PFA
T
| hough u/s 80-IA(5), the profits of the eligible unit has to be computed on the 'stand alone' principle, in a case where the assessee also has non-business income, the brought forward unabsorbed depreciation u/s. 32(2) has to be set off against the eligible profits before computing s. 80-IA deduction |
(i) The assessee's manner of computing Gross Total Income, though mathematically leading to the same result, i.e., in terms of net taxable income, is incorrect and not in conformity with either the terms of the provisions or the scheme of the Act. There is, in fact, no scope for any vacillation; the same being basic to the scheme of the Act, with the apex court in Synco Industries Ltd 299 ITR 444 (SC) explaining the manner in which the GTI is to be computed, so that independent of the provision of s. 80-I(6) (or s. 80-IA(5)), all other applicable provisions, including ss. 32(2) & s. 72, would apply in computing such income. Rather, we observe a complete unanimity of judicial view;
(ii) What is the basis there-for? If not ridiculous or a travesty of the clear provisions of law, what is it? True, if the unabsorbed depreciation exceeds the business income of Rs.77.91 lacs, the same would stand to be set off against the income assessable u/s.22 and/or section 56 in-as-much as the same, per the deeming of section 32(2), forms part of the current years' depreciation, and is to be given effect to, save for a precedence to the provision of sections 72(2) & 73(3), which are inapplicable in the present case in-as much as there is no brought forward business loss. There is no occasion or need for the set off of unabsorbed deprecation against income assessable under other heads of income, i.e., under Chapters IV-C and IV-F, as the assessee claims or does. How, for instance, s. 70 come into play without first determining the income assessable u/s. 28, and which would only be after giving effect to the provision of s. 32. The charge of depreciation u/s.32, it must be appreciated, is one, single charge, i.e., irrespective of the different sources of income where-under it may arise and, accordingly, would, in terms of section 32(1) r/w s. 32(2), allowable under the income assessable u/s.28, which per section 29 is to be computed in accordance with the provisions contained in sections 30 to 43D.
Non- migration of PANs due to pending Refund Caging – reg.by CA Sandeep Kanoi |
Prior to implementation of cadre restructuring in Nov., 2014, a number of AST validations were executed at the time of migration of a PAN which restricted PAN migration, if any of the validation was pending. In these cases, the AO had to complete the action restricting such migration, to enable PAN migration.
Non- migration of PANs due to pending Refund Caging – reg.
AST Instruction No. 134
DIRECTOREATE OF INCOME TAX (SYSTEMS)
ARA Centre, Ground Floor, E-2, Jhandewalan Extension,
ARA Centre, Ground Floor, E-2, Jhandewalan Extension,
New Delhi-110055
F.No.DGIT(S)/DIT(S)-3/AST/Refund Caging/81/2015-16, Dated: 13.03.2015
To,
The Principal Chief Commissioner of Income-tax /CCsIT (By Name)
The Principal Chief Commissioner of Income-tax /CCsIT (By Name)
Ahmedabad/ Allahabad/ Amritsar / Bangalore/ Baroda/ Bhopal/ Bhubaneshwar / Bareilly / Chandigarh/ Chennai/ Cochin/ Coimbatore/ Dehradun/ Delhij Durgapur / Guwahatij Hubli/ Hyderabad/ Indore/ jaipur/ Jalpaigurij Jodhpur/ Kanpur/ Kolkatta/ Lucknow/ Ludhiana/ Madurai/ Meerut/ Mumbaij Nagpur/ Nashik/ Panaji/ Panchkula/ Patna/ Pune/ Raipur / Rajkot/ Ranchij Shimla/ Shillong/ Surat/ Thane/ Trichy / Trivandrum/ Udaipur / Vishakhapatnam; and
The Principal Commissioner of Income-tax / CsIT / CsIT (CO)(By Name)
Agra/Bikaner /Calicut/ Dhanbad/ Gandhinagar / Gwalior / Jabalpur / Jalandhar / Kolhapur / Muzzaffarpur / Mysore/ Patiala/ Rohtak/ Sambalpur / Varanasij Vijaywada/ Delhi (CO)/ Mumbai (CO)/ Chennai (CO)/ Ahmedabad (CO)/ Bangalore (CO)/ Bhopal (CO)/ Bhubaneshwar (CO)/ Kolkatta (CO)/ Cochin (CO)/ Chandigarh (CO)/ Hyderabad (CO)/ Jaipur (CO)/ Kanpur (CO)/ Patna (CO)/ Pune (CO)/ Guhawati (CO).
