17 March 2012

Budget 2012: Highlights by Vimal Punamiya

FAVOURABLE POINTS OF BUDGET 2012 – 13 ON DIRECT TAXATION

1.      The Basic Exemption Limit for Individual (Male) have been increased from Rs. 1,80,000/- to Rs. 2,00,000/- giving tax relief of Rs. 2000/-.

2.      The Basic Exemption Limit for Individual (Female) have been increased from Rs. 2,00,000/- to Rs. 1,90,000/- giving tax relief of Rs.1000/-.


3.      The upper limit of 20 percent slab proposed to be raised from 8 lakhs to 10 lakhs. Therefore the new slab rates for General category is-
Upto Rs. 2,00,000                              NIL
Rs. 2,00,001 to Rs. 5,00,000             10%
Rs. 5,00,001 to Rs.10,00,000           20%
Rs. 10,00,001 and above                  30%

4.      An Individual tax payers or an HUF are allowed a deduction upto Rs.10,000 for interest on deposit from savings Bank accounts ( other than time deposits) with Banking Co., Co-operative soc. Engage in business of banking or Post office,  u/s 80TTA.

5.     Under section 115A the taxable rate have been reduced from 20% to 5 % (plus surcharge and cess) if interest is paid by a specified company to a non resident in respect of borrowing made in foreign currency from sources outside India between 1st July, 2012 and 1st July, 2015, under an agreement and accordingly TDS will be deducted @ 5% under new sec 194LC.

6.      In case any company receives, during the year, any dividend from any subsidiary and such subsidiary has paid DDT as payable on such dividend, then, dividend distributed by the holding company in the same year, to that extent, shall not be subject to Dividend Distribution Tax under section 115-O of the Act, thereby removing the cascading effect of DDT






7.      New clause (48) in section 10 of the Income-tax Act to provide for exemption in respect of any income of a foreign company received in India in Indian currency on account of sale of crude oil to any person in India subject to the following conditions:
(i) The receipt of money is under an agreement or an arrangement which is either entered into by the Central Government or approved by it.
(ii) The foreign company, and the arrangement or agreement has been notified by the Central Government having regard to the national interest in this behalf.
(iii) The receipt of the money is the only activity carried out by the foreign company in India.

8.      The benefit u/s 32(1)(iia) i.e. initial depreciation @20% has been extended to the assessee engaged in the business of generation of distribution of power in case of new machinery or plan (other than ship and aircraft) acquired and installed in previous year.

9.      New provision has been inserted wherein weighted deduction of 150% of the expenditure incurred on the agricultural extension project has been allowed.

10.  U/s 35(2AB) the benefit of weighted deduction have been extended for the further period of 5 years i.e. upto 31st March,2017.

11.  New provision has been inserted wherein weighted deduction of 150% of the expenditure (not been expenditure in the nature of cost of any land or building) incurred on the skill development project .

12.  The Tax Audit limit u/s 44AB have been increased from 60 lakhs to 1 crore in case of person carrying on business and from 15 lakhs to Rs. 25 Lakhs in case of person carrying on profession( w.e.f 1/4/2013).

13.  U/s 44AD, for the purpose of presumptive taxation the threshold limit of the total turnover of the gross receipt has been exceed from 60 Lakhs to 1 crore (w.e.f 1/4/2013).

14.  Senior Citizen are not required to pay Advance tax if there total income does not include any income from Business & profession ( w.e.f. 1/4/2012).

15.  Under Section 2 of Wealth Tax Act the threshold limit of gross salary has been increased  from five lakh rupees to ten lakh rupees for the purpose of levying wealth-tax on residential house allotted by a company to an employee or an officer or a whole time director.


16.  A new section 546B has been inserted to provide relief from Lon long term capital gains tax to an individual or an HUF on sale of a residential property (house or plot of land) in case of re-investment of sale consideration in the equity of a new start-up SME (Small & Medium Enterprise) company in the manufacturing sector which is utilized by the company for the purchase of new plant and machinery subject to the conditions.

17.  STT has been reduced from 0.125% to 0.1%(w.e.f 1/7/2012).

18.  (a) U/s 35AD deduction have been increased from 100% to 150% in respect of specified business commencing the operation on or after 1/4/2012.
(b) Three new business are been included as a specified business namely-
(i) setting up and operating an inland container depot or a container freight station notified or approved under the Customs Act, 1962 (52 of 1962);
(ii) bee-keeping and production of honey and beeswax; and
(iii) setting up and operating a warehousing facility for storage of sugar.
(c ) If the owner of the Hotel transfers the operation of the hotel to another person he will be eligible for such benefit as deemed to be carrying of the specified business as business of building and operating hotel.

19.  Under Sec 80-IA(4)(iv) the terminal date have been extended to a further period of 1 year i.e. upto 31/03/2013.

20.  U/s 80D, 80DDB & 197A the age for availing the benefit of senior citizen have been reduced from 65 years to 60 years.

21.  U/s 80D any payment (does not exceed Rs. 5000/-) made by an assessee on account of preventive health check-up of self, spouse, dependent children or parents is eligible for deduction within the overall limit prescribed in the section.


22.  (a) Non payment/ Short Payment of the TDS by the resident payer u/s 201(1) would not be treated as assessee in default in respect of such tax if resident payee-
(i)                has furnished his return of income under section 139;
(ii)              has taken into account such sum for computing income in such return   
of income; and
(iii)            has paid the tax due on the income declared by him in such return of
income,
and the payer furnishes a certificate to this effect from an accountant in such form as may be prescribed.
(b) the interest u/s 201(1A)(i) shall be payable by the resident payer defaulter from the date on which such tax was deductible to the date of furnishing of return on income by such resident payee (w.e.f 1/7/2012).
23.  As stated above in sec 201(1) similar changes have been made in sec  206C.(w.e.f 1/7/2012).
24.   Under section 40(a)(ia)  where an assessee makes payment to a resident payee without deduction of tax and is not deemed to be an assessee in default under section 201(1) on account of payment of taxes by the payee, then, for the purpose of allowing deduction of such sum, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee.
25. Under section 200A intimation generated after processing of TDS statement shall be
(i) subject to rectification under section 154;
(ii) appealable under section 246A; and
(iii) deemed as notice of demand under section 156.
These amendments will take effect from 1st July, 2012.
26. Under sec 194LA the threshold limit for Non deduction of TDS has been increased from 1 lakh to 2 lakh.
 27. U/s 193 threshold limit for Non deduction of TDS has been increased from Rs.2500     to Rs.5000 in case of payment of interest of any debentures ( whether listed or not).
28. Under section 234D would be applicable to any proceeding which is completed on or after 1st June, 2003, irrespective of the assessment year to which it pertains. (w.e.f. retrospectively from the 1st day of June, 2003).

