press Release issued by the Central Board of Direct Taxes (CBDT) for tax treatment in the hands of nonresident (NR) investors of offshore Rupee Denominated Bonds (RDBs) to be issued by Indian corporates. Issue of such RDBs was recently permitted by the Reserve Bank of India (RBI) through Circular No. 17 dated 29 September 2015.

 

The Press Release clarifies that withholding tax rate (as also final tax rate) on interest income on such RDBs shall be 5%, which is the same as is presently applicable for offshore Dollar Denominated Bonds. The Press Release further clarifies that, capital gains arising on such RDBs due to appreciation of the Rupee between the date of issue and the date of redemption against the foreign currency in which the investment is made, shall be exempt from capital gains tax. Also, the above referred tax treatment shall be provided through amendments in the Indian Tax Laws (ITL) in the forthcoming Budget of 2016-17.

Export of Bulk Cargo - CBEC complicates Procedure

GOODS can be cleared without payment of excise duty for export. The export can be under supervision and sealing of the packages or containers by the Central Excise officers and can also be under self sealing. The advantage of getting the containers sealed by the Central Excise Officers is that they are not normally further examined by the Customs at the port. It is easier and less expensive to deal with Central Excise officers than Customs officers.

It seems CBEC has received references from the trade as well as from field formations regarding problems faced by trade in sealing of Bulk Cargo for export under bond under Notification No.