Analysis and Issues in Schedule AL- ITR 3 & ITR 4

Analysis and Issues in Schedule AL

(Statement of Assets and Liabilities at the end of the Year)

ITR 3 & 4

This is a new schedule incorporated in ITR 3 & 4 for the Assessment Year 2013-14. An individual assessee is required to submit Assets and Liabilities at the end of the year 31^st March, 2013.  It is mandatory if total income of the assessee exceeds Rs.25 Lakhs.

ITR 3 & ITR 4

Total Income ---à Part B-TI –Computation of Total Income- Column-13

Total Income

Aggregate income of all 5 heads of income after setting of losses and deductions under Chapter VIA.

ITR Instructions to fill Schedule AL

·         (i) This Schedule is to be filled giving details of any property held by the assessee and the corresponding liabilities, other than those included in the balance sheet filled in Part A – BS of the return.

·         (ii) The assets to be reported will not include personal effects, i.e. to say, movable property (including wearing apparel and furniture) held for personal use by the assessee or any member of his family dependent on him but excludes items mentioned in column a, b, c and d of column 2 under column A of the Schedule.

·         (iii) For the purpose of column b of column 2 under column A, jewellery includes.-

(a) Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stone, and whether or not worked or sewn into any wearing apparel

(b) Precious or semi-precious stones, whether or not set in any furniture, utensil or other article or worked or sewn into any wearing apparel

Regards,

CA.VMV S RAO

Date extended for filing of online return for the first quarter 2013-14 to 07-08-2013

Circular dated 25-07-2013 – date extended for filing of online return for the first quarter 2013-14 to 07-08-2013 and last date of filing of hardcopy of return 10-08-2013. Last date of filing of annexure 2C and 2D online 07-09-2013 and filing of hardcopy annexure 2C and 2D is 10-09-2013.

Prepayment charges for closure of loan account allowed

Prepayment charges for closure of loan account which was taken for acquisition of property are allowable under section 24(b) of the Income Tax Act. [Windermere properties (Pvt.) limited v/s DY. CIT [2013]34 taxmann.com 109(Mumbai-Tribunal)].

Time for realization and repatriation to India

Time for realization and repatriation to India of Value of goods or software exported would be 9 months from date of export w.e.f 01-04-2013. [Circular 14 of 22-07-2013].

Rent received from renting of flats held as stock-in-trade

Rent received from renting of flats held as stock-in-trade shall be taxable under the head "House Property".[The High Court of Delhi at New Delhi- New Delhi Hotels Limited versus ACIT].

Similar to the case Azimganj Estate (P.) Ltd. v. CIT (2012) 206 Taxman 308 (Cal.).....On this issue, the Calcutta High Court held that the rental income from the unsold flats of a builder shall be taxable as “income from house property” as provided under section 22 and since it specifically falls under this head, it cannot be taxed under the head “Profit and gains from business or profession”. Therefore, the assessee would be entitled to claim statutory deduction of 30% from such rental income as per section 24. The fact that the said flats have been claimed as not chargeable to wealth-tax, treating the same as stock-in-trade, will not affect the computation of income under the Income-tax Act, 1961

CBDT Instruction Regarding Grant Of Interest U/s 244A On Refunds

CBDT Instruction Regarding Grant Of Interest U/s 244A On Refunds

Pursuant to the judgement of the Delhi high Court in Court On Its Own Motion Vs, UOI 352 ITR 273 the CBDT has issued Instruction No. 7/2013 dated 15.07.2013 stating that when the delay in processing the refund is not attributable to the assessee but is due to the fault of the Revenue, interest should be paid under section 244A of the Income-tax Act. The High Court had held that false or wrong uploading of past arrears and failure to follow the mandate before adjustment is made under Section 245 of the Act, cannot be attributed and treated as fault of the assessee. The CBDT has directed that in view of the direction of the High Court, in no case should interest u/s 244A of the Act be denied to the assessee where the assessee is not at fault. It is also stated that the observation of the High Court should be strictly kept in mind while dealing with such matters

Amendment to Securities Laws

An Ordinance to Amend the Securities Laws Promulgated; SEBI would have now Powers to Regulate any Pooling of Funds Under An Investment Contract Involving A Corpus Of Rs.100 Crore Or More, Attach Assets In Case Of Non-Compliance And Chairman SEBI would have Powers to Authorize The Carrying out of Search and Seizure Operations, As Part of Efforts to Crack Down on Ponzi Schemes
The President was pleased to promulgate an Ordinance to amend the Securities Laws today. This was consequent to the approval of the Cabinet, which met on July 17, 2013, to amend Securities and Exchange Board of India (SEBI) Act and related Acts for providing more powers to the capital markets regulator for enforcement against illegal Collective Investment Schemes and to curb insider trading.

