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31 March 2013
Change in PPF Interest Rate
29 March 2013
Circulars on TP Law
Dear Members,
The CBDT has issued two important Circulars relating to Transfer Pricing law. The first bearing No. 02/2013 dated 26.03.2013 deals with the important issue of when the Profit Split Method can be applied in preference to the TNMM and CUP Methods. The second bearing No. 03/2013 dated26.03.2013 explains the circumstances required to be fulfilled for a development centre engaged in R&D activities to be considered to have "insignificant risk" for purposes of determining the ALP.
Both Circulars are a must-read for all tax professionals engaged in transfer pricing and international tax practice.
Bank Branch Audit Empanelment List-2012-13
Statutory Branch Auditors recommended for appointment in Public Sector Banks – 2012-13
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Public Sector Banks – 2012-13
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27 March 2013
Internal Circular on ITR Processing
SECTION 143 OF THE INCOME-TAX ACT, 1961 - ASSESSMENT - PROCESSING OF RETURNS FOR A.Ys. 2010-11 & 2011-12 GETTING TIME-BARRED ON 31-3-2013 ON ONLINE TMS IN ITD APPLICATION
AST INSTRUCTION NO.114 [F.NO.AST/DIT(S)-III/INST.NO.114/32/2012-13], DATED 26-3-2013
Kindly refer to the above.
2. Representations from field formations have been received intimating that owing to the delays in PAN Migration, PAN de-duplication and restoration, certain cases remain to be processed. However, AST does not permit these cases to be processed. Therefore, with the Board's approval, the facility of "Online TMS" is extended for the cases time barring on 31-3-2013. The path for the same is AST → TMS → Processing of New Returns (Online TMS).
3. This software is capable of handling the issues relating to PAN transfer/de-duplication/restoration which prevented processing of the returns in AST. The key features of the software are as under :
(a)
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The returns can be entered by AO having return of income, although the PAN is lying in some other jurisdiction.
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(b)
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The returns with PAN out of Jurisdiction, deleted PAN, PAN under de-duplication, PAN under restoration etc. can be processed on this System.
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(c)
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The AO having return of income can process returns till the command for integration of this data to AST is given by the jurisdictional AO. Once data has been integrated with AST, all future actions can be performed by the AO having PAN jurisdiction.
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Therefore, Online TMS is allowed to the following categories:
(i)
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PAN under migration
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(ii)
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PAN is deleted in de-duplication process
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(iii)
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PAN is under de-duplication or restoration.
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4. No processing of any sort will be allowed in respect of invalid PANs or if the PAN is not available or if Name in PAN database does not match with Return name. Due care needs to be taken while accepting such returns. Alternatively, the AO should initiate the communication with Assessee based on the address given in the return for quoting correct PAN and proceed under AST or online TMS, as the case may be. Under no circumstances, processing on standalone except select cases under DGIT(Int.Tax.)/offline TMS is permitted by the Board.
5. The procedure has been enumerated in the user manual available on itaxnet and ITD. The functionality will be available till 31-3-2013. This instruction may be brought to the knowledge of all field officers working in your charge.
For any clarification, ticket may be lodged with Co-desk.