29. Section 153A & 153C has been amended whereby a Central Government will notify the cases or class of cases in which case the compulsory re-opening of past six years is not required .

30. Under section 56 so as to provide that any sum or property received without consideration or inadequate consideration by an HUF from its members would also be excluded from taxation.( w.e.f retrospectively from the 1st day of October, 2009).

31. Section 47(vii) now excludes the requirement of issue of shares to the shareholder where such shareholder itself is the amalgamated company (eg: holding- subsidiary co.) However, the amalgamated company will continue to be required to issue shares to the other shareholders of the amalgamating company.(w.e.f. 1st day of April, 2013).

32. Similar amended is made in case of demerger.

33. HUF has been included u/s 54B for the purpose of capital gain relief on the sale of agricultural land (w.e.f. 1/4/2013 apply for A.Y 2013-14).

34. Under sec 49 (1) in case of conversion of sole proprietorship or firm into a company which is not regarded as a transfer, the cost of acquisition of asset in the hands of the company would be the same as that in the hand of the sole proprietary concern or the firm, as the case may be.

35. RBI is not liable to pay Wealth Tax on his net Wealth as per sec 45.

36. Proposal to introduce General Anti Avoidance Rule to counter aggressive tax avoidance scheme.
37. (a) DRP shall have a power to consider any matter arising out of the assessment   proceedings relating to the draft assessment order. This power to consider any issue would be irrespective of the fact whether such matter was raised by the eligible assessee or not. 
(b)  If an assessee files an objection against the Assessment Order to DRP than the time limit would be as per sec 144C and not as per sec 153 or 153B and also the assessee can file an appeal directly before the ITAT against the A.O order.
38.  Sec 139 has been amended to provide that in case of all assesses who are required to obtain and file Transfer Pricing report as per Section 92E of the Act, the due date would be 30th November of the assessment year.

39.  Section 92B of the Act, is been amended  to provide for the explanation to clarify meaning of international transaction- ‘international transaction’ shall include a transaction of business restructuring or reorganization, entered into by an enterprise with an associated enterprise, irrespective of the fact that it has bearing on the profit, income, losses or assets or such enterprises at the time of the transaction or at any future date.
40.Under Section 92C provides and 3% upper ceiling limit that variation between the ALP so determined and the transaction price is within the upper ceiling limit (of transaction price), no adjustment shall be made to the transaction price.
41. The time limit for completion of assessment or reassessment where information is sought under a DTAA is been extended from six months to one year.
42. A new sections 92CC and 92CD in the Act to provide a framework for advance pricing agreement under the Act.



UNFAVOURABLE POINTS OF BUDGET 2012 – 13 ON DIRECT TAXATION

1.      There is no increment in the basic exemption limit for Senior Citizen.

2.      There is no change in the corporate rate taxes.

3.      Alternate Minimum tax (AMT) has made applicable to all the persons (other than individual, HUF, AOP, BOI, Artificial juridical person whose adjusted total income does not exceeds 20 Lakhs) other than company who has claimed the deduction under any section (other than sec 80P) included in chapter VIA under the heading ‘C’ i.e. ‘Deduction in respect of certain income” eg: 10A, 10AA, 10B, 10BA .

4.      (a) TDS is required to be deducted at the rate of 1% in case of transfer of  immovable property other than Agricultural land if the consideration paid or payable for the transfer of property exceeds Rs.50lakhs in case of property situated in Urban area and Rs.20 lakhs in case of property situated in other areas (w.e.f 1st October, 2012).

(b) Consideration to be considered for the purpose of deduction of TDS is the Stamp Duty value or the Actual consideration of the property whichever is higher.

(c ) The transfer of property would be registered only after furnishing of the TDS proof to the registering Officer appointed under Indian Registration Act.

5.      Under section 194J TDS is required to be deducted @10% on the remuneration paid to the director, which is not in a nature of salary (w.e.f 1st July,2012).

6.      Every buyer of the jewellery or bullion is required to pay @1% of the consideration as a TCS (irrespective of its nature of consumption) if the consideration is paid in cash and if it exceeds Rs. 2 lakh ( w.e.f 1st July,2012).

7.       The rate u/s 115VG for the daily tonnage income of the shipping company have been increased.

8.      Under section 68,69,69A,69B,69C & 69D all the assessee shall be taxed at the rate of flat 30% without giving any basic exemption limit, expenditure or any allowances (w.e.f. 1st April 2013).

9.      Under section 139 every resident assessee having any asset, ( including financial interest in any entity) located outside India or signing Authority in any account outside India is required to file the return compulsory even if he has a taxable income or not (retrospective effect from 1/04/2012).

10.  Under section 149, the time limit for issuing the notice for re-opening the case have been increased from 6 to 16 years ,where the income in relation to any asset (including financial interest in any entity) located outside India, chargeable to tax, has escaped assessment.

11.   Instead of section 271AAA a new section 271AAB has been inserted and applicable from 1/7/2012 wherein –
a.       Penalty @10% will be levied if the undisclosed income is admitted in the course of search.
b.      Penalty @20% is levied if undisclosed income is not admitted in the course of search but disclosed in return of income filed after search.
c.       Penalty ranging from 30% to 90% is leived if the case is not covered under (a) & (b).
12.    New section 56(2) has been inserted in case of a company not been a company in which public are substantially interested wherein the Share premium received by the company on issue of shares in excess of the fair market value to be treated as income under the head ‘income from other sources’(w.e.f 1/04/2013).

13.  (a) Fees for delay in filing the TDS statement after the due date have been increased to Rs.100 per day to Rs. 200 per day.
(b) Penalty ranging from Rs. 10000 to Rs.1,00,000 shall also be levied for not furnishing TDS statement within the prescribed time i.e. within 1 year from the due date of furnishing the statement ( no penalty w.e.f 1/7/2012 if a reasonable cause for failure is proved).
(c ) If incorrect information is furnished in TDS statement penalty shall be levied  ranging from Rs.10,000 to Rs.1,00,000.