Owing to new and innovative methods of raising funds from investors, such as art funds, time-share funds, emu /goat farming schemes, there has been regulatory gap /overlap regarding types of instruments / fund raising. At the same time, SEBI receives complaints against unapproved fund raising activities of certain companies that claim that they do not come under the purview of SEBI Collective Investment Scheme regulations. With the amendments in force now, SEBI would have powers to regulate any pooling of funds under an investment contract involving a corpus of Rs.100 Crore or more, attach assets in case of non-compliance and Chairman SEBI would have powers to authorize the carrying out of search and seizure operations, as part of efforts to crack down on ponzi schemes.

Besides, SEBI would have powers to seek information, such as telephone call data records, from any persons or entities in respect to any securities transaction being investigated by it. Establishment of Special Courts enabled by this Ordinance would fast-track the resolution of pending SEBI related cases.

These amendments to the SEBI Act, SCR Act and the Depositories Act were finalized after detailed consultations with SEBI and other Ministries and Departments including MHA, DoT, MCA, DFS etc. Government believes that these amendments would give SEBI the legal backing to clamp down on unscrupulous entities that are using newer methods to take gullible investors for a ride. The promulgation of the Ordinance demonstrates the firm commitment and resolve of the Government to act with speed and alacrity to curb irregularities and frauds in securities market.


*****

DSM/RS/ka
(Release ID :97305)

Gold Import Vs CAD

RBI tightens gold import norms to squeeze CAD

The Reserve Bank of India (RBI) on Monday streamlined its gold import policy to ensure at least 20 per cent of the yellow metal sourced from abroad was made available to the country's gems & jewellery exporters. Also, for domestic use, the nominated banks and importing agencies have been made responsible for making gold available only to the entities engaged in jewellery business and bullion dealers supplying gold to jewellers.

While the move is aimed at helping manage the country's precarious current account deficit (CAD) situation and improve gold availability for exporters, domestic prices of the yellow metal might rise. For instance, insisting on meeting certain export levels before allowing fresh import of gold would limit the availability for domestic use, pushing prices up.

The revision has been done in consultation with the government and will be applicable to gold imports in any form /purity, including gold coins.

Besides banks and other agencies that import gold, the new regime would cover the bullion refineries that imported gold in Dore form (raw form), RBI said in statement.

RBI had imposed certain restrictions on import of gold in various forms earlier, too. Those were applicable on nominated banks, agencies, premier, star trading houses, units in special economic zones (SEZs) and export-oriented units, which were permitted to import gold for use in the domestic sector.

The central bank said any import of gold under any type of scheme would follow the 20-80 principle. The present instructions on import of gold on a consignment basis and the letter-of-credit restrictions stand withdrawn.

Under the new norms, an entity importing 100 kg of gold (which will have to be kept in bonded warehouse), for example, will have to release 20 kg to exporters (of gold, gold jewellery) against an undertaking to Customs authorities.

This entity would be permitted by the Customs to make fresh imports only to the extent of actual exports out of the 20 kg of gold held in the bonded warehouse, RBI added. For instance, it will be permitted to undertake fresh imports only after at least 15 kg of this 20 kg has been exported.

The latest move is expected to lead to higher domestic prices, say experts. Naveen Mathur, head of commodities at Angel Broking, said too many restrictions on imports with complex procedures would lead to supply squeeze in the domestic market, pushing prices.

RBI also said the government would issue separate instructions, if any, to the Customs authorities/Directorate General of Foreign Trade to operationalise and monitor these import restrictions.

The latest scheme follows exporters' meeting last month with Commerce Minister Anand Sharma. They had complained that banks were not importing gold for exporters and that jewellery exports were suffering due to low gold availability.

Jewellery exports fell in the first two months of the current financial year, despite a favourable currency and improving economic conditions in the US, one of India's major export markets.

"This will help the domestic and export industry. That's because there was no gold available. The move will increase supply," said Gitanjali Gems Managing Director Mehul Choksi.

Given the low availability of gold (due to increased import duty, and banks being allowed gold imports only on a consignment basis), monthly gold jewellery exports fell a staggering 73 per cent to $556.81 million in June, from $2,062.32 million in the same month a year earlier. In rupee terms, these exports plunged 72 per cent to Rs 3,251.80 crore, from Rs 11,555.17 crore in the month the previous year, according to data compiled by the Gems & Jewellery Export Promotion Council.

RBI said banks and agencies should also ensure compliance with instructions while effecting the foreign exchange transactions put through by/for their clients.

RBI also said: "Entities/units in SEZs and EoUs, premier and star trading houses are permitted to import gold exclusively for the purpose of exports only." This means the units that were allowed to supply certain part of gold in domestic market would now not be able to do so.