24 March 2013
Case Law on Sec 40(a)(ia)
ITO vs. M/s MGB Transport (ITAT Kolkata)
S. 40(a)(ia) TDS: Special Bench verdict binding despite suspension by High Court
The assessee paid dumper hire charges of Rs. 36.37 lakhs and claimed it as a deduction. The AO disallowed the claim u/s 40(a)(ia) on the ground that the assessee had not deducted TDS thereon u/s 194C. Before the Tribunal, the assessee argued that it was not liable to deduct TDS u/s 194C as there was only no "contractual agreement". In the alternative, it was argued that in accordance with the Special Bench judgement in Merilyn Shipping 136 ITD 23 (SB), the disallowance u/s 40(a)(ia) had to be confined to the amounts "payable" as at the end of the year and it did not apply to the amounts already paid during the year. The assessee also argued that though the Andhra Pradesh High Court had granted an "interim suspension" against the said judgement of the Special Bench, it was still binding. HELD by the Tribunal:
The argument that s. 194C does not apply in the absence of a written contractual agreement is not acceptable. Even a verbal contract is sufficient. As regards the judgement of the Special Bench in Merilyn Shipping 136 ITD 23 (SB) where the view was taken that s. 40(a)(ia) can apply only to the amounts remaining payable as at the end of the year and not to the amounts paid during the year, though the Andhra Pradesh High Court has granted "interim suspension" of the said judgement, the said stay/ suspension applies only to the parties to that proceeding and does not destroy the binding effect of the judgement of the Special Bench. There is a difference between "stay of operation" of an order and "quashing of an order". While, in the case of a "quashing", the order of the lower court ceases to exist, in the case of a "stay", the order of the lower court continues to operate and have binding effect. Accordingly, the judgement of the Special Bench in Merilyn Shipping still holds ground and the TDS provisions will apply, for purposes of invocation of s. 40(a)(ia), only on the amounts remaining payable at the end of the year and not on the amounts paid (Shree Chamund Mopeds Ltd. vs. Church of South India Trust Association AIR 1992 SC 1439, 1444 & Pijush Kanti Chowdhury vs. State of West Bengal 2007 (3) CHN 178 followed).
21 March 2013
CBDT on Refund- Impact of HC Case
March 21st, 2013
The Directorate of Income-tax (Systems) has issued a letter dated 21.03.2013 drawing attention to the judgement of the Delhi High Court in Court on Its Own Motion vs. CIT where directions were issued that the department has to follow the procedure prescribed in s. 245 before making any adjustment of refund payable by the CPC. As the Court has held that the assessee must be given an opportunity to file a response before any adjustment of refund is made, the Assessing Officers have been directed to comply with the High Court's order and communicate their findings on adjustable demand to the CPC which will then process the refund and adjust the demand.
ROC Relaxation Circular
General Circular No. 07/2013
Relaxation of additional fees and extension of last date in filing of various forms with the Ministry of Corporate Affairs-reg.
20.03.2013
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Relaxation of additional fees and extension of last date in filing of various forms with the Ministry of Corporate Affairs-reg.
20 March 2013
IndianCAs: Illustrative Bank Branch Audit report [1 Attachment]
[Attachment(s) from Ashwin Nagar included below]
Please find attached illustrative bank branch audit report and a mail from chairman of A&AS board.
| Ashwin Nagar | FCA and SAP-Finance & Consolidations | 
Success is not permanent and failure is not final
Dear Members,
This is further to my earlier mails informing you all regarding 2013 Guidance Note on Audit of Banks as also reporting in respect of total number and amounts of debits/ credits pursuant to Memorandum of Changes issued by the bank branch auditors and reporting thereof under the "Other Matters" Paragraph in the bank branch audit report.
In the above context, I wish to draw your attention to the fact that guidance in respect of the aforementioned matter has been included in paragraph 3.44 of Chapter 3, Accounting and Auditing Framework of Part – I of the Guidance Note. Further, an illustrative format of bank branch audit report (also containing illustrative reporting on the aforementioned aspect of MoCs) has been made part of the Appendices to 2013 Guidance Note on Audit of Banks. The complete text of the Guidance Note is available on ICAI's website www.icai.org under URL http://220.227.161.86/29410aasb19021.pdf and can be downloaded free of cost from there. For your ready reference, however, the said illustrative bank branch audit report format is also attached with this mail.
Regards
Chairman, Auditing & Assurance Standards Board
This is further to my earlier mails informing you all regarding 2013 Guidance Note on Audit of Banks as also reporting in respect of total number and amounts of debits/ credits pursuant to Memorandum of Changes issued by the bank branch auditors and reporting thereof under the "Other Matters" Paragraph in the bank branch audit report.
