Real Estate heading downfall?

"Mumbai has maximum inventory of unsold homes at 155.27 million sq feet I.e approximately 250000 houses which is equivalent to 40 months of unsold inventory. Unsold inventory denotes the number of months required to clear the stock at the existing absorption rate. An ideal scenario implies inventory should be in a range of 8 to 10 months. But Mumbai will take 4 years to sell these houses despite a slew of discount rates, new launches and back room negotiations. Same is the situation in NCR , Chennai , Kolkata, Banglore and Tier II cities. Builder's face crash crunch after RBI put brakes on 20:80 Ponzi scheme. This crisis will worse post 16 May if there is Hung Parliament.  India to expect big real estate crash in next 6 to 10 months.".... Dean Baker   ....renowned Economist who predicted 2008 US crisis. His advice to indian consumers ...."Indian consumers should be smart to defer their decision on investing in real estate ....and be greedy to sell their current exposure in real estate"Please forward this message to all your friends and family members.

Misuse of PAN from Tatkal

Don't give PAN number for railway Tatkal booking as proof of ID.

The Railways display the PAN. name, sex and age of passengers on reservation charts pasted on railway compartments.

This is a boon for benami transactions. It is mandatory for traders like jewelers to collect tax (TCS) from customers on purchase of jewelry worth Rs 5 lakh & bullion worth Rs 2 lakh.

While complying with TCS rules for collection, payment and uploading of TCS information (e-filing of TDS returns) jewellers have to furnish PAN of customers. For certain customers it is not convenient to provide PAN.

To accommodate high net worth customers, traders have a easy source of benami PAN numbers, name, sex and age from reserved railway compartments. A traveller recently noticed a chap copying PAN particulars along with name, age and sex pasted on reserved compartments, and when confronted with the help of railway police, he admitted that he gets Rs 10 per PAN particulars from jewellers. These persons are copying PAN information of senior citizens, women etc from sleeper class with the intention that passengers in sleeper class are not serious tax payers and generally salaried class.

This wrong usage of a PAN number is known only to the regular tax payers, who regularly check their tax credit on form 26 AS provided by the Income Tax department on their website.

This form 26AS is updated only on filing of e-TDS returns by the traders. There is almost 6-12 months time delay for the PAN holder to know that a transaction of above nature has taken place on his name and that too only if he goes through form 26 AS.

On noticing the tax credit of above nature while reconciling form 26 AS for tax credits for filing the return during subsequent financial year i.e. July / September, the tax payer has an option to exclude the same and go ahead in filing the return.

In that case the department will first initiate action from the tax payer's side asking him to explain the sources of money for the above transaction done in his name and also to prove that he has not carried on the above transaction.

The onus lies on the genuine tax payer for the fault committed by the traders.

This dispute may even take more than 2 years to be settled.

In conclusion, the only way to protect yourself from these fraudulent transactions, is to avoid quoting PAN details for identity proof at any source except for income tax related matters for which your Government had issued for.

You may quote your driving licence #, Voter ID # etc as your ID Proof but definitely not your PAN.



NO VAT on 40% of Restaurant Bill

VAT not leviable on 40% of the restaurant bill, which is subject to service tax

 

 

In the recent decision of the Uttarakhand High Court, in the case of Valley Hotels & Resorts vs. The Commissioner, Commercial Tax, Dehradun [TS-129-HC2014 (UTT)-VAT].

The High Court allowed the revision application filed by the assessee and held that, where the element of service has been declared and brought to tax vide notification dated 6 June 2012, by which Service tax is levied on 40% of the billed value in restaurant, no VAT can be imposed thereon.

The issue of double taxation seems to have been addressed and it has been held that VAT cannot be imposed on that portion of the restaurant bill, which has already suffered Service tax.

Sec 234E-Bombay HC Stay Order

S. 234E: High Court grants ad-interim stay against operation of notices levying fee for failure to file TDS statement

S. 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day's delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). A Writ Petition to challenge the validity of s. 234E has been filed in the Bombay High Court. The Petition claims that assessees who are deducting tax at source are discharging an administrative function of the department and that they are a "honorary agent" of the department. It is stated that this obligation is onerous in nature and that there are already numerous penalties prescribed for a default. It is stated that the fee now levied by s. 234E is "exponentially harsh and burdensome" and also "deceitful, atrocious and obnoxious". It is also claimed that Parliament does not have the jurisdiction or competence to impose such a levy on tax-payers.