14.  Under section 201 the time limits to pass the order for the assessee in default of non deduction or short deduction of Tax have been increased from 4 years to 6 years.

15.  u/s 80G & 80GGA any payment exceeding Rs.10000 in cash is made, no deduction for the same is allowed as Donation made.

16.  The Due date of furnishing audit report in case of international transactions is now 30the September of the assessment year only (w.e.f 1/4/2012).

17.  Under Sec 80C(3) the deduction for life insurance premium as regards insurance policies issued on or after 1st April, 2012 shall be allowed for only so much of the premium payable as does not exceed 10% of the actual capital sum assured instead of 20% as given before.

18.  Under sec 10(10D) the threshold of premium payable to 10% of the actual capital sum assured from 20% of the actual capital sum assured. Accordingly, it is proposed to amend section 10(10D) so as to provide that the exemption for insurance policies issued on or after 1st April, 2012 would only be available for policies where the premium payable for any of the years during the term of the policy does not exceed 10% of the actual capital sum assured.

19.  A new section 292CC wherein authorization under sec 132 or requisition u/s 132A can be made in name of more than 1 person and the assessment or reassessement shall be made separately in name of each of the person mentioned in such authorization or requisition.

20.  Under Sce 245Q filing fees for an application for Advance ruling has been increased from 2500 to Rs. 10000 or such fees as may be prescribed whichever is higher.

21.  Under sce 245C the definition of related person have changed wherein a person shall be deemed to have a substantial interest in a business or profession if such person is a beneficial owner of not less than 20% of shares or of 20% share in profits on the date of search.

22.  Once notice u/s 143(2) is issued i.e. scrutiny of the return, processing of the return will not be necessary by the assessing officer.

23.  New sec 50D has been introduced wherein if the actual consideration on the transfer of the asset is not determinable than the fair market value of asset shall be considered as the full value of the asset.

24.  Section 55A has been amended to enable the Assessing Officer to make a reference to the Valuation Officer where in his opinion the value declared by the assessee is at variance from the fair market value. Therefore, in case where the Assessing Officer is of the opinion that the value taken by the assessee as on 1.4.1981 is higher than the fair market value of the asset as on that date, the Assessing Officer would be enabled to make a reference to the Valuation Officer for determining the fair market value of the property.(w.e.f. 1st day of July, 2012).

25.  Presumptive Taxation is not applicable to Professional person carrying on the business-
 (i) a person carrying on profession as referred to in sub-section (1) of section 44AA;
(ii) persons earning income in the nature of commission or brokerage income; or
(iii) a or a person carrying on any agency business.

26.  Section 115JB is amended  that the book profit for the purpose of section 115JB shall be increased by the amount standing in the revaluation reserve relating to the revalued asset which has been retired or disposed, if the same is not credited to the profit and loss account.

27.  It is proposed to amend the aforesaid sections, i.e., 153 and 153B so as to provide that the time limits for completion of assessments and reassessments shall respectively be increased by three months.

28.  Under Sec 10(23C) any Charitable organization will not get the benefit of tax exemption in the year in which the receipt from commercial activities exceeds the threshold limit i.e. Rs.25 lakhs, whether or not the registration or approval granted or notification issued is cancelled, withdrawn or rescinded.

29.  Under sec 253 & 254 A.O can also file an appeal  directly before the ITAT against the order passed in pursuance of direction given by the DRP.

30.  Section 271AA is ammended to provide levy of a penalty at the rate of 2% of the value of the international transaction, if the taxpayer.-
(i) fails to maintain prescribed documents or information or;
(ii) fails to report any international transaction which is required to be reported, or;
(iii) maintains or furnishes any incorrect information or documents.
This penalty would be in addition to penalties in section 271BA and 271G.

31.   Section 147 of the Act, to provide that in all cases where it is found that an international transaction has not been reported either by non-filing of report or otherwise by not including such transaction in the report mentioned in section 92E then such non-reporting would be considered as a case of deemed escapement of income and such a case can be reopened under section 147 of the Act.

32.  Under sec 92CA transfer pricing office have a power to determine arm length price of an international transaction noticed by him in the course of proceedings before him, even if the said transaction was not referred to him by the Assessing Officer, provided that such international transaction was not reported by the taxpayer as per the requirement cast upon him under section 92E of the Act.

33.  Section 115BBA has been amended to provide that income arising to a non-citizen, non-resident entertainer (such as theatre, radio or television artists and musicians) from performance in India shall be taxable at the Flat rate of 20% of gross receipts instead of rate ranges from 10 to 30%.Further in case of non –citizen, non resident sportsmen and non residence sports association the tax rate has been increased from 10 to 20% of gross receipts.

34.  Section 149, has been amended to extend time limit for issue of notice in case of a person who is treated as agent of a non-resident, the time limit presently prescribed of two years be extended to six years.


35.   Amend section 195(1) to clarify that obligation to comply with sub-section (1) and to make deduction there under applies and shall be deemed to have always applied and extends and shall be deemed to have always extended to all persons, resident or non-resident, whether or not the non-resident has:-
(a) a residence or place of business or business connection in India; or
(b) any other presence in any manner whatsoever in India.
These amendments will take effect retrospectively from 1st April, 1962 and will accordingly apply in relation to the assessment year 1962-63 and subsequent assessment years.