In the above context, I wish to draw your attention to the fact that guidance in respect of the aforementioned matter has been included in paragraph 3.44 of Chapter 3, Accounting and Auditing Framework of Part – I of the Guidance Note. Further, an illustrative format of bank branch audit report (also containing illustrative reporting on the aforementioned aspect of MoCs) has been made part of the Appendices to 2013 Guidance Note on Audit of Banks. The complete text of the Guidance Note is available on ICAI's website www.icai.org under URL http://220.227.161.86/29410aasb19021.pdf and can be downloaded free of cost from there. For your ready reference, however, the said illustrative bank branch audit report format is also attached with this mail.
Regards
Chairman, Auditing & Assurance Standards Board
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Attachment(s) from Ashwin Nagar
1 of 1 File(s)
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16 March 2013
IndianCAs: Guidance Note on Audit of Banks 2013 - Free download
Dear members,
You can download 2013 Guidance Note on Audit of Banks (complete text & Appendices) available on ICAI website at URL:
Though I know bank audit is now for few chosen ones only due to increase in limit. Nevertheless, thanks to institute for this making available.
11 March 2013
Lord Shiva-Sec 80G
Expenses incurred on worshipping of Lord Shiva, Hanuman, Goddess Durga and on maintenance of temple cannot be regarded as incurred for religious purpose.
In the instant case, the assessee-trust filed an application seeking approval under section 80G(5)(vi). The Commissioner took the view that the expenses incurred related to the religious object and since expenditure on religious object exceeded 5% of total income, he rejected application for approval under section 80G(5)(vi).
On appeal, the Tribunal held in favour of assessee as under:
1) Lord Shiva, Hanuman, Goddess Durga do not represent any particular religion, they are regarded as super natural powers of the universe;
2) Hindus consist of a number of communities having different Gods who are being worshipped in a different manner, different rituals, and different ethical codes. Even the worship of God is not essential for a person who has adopted Hinduism way of life. Thus, Hinduism holds within its fold men of divergent views and traditions who have very little in common except a vague faith in what may be called as the fundamentals of the Hinduism. Therefore, it cannot be said that Hinduism is a separate community or a separate religion;
3) Technically Hinduism is neither a religion nor a community. Therefore, expenses incurred for worshipping of Lord Shiva, Hanuman, Goddess Durga and for maintenance of temple cannot be regarded to have been incurred for religious purpose. Thus, the Commissioner was not correct, in law, in not allowing the approval to the assessee-trust under section 80G. Accordingly, the order of the Commissioner was to be set aside and the Commissioner was to be directed to grant approval to the assessee-trust under section 80G(5)(vi) - SHIV MANDIR DEVSTTAN PANCH COMMITTEE SANSTAN v. CIT [2012] 27 taxmann.com100 (Nagpur - Trib.)
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10 March 2013
Final list of candidates winning the elections
Though the counting is still on, for the sub parcels of Bishan Shah, but it looks now only academic exercise. The final list of candidates is as below. My congratulations to all of them.
Rank
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Name
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1
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Purushottam Khandelwal
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2
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Vikash Jain
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3
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Aniket Talati
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4
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Amrish Patel
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5
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Chintan Patel
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6
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Satyandra Jha
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7
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Hiren Shah
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8
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Hersh Jani
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Status after elimination of Bishan Shah main parcel.
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Rank
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Name
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Panel
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Total
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1st Pref
|
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1
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Purushottam Khandelwal
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A
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638
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638
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|
2
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Vikash Jain
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A
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292
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208
|
|
3
|
Chintan Patel
|
I
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276
|
179
|
|
4
|
Aniket Talati
|
A
|
268
|
196
|
|
5
|
Amrish Patel
|
A
|
268
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170
|
|
6
|
Satyandra Jha
|
A
|
238
|
153
|
|
7
|
Hiren Shah
|
B
|
231
|
141
|
|
8
|
Hersh Jani
|
B
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227
|
151
|
|
9
|
Mukesh Parikh
|
A
|
203
|
141
|
|
10
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Bishan Shah
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B
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170
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119
|
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11
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Pradeep Tulsian
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I
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148
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105
|
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12
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Sonal Dave
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A
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108
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67
|
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13
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Bhaumil Patel
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B
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90
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78
|
|
14
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Murtuza Pulavwala
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B
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31
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25
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