Friday, September 26, 2014

[aaykarbhavan] Judgmewnts and Information [4 Attachments]




 

Passengers Facilitation at International Airports – Reg.

F. No. 450/148/2014-Cus.IV
Government of India
Ministry of Finance
Department of Revenue
Central Board of Excise and Customs
229-B, North Block,
New Delhi, the 19th September, 2014
Subject: Passengers Facilitation at International Airports – Reg.
         The Board attaches great importance to facilitation of passengers at international airports.  It is also well known that international passengers form an opinion of our country from the way they are treated by the Customs officers.  Therefore, there needs to be a renewed emphasis on improving the efficiency of our Customs officers as well as their behavior towards international passengers Considering all these aspects, the following instructions are issued:-
(i)     Training and exposure to modern methods of developing soft skills would certainly improve the manner in which a Customs officer interacts with international passengers.  This would ensure a higher level of passenger facilitation as well as create a good image of the Department and of our country.  Therefore, besides close monitoring by the supervisory officers, training of the Customs officers posted at international airports has to be given importance.  Hence, the Board has decided that the Chief Commissioners of Customs with international airports in their charge shall ensure that every Customs officer newly posted at the international airports mandatorily undergoes a training in the relevant rules and regulations as well as in the manner of dealing with international passengers.  The emphasis should be on sensitizing the Customs officers to deal with all arriving passengers and especially international passengers in a polite, professional and pro-active facilitative manner.  These training programmes should be repeated on 6-monthly intervals.  Since multiple agencies function at international airports, it would also be useful to coordinate interactive sessions involving officials of other agencies so that collectively a good impression is made on international passengers.  The Chief Commissioner of Customs should coordinate these training programmes with NACEN, but should also take initiative to organize in-house programmes.
(ii)     Another measure that would assist international passengers and in turn create a good image of the Department and our country would be through "Help Desks".  Admittedly, PROs perform this function today, but it is important to publicize this facility.  Since the public is largely attuned to "Help Desks" we need to use this term.  Thus, the Board desires that the Customs should set up a "Help Desk" in a prominent place immediately after immigration in the arrival hall and similarly in the departure hall of international airports.  There should also be a signboard to guide the international passengers to the "Help Desk".  Needless to state, the Customs officers(s) manning the "Help Desk" should be properly selected and must have in his/her possession required forms and information to guide international passengers.
2.   The Board desires that immediate action may be taken on institutionalizing the aforementioned training programmes as well as establishing the "Help Desk".  The Board expected that these steps would enhance passenger facilitation as well as create a good image of the Department and our country.  A compliance report would be appreciated.  Difficulty in this regard, if any, may be informed though Board expects the Chief Commissioners of Customs would smoothly implement these instructions.
Yours faithfully,
(P. K.  Khetan)
OSD Customs (PAC)
- See more at: http://taxguru.in/custom-duty/passengers-facilitation-international-airports-reg.html#sthash.aWzRk3dj.dpuf