 VIMAL PUNMIYA & CO.        
501, NIRANJAN, 99 MARINE DRIVE, MUMBAI-400002

02 March 2012

GDP Growth @ 6.1%

At 6.1%, economic growth hits 3-year low
Manufacturing, mining sectors drag; pressure may mount on RBI to cut rates

The Indian economy grew at the slowest annual pace in almost three years in the October-December quarter at 6.1 per cent, adding pressure on the Reserve Bank of India to go in for a cut in the Repo rate at the policy review meeting slated for March 15. The repo rate is the rate at which the RBI lends money to banks.
The third quarter GDP growth of 6.1 per cent compared poorly with the 8.3 per cent growth recorded in same quarter the previous year, and was also lower than the 6.9 per cent of Q2. The growth performance of the latest October-December quarter was weighed down by the sharp fall in manufacturing sector growth and a contraction in mining.
India's manufacturing sector grew just 0.4 per cent in the third quarter as higher input prices and the sharp jump in borrowing costs depressed output. The sector had recorded a robust 7.8 per cent growth in the same quarter the previous year.
The mining sector recorded a contraction of 3.1 per cent in October-December 2011 compared with the 6.1 per cent growth in same previous period. This is the second consecutive quarter the sector recorded a contraction. Agriculture recorded growth of 2.7 per cent, far lower than the 11 per cent in same quarter last year, official data released by the Central Statistics Office showed.
The latest growth data highlighting the faltering economy are likely to pose more problems for the UPA Government, already buffeted by a string of corruption scandals. Weaker-than-expected growth would also imply lower tax revenues for the Government in the current fiscal. Rising oil prices coupled with lower tax revenues may increase the country's economic pain in the months ahead, say economy watchers and analysts.
The data also reveal that gross fixed capital formation continues to shrink, indicating a bleak investment outlook, according to the Confederation of Indian Industry Director-General, Mr Chandrajit Banerjee. Industry has reiterated its demand that excise duty should not be raised in the current economic situation.
The RBI had last month indicated it was ready to cut interest rates to stimulate the economy. Bankers are betting that the RBI will go in for only a cut in the Cash Reserve Ratio on March 15. A CRR cut seems to be appropriate to infuse liquidity into system, Mr M.V. Nair, CMD of Union Bank, said.
Source : Business Line

23 February 2012

Service Tax on User Toll Fee

Circular No. 152/3 /2012-ST
F.No.354/27/2012-TRU
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise & Customs
(Tax Research Unit)
                     New Delhi, 22nd February, 2012
To
 Chief Commissioner of Customs and Central Excise / Central Excise & Service Tax (All)
Director General of Service Tax /Central Excise Intelligence /Audit
Commissioner of Customs and Central Excise/ Central Excise and Service Tax/ Service Tax (All)
  
Madam/Sir,

Subject:  Toll in the nature of 'user charge' or 'access fee' paid by roads users — regarding.
        
            A representation has been received by the Board, seeking clarification regarding leviability of service tax on toll fee (hereinafter referred as 'toll') paid by users, for using the roads. The representation has been examined. 
2.         Service tax is not leviable on toll paid by the users of roads, including those roads constructed by a Special Purpose Vehicle (SPV) created under an agreement between National Highway Authority of India (NHAI) or a State Authority and the concessionaire (Public Private Partnership Model, Build-Own/Operate-Transfer arrangement). 'Tolls' is a matter enumerated (serial number 59) in List-II (State List), in the Seventh Schedule of the Constitution of India and the same is not covered by any of the taxable services at present. Tolls collected under the PPP model by the SPV is collection on own account and not on behalf of the person who has made the land available for construction of the road.
3.         However, if the SPV engages an independent entity to collect toll from users on its behalf and a part of toll collection is retained by that independent entity as commission or is compensated in any other manner, service tax liability arises on such commission or charges, under the Business Auxiliary Service [section 65(105) (zzb) read with section 65(19) of the Finance Act, 1994].
4.         Further, an SPV formed as a result of agreement between NHAI or State Authority and the concessionaire under the BOT arrangement, cannot be considered as an agent of the NHAI. Renting, leasing or licensing of vacant land by the NHAI or State Authority to an SPV for construction of road and such construction do not attract service tax.
5.         This Circular may be communicated to the field formations and service tax assessees, through Public Notice/ Trade Notice. Hindi version to follow.                                                               (Samar Nanda)
Under Secretary, TRU
Tel/Fax: 011-23092037 

22 February 2012

IndianCAs: WIRC Awards - 2011

 
WIRC Awards – 2011
To Branches of WIRC of ICAI
Best Branch
Large Branch Category
Baroda Branch jointly with Nagpur Branch
Medium Branch Category
Aurangabad Branch
Small Branch Category
Jamnagar Branch
Certificate of Appreciation for Highly Commendable Performance
Large Branch Category
Surat Branch jointly with Vasai Branch
Medium Branch Category
Rajkot Branch
Small Branch Category
Vapi Branch jointly with Jalgaon Branch
Best Branch of WICASA
Large Branch Category
Baroda Branch
Small Branch Category
Rajkot Branch
Certificate of Appreciation for Highly Commendable Performance
Large Branch Category
Nagpur Branch
Small Branch Category
Vasai Branch
To CPE Study Circles of WIRC of ICAI
Best CPE Study Circle within Mumbai
Large CPE Study Circle Category
Borivali (Central) CPE Study Circle jointly with J. B. Nagar CPE Study Circle
Medium CPE Study Circle Category
Mulund CPE Study Circle Category
Small CPE Study Circle Category
Andheri (West) CPE Study Circle
Certificate of Appreciation for Highly Commendable Performance
Large CPE Study Circle Category
Borivali Kandivali (East) CPE Study Circle
Medium CPE Study Circle Category
Ghatkopar CPE Study Circle
Small CPE Study Circle Category
Chembur CPE Study Circle
Best CPE Study Circle Outside Mumbai
Medium CPE Study Circle Category
Pune (West) CPE Study Circle Category
Small CPE Study Circle Category
Navjivan CPE Study Circle
Certificate of Appreciation for Highly Commendable Performance
Medium CPE Study Circle Category
Ellisbridge CPE Study Circle
Small CPE Study Circle Category
Ashram Road CPE Study

 

21 February 2012

Salaries-No IT Return-Rs.5 Lakhs

This year too, no tax returns for salaries up to Rs 5 lakh

Millions of salaried taxpayers will continue to enjoy a procedural relief of not having to file their income-tax returns even for the current financial year (2011-12).
The Central Board of Direct Taxes (CBDT) has specified that individuals with total income of up to Rs 5 lakh in a financial year and comprising only incomes under the head 'salaries' and 'income from other sources' would be exempt from filing their income-tax returns for assessment year 2012-13 (financial year 2011-12).
'Income from other sources' should only be by way of interest from a savings account in a bank, not exceeding Rs 10,000, according to CBDT.
To get exemption from filing of tax returns, an individual must report his PAN (permanent account number) and the entire income from bank interest to his employer, pay the entire tax by way of deduction of tax at source, and obtain a certificate of tax deduction in Form No 16.
Persons receiving salary from more than one employer, having income from sources other than salary and interest income from a savings bank account, or having refund claims will not be entitled to the exemption from filing tax returns.
The exemption from filing of tax returns would not be available where notices are issued to the individual for filing of income tax return under certain specified sections.
The CBDT had, in June last year, extended a similar exemption from filing of tax returns for salaried taxpayers with total income of up to Rs 5 lakh with regard to the financial year 2010-11.
(This article was published in the Business Line print edition dated February 21, 2012)

