[aaykarbhavan] Judgments and Information [6 Attachments]

CASE LAWS
2014-TIOL-1689- HC-P&H-IT
S C Kumar Vs ITO
Income Tax Act – Section 194A – Criminal Procedure Code, 1973.
Keywords: TDS, non-deduction of tax at source & Nominee Director.
Whether order summoning accused without recording preliminary evidence can be said to be a non-speaking order where the complaint was been filed by a public servant acting or purporting to act in the discharge of his official duties – Whether a person appointed as Director of a company on behalf of Industrial Finance Corporation of India who was not supposed to look into the day-to-day affairs of the company could be held liable for the conduct and affairs of the Company – Whether complaint filed by Income Tax Officer for non deducting of tax at source for the year 1984-85 i.e. prior to insertion of explanation treating the crediting of interest without deduction at source as an offence was justified. - Petition allowed : PUNJAB AND HARYANA HIGH COURT

2014-TIOL-1688- HC-DEL-IT
Pepsi Foods Pvt Ltd Vs ACIT
Income Tax - Sections 132(4A)(i), 153A, 153C, 158BC, 158BD, 292C - search - seizure - satisfaction - belongs to.

Whether AO of the person who is searched, must arrive at a clear satisfaction that a document seized from him does not belong to him but to some other person - W hether after such satisfaction is arrived at, the document needs to be handed over to the AO of the person to whom the said document "belongs" - Whether whenever a document is found from a person who is being searched the normal presumption is that the said document belongs to that person - Whether it is for the Assessing Officer to rebut that presumption and come to a conclusion or "satisfaction& quot; that the document in fact belongs to somebody else - Whether mere use of the word "satisfaction& quot; or the words "I am satisfied" in the order or the note would meet the requirement of the concept of satisfaction as used in Section 153C. - Assessee' s writ allowed : DELHI HIGH COURT

Indirect Tax Basket
SERVICE TAX SECTION
2014-TIOL-1858- CESTAT-DEL + Story
M/s ILFS Clusters Development Initiative Ltd Vs CCE & ST
ST - Payments received under the Swarnjayanti Gram Swarojgar Yogna (SGSY) – Demand of ST confirmed of Rs.23.44 crores - Aim of the said skill development programme is training, skill development and capacity building of the rural poor to enhance their employability or capacity for self-employment and is similar to what the Govt. run Industrial Training Institutes (ITIs) do - Prima facie , it cannot be said that appellants have provided Manpower Recruitment and Supply service: CESTAT [para 5] - Pre-deposit ordered : DELHI CESTAT

CENTRAL EXCISE SECTION
2014-TIOL-1861- CESTAT-MUM
M/s Grauer & Well (India) Ltd Vs CCE
CENVAT - Rule 2(k) of CCR, 2004 - Computers are installed in the office of the factory for maintaining stocks of goods - prima facie these computers are having nexus with the manufacturing activity, therefore, they are entitled to take input credit - pre-deposit waived and stay granted: CESTAT [para 2] - Stay granted : MUMBAI CESTAT


CUSTOMS SECTION
TARIFF NOTIFICATION
029
Pulses & Chickpeas exempted from Customs duty till 01.04.2015 & 01.01.2015 respectively
ANTI DUMPING NOTIFICATION
042
Anti-dumping duty on Flexible Slabstock Polyol imported from China PR. extended till 30.08.2015
CASE LAWS
2014-TIOL-1690- HC-DEL-FEMA
Rakesh Jain Vs UoI
FERA - Sections 9 (1)(b), (c) & (d), 49(5)(b), 49(6), 50, 52(2) & (4), 63 & 64(2) - General Clauses Act - Section 6(e)
Keywords - proceeding against directors - individual capacity - revision petition - registered sale deed - sale consideration & violation of FERA.
Whether when a revision petition is filed u/s 52(4) of FERA within the sunset period prescribed u/s 49(3) of the FERA itself, it can be said that such revision petition will continue before the Appellate Board functioning under FEMA even after the repeal of FERA - Whether where any proceedings for contravention of provisions of FERA is initiated against directors of a company in their individual capacity and not against the company itself, can it be said that the whole proceedings are unsustainable. - Assessees' appeal allowed : DELHI HIGH COURT 

Concealment penalty rightly levied for claiming depreciation on non-existent asset: Karnataka HC

September 27, 2014[2014] 49 taxmann.com 129 (Karnataka)/[2014] 362 ITR 630 (Karnataka)/[2014] 265 CTR 163 (Karnataka)

IT : Where assessee claimed depreciation on non-existent assets, penalty was to be levied for filing inaccurate particulars of income

No sec. 69 addition if deviation in Qty. of stock shown in books and in statements given to banks was explained

September 27, 2014[2014] 49 taxmann.com 141 (Amritsar - Trib.)/[2013] 28 ITR(T) 89 (Amritsar - Trib.)