Source: Business Standard

Section 271(1)(c) penalty under Income Tax Act

No section 271(1)(c) penalty under Income Tax Act even if explanation unproved if it is not disproved by assessment officer. [Saket Agarwal v/s ITO (ITAT Delhi)].

In case of mismatch, assessment officer to check deposit of TDS and give credit as per Form 16,16A

In case of mismatch, assessment officer to check deposit of TDS and give credit as per Form 16,16A. May ask deductor to file correction statement. [Instruction 5 of 08-07-2013].

Penalty was liable to be waived off under section 80 of the Service Tax Act

Where an assessee having limited operations had co-operated in proceedings and paid service tax along with interest, penalty was liable to be waived off under section 80 of the Service Tax Act. [Royal travels v/s commissioner of central excise [2013] 35 taxmann.com 19 (Ahmedabad – CESTAT)].

Section 194I now bifurcated

TDS update- section 194I now bifurcated - 194IA (2 p.c.) and 194IB (10 p.c.) use new sections for filing E-TDS return.

GN on Tax Audit-2013

Guidance Note on Tax Audit u/s 44AB of the Income-tax Act, 1961- Revised 2013 Edition. - (09-07-2013)

The result of ICAI final exam held in May, 2013 and (CPT) held in June, 2013

The result of ICAI final exam held in May, 2013 and (CPT) held in June, 2013 are likely to be declared on 16-07-2013 around 2.00 P.M.

The result of [ISA] assessment test held on 22-06-2013

The result of [ISA] assessment test held on 22-06-2013 is likely to be declared on 16-07-2013 around 2.00 P.M.

Income tax department has released Income Tax Return (ITR ) 7

Income tax department has released Income Tax Return (ITR ) 7 as applicable for persons including companies required to furnish return under section 139(4A) or section 139(4B) or section 139(4C) or section 139(4D) for e-filing of returns for assessment year 2013-14 of financial year 2012-13.

EXEMPTION TO SPECIAL ECONOMIC ZONE FROM SERVICE TAX

EXEMPTION TO SPECIAL ECONOMIC ZONE FROM SERVICE TAX

By: Mr. M. GOVINDARAJAN

In exercise of the powers conferred by Section 93(1) of the Finance Act, 1994 read with Section 95(3) of Finance Act, 2004 and Section 140(3) of Finance Act 2007 and in supersession of Notification No. 40/2012-Service tax, dated 20.06.2012 the Government by Notification No. 12/2013-Service tax, dated 01.07.2013 gave exemption to the services on which service tax is leviable under Section 66B of the Finance Act, 1994, received by a Unit located in a Special Economic Zone ('SEZ' for short) and Developer of SEZ ('Developer' for short) and used for the authorized operation from the whole of the service tax, education cess and secondary and higher education cess levied thereon. This notification came into effect from 01.07.2013. The exemption is provided as detailed below: The exemption shall be provided by way of refund of service tax paid on the specified services received by the SEZ Unit or the Developer and used for the authorized operations; Where the specified services received by the SEZ or the developer are used exclusively for the authorized operations, there is an option not to pay the service tax ab initio, subject to the conditions and procedures. Instead of availing exemption or claiming refund the SEZ unit is having the option to avail CENVAT credit on the specified services in accordance with the CENVAT credit Rules, 2004. Conditions The following are the conditions prescribed in this Notification are as follows: The SEZ unit or the developer is to get an approval of the Approval Committee of the list of services required for authorized operations; The ab initio exemption shall be allowed subject to the following procedure and conditions: A declaration shall be furnished in Form A1 verified by the specified officer of the SEZ along with the list of specified services; On receipt of the declaration the authorization shall be issued by the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be to the SEZ unit or the developer in Form – A2; The SEZ unit or the Developer has to provide a copy of the said authorization to the provider of specified services; On the basis of the authorization the service provider shall provide the specified services to the SEZ unit or the Developer without payment of service tax; The SEZ unit or the Developer has to file Quarterly report in Form A3 furnishing the details of specified services received by it without payment of duty; An undertaking in Form A1 is to be furnished that in case the specified services on which exemption has been claimed are not exclusively used for authorized operation or were found to have been used exclusively for authorized operation, it shall pay to the government an amount that is claimed by way of exemption from service tax and ceases along with interest as applicable on delayed payment of service tax; The refund of service tax on the specified services that are not exclusively used for authorized operation or the specified services on which ab-initio exemption is admissible but not claimed, shall be allowed subject to the following procedure and conditions: The service tax paid on the specified services common authorized to the authorized operation in SEZ and DTA units (Domestic Tariff Area) shall be distributed amongst the SEZ unit or the developer and DTA in the manner as prescribed in Rule 7 of CENVAT Credit Rules; For the purpose of distribution the turnover shall be taken during the relevant period; The eligibility of refund is of the service tax paid on- The specified service on which ab-initio exemption is admissible but not claimed; and The amount distributed to it. The claim for refund is to be made to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, in Form A4; The amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse change shall have been paid under the provisions of the Act; The claim for refund shall be made within one year from the end of the month in which actual payment of service tax was made to the service provider or such extended period as the Authority shall permit; Only one claim of refund is to be made for every quarter; If already not registered, before filing a claim for refund under this Notification, an application for registration shall be made; If more than one SEZ unit registered under a common service tax registration, a common refund may be claimed at the option of the assessee. The units shall maintain proper account of receipt and use of the specified services, on which exemption or refund is claimed for authorized operations. Erroneous refund Where any sum of service tax paid on specified services is erroneously refunded for any reason whatsoever, such service tax refunded shall be recoverable under the provisions of the said Act and the rules made there under, as if the recovery of service tax is erroneously refunded.