16 February 2012

IndianCAs: Latest Judgements


1 2009 TMI - 33633 - HC
Commissioner of Gift-tax Versus Ripan Kumar
Gift-tax – Whether Tribunal was right in holding that in valuing the unquoted shares for the purposes of working out the value of the deemed gift on March 20, 1979, and March 31, 1979, reference should be made to the balance-sheet of the said company as on March 31, 1978 - Revenue, has made an attempt to attack the order of the Tribunal by asserting that the Gift-tax Officer had rightly assessed the gift-tax by applying the break up method – finding of tribunal is justified - in terms of the view taken by the Division Bench in Shakuntala Devi's case reference is answered in favour of the assessee


2 2009 TMI - 33620 - HC
ATS INFRASTRUCTURE LTD. Versus CIT
Transfer of case from Delhi to Meerut - Show cause notice u/s 127 - even if the notice in question erroneously mentions the pendency of a case in Meerut, since the decision to transfer it there is in large measure influenced by the convenience of the Petitioners, it becomes impervious to challenge – Meerut is undoubtedly of closest proximity both to Delhi as well as to the Noida and hence the impugned decision is neither capriciousness, malafide nor arbitrary - Petitions lack merit and are dismissed


3 2009 TMI - 33619 - AAR
M/s K.T. Corporation, In re
Draft Reciprocal Carrier Services Agreement between K.T. Corporation, Korea and Vodafone Essar South Limited - Whether the Liaison Office of K.T. Corporation in New Delhi constitute a Permanent Establishment - L.O. was set up to act only as a communication channel and it became functional within the restrictions imposed by R.B.I - L.O. is, no doubt, a fixed place of business (i.e. an office) maintained exclusively for the purpose of collecting information for the applicant which is in the nature of preparatory and auxiliary character for the enterprise. Facts being so, L.O. cannot be regarded as PE of the applicant as per the exclusionary provision of Article 5(4) of the Treaty


4 2009 TMI - 33618 - HC
S.R. BATLIBOI & CO. Versus DEPARTMENT OF INCOME TAX (INVESTIGATION)

While audit of EMAAR, laptops were seized – Petitioner on request of Deputy Director, Income Tax (DDIT) provided the electronic data relating to three companies of the EMAAR Group together with the print copies of the data. Nevertheless, the DDIT insisted on securing total and unrestricted access to the laptops obviously in order to gain information and data of all the other clients of the Petitioner – held that Revenue is not empowered to make use of material stumbled in a Search against a third party - impugned summons are set aside, and Respondents are directed to return the laptops to Petitioner


5 2009 TMI - 33617 - AAR
Sri Ramachandra Educational and Health Trust (SREHT), In re

Agreement with HMI, USA for transfer of knowledge and experience - Whether Tax is to be deducted by SREHT, India at source U/s. 195 on the payments made on account of annual contract fee and additional fee to HMI, USA, when both the parties are exempt from tax in their respective countries - a clear picture of the activity and payments does not emerge from the facts available - As the applicant makes lump sum payment for various services rendered by HMI, it is not possible for us to say what amount relates to which particular service - we cannot give ruling that the applicant is not at all liable to deduct any tax at source


6 2009 TMI - 33616 - HC
Commissioner of Income Tax-III, Coimbatore Versus M/s Mani Spinning Mills P. Ltd.
Whether ITAT was right in holding that for purposes of computation of interest under Section 234B and 234C, tax credit u/s 115JAA has to be first set off against the tax payable and the interest under the said sections have to be computed after taking into consideration the tax credit carried forward u/s 115JAA even though there is no legal sanction for such adjustment u/s 208 to 211, u/s 234B or 234C or under any other provisions of the Act - question of law is answered against the revenue to the effect that the interest under the said two provisions have to be calculated after giving effect to the MAT credit


7 2009 TMI - 33615 - HC
Commissioner of Income Tax Central I, Chennai Versus M/s. Jumbo Bag Ltd.
Whether ITAT was right in cancelling the order CIT u/s 263 on the ground that deduction u/s 80HHC was allowable on the basis of book profits and not on the basis of eligible profits u/s 80HHC as per computation under the normal provisions of the Income Tax Act, while computing the books profits u/s 115JB - Assessing Officer is not entitled to touch the profit and loss account prepared by the assessee as per the provisions contained in the Companies Act, while arriving at the book profit under Section 115J and the book profit so arrived at should be the basis for taxation and therefore, the computation under Section 80HHC should be limited to the case of profits of eligible category only - question of law is answered against the revenue and the appeals are dismissed


8 2009 TMI - 33606 - HC
Commissioner of Income Tax Versus The Tiruttani Co-operative Sugar Mills Limited

Assessability of receipts on account of higher free sale of sugar and receipt of excise duty rebate - held that subsidy received by the assessee was not in the course of a trade so it was of a capital nature – in respect of "Receipt from concession in the rate of excise duty rebate" held that the incentives given by the Government in the form of higher free sugar were given exclusively for the purpose of repayment of loan borrowed for the purpose of meeting part of the capital cost from financial institutions and therefore were not revenue receipts - Both these receipts are capital in nature and therefore not to be treated as income liable to tax


9 2009 TMI - 33605 - HC
Commissioner of Income Tax Chennai Versus M/s. Anusha Investments Ltd.

