- 10:12 pm
- 0 Comments
CA IPCC Best Recommended Books For Nov 2015
CA IPCC Group I
♧Accounting
ICAI Study Material (1st Preference)
ICAI Practice Manual
CA Praveen Sharma
M.P. Vijay Kumar
Shukla & Grawal
Padhuka
Anil Sharma (Coaching Book) (For Jaipur Students)
♧Law Ethics and Communication
ICAI Study Material(1st Preference)
ICAI Practice Manual
Munish Bhandari Full Book
Munish Bhandari Hand Book
Dr R.L Naulakka For Hindi Medium
Dr R.L Naulakka For English Medium
♧Cost Accounting and Financial Management
ICAI Study Material(1st Preference)
ICAI Practice Manual
Padhuka
♧Taxation
ICAI Study Material(1st Preference)
ICAI Practice Manual
Bangar’s Book
Bangar’s Book For Hindi Medium
Girish Ahuja & Ravi Gupta Edition
CA IPCC Group II
♧Advanced Accounting
ICAI Study Material(1st Preference)
ICAI Practice Manual
CA Praveen Sharma
M.P. Vijay Kumar
Padhuka
♧Audit and Assurance
ICAI Study Material(1st Preference)
ICAI Practice Manual
CA Sunny Jain (For Jaipur Base Students)
CA Kamal Garg
CA Surbhi Bnasal
♧IT & SM
ICAI Study Material(1st Preference)
ICAI Practice Manual
Dinesh Madan (For IT)
P.S Rathore (For SM)
Note : This content is Recommended by only Expert . THIS IS ONLY RECOMMENDATION ONLY . WE WILL NOT BE LIABLE IN FUTURE FOR ANY TYPE OF LOSS AND DISCREPANCIES ETC., IF YOU TAKEN STEPS ON ABOVE CONTENT . IT DEPENDS OWN YOUR CHOICE
- 9:40 pm
- 0 Comments
- 8:42 pm
- 0 Comments
Income Tax Due Dates August 2015
7 August 2015 – Due date for deposit of Tax deducted /collected for the month of July, 2015
15 August 2015 –Quarterly TDS certificate (in respect of tax deducted for payments other than salary) by a person being an office of the Government for the quarter ending June 30, 2015
22 August 2015 –Due date for issue of TDS Certificate for tax deducted
under Section 194-IA in the month of July, 2015
31 August 2015 –Annual information return under section 285BA for the financial year 2014-15
31 August 2015 –Due date for filing returns of income-tax and wealth tax for the assessment year 2015-16 for all assessees other than –
(a) Company; or
(b) A person other than company whose books of account are required to be audited ; or
(c) A working partner of a firm whose accounts are required to be audited; or
(d) Assessee who is required to furnish a report under Section 92E.
- 8:38 pm
- 0 Comments
No obligation to deduct TDS on amounts paid as reimbursement of expenses
Suraj R. Agrawal
Citation of the Case :
CIT vs. DLF Commercial Project Corp (Delhi High Court) , ITA No. 627 of 2012,Pronounced on: 15.07.2015
Brief of the Case
Delhi High Court in the case of CIT vs. DLF Commercial Project Corp held that There is no obligation to deduct TDS on amounts paid as “reimbursement of expenses” because it do not have the character of income.
A) Facts of the case:
a. Assessee is in the business of developing land for commercial, residential, retail, industrial parks, information technology parks, SEZ, etc.
b. During AY 2007-08, the assessee filed its return reporting an income of ₹1,67,95,360.
c. AO added a sum of ₹ 19,09,83,236/- under Section 40(a)(ia) of the Act for non-deduction of TDS on reimbursement expenditure paid to M/s DLF Land Ltd.
d. The latter entity had deducted TDS on the payments made by it as a facilitator on behalf of the assessee.
e. CIT(A) & ITAT ruled in favour of the assessee and deleted this amount.
f. The assessee entered into an agreement dated 01.04.2007 with the said company to carry out activities like maintenance of books of accounts and getting the accounts audited, maintenance of secretarial records, filing with various statutory authorities etc. M/s DLF Land Ltd. was entitled to service charges @ 5% of the total expenditure incurred.