Empanelment with SBI for Forensic Audit

STATE BANK OF INDIA
CPPD, CORPORATE CENTRE, MUMBAI – 400 021
REQUEST FOR PROPOSAL FOR EMPANELMENT OF FORENSIC AUDITOR
State Bank of India invites applications in the prescribed format from the Firms/Companies who are conducting forensic audit of high value accounts and willing to have their firm/company empanelled as Forensic Auditor for high value borrowal account of our Bank.
CRITERIA AND TERMS & CONDITIONS FOR EMPANELMENT OF FORENSIC AUDITOR FOR HIGH VALUE ACCOUNT i.e ACCOUNT WITH EXPOSRE OF Rs 100 CRORES AND ABOVE
Eligibility Criteria :
a). Firms/Corporates who display exceptional professional competence in Forensic Auditing of the accounts with exposure of Rs 100 crores and above.
b) Having atleast 2 qualified Chartered Accountants as Members & must be registered with Institute of Chartered Accountants of India(ICAI) as Partner/Director with experience of minimum 5 years , preferably having exposure in banking sector.
c) Having in depth knowledge and extensive experience in accounting and should be aware of the various practices existing in cross section of industries.
d) Having proven track record of conducting a number of Forensic and Investigative audits and exposed/established frauds and malpractices.
e) Having reputation beyond reproach. Unblemished track record, with no unsatisfactory conduct in the past and should not have been blacklisted by any financial institution/other organisations/any government department. The firm/company should furnish self attested affidavit on stamp paper in this regard.
f) Having branches/offices at least in all Metro Cities ; New Delhi, Mumbai, Kolkata, Chennai,
g) The name of the Firm/Company or its promoter/partner etc. should not be in the defaulters/barred/caution list published/displayed at websites of public bodies such as by RBI/IBA/ECGC/SEBI/CICs etc.
Other Terms & Conditions
i) Application in the format placed below should be submitted to DGM-2, State Bank of India, CPPD, Corporate Centre, 4th Floor State Bank Bhawan, Madame Cama Road, Mumbai – 400021, till 5.00 PM of 15th day from the date of advertisement.
ii) Usual KYC norms like Identity and address proof of Firm/Company are mandatory.
iii) PAN Number and Registration Number with Institute of Chartered Accountant of India is also mandatory for applicant and its CA Partners/Directors.
iv) In the event of gross negligence/malpractices noticed by the Bank in Forensic Auditor's conduct/scope of work apart from depanelling the firm/company, the Bank reserves the right to include their names in the cautionary list for circulation to all the Banks through IBA.
v) Forensic Auditor will be evaluated on the basis of their performance and usefulness to the Bank during review of empanelment by the bank at annual interval or as convenient to the bank.
vi) Bank reserves the right to reject any or all applications for empanelment without assigning any reasons therefor.
vii) On empanelment the firm/company will have to give an undertaking with Non Disclosure Agreement clause.
viii) Fee structure would be determined by the bank and the concerned auditor as the amount depends on the complexity of work involved, reasonable time the auditor would need to complete the audit and resources required to be deployed for the completion of audit assigned.
- See more at: http://taxguru.in/chartered-accountant/empanelment-sbi-forensic-audit.html#sthash.kAiBHa8q.dpuf

Sec. 10(23C): Apart from annual grants, other grants are also relevant to check whole/substantial funding by Govt.

September 26, 2014[2014] 49 taxmann.com 136 (Karnataka)
IT: Word 'wholly or substantially financed by Government' cannot be confined only to annual grants as apart from providing annual grant, if Government grants land, invests money in building and infrastructure and also running educational institution all that has to be taken into consideration to decide whether institution is wholly or substantially financed by Government in order to become eligible to claim exemption under section 10(23C)(iiiab)


Interest paid on borrowings used for investment in foreign co. disallowed as this wasn't assessee's business

September 26, 2014[2014] 49 taxmann.com 128 (Bombay)
IT : Where interest paid on borrowals utilized for investments in a foreign company was not in course of assessee's business, its claim for deduction under section 36(1)(iii) was to be rejected
IT : Where assessee failed to prove that entire foreign travel expenses of directors and auditors were incurred for its business affairs, Tribunal was justified in disallowing a part of said expenses

AHMEDABAD, SEPT 26, 2014: THE issue before the Bench is - Whether when assessee is born out of restructuring of an Electricity Board, the expenditure incurred on IT support to LAN, upgradation of bandwidth and for coordination with BSNL for better connectivity is to be treated as capital in nature. And the answer goes against the Revenue.
Facts of the case

The
 assessee company is engaged in the business of generation, transmission and distribution of electricity in the State of Gujarat. The erstwhile Gujarat Electricity Board in a process of restructuring was demerged into seven different companies. Gujarat Urja Vikas Limited [GUVNL] was assigned the function of bulk purchase and sale of power. The return of income filed by the assessee for the A.Y 200607 declaring Nil income and the book profit was shown which was revised later on account of some error in computation and the same was reduced. Return was processed under Section 143 (1) but later scrutinized. In scrutiny assessment, income and book profit under Section 115JB of the Act was computed. The Assessing Officer was of the opinion that an expenditure claimed under "Legal & Professional Fees" pertained to re-organization of the business of erstwhile Gujarat Electricity Board by way of demerger and also included expenditure pertaining to issue of allotment of shares; expenditure pertaining to Internet Bandwidth, supply and installation of software, legal and professional fees in respect of restructuring, etc. These expenses according to the Assessing Officer were not the business expenditures, but, were capital in nature, hence were disallowed.

In appeal, CIT [A] held that M/s C and F were paid certain amounts for preparation, finalization and for filing of the annual revenue requirement [ARR], petitions before GERC, for preparation of short termpower purchase agreements and for formulating strategies for demand side management. Moreover, other expenses were neither covered nor could be categorized as capital in nature. CIT [A] allowed the appeal of the assessee thereby holding that the payments made were not capital in nature. 