IT: Where having regard to difference in figures of closing stock in statement submitted to bank for taking loan and in books of account on last day of relevant financial year, Assessing Officer made addition as unexplained investment, in view of fact that assessee submitted a reconciliation statement wherein said difference was explained as sales which remained uncontroverted, impugned addition deserved to be set aside

Regards

New Age is Coming to India

Posted In Corporate Law | Articles | 1 Comment »

CA Rajesh Pabari

Just imagine the consequences if every part of India will be connected by Broadband and 3G/4G.

1. Education: Education is the first area that will be impacted greatly. Some school can upload videos on daily basis (say in Mumbai) and students sitting in remote villages can watch those videos. What an Idea Sirji! Yes, this will happen. Ultimately, this will be a boon for our country and all other countries that are in development stage.

2. Skill Development: As of now, there are millions or billions of videos on internet (Mostly on youtube) for learning any new thing you can think of. It won't be difficult for anyone to learn something where he/she has interest. I guess people will be able to pursue their passion easily and productivity will improve per person ultimately leading to increase in national output.

3. Content Sharing: People will create their stuffs and put on the internet, if something is worth giving attention it will ultimately be discovered by the internet users. The data over internet will keep on increasing.

4. Marketing: The future of marketing is way different than present. The future will mostly be internet driven. Websites, YouTube, Facebook and such things will assume more share in marketing efforts. More importantly, useless marketing will be criticized on nearly immediate basis on internet. (Such as useless and annoying advertisements on TV). So, only the honest and pleasing advertisements will have a place in the market. Good for marketers that they will come to know the feedback of people in fairly quick time.

5. Innovators and new comers: People who are inventing something or coming up with quite different ideas or useful websites or products will spread to the market on nearly immediate basis because of connectivity. If your product or service is genuinely useful for the market and comes at fairly acceptable prices, you won't face problem of finding customers or clients. If you are making extra ordinarily high profits out of high margin of profit, entrepreneur class will catch up with you to compete and grab market share that you have created.

6. Professionals: Professionals like CA, CS, Lawyers etc will be valued for their services only if they are giving better services and they are different from the crowd or they are specialized in something or reasons similar to these. Information exchange and internet platforms will ultimately benefit consumers of services. Because of easy connection between clients and service providers, income of professionals from referral fees will take a hit.

7. Managers: Professional managers and MBAs coming out of colleges will be relatively smarter because of openness of information and knowledge on the internet. They can tap into lectures and speeches of internationally acclaimed business tycoons, top university professors also they can learn easily from each other by having online group discussion, connecting with each other over cell phones and so on. Ultimately benefiting the business community and industry.

8. Politics: Work of politicians will be quickly spread to the nationwide audience hence politicians who are actually doing something for the society and country will find their supporters and will ultimately be able to move ahead. Same is true with the unworthy people on top.

To Conclude, India will gain a lot from the Digital India target in mind. I hope telecom companies keep these purposes and consequences in mind and start investing in connecting India as soon as possible and resultantly they themselves will benefit. If not through competition then by Public-Private partnerships, the project should be given priority.

(Written by CA Rajesh Pabari – for feedback kindly contact carajeshpabari@gmail.com or WhatsApp on +919022780919

- See more at: http://taxguru.in/corporate-law/age-coming-india.html#sthash.zuZBlBqx.dpuf

Loss return and turnover less than 1 crore-No audit U/s 44AB

Posted In Income Tax | Articles | 5 Comments »

CA Pratik Anand

The recent CBDT circular on extension of due date for assessees required to get their accounts audited u/s 44AB has brought to light many things. Once such thing is the implication for assessees having having turnover less than Rs. 1crore and having Net loss from business.

Many of us were in the belief that those assessees having loss from business and having turnover less than Rs. 1 crore are required to get their accounts audited U/s 44AB r/w section 44AD but that is not the case.