Not to enforce demand if intimation u/s 143(1)

CBDT – Not to enforce demand if intimation u/s 143(1) undelivered for returns processed prior to 31-03-2010 instruction no.4/2013 dated 05-07-2013 [honorable delhi high court vide judgment in case of court on its own motion v/s UOI].

SA-700 on tax audit report u/s 44AB

SA-700 on tax audit report u/s 44AB of the Income Tax Act, not applicable for reports filed up to 31st March, 2014.

Section 43(5)(e) of the Income Tax Act

Conditions to be fulfilled to be notified as a recognised association u/s 43(5)(e) of the Income Tax Act, for derivative transactions [notification no. 51/2013, dated july 4, 2013 S.O. 2017(E)].

CBDT instructions no.3

CBDT instructions no.3 dated 05-07-2013 issued regarding procedure to be followed in receipt and disposal of rectification application u/s 154 of the Income Tax Act.

Circular on Writing of Arrears of Excise,Customs & ST

Circular No.  971/5 /2013

F.No.296/10/2009-CX-9(Pt.)

Government of India

Ministry of Finance

Department of Revenue

Central Board of Customs & Excise

New Delhi, the 29th May, 2013

To

            All Chief Commissioners

            All Directors General

           

Sub:     Writing off of arrears of Central Excise duty, Customs duty and Service Tax - Constitution of Committees to advise the authority for writing off of arrears-reg.

Sir,

I am directed to refer to the Circular No. 946/07/2011 dated 01.06.2011 issued from this file number on the subject and to say that certain amendments have been made in the Delegation of Financial Power Rules, 1978 vide S.O. 3624 dated 14.12.2012. A copy of the said notification is enclosed.

2.         With this amendment, the authorities competent to write-off the arrears of Central Excise and the Commissioner of Service Tax are also delegated powers to write-off the arrears of Service Tax as well. Consequently, the constitution of the Committees for examining the proposals for write-off of irrecoverable arrears and recommending deserving cases to the authority competent to order such write-off, also requires modification.  Hence, para 4 & 5 of the Circular No. 946/07/2011 be substituted by the following:-

"4.        The constitution of the Committees and the powers to write off, delegated to the competent authorities are as under:-

S. No.	Competent Authority	Constitution of the Committee	Powers delegated
1.	Chief Commissioner of  Customs & Central Excise/ Central Excise/ Customs	Committee of two Chief Commissioners of  Customs & Central Excise/ Central Excise/ Customs and the Chief Commissioner (TAR)	(a) Full powers for abandonment of irrecoverable amounts of fines and penalties imposed under the Customs Act, 1962, the Central Excise Act, 1944, the Gold Control Act, 1968 and the Finance Act, 1994; and  (b) To write off irrecoverable amounts of Customs or Central Excise duty or Service Tax upto Rs. 15 lakhs subject to a report to the Board.
2.	Commissioner of  Customs & Central Excise / Commissioner of Customs / Commissioner of Central Excise/ Commissioner of Service Tax	Committee of two Commissioners of  Customs & Central Excise/ Central Excise/ Customs/ Service Tax and one Commissioner (TAR) nominated by CC(TAR))	(a) Full powers for abandonment of irrecoverable amounts of fines and penalties imposed under the Customs Act, 1962, the Central Excise Act, 1944, the Gold Control Act, 1968 and the Finance Act, 1994; and   (b) To write off irrecoverable amounts of Customs or Central Excise duty or Service Tax upto Rs. 10 lakhs subject to a report to the Chief Commissioner.

5.         As regards write off of interest amount, it is clarified that once duty/ tax involved is written off, the interest due thereon would get automatically written off.  It is also clarified that the duty/ tax involved in the case would determine the level of authority/Committee competent to write off the amount involved."