Agra/Bikaner /Calicut/ Dhanbad/ Gandhinagar / Gwalior / Jabalpur / Jalandhar / Kolhapur / Muzzaffarpur / Mysore/ Patiala/ Rohtak/ Sambalpur / Varanasij Vijaywada/ Delhi (CO)/ Mumbai (CO)/ Chennai (CO)/ Ahmedabad (CO)/ Bangalore (CO)/ Bhopal (CO)/ Bhubaneshwar (CO)/ Kolkatta (CO)/ Cochin (CO)/ Chandigarh (CO)/ Hyderabad (CO)/ Jaipur (CO)/ Kanpur (CO)/ Patna (CO)/ Pune (CO)/ Guhawati (CO).
Subject: – Non- migration of PANs due to pending Refund Caging – reg.
Sir/ Madam,
Prior to implementation of cadre restructuring in Nov., 2014, a number of AST validations were executed at the time of migration of a PAN which restricted PAN migration, if any of the validation was pending. In these cases, the AO had to complete the action restricting such migration, to enable PAN migration.
2. It was anticipated that mass PAN migration could take place post-cadre restructuring. Therefore, consequent upon cadre restructuring, AST validations were relaxed or cancelled in non-critical cases for smoothen migration of PAN except refund caging pending cases which was considered as critical and the same was also duly approved by the Competent Authority. Therefore, necessary modifications were made in the System which is now maintaining the details of initiations/workflow reverted while PAN transfer for the validations relaxed / cancelled and it is visible to the destination AO so that new jurisdictional AO is able to take necessary action on the pending cases.
3. The field formations were expected to complete the pending caging work in respect of PANs lying under their jurisdiction before implementation of cadre restructuring so that these could be migrated to their new jurisdiction. However, this office is receiving references from field formations as well as complaints are being lodged at helpdesk wherein it has been reported that 'consequent upon cadre restructuring, numerous PANs have been transferred to new jurisdiction except those where refund caging is still pending. It is further reported that it is not possible to remove the caging of these PANs due to change of assessing officer who had effected caging of the cases. On analyzing the statistics obtained from the system, it is found that in many cases field formations had not completed refund caging exercise. Further, it is observed that various RCCsacross the country have marked the jurisdictions at AO/Range/Charge level as 'OLD'and the PANslying under them are now orphan and therefore caging in these cases cannot be completed.
4. In view of the issues discussed above, the following instructions are issued:
(i) In case of presently active AOs having pending caging of the cases whose jurisdiction has been changed:
The AOs are advised to complete the caging after due verification of the records irrespective of the new jurisdiction after cadre restructuring. After completion ofthe caging, the PANcan be migrated to its new jurisdiction.
However, in cases where a manual refund was already issued or present active AO do not want to complete the pending caging process. In such scenarios, the AO can block the refund for concerned AY by following the navigation path "ITD-AST-0THERS-Block Refund". In this regard, the following instructions are to be followed:
(a) Cases where caging is pending and refund has been issued manually, in such cases, a pop-up message will be displayed onto AO's "Block Refund" screen and his confirmation will be sought. On getting confirmation, system will mark such refund cases as blocked for concerned A.Y.
(b) Cases where caging is pending and AO verifies non-existance of any manual refunds which is also verified by the system automatically, the active AOs can block these refund cases with their remarks.
With pending caging, in 'both the above scenarios, once the refund gets into blocked status for that AY., the system allows its PAN migration. The destination AO will not be able to unblock the refund cases which were blocked by adopting the procedure mentioned in 4(i)(a) above. In scenario of 4(i)(b) above, the destination AO can unblock the refund only after due verification and then can complete the caging process.
(ii) In case of presently 'OLD'marked AOs with pending caging at the AO level:
The jurisdictional CIT(if active) or CIT(CO) can migrate the PAN and in this case, the caging will also migrate to the destination AO as pending and to be completed by the destination AO after due verification of the record.
(iii) In case of presently 'OLD' marked AOs with pending caging at the Range level:
This scenario is under analysis and will be taken up separately on the basis of complaints lodged at Help desk.
(iv) In case of presently inactive AOs having pending caging of the cases:
The respective RCCs are to identify such inactive AOs and should be marked "Y" in "OLD Flag" against them. Thereafter, the PANs can be migrated with pending refund caging as discussed in 4(ii) & 4(iii) above.