Whether Tribunal was right in holding that MAT credit is to be set off from the tax payable before setting off the tax deducted at source and advance tax paid - Whether the MAT credit can be given priority of set off against tax payable, contrary to the Scheme of Schedule G of Form 1 - Whether the interest u/s 234B and 234C had to be calculated after giving the MAT credit against the tax payable on the basis of normal computation - questions of law answered in favour of the assessee


10 2009 TMI - 33604 - HC
M/s. Royal Stitches (P) Ltd. Versus The Chief Commissioner of Income Tax, Chennai

Chief Commissioner dismissing the respondent's petition for waiver of interest u/s 234-B – AO did not accept the claim of the assessee that the interest income from bank deposits should be assessed under the head 'business' - petitioner contend that respondent declined to exercise his power of discretion to grant waiver of interest arbitrarily by applying an irrelevant decision - notification 400/234/IT(B) dated 23.05.1996 issued by the CBDT u/s 119 empowers the Board to issue instructions and directions with regard to waiver of interest as claimed by assessee – there is no scope of interference in the order of the respondent, in respect of assessment years, 1993-94, 1994-95 and 1995-96 – but for A.Y. 1996-97 order of respondent is set aside


11 2009 TMI - 33603 - HC
Commissioner of Income Tax Bhopal Versus M/s Garg Trading Co.
Assessee offered income in respect of tendu patta business on the basis of provisions of S. 44AC – activity like collection of tendu leaves, pruning, prevention of diseases, plucking, arrangements of pudas at collection centres, drying, gradation of bid leaves, putting them in the bags and thereafter their transportation do not amount to "processing" of tendu leaves within the meaning of S.. 206C - activity undertaken by the assessee is neither a manufacturing activity nor a processing activity –Tribunal was justified in law in the holding that case of assessee clearly falls within preview of S. 44-AC


12 2009 TMI - 33602 - HC
Commissioner of Income Tax, Guwahati Versus M/s. Peerchand Ratanlal Baid (HUF)
Addition of undisclosed income made for the block period - since the Assessing Officer had failed to initiate proceedings in terms of Section 153 read with Explanation 3 necessarily follows a conclusion that notice under Section 148 was necessary and no such notice having been given to the assessee the provisions of Section 153 did not authorise such notice to be issued any further - while dismissing the appeal of the Revenue we deem it proper to conclude that the provisions of Section 147/148 will apply to an assessment for a block period made under Chapter XIV-B


13 2009 TMI - 33591 - HC
SURAJMAL MEMORIAL EDUCATION SOCIETY, NEW DELHI Versus DIRECTOR GENERAL OF INCOME TAX (EXEMPTIONS) and ANR.
Denial of exemption under section 10(23C)(vi) and no renewal of exemption on the ground that the petitioner had not applied its income wholly and exclusively to objects for which it was set up - Petitioner claims that it had withdrawn amounts, credited to its principal, and thereafter paid sums to these two schools in cash – but there was no documentary proof - The Director General ordered to produce the books of account of the two schools - The petitioner failed to produce the books of accounts of those two schools and instead requested for issuance of summons under Section 131 - This request was turned down by the Director General. – Held that, this would indeed be a very dangerous precedent fraught with possibilities of harassment at the behest of the assessee, if, without any foundation the Department insists on a third party to produce its books of accounts – Petition dismissed


14 2009 TMI - 33590 - SC
Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell & Co. Ltd.
Whether in the facts and in the circumstances of the case, the Division Bench of the High Court was justified in affirming the findings of ITAT deleting the disallowance of Rs.14,51,100/ - holding that the technical service charges (royalty) payment under consideration is allowable based on subsequent agreement dated 10.4.1992 at higher rate than that based on earlier agreement entered into in December, 1990 even though earlier agreement entered into in December, 1990 was to be effective upto 2000 and had neither been substituted nor rescinded? – Held yes - The Tribunal and the High Court recorded a finding that the new agreement in April, 1992 was not a subterfuge or clandestine device to reduce the tax liability but was an expenditure incurred on business expediency and the decision of the parties to enter into an agreement was based on commercial consideration


15 2009 TMI - 33589 - SC
Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell & Co. Ltd.
Whether on the facts and in the circumstances of the case, the ITAT was justified in allowing the depreciation on research and development assets which related to the closest business of fast food division/unit of the assessee company as such not used during the previous year? - Stand of the revenue is that machinery in respect of R & D centre related to the fast food unit which was closed and therefore the assessee was not entitled to any depreciation because there was no actual user of the machinery - Stand of the assessee on the other hand is that the machinery was used in respect of both the fast food and the liquor units. This aspect needs to be factually examined – matter remanded


16 2009 TMI - 33588 - SC
Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell & Co. Ltd.
Section 43B - Furnishing of bank guarantee cannot be equated with actual payment which requires that money must flow from the assessee to the public exchequer as required under Section 43B. By no stretch of imagination it can be said that furnishing of bank guarantee is actual payment of tax or duty in cash – further - the expression now used in Section 43B (i)(a) is "Tax, Duty, Cess or fee or by whatever name called". It denotes that items enumerated constitute species of the same genus and the expression `by whatever name called' which follows preceding words `Tax', `Duty', `Cess' or `fee' has been used ejusdem generis to confine the application of the provisions not on the basis of mere nomenclatures, but notwithstanding name, they must fall within the genus `taxation' to which expression `Tax', `Duty', `Cess' or `Fee' as a. group of its specie belong vis. - bottling fees chargeable from the assessee under the Rules framed under the Rajasthan Excise Act, 1950 and interest chargeable on late payment of bottling fees not covered by provisions of section 43B.


17 2009 TMI - 33587 - SC
Commissioner of Income Tax, Udaipur Rajasthan Versus Mcdowell & Co. Ltd.