Click here for : Notification  |   Circular No. 946/07/2011 dated 01.06.2011

Yours faithfully,

(Surendra Singh)

Under Secretary to the Govt. of India

Tel: 2309 2413

ICAI cannot be deemed to be pursuing commercial activities by

CBDT Instructions On S. 143(1) Intimations And S. 154 Rectifications

July 5th, 2013

The CBDT has issued Instruction No. 03/2013 dated 05.07.2013 with regard to the the directive issued by the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273 on the procedure to be followed on the receipt and disposal of rectification applications filed u/s 154 of the Act. The CBDT has set out a detailed procedure on where applications should be received, the maintenance of registers and their disposal.
 The CBDT has also issued Instruction No. 04/2013 dated 05.07.2013 with regard to the directive issued by the Delhi High Court in Court on Its Own Motion vs. UOI 352 ITR 273 that the demand should not be enforced in cases where no intimation u/s 143(1) was sent by the field authorities in respect of returns which were processed prior to 31.03.2010.

ICAI cannot be deemed to be pursuing commercial activities by coaching classes

ICAI cannot be deemed to be pursuing commercial activities by taking coaching classes or campus placements for a fee exemption under 10(23C)(iv) cannot be denied to ICAI on account of fees received by it for providing coaching classes and campus placement for its students. [ ICAI v/s Director General of Income-tax (exemptions) [2013] 35 taxmann.com 140 (Delhi)].

For exemption under sec 54F

For exemption under sec 54F, deposit in capital gains A/c scheme by due date of filing ITR under sec 139(4). [CIT, Rohtak v/s Shri J S Chawla, HC, Punjab and Haryana].

Kerala HC on ST on AC Restuarants

Kerala HC rules service tax on AC restaurants invalid

The Kerala High Court on Wednesday held that the Centre's decision to impose service tax on food and beverages supplied by air-conditioned restaurants with licences to serve alcoholic beverages in the 2011-12 budget was beyond the legislative competence of Parliament.

Justice A.M. Shaffique passed the verdict while allowing a batch of writ petitions filed by Kerala Bar Hotels Association and certain bar hoteliers.

The service tax was imposed on air-conditioned restaurants with licence to serve alcoholic beverages in the 2011-12 Union Budget. A service tax of 12.36 per cent applicable on 30 per cent of the bill had been imposed on such restaurants, which came into effect on April 1 last year.

The petitioners contended that Article 366 Section 29 (f) of the Constitution defined supply of food and drinks in hotels as 'deemed sales' and empowered the State governments to collect sales tax on the total value of sales. Therefore, the Centre has no authority or power to collect such service tax.

The court observed that the every purpose of incorporating the definition of tax on sale or purchase of goods in Article 366 was to empower the State government to impose tax on the supply, whether it was by way of or as part of any service of goods either being food or any other article for human consumption or any drink, intoxicating or not.

The Constitution permitted sale of goods during service as taxable. Necessarily, service formed part of sale of goods. Therefore, the State government alone has the legislative competence to enact a law imposing a tax on service elements forming part of sales of goods, the court ruled.

The court also ordered that if the petitioners had made any payments on the basis of the impugned clauses, they were entitled to seek refund of the amount.

sr

ICAI clarified regarding deferment of SCA norms

ICAI clarified regarding deferment of SCA norms (Regarding DISA Requirement) of PSB’s by one year i.e. the norms will be effective from the year 2014-15 and bank audit fees increase clarification.

Books of account pre-requisites to tax unexplained cash credit

Books of account pre-requisites to tax unexplained cash credit, no additions for deposit in bank account in absence of books.[ CIT(A) – ITO vs kamal kumar mishra [2013] 33 taxmann.com 610 (Lucknow - Tribunal)].

Service tax department has issued notification

Service tax department has issued notification no. 12/2013-ST dated 01-07-2013 along with forms A-1, A-2, A-3 and A-4 regarding exemption on services provided to SEZ authorised operations.

Central board of direct tax withdraws circular

Central board of direct tax withdraws circular no.2 dated 26-03-2013 on profit split method (PSM) for transfer pricing, circular no. 05/2013 of 29-06-2013.

No penalty under section 76 was leviable if service tax was paid belatedly

No penalty under section 76 was leviable if service tax was paid belatedly with interest prior to issue of show cause notice – [professional couriers vs commissioner of customs, central excise & service tax[2013] 34 taxmann.com 120 (Bangalore - CESTAT)].

Breather for IT firms as CBDT withdraws controversial tax circular

Breather for IT firms as CBDT withdraws controversial tax circular

In a major relief to the IT industry, the Central Board of Direct Taxes (CBDT) today announced the withdrawal of a controversial circular that could have adversely impacted the tax spend for this industry.

The CBDT also modified another circular relating to taxation of R&D centres that also has a crucial role in software development.