5. The complete procedure is elaborated in the user manual for the functionality which is available on i-taxnet.
6. This instruction may be brought to the knowledge of all field officers working in your charge for necessary action.
7. For any system related issue, the officers may lodge a complaint at the Helpdesk for speedy resolution.
8. This issues with the prior approval of Pro DGIT(S).
Yours faithfully,
(Ashish Abrol)
Addl. DIT(S)-3, New Delhi
Addl. DIT(S)-3, New Delhi
Sec. 391-394 'complete code', overrides new Company Law's Sec. 180; Regional Director objections dismissed |
HC sanctions scheme of arrangement filed u/s 391 – 394 of Companies Act, 1956 for hiving off United Spirits Ltd's ('transferor co.') undertaking to Enrica ('transferee co.') by way of slump sale on a going concern basis; Rejects Regional Director's objections that proposed scheme of arrangement does not fall u/s 391-394 but u/s 180 of Companies Act, 2013 (relating to restrictions of the powers of the Board), holds that Sec. 391 to 394 is a complete code providing powers of Company Court in dealing with scheme of amalgamation / reconstruction; States that "When it is held that Sec. 391 - 394 is a code by itself necessarily it would have precedence over the other provisions of the Act…… Therefore, it cannot be said that the non-compliance of Section 180 would run contrary to the provisions of Sections 391 to 394"; Observes that terms of proposed scheme will be beneficial to all stakeholders (transferor & transferee co., creditors' interest, shareholders, employees, secured / unsecured creditors etc.), also notes that Madras HC has sanctioned scheme filed by Enrica (i.e. Transferee Co.) and it cannot be said that affairs of United Spirits Ltd's are conducted in manner prejudicial to creditors, shareholders, employees etc; Also observes that CCI, SEBI, BSE, NSE & Bangalore SE have already given their consent / approval:Karnataka HC |
| The ruling was delivered by Justice Ravi Malimath. Advocate Vivek Holla argued on behalf of petitioner. |
ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS
F International transactions : Transfer pricing : ALP : AMP expenses incurred on after sales support costs for company dealers and salesman bonus to excluded : BMW India P. Ltd. v. Asst. CIT (Delhi) p. 231
F Cisco switches to be included in block of computers entitled to higher rate of depreciation : BMW India P. Ltd. v. Asst. CIT (Delhi) p. 231
F International transactions : ALP : Where contracts directly with AE not governed by technical strengths of entities, transfer pricing adjustments to be deleted : Dy. CIT v. ITC Infotech India Ltd. (Kolkata) p. 401 (9-1-2015)
F Licence fee paid towards purchase of computer software, revenue in nature : Dy. CIT v. Graziano Transmission India P. Ltd. (Delhi) p. 426
F Undisclosed investment : Addition based on cancelled document to be deleted : Dy. CIT v. R. P. Import and Export P. Ltd. (Chandigarh) p. 436
F Cash credits : Where deposits are genuine, addition not justified : Pushpak Auto Centre v. ITO (Delhi) p. 447 (16-1-2015)
F Where electricity duty not remitted to Government within stipulated time under Kerala Electricity Duty Act, provisions of section 43B applicable and section 43B not applicable to surcharge disallowance not justified : Asst. CIT v. Kerala State Electricity Board (Cochin) p. 458 (6-2-2015)
F Where failure by assessee to reconcile difference between purchases and unaccounted purchases, difference properly treated as unexplained investment u/s. 69 : Debasish Banerjee v. ITO (Kolkata) p. 469 (3-2-2015)
F Decision of jurisdictional High Court binding upon authorities within its jurisdiction, depreciation allowed : Dy. DIT v. Bhardwaj Welfare Trust (Delhi) p. 482 (13-2-2015)
F Where cash surrendered on search and duly reflected in wealth-tax return and accepted, it cannot thereafter be treated as undisclosed income : Asst. CIT v. Joginder Paul (Chandigarh) p. 486 (12-1-2015)
F Where tax paid by recipient, no disallowance can be made u/s. 40(a)(ia) : Arcadia Share and Stock Brokers P. Ltd. v. Dy. CIT (Mumbai) p. 491
F Loss in year earlier to initial assessment year already absorbed cannot be notionally brought forward and set off against profits of eligible business for current year : Asst. CIT v. INTEX (Chennai) p. 496 (30-1-2015)
F Commissioner cannot pass final orders on subjects in revision : Asst. CIT v. Manas Salt Iodisation Industries P. Ltd. (Gauhati) p. 502 (20-1-2015)