The Bombay High Court has, vide order dated 28.04.2014, granted ad-interim stay in terms of prayer clause (d) i.e. stayed the operation of the impugned notices levying the fee.

See also Narath Mapila LP School vs. UOI (Ker), Adithya Bizorp Solutions India vs. UOI (Kar) & Om Prakash Dhoot vs. UOI (Raj) where similar interim orders of stay have been passed. The CBDT has vide Circular No. 07/2014 dated 04.03.2014 extended the due date of filing of the TDS/TCS statement for Government deductors

Rashmikant Kundalia vs. UOI (Bombay High Court)

crossed cheque and account payee cheque

FYI - Rajmoti Industries vs. ACIT (Gujarat High Court)

S. 40A(3): There is a difference between “crossed cheque” and “account payee cheque”. Payment by crossed cheque attracts s. 40A(3) disallowance

FATCA

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010 by US Government, aims to check and impose withholding tax on illicit activities of US taxpayers who use offshore accounts to evade taxes. The final FATCA regulations, issued in January 2013, are set to come into effect from July 1, 2014 after signing of Intergovernmental Agreements (IGA) with different countries. On April 11, 2014, India reached an agreement 'in substance' with USA on FATCA.

Resolutions to be proposed at the ensuing AGM

Friends pl add on to do list immediately after 28th April

Resolutions to be proposed at the ensuing AGM

1)      Increase in borrowing limit and creation of charge - S/180 (I) (c) & 180 (I) (a)

2)      Accepting Public Deposits - S/73 & 76

3)      Change/ Alteration in AOA –Adopt Table F

4)      Invt. in other body Corporates - S/186

5)      Appointment of Branch Auditors (Dubai Branch)

6)      Related Party transactions, if any - S/188

7)      Appointment of Auditors – Within 3yrs of notification S/139 (2)

8)      Issue of Securities (CPs etc) on Pvt. Placement - S/42

9)      Appt of CFO & other KMPs - Board approval as 203

10)   Fixing Remuneration of KMPS - Board approval as 203

11)   Appt. of independent directors - S/149(10) to (12)

Actions immediately to be taken on  notification of the Act

1)      Identify related parties – To be notified to a/cs and SAP team

2)      Print new Business letters, bills etc with CIN no. – s/12(3) (c)

3)      Devise CSR policy & spending – s/135

4)      Adopt new Whistle Blower Policy – Vigil mechanism – 177(10)

5)      File Return on Public Deposits within 3 months – 74(1)

6)      Return on change in Top 10 shareholders – within 15 days -  S/93

7)      To obtain positive consent for receiving documents by email (S/101)

8)      Obtain certificate of Independence from Directors S/149 (7)

10)   Terms of reference of Audit committee –Additional items to be placed before audit committee at each meeting - S/177 (4)

11)   Nomination & Remuneration policy to be approved by Board – S/178 (3) & (2)

12)   Terms of reference of Stakeholder committee – Additional items to be placed before the Committee - S/178 (6)

13)   Devise Code for independent Directors – Schedule IV

14)   Observe Secretarial standards for Board & General meetings S/118 (10)

15)   Reconstitute Board (within 1year)– for (i) appl. of ID’s for 5yrs (ii) not liable to retire by rotation –S/149 (10) to (13)

16)   Maintain Register of KMPs - S/170

17)   Can pay sitting fees upto Rs. 1lakh S/197 (5)

18)   Check the compliance required by unlisted Public companies (if paid-up/networth exceed prescribed limits)- refer Annexure (will be circulated separately)

Additional compliances

1)      To attend at least 1 Board Meeting in 12 months or vacate office S/167 (1) (b)

2)      Change in top 10 shareholders S/93

3)      File Board Resolutions passed  U/S 179

4)      File Report on AGM – S/121

5)      Postal Ballot Applicable to Pvt. Cos – S/110

6)      Directors Responsibility Statement – Clause  (e) & (f) of S/134 (5) have laid down adequate “internal financial controls” (defined in the Act) – To devise policy on internal financial controls.