The circular (No 2 of 2013) that has been withdrawn related to the adoption of Profit Split Method (PSM) as a preferred mode for computation of tax liability. The decisions were taken following representation from the industry for clarity on two circulars concerning global taxation of transfer pricing.

Tax experts hailed the latest announcements stating that compliance cost will come down and chances of double taxation may be reduced.

"The rescinding of Circular No. 2 is very good news for the industry. This is a positive move and would certainly improve the sentiments of foreign investors who were shying away from investing in R&D in India," said Vijay Iyer, National Transfer Pricing Leader, Ernst & Young India

Safe harbour rules

The Finance Ministry also said that CBDT would soon issue safe harbour rules. Such a move would bring further certainty in assessment of development centres that are engaged in providing contract R&D services.

Safe harbour rules have been defined as circumstances in which the income-tax authorities shall accept the transfer price declared by the assessee.

The Income Tax Department by withdrawing Circular No 2 has made sure that profit-split method, which could lead to higher taxation, will not be the preferred mode.

Besides this method, there are five other methods for computing tax liability under the transfer pricing rules. These include resale price method, cost plus method, comparable uncontrolled price method and transactional net margin method.

Retention money is not an income

Retention money is not an income of contractor if it has got no rights on it till satisfactory completion of work. [DIT (International taxation) vs. Ballast Nedam International [2013] 34 taxmann.com 270 (Gujarat)].

Standardizing the process of filing application under section 10(46)

Ministry of Finance, Central Board of Direct Tax issued [Notification no. F.NO. 196/6/2013- ITA.1 by dated 24-06-2013], regarding standardizing the process of filing application under section 10(46) of the Income Tax Act, 1961.

Remuneration for branch audit work of the bank

Remuneration for branch audit work of the bank. Category of bank branch on the basis of quantum of advances. Rates of audit fees:-
Up to 10 crore-Rs. 40,250/-
Above 10 crore up to 20 crore- Rs. 57,500/-
Above 20 crore up to 30 crore- Rs. 79,350/-
Above 30 crore up to 50 crore- Rs. 1,20,750/-
Above 50 crore up to 75 crore- Rs. 1,38,000/-.

The soft ITR 5 for the assessment

The soft ITR 5 for the assessment year 2013-14 is now available at Income Tax department website.

RBI has increased the bank audit fees

RBI has increased the bank audit fees payable form financial year 2012-13 as per [RBI Notification no. DBS.ARS.No.BC. 08/ 08.92.001/ 2012-13 dated 25-06- 2013].

Lower Deduction Certificate

Lower Deduction Certificate to a unit enough to cover other units of assessee even if separate TANs. [CIT Chandigarh Vs Parle Biscuits. High Court of Punjab & Haryana].

Right to collect toll is an intangible asset

Right to collect toll is an intangible asset within the purview of sec. 32(1)(ii) of the Income Tax Act and is eligible for depreciation. [ACIT Vs. Ashoka Infraways (P.) Limited, 2013] 33 taxmann.com 499 (Pune - Tribunal)].

demerger abundant

Resultant Company can file appeal after demerger abundant caution appeal by demerged Company dismissed to avoid duplicity. [Cairn Energy Gujarat BV Vs. ADIT [2013] 34 taxmann.com 281 (Ahmedabad - Tribunal)]

No violation of Sec 269SS

No violation of Sec 269SS for cash loan from relative if assessee unable to get it in cheque or DD for some valid reason. [CIT-I Vs M.Yesodha, Chennai High Court].

Stridhan of a lady

Stridhan of a lady seized from her ex-husband’s premises during search of Income Tax must be handed over to her. [High Court Of Gujarat at Ahmedabad Renuka R Modi].

Commodity Transaction Tax

Chapter VII of Finance Act, 2013 on Commodity Transaction Tax effective from July 1, 2013

SECTION 115 OF THE FINANCE ACT, 2013 - COMMODITIES TRANSACTION TAX – NOTIFIED DATE FOR ENFORCEMENT OF CHAPTER VII OF FINANCE ACT, 2013

NOTIFICATION NO. 45/2013 [F.NO.142/09/2013-TPL]/SO 1768(E), DATED 19-6-2013

In exercise of the powers conferred by sub-section (2) of section 115 of the Finance Act, 2013 (17 of 2013), the Central Government hereby appoints the 1st day of July, 2013 as the date on which Chapter VII of the said Act shall come into force.

Valuation loss is allowable

Valuation loss is allowable even if stock-in-trade shown as investment in compliance of RBI guidelines. [Karnataka Bank Ltd. Vs. ACIT [2013] 34 taxmann.com 150 (Karnataka).]

Addition on the basis of seized material

Addition on the basis of seized material was unjustified if assessee was able to show that the admissions made during survey were incorrect. [Acit V. Maya Trading Co.( 2013) 34 taxmann.com 144 (Agra – Trib)].