Whether on the facts and in the circumstances of the case, the I.T.A.T. was justified in deleting the addition of Rs.2,77,887/ - being made treating the expenditure incurred in purchase of new transformer as capital expenditure even when the old transformer still exists in the blocks of asset and not sold, discarded or demolished or destroyed? - Since neither the Tribunal nor the High Court dealt with the factual aspect in detail, we remit the matter to the Assessing Officer to consider the respective stands in the background of what has been stated by this Court in Saravana [2007 TMI - 1775 ] and Ramaraju [2007 TMI - 2064 ] cases


18 2009 TMI - 33586 - HC
Commissioner of Income Tax, Haldwani, Nainital Versus M/s. Kisan Sahkari Chini Mill
Assessee, a public sector co-operative sugar mill involved in mfg. and sale of sugar - Amount received by assessee being incentive as levy sugar released for free sale, claimed by the assessee as capital receipt but the AO has treated it to be revenue receipt - Order of the ITAT sustained in with tribunal held that the subsidy in question should be treated as capital receipt – revenue appeal dismissed


19 2009 TMI - 33585 - HC
Commissioner of Income-tax, Dehradun Versus M/s RBF Rig Corporation

Whether, the ITAT has erred in law in holding that reimbursement of expenses on account of catering charges and fuel etc. to the assessee were not part of the gross receipts for the purposes of S. 44BB – words used in the section, include the amount received by the assessee on account of catering charges and fuel etc. to the non-resident assessee involved in the business of oil exploration, as the catering charges do form part of `services and facilities' in connection with the extraction or production of the mineral oil - catering charges and fuel expenses reimbursed cannot be excluded from the `amount' defined in sub-section (2) of Section 44BB – tribunal's order set aside

20 2009 TMI - 33584 - HC
JAL HOTELS CO. LTD. Versus ASSTT. DIR. OF INCOME TAX
Legal propriety of notices issued u/s 148 - once the basic or primary facts have been disclosed, the burden to prove that amounts represents undisclosed income of the assessee is on the Revenue – there was no new material in the hands of the Revenue leading to the view that there was reason to believe that income had escaped assessment. Instead, the case is a classic instance of a change of opinion. Consequently, the Writ Petitions are allowed and the impugned Notice u/s 148 is quashed

09 February 2012

FCRA Vs Banks

Banking : Implementation of the provisions of Foreign Contribution (Regulation) Act, 2010 - CIRCULAR NO. DBOD.AML.BC.NO.80/14.08.001/2011-12, DATED 06-02-2012 

08 February 2012

Statutory Central Auditors-Bank-2011-12

Names of Audit Firms approved for appointment as Statutory Central Auditors in 25 Public Sector Banks for the year 2011-12

Allahabad Bank, Kolkata

   

1

M/s N K Bhargava & Co, New Delhi

2

M/s M C Jain & Co, Kolkata

3

M/s P A & Associates, Bhubaneswar

4

M/s M R Narain & Co, Chennai

5

M/s S Ghose & Co, Kolkata

6

M/s K M Agarwal & Co, New Delhi

 

 

Andhra Bank, Hyderabad

   

1

M/s Umamaheshwara Rao & Co, Hyderabad

2

M/s R Subramanian & Compnay , Chennai

3

M/s  Raju & Prasad, Hyderabad

4

M/s Patro & Co, Bhubaneshwar

5

M/s Nataraja Iyer & Co, Hyderabad

6

M/s C R Sagdeo & Co, Nagpur

   

Bank of Baroda, Mumbai

   

1

M/s S K Mittal & Co, New Delhi

2

M/s Khimji Kunverji & Co., Mumbai

3

M/s Ray & Ray, Kolkata

4

M/s N B S & Co, Mumbai

5

M/s Laxminiwas Neeth & Co, Hyderabad

6

M/s Brahmayya & Co., Chennai 

   

Bank of India, Mumbai

   

1

M/s Agarwal & Saxena, Kanpur

2

M/s Karnavat & Co., Mumbai

3

M/s L. B. Jha & Co., Kolkata

4

M/s S R B & Associates, Bhubaneshwar

5

M/s Sankaran & Krishnan, Chennai

6

M/s Chaturvedi & Shah, Mumbai

 

 

Bank of Maharashtra, Pune

   

1

M/s Ray & Co , Kolkata

2

M/s N Kumar Chhabra & Co., Chandigarh

3

 M/s Kirtane & Pandit , Pune

4

M/s J C R & Co, Mumbai

5

M/s DSP & Associates, New Delhi      

6

M/s Jodh Joshi & Co, Nagpur

 

 

Canara Bank , Bangalore

   

1

M/s S. Bhandari & Co., Jaipur

2

M/s Manubhai & Co Ahmedabad

3

M/s R K Kumar & Co, Chennai

4

M/s H. K. Chaudhry & Co., New Delhi

5

M/s Nandy Halder & Ganguly, Kolkata

6

M/s K. Venkatachalam Aiyer & Co., Thiruvananthapuram

 

 

Central Bank of India, Mumbai

   

1

M/s K. S Aiyar & Co., Mumbai

2

M/s Sagar & Associates , Hyderabad

3

M/s G S A & Co, New Delhi

4

M/s Ghiya & Co., Jaipur

5

M/s D. Rangaswamy & Co., Chennai

6

M/s SAMSAND & Associates, New Delhi 

 

 

Corporation Bank, Mangalore

   

1

M/s Vinod Kumar & Associates, New Delhi

2

M/s Suresh Chandra & Associates, New Delhi

3

M/s O P Totla & Co., Indore

4

M/s Rajendra K Goel  & Co., New Delhi

5

M/s K. Varghese & Co., Kochi

6

M/s V. Narayanan & Co., Chennai

   

Dena Bank, Mumbai

   

1

M/s B. K. Khare & Co., Mumbai

2

M/s Gandhi Minocha & Co., New Delhi

3

M/s S N Dhawan & Co, New Delhi

4

M/s P K Chopra & Company, New Delhi

5

M/s Avanish K Rastogi & Associates, Lucknow 

6

M/s S C Bapna & Associates, Vadodara

 

 

Indian Bank,Chennai

   

1

M/s Suri & Co, Chennai

2

M/s Kalyanasundaram & Co., Chennai

3

M/s S Mohan & Co., New Delhi

4

M/s Raj K Aggarwal & Associates, New Delhi

5

M/s Chandran & Raman , Chennai

6

M/s A B P & Associates, Bhubaneswar

 

 

Indian Overseas Bank, Chennai

   

1

M/s Badari Madhusudan & Srinivasan, Bangalore 

2

M/s B Thiagarajan & Co, Chennai

3

M/s M. Bhaskara Rao & Co., Hyderabad 

4

M/s S. R. Mohan & Co., Hyderabad

5

M/s Sankar & Moorthy, Thiruvananthapuram 

6

M/s Mittal Gupta & Co, Kanpur

 

 

Oriental Bank of Commerce, New Delhi

   