7)      Auditors – Appoint for 5yrs – Existing limit to be considered S/139 (2) – Ratification every year

8)      To inform auditor & ROC about appointment within 15 days – S/139

9)      Relative of auditor not to hold shares in excess of Rs. 1lakh S/141

SEBI INTRODUCED amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance)

SEBI has pursuant to a master circular issued today, introduced amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement. The master circular will supersede all other earlier circulars issued by SEBI on Clauses 35B and 49 of the Equity Listing Agreement. The revised Clause 35B would be applicable to all listed companies and the modalities would be governed by the provisions of Companies (Management and Administration) Rules, 2014.

Following are some of the highlights of the revised Clause 49:

1.       Applicability

a)      To all listed companies with effect from 1 October 2014.

b)      The provisions of Clause 49(VI)(C) [constitution of risk management committee] will be applicable to top 100 listed companies by market capitalisation as at the end of the immediate previous financial year.

2.       Related Party Transactions i.e. a transfer of resources, services or obligations between a company and a related party, regardless of whether a price is charged:

a)      Applicable to all prospective transactions.

b)      A “related party” is a person or entity that is related to the company. Parties are considered to be related, if one party has the ability to control the other party or exercise significant influence over the other party, directly or indirectly, in making financial and/or operating decisions and includes certain specified entities.

c)       Company is obliged to formulate a policy on materiality of related party transactions and also on dealing with Related Party Transactions.

d)      A transaction with a related party will be considered material, if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds five percent (5%) of the annual turnover or twenty percent (20%) of the net worth of the company as per the last audited financial statements of the company, whichever is higher.

e)      All Related Party Transactions will require prior approval of the Audit Committee.

f)       All material Related Party Transactions will require approval of the shareholders through special resolution and the related parties will have to abstain from voting on such resolutions.

g)      Details of all material transactions with related parties will have to be disclosed quarterly along with the compliance report on corporate governance.

h)      All existing material related party contracts or arrangements as on the date of this circular which are likely to continue beyond March 31, 2015 will have to be placed for approval of the shareholders in the first General Meeting subsequent to 1 October 2014. A company may choose to get such contracts approved by the shareholders even before 1 October 2014.

Equal treatment of all shareholders

3.       Companies are obliged to provide equal treatment to all shareholders including minority and foreign shareholders.

Whistle blower mechanism

4.       Companies will have to establish a whistle blower mechanism.

Accounting standards

5.       Implement the prescribed accounting standards in letter and spirit in the preparation of financial statements taking into consideration the interest of all stakeholders.

Disclosure of interest by board and key executives

6.       Members of the Board and key executives are obliged to disclose to the board whether they, directly, indirectly or on behalf of third parties, have a material interest in any transaction or matter directly affecting the company.

Woman director and Independent director

7.       Mandatory appointment of a woman director and independent directors.

8.       An independent director cannot act as such in more than seven listed companies.

9.       Any person who is serving as a whole time director in any listed company cannot serve as an independent director in more than three listed companies.

10.   An independent director can hold office for a term up to five consecutive years

CBDT on Roads-BOT

Important CBDT Circular On Depreciation/ Amortisation Of Intangible Assets

The CBDT has issued Circular No. 09/2014 dated 23.04.2014 in which it has dealt with the important issue of treatment of expenditure incurred for development of roads & highways in Build-Own-Transfer (BOT) agreements.

The CBDT has expressed the view that as the assessee does not hold any rights in the project except recovery of toll fee to recoup the expenditure incurred, the assessee cannot be treated as the "owner" of the property and cannot be allowed depreciation u/s 32(1)(ii) of the Act.

However, the CBDT has also held, following the law laid down in Madras Industrial Investment Corp 225 ITR 802 (SC), that the entire cost of construction and development of the infrastructure facility has to be amortized evenly over the period of the concessionaire agreement and allowed as business expenditure u/s 37(1) of the Act.

