Monthly Archives: July 2015

TCS on sale of Imported Timber

By | July 30, 2015

Question Whether  TCS on sale of Imported Timber should be collected from the buyers ?   Answer: yes, Tax at Source has to be deducted on sale of Imported timber as Section 206C does not draw any distinction between timber grown in india and timber imported from abroad HIGH COURT OF KERALA Hillwood Furniture (P.) Ltd. v. Income-tax… Read More »

New ITR forms 3, 4, 5, 6 and 7 for AY 2015-16

By | July 30, 2015

CBDT notifies new ITR forms 3, 4, 5, 6 and 7 for Financial year 2014-15 (AY 2015-16) mandates reporting of CSR exp. in ITR 6 [TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, SECTION 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF REVENUE [CENTRAL BOARD OF DIRECT TAXES] Income-tax… Read More »

KYC Records Registry

By | July 30, 2015

Central KYC Records Registry under Money Laundering   PREVENTION OF MONEY-LAUNDERING (MAINTENANCE OF RECORDS) AMENDMENT RULES, 2015 – AMENDMENT IN RULES 2, 9 & 10 AND INSERTION OF RULE 9A NOTIFICATION NO.4/2015 [P.12011/5/2011-SO(ES.CELL)]/GSR 544(E), DATED 7-7-2015 In exercise of the powers conferred by sub-section (1) read with clauses (i), (j), (jj), (jjj) and (k) of sub-section… Read More »

Tax on membership fees

By | July 30, 2015

QUESTION : How the Tax on membership fees will be paid  ?  Whether Non Refundable membership fees  will be taxed in the year of receipt or it will have to be apportioned  over the Period of Membership. ? Answer :  Non refundable membership fee has to be apportioned and taxed during period of membership. The assessee company is engaged… Read More »

section 14A Expenditure incurred for exempt income

By | July 30, 2015

Question : Whether business loss incurred in the course of purchase and sale of mutual fund units is an expenditure incurred for earning exempt dividend income and, hence, not allowable under section 14A of the Income-tax Act,1961  ? Answer No, Section 14A can not be applied if no proximate cause exists between expenditure and exempt income Where assessee… Read More »

Audit of Engineering Industry

By | July 29, 2015

Institute of Cost Accountants issues guidance on internal audit of Engineering Industry The Institute of Cost Accountants of India (ICAI) has recently issued a guidance note on internal audit of Engineering industry which provides elaborated guidance to auditors on the aspects to be considered while performing internal audit. The document provides elaborated guidance on the… Read More »

Audit of plantation industry

By | July 29, 2015

Institute of Cost Accountants issues guidance on internal audit of plantation industry    The Institute of Cost Accountants of India (ICAI) has recently issued a guidance note on internal audit of plantation industry which provides elaborated guidance to auditors on the aspects to be considered while performing internal audit. The document provides elaborated guidance on… Read More »

Internal audit of Power Industry

By | July 29, 2015

Institute of Cost Accountants issues guidance on internal audit of Power Industry  The Institute of Cost Accountants of India (ICAI) has recently issued a guidance note on internal audit of power industry which provides elaborated guidance to auditors on the aspects to be considered while performing internal audit. The document provides elaborated guidance on the… Read More »

Merchant Banker SEBI issued FAQ

By | July 29, 2015

SEBI issued FAQs for Merchant Bankers FAQ ON MERCHANT BANKERS  PRESS RELEASE, DATED 16-7-2015 1. What is the procedure of obtaining registration as a Merchant Banker from SEBI? For registration as a Merchant Banker, an applicant is required to pay a non-refundable application fee of Rs.50,000/- by way of demand draft drawn in favour of… Read More »

Draft Rules on Land Acquisition Act

By | July 29, 2015

RIGHT TO FAIR COMPENSATION AND TRANSPARENCY IN LAND ACQUISITION, REHABILITATION AND RESETTLEMENT (COMPENSATION, REHABILITATION AND RESETTLEMENT, DEVELOPMENT PLAN) RULES, 2015 NOTIFICATION NO. GSR 547(E) [F.NO.13011/01/2015-LRD), DATED 8-7-2015 The following draft of certain rules, which the Central Government proposes to make in exercise of the powers conferred by clauses (b), (e), (f), (g), (h), (i), (j), (k),… Read More »

Tax Challan

By | July 29, 2015

COLLECTION OF DIRECT TAXES – OLTAS MASTER CIRCULAR DGBA.GAD. NO.3/42.01.034/2015-16, DATED 1-7-2015 This circular may be downloaded from  website www.mastercirculars.rbi.org.in. (Extract of circular) Mandatory Electronic Payment of Tax by Certain Categories of Taxpayers CBDT has made electronic payment of taxes mandatory for the following categories of taxpayers: A Company A person (other than a company) to whom provisions of… Read More »