B) Issue put before Delhi High Court:
Did the Income Tax Appellate Tribunal (ITAT) fall into error in its findings with respect to the addition on account of reimbursement of interest within Section 40(a)(ia) on the issue of non-deduction of TDS on the payments made on reimbursement of service charges?
C) Contentions of Appellant:
The payment was made for the purposes of reimbursement of expenses handled by M/s DLF Land Ltd. on behalf of the assessee, and the assessee had duly deducted TDS on the service charges paid to M/s DLF Land Ltd. by the assessee.
Since the reimbursement of expenses was not taxable, learned senior counsel submits that the assessee was not required to deduct TDS on the entire amount.
D) Contention by Revenue:
The assessee ought to have deducted TDS on the total amount reimbursed by it to M/s DLF Land Ltd., and the TDS actually deducted by the assessee towards M/s DLF Land Ltd.‟s service charge does not suffice
Therefore, the CIT(A) and ITAT were wrong in deleting the addition of ₹ 19,09,83,236/- made by the AO.
E) Ruling of Honorable Delhi High Court:
This Court holds that the CIT(A) and the ITAT rightly set aside the AO‟s order, ruling that the assessee was not required to deduct TDS on reimbursement expenses paid to M/s DLF Land Ltd.
The assessee has correctly relied upon this Court‟s ruling in Industrial Engineering Projects Pvt. Ltd., (supra).
A Division Bench of this Court in that case specifically held that “reimbursement of expenses can, under no circumstances, be regarded as revenue receipt”
M/s DLF Land Ltd. had deducted TDS on the payments made by it under various heads on behalf of the assessee.
The assessee deducted TDS on the service charge paid by it to M/s DLF Land Ltd. Neither provision obliges the person making the payment to deduct anything from contractual payments such as those made for reimbursement of expenses, other than what is defined as “income”.
The ITAT‟s ruling in this regard is upheld.
Both questions of law are answered in favour of the assessee and against the revenue.
F) Key Take Away
Section 194C (TDS for “work”) and Section 194J (TDS of income from “professional services”- the latter expression defined expansively by Section 194J (3) Explanation (a)). Neither provision obliges the person making the payment to deduct anything from contractual payments such as those made for reimbursement of expenses, other than what is defined as “income”. The law thus obliges only amounts which fulfil the character of “income” to be subject to TDS in such casesǢ for other payments towards expenses, the deduction to those entitled (to be made by the payeee) the obligation to carry out TDS is upon the recipient or payee of the amounts.
- 10:42 pm
- 0 Comments
Applicability Of IND AS In India
Shruti Agrawal
1. Voluntary Adoption:
Companies may voluntary adopt Ind AS for financial statements for accounting period beginning on or after 1st April 2015 with the comparatives for the periods ending 31st March 2015 or thereafter. If any company adopts the Ind AS then it will be required to follow i.e. there is no option of rollback.
2. Mandatory Adoption:
a. Following companies will have to adopt Ind AS mandatorily for financial statements for accounting period beginning on or after 1st April 2016 with the comparatives for the periods ending 31st March 2016 or thereafter:
i. Companies whose securities are listed or in process of listing in any stock exchange whether in India or outside India and having a net worth of Rs. 500 crores or more.
ii. Unlisted companies having a net worth of Rs. 500 crores or more
iii. Holding, subsidiary, Joint Venture, Associate of companies written in (i) or (ii)
b. Following companies will have to adopt Ind AS mandatorily for financial statements for accounting period beginning on or after 1st April 2017 with the comparatives for the periods ending 31st March 2017 or thereafter:
i. Companies whose securities are listed or in process of listing in any stock exchange whether in India or outside India and having a net worth of less than Rs. 500 crores.
ii. Unlisted companies having a net worth of Rs. 250 crores or more.
iii. Holding, subsidiary, Joint Venture, Associate of companies written in (i) or (ii)
3. Other Important Points:
a. Ind AS would apply to standalone and consolidated financial statements.
b. The rules clarify that an Indian company having an overseas subsidiary, joint venture, associate or which is a subsidiary, joint venture associate is required to prepare their Consolidated Financial statements as per these rules.
c. Here subsidiary company means a company in which the holding company:-
i. Controls the composition of Board of Directors.
ii. Exercises or Controls more than one half of total share capital either own or together with its subsidiaries.