The CBDT's view with regard to the assessee not being the "owner" runs counter to the law laid down in Noida Toll Bridge 213 Taxman 333 and several other judgements. In Swarna Tollway, the ITAT has conducted a thorough analysis of the entire law on the subject and concluded that the assessee has to be treated as the "owner" even though it has limited rights on the structure. The Tribunal relied on several judgements of the Supreme Court including Mysore Minerals 239 ITR 775 (SC) where the concept of "owner" has been considered in great detail.

Unfortunately, the CBDT has not applied its mind these aspects and come to a conclusion in a summary manner.

It is well settled that a Circular which is contrary to the law has no binding effect (seeDeath of a Circular).

However, the CBDT's directive that the expenditure should be amortized and allowed as business expenditure is welcome.

Regards,

VMVSR

SEBI's New Corporate Governance Norms

SEBI's New Corporate Governance Norms: A more transparent roadmap for Listed Entities

In a step towards ensuring lucidity in the regime, the Capital Market Regulator, SEBI, has floated new Corporate Governance Norms and revised Clause 35B with the basic premise of promoting interest of varied stakeholders on one hand and aligning the provisions of extant Clause 49 of the Listing Agreement with the Companies Act, 2013 on the other.

The new norms aim to intensify the corporate governance framework for listed companies in India and are considered as a step forward to increment harmonisation in SEBI & MCA laws. 

The main highlights are outlined as follows:

• Amendment in Clause 35B in line with the Section 108 of the Act read with Rule 20 of Companies (Management and Administration) Rules, 2014, thereby casting a mandate on all the listed Companies for the mandatory electronic voting facility to all the members of the Company to exercise their right to vote on the resolutions which the company intends to pass, at the general meetings through electronic means. As per the extant SEBI Circular, only top 500 Listed Companies are mandatorily required to give e-voting facility to the members.
• In line with Section 149 (6) of the Act, now the Nominee Directors have been excluded from the definition of Independent Directors.
• In line with the provisions of vigil mechanism as specified in section 177 (9) of the Act, SEBI has mandated whistle blower mechanism in every listed company. Under the extant Cl 49, its a non mandatory requirement.
• Role of audit committee has been extended and its roots are made widespread. This is very categorically reflected in the provisions of the new Clause, which has expanded the role of audit committee.
• Stock options have been prohibited for independent director to protect their independence in real sense, in alignment with section 197 of the Act.
• Broadened the ambit of Independent Directors as compared with the extant arena of Independent Directors
• Board has also mandated for separate meeting for independent directors. This is also in line with the provisions of the Act. The Act also provides for atleast one separate meeting of independent director without attendance of non-independent director and members of management in a year. The intent is to provide the independent directors an opportunity to formulate the action plans to guide and drive themselves and to establish a better coordination between them because the Act poses enhanced responsibility on the independent directors.
• A listed company is a type of corporate entity which deals with public at large in a wider way than the others do, so it is the need of the hour to have a committee to maintain relations with stakeholders, hence the requirement of Stakeholders Relationship Committee has been provided by SEBI. SEBI has also mandated for mandatory Nomination Committee, with the Chairman being Independent, which under the extant Clause is a non mandatory requirement.
• The Act has posed the requirement of performance evaluation of Directors on nomination and remuneration committee. In lines with the said provision, SEBI has also mandated for evaluation of performance of independent directors and board of directors in a listed company.
• As per the amendment, in all listed companies, any RPT is to be priorly approved by the audit committee. In addition, all material RPTs are to be approved by the shareholders, by way of special resolution, with the related parties being abstained from voting.  In this regard, SEBI has clearly defined what will tantamount to RPTs and material RPTs.
• In addition, the four walls of RPTs have also been widened to include the elements of Accounting Standards and Companies Act 2013 as well. 
• All listed companies to have at least one woman director on their Boards. 
• SEBI by taking stricter view has specified the maximum number of boards an independent director can serve on listed companies, which is restricted to 7. This number has further been reduced to 3, in case the person is serving as a whole time director in a listed company. 
• SEBI has prescribed the maximum tenure of five consecutive years for the Independent Directors that can be further extended to another term of upto five consecutive years subject to shareholders' approval by way of special resolution. Further, after the expiration of the term or extended term, such independent director shall be eligible for being appointed as an independent director only after expiration of 3 years of ceasing to be an independent director.
• Bodies Corporate which are subject to regulations under other statutes (e.g. banks, financial institutions, insurance companies, etc.) are required to comply with the new norms to the extent that it does not violate the provisions of their respective statutes. However, the Mutual Funds are exempt from the applicability of such new norms.
• In addition to the above mentioned mandates, the Board has also included the specific provisions related to the following:
• Policy on dealing with RPTs
• Enhanced Disclosure requirements related to remuneration of directors
• Divestment of material subsidiaries
• Disclosure of letter of appointment of independent directors along with their detailed profile
• Policy on Risk management
• Mandatory requirement to formulate Risk management Committee is only on top 100 listed entities by market capitalisation.
• Providing training to independent directors
• Boards of Companies have to satisfy themselves that plans are in place for orderly succession for appointments to the board and senior management.