1

M/s S. P. Marwaha & Co., New Delhi

2

M/s Agiwal & Associates, New Delhi

3

M/s Jain Kapila Associates, New Delhi

4

M/s Manian & Rao, Bangalore

5

M/s B. Purushottam & Co., Chennai

6

M/s Tej Raj & Pal, Bhubaneswar

 

 

Punjab & Sind Bank, New Delhi

   

1

M/s Alka & Sunil New Delhi

2

M/s R M Lall & Co., Lucknow

3

M/s Bhatia & Bhatia, New Delhi

4

M/s G. S. Goel & Co., New Delhi

5

M/s O P Tulsyan & Co, New Delhi

6

M/s S B G & Co., New Delhi 

 

 

Punjab National  Bank, New Delhi

   

1

M/s V K Verma & Co, New Delhi

2

M/s Borkar & Muzumdar, Mumbai

3

M/s Mookherjee Biiswas & Pathak, Kolkata

4

M/s Amit Ray & Co, Allahabad

5

M/s G S Madhava Rao & Co , Hyderabad

6

M/s Sarda & Pareek, Mumbai

 

 

Syndicate Bank

   

1

M/s Prakash Chandra Jain & Co., Udaipur

2

M/s S Sonny Associates, Chennai

3

M/s Thakur Vaidyanath Aiyar & Co., New Delhi

4

M/s Chandiok & Guliani, New Delhi

5

M/s Jain & Associates, Chandigarh

6

M/s R Vender Gupta and Associates, New Delhi

 

 

UCO Bank, Kolkata

   

1

M/s SBA & Associates, Kolkata

2

M/s Ved & Co, New Delhi

3

M/s Dass Gupta & Associates, New Delhi

4

M/s Baweja & Kaul, Jammu

5

M/s Gupta Sharma & Ass. Jammu

6

M/s Kothari & Co, Kolkata

 

 

Union Bank of India, Mumbai

   

1

M/s Price Patt & Co, Chennai

2

M/s Arun K. Agarwal & Associates, New Delhi

3

M/s J. L. Sengupta & Co., Kolkata

4

M/s Singrodia Goyal & Co, Mumbai

5

M/s Om Prakash S. Chaplot & Co., Mumbai

6

M/s G. S. Mathur & Co., New Delhi

 

 

United Bank of India, Kolkata

   

1

M/s George Read & Co., Kolkata

2

M/s D. K. Chhajer & Co., Kolkata

3

M/s M. Choudhury & Co., Kolkata

4

M/s M. C. Bhandari & Co., Kolkata

5

M/s Ramesh C. Agrawal & Co., Allahabad

6

M/s Dinesh Mehta & Co, New Delhi

 

 

Vijaya Bank, Bangalore

   

1

M/s  S. Viswanathan, Chennai

2

M/s M P Chitale & CO, Mumbai

3

M/s Rao Associates, Bangalore

4

M/s Contractor Nayak & Kishnadwala, Mumbai  

5

M/s P Chandrasekar, Bangalore

6

M/s Mukund M Chitale & Co, Mumbai

 

 

State Bank of India

 

1

M/s B M Chatrath & Co Kolkata

2

M/s Kalyaniwalla & Mistry, Mumbai

3

M/s K K Soni & Co, New Delhi

4

M/s Essveeyar , Chennai 

5

M/s K C Mehta & Co, Vadodara

6

M/s S B A & Co, Indore

7

M/s K G Somani & CO, New Delhi

8

M/s Singhi & Co, Kolkata

9

M/s Venugopal & Chenoy, Hyderabad

10

M/s S C M & Associates, Bhubaneswar

11

M/s M Verma & Associates, New Delhi

12

M/s Dagliya & Co, Bangalore

13

M/s Todi Tulsyan & Co., Patna

14

M/s Krishnamoorthy & Krishnamoorthy, Kochi 

 

 

State Bank of Bikaner & Jaipur, Jaipur

 

1

M/s S C J Associates , Agra

2

M/s. S.L. Chhajed & Co., Bhopal

3

M/s Agrawal Anil & Co, New Delhi

4

M/s L U Krishnan & Co., Chennai

5

M/s B Khosla & Co., Jaipur

6

M/s S Daga & Co, Hyderabad

 

 

State Bank of Hyderabad, Hyderabad

   

1

M/s Rao & Kumar, Vishakhapatnam

2

M/s D. V. Ramana Rao & Co.,Hyderabad

3

M/s Rao & Narayan, Hyderabad

4

M/s S Mann & Co, New Delhi

5

M/s Ananthan & Sundaram, Thiruvananthapuram

6

M/s Elias George & Co, Kochi

 

 

State Bank of Mysore, Bangalore

   

1

M/s B L Ajmera & Co , Jaipur

2

M/s Bhasin Raghavan & Company, New Delhi

3

M/s S K Basu & CO, Kolkata

4

M/s M K P S & Associates. Bhubaneshwar

5

M/s K. P. Rao & Co., Bangalore

6

M/s Maharaj N R Suresh & Co, Chennai

 

 

State Bank of Patiala, Patiala

   

1

M/s Gupta Gupta & Associates, Jammu

2

M/s Abhijit Dutta & Associates, Kolkata 

3

M/s S. L. Gangwal & Co., Jaipur

4

M/s Rawla & Co, New Delhi

5

M/s Sreedhar Suresh & Rajagopalan, Chennai

6

M/s Patel Mohan Ramesh & Co, Bangalore

 

 

State Bank of Travancore, Thiruvananthapuram

   

1

M/s G K Rao & Co, Hyderabad

2

M/s Abraham & Jose, Thrissur

3

M/s Jagdish Chand & Co., New Delhi

4

M/s B. V. Rao & Co., Vishakhapatnam

5

M/s Ayyar & Cherian, Bangalore

6

M/s Sridhar & Co., Thiruvananthapuram

 


--
Best Wishes

CA. V.M.V.SUBBA RAO
Chartered Accountant
Door No.24-2-1885,
I Floor, Flat No.5,
Siddivinayaka Residency, I Cross,
Central Avenue, MSR Nagar,
Magunta Layout,
Nellore-524 003
Andhra Pradesh
India
Mobile:+91 - 0 9390221100
           +91 - 0 9440278412
e-Mail: vmvsr@rediffmail.com
           vmvsr@yahoo.co.uk
http://pdicai.org/MyPage/203038.aspx

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