No disallowance of expenditure u/s. 40(a)(ia)

No disallowance of expenditure u/s. 40(a)(ia) for default of short-deduction of TDS under Income Tax Act.[Income Tax Appellate Tribunal Mumbai].

Rejection of Books of account

• Mere rejection of Books of account and estimation of profit cannot be ground for concealment penalty under Income Tax Act. [High Court of Gujarat Whitelene Chemicals].

SC on S. 194C TDS does not apply to contract manufacturing agreements

CIT vs. Silver Oak Laboratories P. Ltd (Supreme Court) S. 194C TDS does not apply to contract manufacturing agreements  The assessee, a manufacturer of pharmaceutical products, entered into agreements with various manufacturers who manufactured the said items according to the specifications provided by the assessee. The AO held that the transaction between the assessee and the manufacturer was in the nature of a "works contract" and fell within the purview of s. 194C and that the assessee ought to have deducted TDS thereon. The assessee was held to be in default and liable to pay the tax and interest u/s 201(1) & 201(1A). On appeal by the assessee, the Tribunal held that the transaction was one of sale simplicitor and was not in the nature of a work contract and that the assessee was not liable to deduct TDS u/s 194C. The department's appeal to the High Court was dismissed by following Reebok India 306 ITR 124 (Del). On appeal by the department to the Supreme Court, HELD dismissing the SLP:  On examining the terms and conditions, invoices, purchase orders and challans indicating payment of excise duty, there is no material on record to indicate that the transaction in question is a "contract for carrying out works". Hence, s. 194C is not attracted. S. 194C has been amended by the Finance (No.2) Act, 2009, w.e.f. 1.10.2009 to provide that "work" includes manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from such customer. It is clarified that the definition of the word "work" will not include manufacturing or supplying a product according to the requirement or specification of a customer by using material purchased from a person other than such customer.  This impliedly approves the view taken in Glenmark Pharmaceuticals 324 ITR 199 (Bom)

Double taxation agreement with Monaco

Double taxation agreement with Monaco [Notification no. 43/2013 dated 12/06/2013 SO 924(E)].

Conversion of company into LLP

On conversion of company into LLP, Auditor of the company deemed to be auditor of LLP. [Circular of Ministry of Corporate Affairs].

E-filing of form 3CEB

E-filing of form 3CEB for specified domestic transactions mandatory besides for foreign transactions. [New Rules and Revised Form. Income Tax 6th Amendment Rules, 2013] .

Statement of the assessee in survey operations

Statement of the assessee in survey operations not conclusive piece of evidence under Section 133A of the Income Tax Act. [CIT Vs P. Bala Subramanian, 2013, 354ITR 116 (Madras)].

Periodic legal audit and reverification of title deeds

Periodic legal audit and reverification of title deeds by banks for credit exposures of 5 crore and above till the loan stands fully repaid.[ RBI Circular of 07-06-2013].

Penalty u/s 271 (1)(c)

Penalty u/s 271 (1)(c) of the Income Tax Act cannot be levied in respect of an addition made u/s 50C.[Commissioner of Income Tax Vs Madan Theatres Limited (Calcutta High Court)].

ITR- IV Soft form no. 4

ITR- IV Soft form no. 4 for the assessment year 2013-14 is now available on Income Tax Site.

Home loan prepayment fee

Home loan prepayment fee/foreclosure charges are eligible for deduction under head Income from house property. [Case of Windermere Properties, ITAT Mumbai].

Income Tax Return for assessment year 2013-14

Central Board of Direct Taxes notifies Income Tax Return for assessment year 2013-14 (Financial year 2012-13), IncomeTax (Third Amendment) Rules, 2013 – Amendment in Rule 12 and substitution of Forms Sahaj (ITR-1), ITR-2, ITR-3, Sugam (ITR-4S), ITR-4 and ITR-V notification no, 34/2013 [F.NO.142/5/2013-TPL]/SO 1111(E), dated 01-05-2013.

Concurrent audit for Central Bank

Concurrent audit for Central Bank link to apply online ishttp://119.82.71.21/caudit/con_audit_details.aspx or visit website of Central Bankwww.centralbankofindia.co.in. Last date to apply is 13/06/2013.