 

 

 

All the above said requirements as amended by the SEBI shall be made applicable to the listed companies' with effect from October 01, 2014 and accordingly, all existing material related party contracts or arrangements as on the date of this circular which are likely to continue beyond March 31, 2015 shall be placed for approval of the shareholders in the first General Meeting subsequent to October 01, 2014 or even before the said date.  

Comments:

Undoubtedly, the new norms will ensure more transparency in the day to today workings of listed entities but the roadmap ahead for the listed companies as well as for the Independent Directors is not simple as the new Corporate Governance Norms prescribes a stringent regime.

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)

ICAI expresses its concern on the proposed definition of “Accountant” in DTC, 2013 - (17-04-2014)

As the members are aware, the Direct Taxes Code, 2013 has proposed to widen the scope of the definition “Accountant” to include other professionals as well. It is a fact that various provisions in the Income-tax Act, 1961 under which chartered accountants have been given the responsibilities to undertake audit and certification of accounts of various entities have the emphasis on “audit” of the relevant accounts which is the exclusive domain of Chartered Accountants. 

The Council of ICAI is aware that the proposed change is a cause of major concern to the entire profession. In this regard, ICAI has through a representation to Ministry of Finance, placed on record its concern not only for the profession, but for the country as a whole since issuance of audit certificates by persons having limited knowledge of audit of accounts will not only be professionally incorrect and but will raise many concerns including causing huge revenue leakages. 

A meeting in this regard was held with Mr. Rajiv Takru, Revenue Secretary and Mr. R.K.Tewari, Chairman, CBDT on 16.4.2014, wherein CA. K. Raghu, President, ICAI and CA. Manoj Fadnis, Vice President, ICAI emphasized on the fact that there is a very significant difference in the area of expertise of other professionals vis-a-vis Chartered Accountants. 

Members be assured that the Council of ICAI is equally concerned and will not leave any stone unturned to save the profession and the nation. 

Standard Operating Procedure instructions for IT

FYI- Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The SOP also makes special provisions for dealing with the tax demand upto Rs. 1,00,000/- in the case of Individuals and HUFs in order to accommodate certain extra ordinary situations. The SOP is expected to mitigate the long standing grievances of taxpayers by way of reduction/deletion of tax demands. The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income. Such mistakes include quoting of invalid/incorrect TAN; quoting of only one TAN against more than one TAN tax credit; furnishing information in wrong TDS Schedules in the Return Form; furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax payments etc. As a result of these mistakes, the tax credit cannot be allowed to the taxpayers while processing returns despite the tax credit being there in 26 AS statement. The CBDT, therefore, desires the taxpayers to verify if the demand in their case is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional assessing officer in case the return was processed by such officer, or the taxpayer is informed by CPC, Bangalore that such rectification is to be carried out by Jurisdictional assessing officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made by logging in to e- filing website http://incometaxindiaefiling.gov.in as per the procedure given in detail in its Help Menu.

Amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement.