Provided that such class or classes of holding companies as may be prescribed shall not have layer of subsidiaries beyond such numbers as may be prescribed.
d. Here associate company means a company in which the other company has a significant influence but this company is neither subsidiary or nor joint venture of that particular company.
e. Significant Influence for the point no. d means control of at least 20% of its total share capital, or of business decisions under an agreement.
f. Net Worth means the aggregate value of the total share capital and all reserves creating out of the profits and securities premium account after deducting the aggregate value of losses, deferred expenditure and miscellaneous expenditure not written off but does not include reserves created out of revaluation of assets, write back of depreciation and amalgamation.
- 10:42 pm
- 0 Comments
Indian Model of Goods & Service Tax (GST)
CA Mohit Singhal
Indian Model Of GST:-
Generally, GST consist three prime models:-
1. Central GST-(CGST)
2. States GST-(SGST)
3. Dual GST
Non concurrent dual GST
Concurrent dual GST
CGST: – Under this option, the two levels of government would combine their levies in the form of a single National GST, with appropriate revenue sharing arrangements among them. In the case of a Central GST (where all goods and services are taxed by the Central government only), the Centre will collect most of the country’s total tax revenue, leaving very little for the sub-national Governments.
SGST: – The second model is to have a State GST in which the States alone levy GST and the Centre withdraws from the field of GST or VAT completely. In this case, the State GST will work as the redistributing mechanism. The loss to the Centre from vacating this tax field could be offset by a suitable compensating reduction in fiscal transfers to the States. This would significantly enhance the revenue capacity of the States and reduce their dependence on the Centre.
Dual GST: –
♣ Non-Concurrent Dual GST: –Under this model, GST on goods can be levied by the States only and on services by the Centre only. The States already have the power to levy the tax on the sale and purchase of goods (and also on immovable property), and the Centre for taxation of services. No special effort would be needed for levying a unified Centre tax on interstate services. This model of dual GST would not be acceptable to the Centre as well as the States. Hence, the Government has already announced its intention to follow the Concurrent Dual GST.
♣ Indian Model of GST – Concurrent Dual GST
Indian GST model would be Concurrent Dual GST consisting both the Central GST and State GST levied on same base. Under this model, GST will be levied by both tiers of Governments concurrently. There will be Central GST to be administered by the Central Government and there will be State GST to be administered by State Governments. In this model, both goods and services would be subject to concurrent taxation by the Centre and the States. All types of goods and services will be brought under this proposed GST structure except few exceptions.
For Example, if a product have levy at a base price of Rs. 10,000 and rate of CGST and SGST are 8% then in such case both CGST and SGST will be charged on Rs. 10,000 i.e. CGST will be Rs 800 and SGST will be Rs.800.
Features of Proposed Indian Dual GST:-
Single Registration:- There would a single registration or taxpayer identification number, based on the Permanent Account Number (PAN) for direct taxation. Three additional digits would be added to the current PAN to identify registration for the Centre and State GSTs.
Uniform Method:- Procedures for collection of Central and State GSTs would be Moreover, tax payment challan might contain some additional information, e.g., amount of CGST paid on SGST challan, and vice-a-versa. Payment of tax might be only online through net-banking.
One Common Return:- There would be one common tax return for both taxes, with one copy given to the Central authority and the other to the relevant State authority Moreover, most likely, GST returns will be required to be filed online.
Classification of goods & services:-HSN will form the basis of product classification for Central GST and State GST.