Section 194H TDS on Discount allowed on recharge coupons

By | July 29, 2015

Discount allowed by assessee to its distributors in respect of starter packs and recharge coupons for its prepaid mobile service amounted to payment of commission or brokerage requiring deduction of tax at source under section 194H HIGH COURT OF CALCUTTA Hutchison Telecom East Ltd. v. Commissioner of Income-tax, TDS, Kolkata GIRISH CHANDRA GUPTA AND ARINDAM… Read More »

Appointment include ratification

By | July 29, 2015

Query: Section 102(2) of the Companies Act, 2013 while defining ordinary business refers to appointment of and fixing remuneration of Auditors. While as per Section 139 of the Companies Act 2013, Auditor appointed for a term of five years needs to be ratified every year in AGM. Does the term as used in Section 102(2),… Read More »

MRP on cement cleared to builders and Govt

By | July 29, 2015

Question : Whether there is a need to declare MRP on cement cleared to builders and Govt.? Answer : Builders, government and RMC (Ready-mix Concrete) producers quality as ‘industrial/institutional buyers’ and there is no need to declare RSP (retail sale price) on cement cleared to them CESTAT, NEW DELHI BENCH Ultratech Cement Ltd. v. Commissioner of Central… Read More »

Preoperative expenses are Revenue expenses if

By | July 29, 2015

  Question : Whether the Preoperative Expenses are Revenue expenses if company expanded its existing business?   Answer : Where assessee company expanded its existing business and claimed said expenses as pre-capitalisation cost, same was to be treated as revenue expenditure HIGH COURT OF DELHI Commissioner of Income-tax v. SRF Ltd. S. RAVINDRA BHAT AND R.… Read More »

Inherited property Capital Gain Calculation

By | July 29, 2015

Question : How to Calculate Capital Gain in case of inherited property ? Answer : Capital gain in case of inherited property is to be computed by taking CII of the year in which asset is acquired by previous owner   As per section 49 where capital asset became property of assessee by succession or inheritance, then… Read More »

Anonymous donations tax treatement

By | July 28, 2015

Offerings received in donation boxes of temple can’t be taxed as black money under Sec. 115BBC IN THE ITAT MUMBAI BENCH ‘G’ Gurudev Siddha Peeth v. Income-tax Officer, Ward- 1 (1), Kalyan R.C. SHARMA, ACCOUNTANT MEMBER AND SANJAY GARG, JUDICIAL MEMBER IT APPEAL NOS. 3466 AND 3467 (MUM.) OF 2012 [ASSESSMENT YEARS 2007-08 & 2008-09… Read More »

Section 115JB profit arising on sale of share

By | July 28, 2015

IN THE ITAT MUMBAI BENCH ‘D’ Dharmayug Investments Ltd. v. Assistant Commissioner of Income-tax, Range 1 (1), Mumbai B.R. BASKARAN, ACCOUNTANT MEMBER AND AMIT SHUKLA, JUDICIAL MEMBER IT APPEAL NO. 1284 (MUM.) OF 2013 [ASSESSMENT YEAR 2009-10] JUNE  10, 2015 While computing book profits under Section 115JB whether profit arising on sale of shares ought… Read More »

payable under section 40(a)(ia)

By | July 28, 2015

Requirement to deduct tax at source under section 194C is mandatory and, in case of assessee’s failure to do so in respect of contractual payments, disallowance has to be made under section 40(a)(ia) irrespective of fact as to whether assessee is following cash or mercantile system of accounting HIGH COURT OF PUNJAB AND HARYANA P.M.S.… Read More »

CBEC clarifies on withdrawal of exemption to domestically manufactured goods

By | July 28, 2015

JUDGMENT OF SUPREME COURT IN CASE OF SRF LTD. V. COMMISSIONER OF CUSTOMS, CHENNAI [2015] 56 taxmann.com 407 (SC) – CLARIFICATION RELATING TO NOTIFICATIONS NO.30/2004-C.E., DATED 9-7-2004; NO.1/2011-C.E., DATED 1-3-2011 AND NO.12/2012-C.E., DATED 17-3-2012, AS AMENDED FROM TIME TO TIME CIRCULAR NO.1005/12/2015-CX, DATED 21-7-2015 It may recalled that the Hon’ble Supreme Court, in the case… Read More »

Documents required for Tax exemption section 11(1)(c)

By | July 28, 2015

Documents required for Tax exemption section 11(1)(c) Date: 27.07.2015 Subject: Part III of the Standard Operating Procedure (SOP) (Part I – 08.07.2015) for making application for claim of tax exemption u/s 11(1)(c) of the Income-tax Act, in respect of remittance of money/relief articles by Indian NGOs/Charitable Organisations for earthquake hit people in Nepal. In view… Read More »

NAME OF COMPANY

By | July 27, 2015

SECTION 4 OF THE COMPANIES ACT, 2013 – MEMORANDUM – NAME OF COMPANY – USE OF WORD ‘NATIONAL’ IN THE NAMES OF COMPANIES OR LIMITED LIABILITY PARTNERSHIPS (LLPs) GENERAL CIRCULAR NO.2/2014 [F.NO.2/2/2014-CL-V], DATED 11-2-2014 It has come to the knowledge of this Ministry that Companies/Limited Liability Partnerships are being registered with the word ‘National’ in… Read More »