SEBI has pursuant to a master circular issued today, introduced amendments to clause 35B (E-voting facility) and clause 49 (Corporate Governance) of the equity listing agreement. The master circular will supersede all other earlier circulars issued by SEBI on Clauses 35B and 49 of the Equity Listing Agreement. The revised Clause 35B would be applicable to all listed companies and the modalities would be governed by the provisions of Companies (Management and Administration) Rules, 2014.

Following are some of the highlights of the revised Clause 49:

1.       Applicability

a)      To all listed companies with effect from 1 October 2014.

b)      The provisions of Clause 49(VI)(C) [constitution of risk management committee] will be applicable to top 100 listed companies by market capitalisation as at the end of the immediate previous financial year.

2.       Related Party Transactions i.e. a transfer of resources, services or obligations between a company and a related party, regardless of whether a price is charged:

a)      Applicable to all prospective transactions.

b)      A “related party” is a person or entity that is related to the company. Parties are considered to be related, if one party has the ability to control the other party or exercise significant influence over the other party, directly or indirectly, in making financial and/or operating decisions and includes certain specified entities.

c)       Company is obliged to formulate a policy on materiality of related party transactions and also on dealing with Related Party Transactions.

d)      A transaction with a related party will be considered material, if the transaction / transactions to be entered into individually or taken together with previous transactions during a financial year, exceeds five percent (5%) of the annual turnover or twenty percent (20%) of the net worth of the company as per the last audited financial statements of the company, whichever is higher.

e)      All Related Party Transactions will require prior approval of the Audit Committee.

f)       All material Related Party Transactions will require approval of the shareholders through special resolution and the related parties will have to abstain from voting on such resolutions.

g)      Details of all material transactions with related parties will have to be disclosed quarterly along with the compliance report on corporate governance.

h)      All existing material related party contracts or arrangements as on the date of this circular which are likely to continue beyond March 31, 2015 will have to be placed for approval of the shareholders in the first General Meeting subsequent to 1 October 2014. A company may choose to get such contracts approved by the shareholders even before 1 October 2014.

Equal treatment of all shareholders

3.       Companies are obliged to provide equal treatment to all shareholders including minority and foreign shareholders.

Whistle blower mechanism

4.       Companies will have to establish a whistle blower mechanism.

Accounting standards

5.       Implement the prescribed accounting standards in letter and spirit in the preparation of financial statements taking into consideration the interest of all stakeholders.

Disclosure of interest by board and key executives

6.       Members of the Board and key executives are obliged to disclose to the board whether they, directly, indirectly or on behalf of third parties, have a material interest in any transaction or matter directly affecting the company.

Woman director and Independent director

7.       Mandatory appointment of a woman director and independent directors.

8.       An independent director cannot act as such in more than seven listed companies.

9.       Any person who is serving as a whole time director in any listed company cannot serve as an independent director in more than three listed companies.

10.   An independent director can hold office for a term up to five consecutive year

Press Note on Tax Credit

CBDT optimist on Standard Operating Procedure; Urges taxpayers to file rectification request for TDS mismatches

April 18, 2014

SECTION 139D OF THE INCOME-TAX ACT, 1961 - FILING OF RETURN IN ELECTRONIC FORM - EXTENSION OF FACILITY TO TAXPAYERS TO VERIFY IF DEMAND IN THEIR CASE IS DUE TO TAX CREDIT MISMATCH ON ACCOUNT OF INCORRECT FURNISHING OF SPECIFIED PARTICULARS AND SUBMIT RECTIFICATION REQUESTS WITH CORRECT PARTICULARS OF TDS/TAX CLAIMS FOR CORRECTION OF THESE DEMANDS

PRESS NOTE NO.402/92/2006-MC, DATED 17-4-2014

 

Detailed instructions have been issued by the CBDT to all the assessing officers laying down a Standard Operating Procedure (SOP) for verification and correction of demand by the AOs. As per this SOP, the taxpayers can get their outstanding tax demand reduced/deleted by applying for rectification along with the requisite documentary evidence of tax/demand already paid. The SOP also makes special provisions for dealing with the tax demand upto Rs. 1,00,000/- in the case of Individuals and HUFs in order to accommodate certain extraordinary situations. The SOP is expected to mitigate the long standing grievances of taxpayers by way of reduction/deletion of tax demands.