F Where subsidies such as transport and interest are part of business profits and gains from industrial undertaking, deduction allowable u/s. 80-IC : Asst. CIT v. Manas Salt Iodisation Industries P. Ltd. (Gauhati) p. 502 (20-1-2015)
F Expenditure incurred on advertisement, sponsorship and brand-building are in nature of selling cost, not capital expenditure and allowable : Vardhman Developers Ltd. v. ITO (Mumbai) p. 512 (4-2-2015)
F Where failure by AO to establish that data storage charges falling under fees for technical services, disallowance not attracted : Asst. CIT v. Vishwak Solutions P. Ltd. (Chennai) p. 522 (30-1-2015)
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 info@cliofindia.com |
GOODS AND SERVICE TAX REPORTS (GSTR) HIGHLIGHTS
F Mere dispatch of notice informing grounds on which confiscation proposed to address of owner of such goods not sufficient : Purushottam Jajodia v. Directorate of Revenue Intelligence Purushottam Jajodia v. Directorate of Revenue Intelligence (Delhi) p. 1
F Notice contemplated in sections 110(2) and 124(a) of 1962 Act can only be regarded as having been "given" when actually received or deemed to be received by person from whom goods were seized : Purushottam Jajodia v. Directorate of Revenue Intelligence Purushottam Jajodia v. Directorate of Revenue Intelligence (Delhi) p. 1
F Assessees making out prima facie case for partial waiver of pre-deposit directed to pay 50 per cent. of duty demanded : Aircel Cellular Ltd. v. Commissioner of Customs (Mad) p. 15
F Interest leviable on differential duty paid consequent to price escalation after clearance of goods by raising supplementary invoices : S. L. Lumax Ltd. v. CCE (Mad) p. 23
F Voluntary payment of duty not to obviate liability to interest payable on differential duty paid consequent to supplementary invoices : Alstom T and D India Ltd. v. CESTAT (Mad) p. 28
F Effective date of enhancement of price of cement would be date of enactment : CCE v. Ultra Tech Cement Ltd. (Cal) p. 42
F Compounded levy scheme : Failure to discharge monthly liability, penalty equal to duty cannot be imposed : CCE v. Patiala Castings P. Ltd. (P&H) p. 44
F Amendment to rule 6(6) of 2004 Rules by Notification No. 50/2008-CE to be construed as retrospective in nature and benefit of rule to be extended to goods cleared to a "developer" of a special economic zone for authorised operations : CCE and Service Tax v. Fosroc Chemicals (India) P. Ltd. (Karn) p. 50
F Application for refund made in terms of 1944 Act to be considered in accordance therewith and not otherwise : Andrew Telecom (I) P. Ltd. v. Commissioner of Customs and Central Excise (Bom) p. 57
F Rules of limitation give finality to certain proceedings and orders and reopening not permissible beyond a particular limit : Andrew Telecom (I) P. Ltd. v. Commissioner of Customs and Central Excise (Bom) p. 57
F Contract of hire and no renting of cab not taxable service : Commissioner of Customs and Central Excise v. R. S. Travels (Uttarakhand) p. 80
F Refund : Failure by Department to consider all factors having bearing on issue, ejection of refund claim not proper : CCE and Customs v. Dhariwal Industries Ltd. (Guj) p. 82
F "Market price" must be value in market to which goods were exported : Consistent value based on distinct principle to be followed, partial recovery of excess rebate on basis of different valuation not proper : Dr. Reddy's Laboratories Ltd. v. Union of India (Delhi) p. 93
F Where no proof that inputs on which credit taken diverted elsewhere without reversal of Cenvat credit, plea of revenue neutrality allowed : Standard Grease and Specialities P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 105
F No proof that cash represented sale proceeds of clandestinely removed inputs, confiscation of cash set aside : Standard Grease and Specialities P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 105
F Assessee removing Cenvatable inputs without reversing corresponding Cenvat credit at time of removal of inputs as liable to penalty : Standard Grease and Specialities P. Ltd. v. CCE and Service Tax (Trib.-Ahd) p. 105
| COMPANY LAW INSTITUTE OF INDIA PVT. LTD. No. 2, Vaithyaram Street, T.Nagar, Chennai - 600017. Phone: (044) 24350752 - 55 Fax: (044) 24322015 |
PFA
Interest Payment from India- TDS u/s 195 and Tax Planningby CA Sandeep Kanoi |
Interest Income from India- Foreign Remittance- Taxation and Planning. A. Taxation as per Domestic Law: A.1. Definition of Interest- 2(28A) "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;
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