The Tribunal concurred with the findings of CIT [A] and dismissed the appeal of the Department. 

On appeal, the Court held that,

++ except for a sum of Rs 1.10 Crores [rounded off] said to have been expended towards IT system maintenance, counsel for the Department has hardly any resistance in treating such amount as business expenditure. As could be noticed, the particulars at serial nos. 1 & 2 represent expenditure of Rs. 90.61 lacs and Rs. 86.25 lacs [rounded off] are towards consultancy charges. Item No. 4 is "Filing Fees" given to GERC. Item No. 5 is the legal consultancy fees to advocate. Likewise, particulars in item nos. 6 & 9 are again respectively toward "Finance consultancy and IT consultancy charges". Likewise, Item Nos. 7 & 8 are also "advocate fees" paid to counsel to represent the assessee before the Gujarat High Court in Letters Patent Appeal as well as Special Civil Suits. Wherever, there was a legal consultancy or fees paid to the advocates, there is hardly any dispute that such fees cannot be said to have been capital in nature. The only emphasis is on the sum of Rs. 1.10 Crores which has been spent towards IT system by Gujarat Info Petro Limited. As could be noticed, this was for the purpose of supporting LAN networking for providing IT professional facility management service and also for coordination with BSNL for internet connectivity and providing IT providing and upgrading internet bandwith. It can be noted that such consultancy work and preparation of ARR can be said to be connected with the business of the assessee;

++ considering the principle of commercial trading, when the question is to be addressed, both the CIT [A] as well as the Tribunal rightly held it to be revenue in nature and the same cannot be said to be capital. It is quite apparent that the fees paid for support for LAN work; providing and upgradation of Internet Bandwidth, or for coordination with BSNL for internet connectivity, etc are not having any enduring benefit. If any consultancy is required for the said purpose, the amount clearly would come under the head of Consultancy and that surely could not be considered as capital in nature. In the present form, the expenditure made was at the best for continuing the benefit for one year. Resultantly, such payment cannot be categorized as capital in nature as no asset is brought into existence on account of such payment.

Revenue had rightly taxed capital gains on sale of property in the year in which its possession was handed over

September 26, 2014[2014] 48 taxmann.com 404 (Hyderabad - Trib.)/[2013] 28 ITR(T) 167 (Hyderabad - Trib.)
IT: Where assessee filed his return for assessment year 2007-08 declaring capital gain from sale of property, in view of fact that sale deed was executed on 3-9-2005 and possession of property was also handed over on same date, revenue authorities rightly concluded that capital gain in question was to be assessed in assessment year 2006-07

No deemed concealment if additional income was declared by assessee pursuant to search via belated return

September 26, 2014[2014] 49 taxmann.com 46 (Mumbai - Trib.)/[2013] 158 TTJ 120 (Mumbai - Trib.)
IT: In absence of any limitation or restriction relating to words 'due date' given in clause (b) of Explanation 5A to section 271(1)(c), it cannot be read as 'due date' as provided in section 139(1) alone rather it can also mean date of filing of return of income under section 139(4)
 

Loss arising due to share dealing wasn't speculative if assessee had only carried out solitary transaction of shares

September 26, 2014[2014] 49 taxmann.com 132 (Delhi)/[2014] 360 ITR 182 (Delhi)
Solitary transaction of purchase and sale of shares in which assessee incurred loss due to fall in value of share, did not constitute assessee's business and loss could be set off against assessee's profit from other businesses

SC: HC couldn't issue directions to CIT on issue which was already dropped and not raised by him before HC

September 26, 2014[2014] 49 taxmann.com 130 (SC)/[2014] 268 CTR 483 (SC)
IT : Where proceedings under section 12AA(3) had already been dropped by Commissioner and this was not an issue before High Court in writ petition, High Court was not justified in issuing direction to Commissioner to pass an order under section 12AA(3)

FinMin clears air on service tax levy on joint ventures

The Finance Ministry has made it clear that "taxable services" provided by members of a joint venture (JV) to a JV and vice-versa will attract service tax. This will be the case when the "taxable services" are provided for a consideration, the Finance Ministry said in a circular on Wednesday.
The same treatment will hold good when taxable services are provided between members of a JV for a consideration, says the circular.
India is currently adopting the concept of negative list for services taxation and except for a specified set of services in this list, all other services are subject to service tax.
As regards taxation of cash calls or capital contributions made by the members to the JV, the Ministry said that detailed and close scrutiny of the terms of JV agreement may be required in each case.
If "cash calls" are merely a transaction in money, they are excluded from the definition of service and, therefore, will not attract tax, says the circular.
Tax authorities at the field level have been advised to carefully examine the leviability of service tax with reference to the specific terms/clauses of each JV agreement.