 

The CBDT has further noted that many taxpayers are committing mistakes while furnishing their tax credit claims in the return of income. Such mistakes include quoting of invalid/incorrect TAN; quoting of only one TAN against more than one TAN tax credit; furnishing information in wrong TDS Schedules in the Return Form; furnishing wrong challan particulars in respect of Advance tax, Self-assessment tax payments etc. As a result of these mistakes, the tax credit cannot be allowed to the taxpayers while processing returns despite the tax credit being there in 26AS statement. The CBDT, therefore, desires the taxpayers to verify if the demand in their case is due to tax credit mismatch on account of such incorrect particulars and submit rectification requests with correct particulars of TDS/tax claims for correction of these demands. The rectification requests have to be submitted to the jurisdictional assessing officer in case the return was processed by such officer, or the taxpayer is informed by CPC, Bangalore that such rectification is to be carried out by Jurisdictional assessing officer. In all other cases of processing by CPC, Bangalore, an online rectification request can be made by logging into e-filing website http://incometaxindiaefiling.gov.in as per the procedure given in detail in its Help Menu  

Unpaid taxes if a Pvt Ltd company

Unpaid taxes of Private limited Company could not be recovered from its director if he was not grossly negligent in his affairs -GUJ HC- Jashvant lal Vs.ITO

Parliament competent to impose Service Tax on Restaurants and hotels: Bombay HC

Bombay HC upholds service tax levy on AC restaurants; Differs from Kerala HC ratio

 

Bombay HC dismisses writ filed by Indian Hotels and Restaurant Association, upholds validity of service tax levy on air-conditioned restaurants serving liquor u/s 65(105)(zzzzv) of Finance Act; Rejects assessee's challenge to Parliament's competence to tax sale / purchase of goods by way of / as part of any service, covered under "State List" read with Article 366(29A)(f) of Indian Constitution; Tax on sale / purchase of goods and tax on services two distinct concepts; To say that Parliament is denuded of its competence to tax restaurant services entails violence to plain language of Constitutional provisions; Service tax does not tax sale of goods, but services provided in such sale; Entry 54 in List II does not envisage service tax on services rendered by restaurant to any person, as referred u/s 65(105)(zzzzv); Rejects Kerala HC's single Judge ruling in Kerala Classified Hotels and Resorts Association for want of categorical finding that tax in question covered by State List; HC accepts Revenue's reliance on SC ruling in Tamil Nadu Kalyana Mandapam pertaining to catering services  : Bombay HC

Section 40(a)(ia),

IT: In view of retrospective amendment in section 40(a)(ia), deduction made in last month of financial year would be allowable, if same was deposited before filing of return under section 139(1)

[2014] 42 taxmann.com 547 (Rajasthan)

HIGH COURT OF RAJASTHAN

Commissioner of Income-tax, Udaipur
v.
Choudhary Construction Company

Sum received by retiring partner

Sum received by retiring partner towards his share capital wasn’t liable to capital gain tax
April 14, 2014[2014] 43 taxmann.com 253 (Hyderabad - Trib.)

New e forms

FYI - The ministry of Corporate Affairs vide public notice dated 11th April 2014 stated  that all the new e forms   under the Companies Act 2013 would be available for  uploading from the 28th day of April 2014 (instead of staggered roll out of new e forms from the 14th of April, 2014)

CIN Mandatory

Corporate Identification Number (CIN) to be mandatorily mentioned on letterheads etc. from 1st April, 2014

In the latest from the Ministry of Corporate Affairs, 183 new Sections of the Companies Act 2013 have been notified to take effect from April 1, 2014.

As per Section 12 of the Act notified from 1st April, 2014, every company is mandatorily required to mention its Corporate Identification Number (CIN) along with the name and address of registered office on letterheads, invoices, notices and on all official correspondence and publications. Additionally, contact details, email and website address, if any, must be incorporated in such documents mentioned from April 1, 2014.

In case of any failure to quote the CIN number, penalty of Rs 1,000 per day shall be imposed on the defaulting company and on every officer in default for every day during which the default continues. However, maximum penalty imposable shall not exceed Rs 100,000.