Cost Inflation Index-2013-14- 939

SECTION 48, EXPLANATION (v) OF THE INCOME-TAX ACT, 1961 - CAPITAL GAINS - COMPUTATION OF - NOTIFIED COST INFLATION INDEX FOR FINANCIAL YEAR 2013-14

NOTIFICATION NO. 40/2013 [F. NO. 142/7/2013-TPL]/SO 1464(E), DATED 6-6-2013

In exercise of the powers conferred by clause (v) of the Explanation to section 48 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby makes the following amendment in the notification of the Government of India in the Ministry of Finance (Department of Revenue), Central Board of Direct Taxes, published in the Gazette of India, number S.O. 709 (E), dated the 20th August, 1998, namely:—

In the said notification, in the Table, after serial number 32 and the entries relating thereto, the following serial number and entries shall be inserted, namely :-

Sl. No.	Financial Year	Cost Inflation Index
(1)	(2)	(3)
"33	2013-14	939"

Transfer pricing law

Transfer pricing law not applies to share investment transactions under Income Tax Act. In the Income Tax Appellate Tribunal Hyderabad Bench M/s Vijai Electricals Limited.

TDS on Poperty

Buyer of property to download and issue to seller, TDS certificate in form 16B in 15 days from due date of deposit of TDS. (22 days from end of month of Sale).

E-payment of TDS

E-payment of TDS on sale of property in challan cum statement in Form 26QB in 7 days from end of month in which deduction made. Income Tax 5th Amendment Rules, 31-05-2013.

TDS on immovable proprty

The Finance Act, 2013 had provided that purchaser of an immovable property (other than agricultural land) worth over Rs 50 lacs is required to pay withholding tax at the rate of 1% from the consideration payable to a resident transferor. The rate at which tax is to be cut is 1%, but it would go up to as high as 20% if the seller does not disclose his permanent account number. This amendment is effective from 01-06- 2013.

No penalty for mere change in head

No penalty for mere change in head of income under Income Tax Act. [ITAT Bench, Ahmedabad, M/s.Crown Tradelink Pvt. Ltd].

Acknowledgement to be given by banks to their customers at the time of submission of Form 15G/15H. [RBI Notification of 31-05-2013].

Canara Bank empanelment

Canara Bank invites applications from the eligible/interested Individuals / Firms / Companies for empanelment as concurrent auditors for conducting concurrent audit in the identified 615 branches / units for the period from 01.07.2013 to 30.06.2014.

Form 15 G Ack by Banks

Date: May 31, 2013 Acknowledgement by banks at the time of submission of Form 15-G / 15-H RBI/2012-13/516 DBOD.No.Leg.BC.100/09.07.005/2012-13 May 31, 2013 All Scheduled Commercial Banks (excluding RRBs) Dear Sir/Madam, Acknowledgement by banks at the time of submission of Form 15-G / 15-H As you are aware banks are not required to deduct TDS from depositors who submit declaration in Form 15-G/15-H under Income Tax Rules, 1962. However, it has been brought to our notice that despite submission of Form 15-G/15-H by customers, banks are deducting tax at source, at times, causing inconvenience to customers resulting in a number of complaints.  Such instances arise because either the forms are misplaced or a track is not kept of forms received in the branches. 2. The matter has been examined by us in consultation with Indian Banks' Association (IBA). With a view to protect interest of the depositors and for rendering better customer service, banks are advised to give an acknowledgment at the time of receipt of Form 15-G/15-H. This will help in building a system of accountability and customers will not be put to inconvenience due to any omission on part of the banks. Yours faithfully, (Rajesh Verma) Chief General Manager  Top

MCA Circular on Declaration

Circular No: 11/2013 File No. 17/118/2012 CL V Government of India Ministry of Corporate Affairs 5th Floor, Shastri Bhawan Rajendra Prasad Road New Delhi – 110001 Dated: 29th May, 2013 To All Regional Directors All Registrar of Companies Sub: Power of ROCs to obtain declaration/ affidavits from subscribers/first directors at the time of incorporation. Sir, The matter of protection of interest of investors, including depositors, is very important to ensure healthy corporate capital market environment in the country. The recent instances of raising of monies by companies in a manner which is opaque/convoluted, non-accountable and which does not protect interests of depositors have been taken note of by the Ministry seriously. Keeping in view the need to protect the interest of investors and ensure that companies raise monies in accordance with the provisions of the Companies Act/Deposit Rules, it is clarified that in exercise of the powers under the Companies Act, the Registrar of Companies may obtain declaration/affidavits from subscribers/first directors first at the time of incorporation and from directors, subsequently whenever company changes its objects, to the effect that company/directors shall not accept deposits unless compliance with the applicable provisions ofCompanies Act, 1956, RBI Act, 1934 and SEBI Act, 1992 and rules/directions/regulations made there under are duly complied and filed with the concerned authorities. Yours faithfully (Sanjay Shorey) Joint Director 23389622

I

Section 2(22)(e) not applies to amount advanced for investment

Section 2(22)(e) not applies to amount advanced for investment on behalf of company under Income tax act. [ITAT DELHI BENCH Adarsh Kapoor]

No penalty merely because claim of the assessee was disallowed

No penalty merely because claim of the assessee was disallowed u/s.40(a)(ia) under Income tax act. [ITAT MUMBAI Tanushree Basu]