Sub Section (1) of section 44AD reads as follows:

(1) Notwithstanding anything to the contrary contained in sections 28 to 43C, in the case of an eligible assessee engaged in an eligible business, a sum equal to eight per cent of the total turnover or gross receipts of the assessee in the previous year on account of such business or, as the case may be, a sum higher than the aforesaid sum claimed to have been earned by the eligible assessee, shall be deemed to be the profits and gains of such business chargeable to tax under the head "Profits and gains of business or profession".

Sub section (5) of section 44AD reads as follows:

(5) Notwithstanding anything contained in the foregoing provisions of this section, an eligible assessee who claims that his profits and gains from the eligible business are lower than the profits and gains specified in sub-section (1) and whose total income exceeds the maximum amount which is not chargeable to income-tax, shall be required to keep and maintain such books of account and other documents as required under sub-section (2) of section 44AA and get them audited and furnish a report of such audit as required under section 44AB.

Simultaneous reading of sub sections (1) and (5) brings to light the following points:

♠ The profits of an assessee engaged in eligible business under the head 'Profits and gains from business and profession shall be deemed to be equal to 8% of the total turnover of the asessee or such higher amount as may be claimed by the assessee.

Ques: What if the profits of an assessee engaged in eligible business are actually less than eight percent of the turnover or gross receipts of the business?

Ans: If an assessee claims that his profits and gains from eligible business are less than 8% of the gross receipts and whose total income exceeds the maximum amount not chargeable to tax, the asseessee shall maintain the books of account as prescribed U/S 44AA and get them audited under section 44AB of the Act.

Here the catch lies in the words 'and whose total income exceeds the maximum amount which is not chargeable to income-tax'

Since the words start with 'and' therefore both the conditions need to be fulfilled for an assessee to be required to get his accounts audited u/s 44AB.

Ques: What are the conditions to require the assessee to get the accounts audited in case the turnover is less than Rs. 1 crore from eligible business?

Ans: 1) The assessee should keep the books of account as prescribed under 44AA and the profits claimed as per those books of account shall be less than 8% of the gross receipts or turnover of the business.

♠ The second condition in order to mandate tax audit u/s 44AB is that the total income of the assessee should exceed the maximum amount not chargeable to tax under the Income Tax Act'1961.

Now let us consider the case of a partnership firm which is engaged in eligible business as per section 44AD and whose turnover is say Rs. 80 lacs in the preceding Financial Year 2013-14 and which shows Net loss from business of Rs. 50,000/-.

Is this firm required to get the accounts audited under section 44AB read with section 44AD of the Income Tax Act'1961?

The answer is 'No' because if we read section 44AD carefully, the audit is required where profits are less than 8% of the gross receipts or turnover and the income exceeds maximum amount not chargeable to tax.

Since, the firm is taxed at an income starting from Rs. one, therefore the maximum amount not chargeable to tax is nil.

In case of loss, since there is no income, therefore it does not exceed the maximum amount not chargeable to tax and so the second condition mandating tax audit u/s 44AB r/w section 44AD is not satisfied and therefore the assessee is not required to get the accounts audited u/s 44AB.

Therefore, in case of assessees other than companies, professionals, assessees having agency business (Those on whom section 44AD is not applicable) having turnover less than Rs.1 crore and showing loss from business shall not be required to get the accounts audited U/s 44AB if they do not have any other income other than income from eligible business and the due date for such assessees shall be 31^st   July of the Assessment Year and not 30^th September.

Therefore such assessees should file the return of income by the 31^st July of the Assessment Year without audit report as the loss will not be carried forward due to late filing of the Income Tax Return after the due date.

Hope you find the above information relevant and useful in your daily practice.

(The author is a CA in practice at Delhi and can be contacted at: E-mail: capratikanand@gmail.com, Mobile: +91-9953199493)

- See more at: http://taxguru.in/income-tax/loss-return-turnover-1-croreno-audit-44ab.html#sthash.Ml9VgYJt.dpuf

HC allowed sec. 10A relief as it was proved that receipts of arbitration award weren't included in export proceeds

September 27, 2014[2014] 49 taxmann.com 133 (Delhi)/[2014] 360 ITR 351 (Delhi)

IT : Merely because payment against impugned invoice of software export was received in advance, section 10A exemption could not be denied on ground that it was an arbitration award as stamp paper purportedly for arbitration was purchased prior to raising such invoice

 

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Posted by: Dipak Shah <djshah1944@yahoo.com>

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