India is currently adopting the concept of negative list for services taxation and except for a specified set of services in this list, all other services are subject to service tax.

Impact on employees of Enhancement of wage ceiling from Rs. 6500/- to Rs. 15000/-

Vide notification dated 22.08.2014 Ministry of Labour and employment has enhanced the ceiling of wage from Rs. 6500/- to Rs. 15000/- for the computation of contribution to Provident fund for both employer and employee contribution.
Extract of the Notification
608(E)- In exercise of powers conferred by section 6A read with sub section (1) of section 7 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the central government hereby makes the following, further to amend the Employees' Provident Funds Scheme, 1952, namely:-
1.  (1) This Scheme may be called the Employees' Provident Funds (Amendment) Scheme, 2014.
(2) It shall come into force on and from the 1st day of September, 2014.
2. In the Employees' Provident Funds Scheme, 1952,-
(a) In paragraph 2, in clause (f), in sub-clause (ii), for the words "six thousand and five hundred rupees", the words "fifteen thousand rupees" shall be substituted;
(b) In paragraph 26, in sub-paragraph (6), for the word "six thousand and five hundred rupees" the words "fifteen thousand rupees" shall be substituted;
(c) In paragraph 26A, in sub-paragraph (2), in the proviso, for the words "six thousand and five hundred rupees" wherever they occur, the words "fifteen thousand rupees" shall be substituted.
[F No.- S-35012/1/2012-SSII]
609(E)- In exercise of powers conferred by section 6A read with sub section (1) of section 7 of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952 (19 of 1952), the central government hereby makes the following, further to amend the Employees' Pension Scheme, 1995, namely:-
  1. (1) This Scheme may be called the Employees' Pension (Amendment) Scheme, 2014.
(2) It shall come into force on and from the 1st day of September, 2014.
  1. In the Employees' Pension Scheme, 1995 (hereinafter referred to as the principal Scheme), in paragraph 3, in sub- paragraph 2, in the proviso, for the words "rupees six thousand and five hundred", whenever occur, the words "fifteen thousand rupees" shall be substituted.
3. In the principal scheme , in paragraph 6, in clause (a), after the words, figures and letter "or 27A of the Employees' Provident Fund Scheme, 1952", the words "and whose pay on such date is less than or equal to fifteen thousand rupees" shall be inserted.
Impact on Employees
On Take Home
As a result of the above notification every employee whose salary is less than Rs. 15000 is comes under the mandatory requirement of contribution to the Provident fund.
Earlier the limit was Rs. 6500/- PM and employee was required to pay Rs. 780/- as contribution through his employer, and employees whose salary was in excess of Rs. 6500/- was not required to contribute to the fund. The same provision is continued in the above notification.
Through this notification, the department has widened the scope Provident Fund by enhancing the salary limit. As a result of the notification employees getting salary more than Rs. 6500/- and up to Rs. 15000/- also comes the umbrella of Provident fund. The above enhancement will reduce their take home ranging from Rs. 781/- to Rs. 1800/- depending upon the salary bracket in which falls.
However, this step will encourage saving and investment in the economy. Therefore, this will positively impact employee in terms of enhances capital receipt at the time of retirement.
Impact on Computation of Taxable Income
The above contribution will be eligible for deduction u/s 80C under the income tax Act 1961.
Impact on Employers Cost:
As a result of the above amendment in the provisions of Employees' Provident Fund and Miscellaneous Provisions Act, 1952, employer cost will increase from 780 to 1800 depending upon the slab of the employees.
epf 1 epf 2
(Sensys Technologies- For any clarification and explanations on the above matter you may contact of experts of out panel at contact@sensysindia.com)
- See more at: http://taxguru.in/corporate-law/impact-employees-enhancement-wage-ceiling-rs-6500-rs-15000.html#sthash.Ur3csf02.dpuf