Interest on Fixed Deposit not taxable in HUF if

By | July 27, 2015

Interest on Fixed Deposit not taxable in HUF if  Fixed Depoist was transferred to daughters of Karta on disposal of assets Where asset was disposed in favour of six minor daughters of Karta in form of fixed deposits, interest thereafter could not be treated as part of wealth of assessee-HUF and would not be taxable… Read More »

Refund of CENVAT available when export proceeds were not realized

By | July 27, 2015

Issue: Whether refund of CENVAT credit is allowed if input services were used in relation to export and the export proceeds were not realized? Held: Yes,Refund of CENVAT available when export proceeds were not realized  M/s P&P Overseas Vs. Commissioner of Central Excise, Excise Appeal Nos. 1307-1308 of 2011, Date of Decision: 29.10.2014, CESTAT –… Read More »

Brand expenses are revenue expenses

By | July 27, 2015

Question :Whether the brand registration expenses and other expenses upon development of brand incurred by assessee are in the nature of revenue expenditure ? Held  :Yes, Brand expenses  are revenue expenses and can be debited in profit and loss account and reduced from the income. M/s Seagram Distilleries Pvt. Ltd. Vs. Jt. Commissioner of Income Tax,… Read More »

Forensic Audit

By | July 27, 2015

Forensic Audit   Introduction With the growing complexity of business environment and other complex issues of financial market, cases of scams and financial irregularities are on a spree. None the less, these scams are highly affecting the Indian business environment and thus act as a key factor for downgrading the Indian economy. Subsequently the number of… Read More »

SIT on Black money

By | July 26, 2015

Recommendations of SIT on Black Money as Contained in the Third SIT Report Misuse of exemption on Long Term Capital gains tax for money laundering Misuse of Participatory notes for money laundering Shell Companies and beneficial ownership (Reference p. 73-76 of the Third SIT Report) Action under PMLA for Trade Based Money laundering Use of… Read More »

Gold Deposit Scheme (GDS)

By | July 26, 2015

Gold Deposit Scheme (GDS): Salient Features Include-All Designated Banks can Operate GDS as per Guidelines  The Central Government, with a view to bring privately held stock of gold in circulation, to reduce the country’s reliance on import of gold and to provide its owners with some income apart from freeing them from the problems of… Read More »

Tax on Advance received on transfer of development right

By | July 26, 2015

Question: whether there is any Tax on Advance received on transfer of development right ? Answer  No. Tax is payable when the conveyance deed is executed.  CIT Vs. M/S. DLF  Commercial Project Corporation, I.T.A. No. 627/2012, Date ofOrder: 15.07.2015, High Court of Delhi The assessee follows the accrual system of accounting. The accrual system of… Read More »

Service Tax Amnesty Scheme Order are appealable

By | July 25, 2015

Question : Service Tax Amnesty Scheme  Order are appealable ? Answer :’Designated authorities’ under Service Tax Voluntary Compliance Encouragement Scheme amount to ‘adjudicating authorities’, as they pass order/decision; hence, orders passed by them are appealable as per Finance Act, 1994 HIGH COURT OF MADRAS Narasimha Mills (P.) Ltd. v. Commissioner of Central Excise (Appeals) S. VAIDYANATHAN,… Read More »

ESOP to NR Employees

By | July 25, 2015

Cos. issuing ESOP to NR employees to furnish return to RBI in Form-ESOP within 30 days of their issuance ISSUE OF SHARES UNDER EMPLOYEES STOCK OPTIONS SCHEME AND/OR SWEAT EQUITY SHARES TO PERSONS RESIDENT OUTSIDE INDIA A.P. (DIR SERIES 2015-16) CIRCULAR NO.4, DATED 16-7-2015 Attention of Authorised Dealer Category – I (AD Category-I) banks is… Read More »

FAQs ON SECRETARIAL STANDARD

By | July 24, 2015

FAQs ON SECRETARIAL STANDARD ICSI replies to queries received on SS-1 and SS-2 ON SECRETARIAL STANDARD ON BOARD MEETINGS (SS-1) AND ON GENERAL MEETINGS (SS-2) PRESS RELEASE, DATED 21-7-2015 Scope/1. Is SS-1 applicable to banking entities which are listed on Stock exchanges? Ans. SS-1 is applicable to all companies incorporated under the Act (for definition… Read More »

Taxability of Premium received by society on transfer of plots

By | July 24, 2015

Taxability of Premium received by society on transfer of plots : Not  Taxable Where assessee-society received contribution from outgoing members as premium on sale of plot, since said amount was to be utilised for benefits of members of society, it could not be regarded as ‘taxable income’ in hands of assessee HIGH COURT OF GUJARAT… Read More »