COMPANY CASES

Volume 186 Part 4 (Issue dated 26-9-2014)
SUBJECT INDEX TO CASES REPORTED IN THIS PART
HIGH COURTS
Bank --Enforcement of security--Winding up--Secured creditor-bank can maintain winding up petition without giving up its security and can stand outside winding up in respect of secured assets and still maintain petition for winding up for remaining debts--Order on winding up petition still to be passed--Creditor-bank clearly stating that it was standing outside winding up proceedings in respect of secured assets--Amount due more than secured assets--Refusal to stay proceedings under section 13(4) of 2002 Act--Proper--Companies Act, 1956, s. 433--Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ss. 13(4), 14-- Kingfisher Airlines Ltd . v . State Bank of India (No. 2 ) (Karn) . . . 254
----Enforcement of security--Winding up--Secured creditor-banks can choose to stand outside winding up, in seeking to enforce their secured interests and simultaneously prefer petition seeking winding up of company--Company court cannot exercise jurisdiction over mortgaged property, whether before or after winding up order passed--Companies Act, 1956, ss. 433, 443, 446(2)--Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, ss. 14, 34, 35-- Kingfisher Airlines Ltd . v . State Bank of India (No. 1 ) (Karn) . . . 239
Investigation --Who can seek--Shareholders entitled to file application--Failure to list shares in stock exchange and give notices to shareholders--Failure to comply with earlier orders of court to furnish documents to court appointed chartered accountant in order to form opinion regarding accounts of company--Total non-co-operation with intention to hide relevant materials--Conduct of business of company oppressive to its members--Prima facie case made out--Central Government directed to investigate into affairs of company--Companies Act, 1956, s. 237(a)(ii)--Companies (Court) Rules, 1959, r. 11(9)-- Kannan (T.) v . Shapre Infotech India Ltd . (Mad) . . . 193
Oppression and mismanagement --Petition for relief--Amendment of petition--Amendment to be made at first available opportunity--Application for amendment filed at stage of arguments--Not entertained--Companies Act, 1956, ss. 397, 398--Company Law Board Regulations, 1991, reglns. 44, 46-- Dr. Jang Bahadur Singh v . Frick India Ltd . (P & H) . . . 232
----Petition for relief--Maintainability--Dismissal of early petition as withdrawn with liberty to file fresh petition--Majority shareholders can file petition under sections 397 and 398--Unless specifically conferred, provisions of Code of Civil Procedure not applicable to Company Law Board--No justification in proceedings under section 397 to insist on fresh petition being filed only on basis of fresh cause of action--Theories of fresh cause of action not applicable to petition under section 397--Appeal allowed and matter remanded to Company Law Board--Companies Act, 1956, ss. 397, 398, 402--Code of Civil Procedure, 1908, O. 7, r. 11--Company Law Board Regulations, 1991, regln. 44-- Gurpartap Singh v . Vista Hospitality P. Ltd . (Delhi) . . . 202
COMPANY LAW BOARD ORDERS
Oppression and mismanagement --Petition for relief--Amendment of petition--Petitioner having knowledge of fact before commencement of trial--Amendment not to be allowed at belated stage when final hearing having already commenced and matter at stage of hearing arguments of respondents--Application filed with intention to delay proceedings--Dismissed--Companies Act, 1956, ss. 397, 398--Code of Civil Procedure, 1908, O. 6, r. 17--Company Law Board Regulations, 1991, regln. 44-- Dr. Jang Bahadur Singh v . Frick India Ltd . . . . 226

CBDT Clips AO's Power To make Fishing Enquiry In CASS cases

The CBDT has issued Instruction No. 7 of 2014 dated 26.09.2014 pointing out that in cases selected for scrutiny under Computer Aided Scrutiny Selection ('CASS'), some AOs routinely call for information which is not relevant for enquiry into the issues to be considered. This has been causing undue harassment to the taxpayers and has also drawn adverse criticism from several quarters. The CBDT has directed that cases selected for scrutiny during the Financial Year 2014-2015 under CASS, on the basis of either AIR data or CIB information or for non- reconciliation with 26AS data the scope of enquiry should be limited to verification of these particular aspects only. The Assessing Officer shall confine the questionnaire and subsequent enquiry or verification only to the specific point(s) on the basis of which the particular return has been selected for scrutiny.
 

CBDT Orders On Constitution And Jurisdiction Of DRP

The CBDT has issued Order Nos. 5 and 6/FT&TR/2014 dated 26.09.2014 on the jurisdiction of the Dispute Resolution Panel at Delhi & Bangalore. The CBDT has also issued Order Nos. 7 to 9/FT&TR/2014 dated 26.09.2014 on the Constitution of the DRP at Delhi, Bangalore and Mumbai respectively
 


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


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