Administration:- States would collect the State GST from all the registered dealers. To minimize the need for additional administrative resources at the Centre, States would also assume the responsibility for administering the Central GST for dealers with gross turnover below the current registration threshold of Rs 1.5 crores under the Central Excise (CENVAT). They might collect the Central GST from such dealers on behalf of the Centre and transfer the funds to the Centre.
For the purpose of assessment and administration of different assesses, following categorization has been recommended:-
Threshold limit (common for goods and services) can be allowed somewhere between Rs. 10 lacs and Rs. 20 lacs.
Gross turnover of goods upto Rs. 1.5 Crores may be assigned exclusively to the State;
Gross turnover of services upto Rs. 1.5 Crores may be assigned exclusively to the
Gross turnover of above Rs. 1.5 Crores may be assigned to both the Governments – for the administration of CGST to the Centre and for the administration of SGST to the State.
- 10:41 pm
- 0 Comments
Is the boss always right?
'The boss is always right' maybe a popular corporate mantra but what if the going gets difficult. Avinash Iyer gives tips on how to deal with this 'sometimes intimidating, sometimes friendly' figure in your office
One of the most interesting relationships in your lives is the one that you share with your boss. Be it reporting late to office or performance at the workplace, nothing escapes the employer's attention. It would be quite apt to say then, that the 'boss' is perhaps one of the most discussed persons in any corporate organisation. The places of discussion may vary though. It could be in the boardroom, in the cafeteria or near the watercooler.
Someone once said that there are no bad bosses, just difficult ones. And whichever way you perceive your boss - as the all encompassing authority or as the monster in pinstripes - you must try not to strain the employer-employee symbiosis.
Who's the boss
Often, the chinks in the workplace relationships begin to show because ego issues start creeping up. Software professional Ashok Velluswamy says, "There are times when I get very annoyed with my boss. But it is important not to lose one's cool and let things pass. At the end of the day what is important is that the work should not suffer." Given the norms at your workplace, you may call your boss with his/ her first name but you must take care that the lines don't blur too much. After all, every organisation has its own hierarchy that needs to be strictly adhered to.
Dealing with it
The corporate world is a microcosm of the real world. You meet different types of people and you should learn to deal with them differently. Hence, even when it comes to dealing with a difficult boss you should exercise prudence. Here are just some of the ways to go about it:
Temper tales: Work pressure and the urgency to meet deadlines, at times, compel one to lose his/ her temper. The same is the case with bosses. This does not mean that as an employee, you should retaliate in equal measure. It would be a good idea to take stock of the situation and act accordingly. At the same time, you should not tolerate verbally or physically abusive behaviour of any kind. Information technology engineer Paramita states, "Yes, there are times when my seniors scold me. But as long as it does not get personal, I take it in my stride."
Appraisal woes: Sometimes, despite all your genuine efforts and persuasive skills, your employer may act tough when it comes to grading you during the appraisal period. In such situations, discuss the issue with him/ her in order to get a satisfactory explanation. If things still don't work, then you must follow your organisation's protocol and report the matter to the authorities concerned.
Beat the bias: It cannot be denied that each one of us has biases. How much ever you try to conceal it, it does reflect somewhere. So, there are chances of you being at the receiving end of biases. It is here that personal discretion comes into play. You must be mature enough to understand the rationale behind certain decisions but at the same time stand up to what you think is unfair or unjust.
Handling prejudices is a two-way process. If you expect the employer to be fair, you too should be fair in your conduct. Female bosses or bosses younger to you should not be treated any differently. There is a reason they are higher on the corporate grid and you should understand it.
Final frontier
Their tales may make for anecdotal phone messages or jokes but when it comes to actual work they should be taken seriously. However, in case of grave concerns you can make use of your organisation's policies and find a solution to the problem. It is essential to maintain harmony at the workplace and it is possible only if you don't take others for granted and respect them for the skills and experience they possess.
Source : ET wealth
- 10:34 pm
- 0 Comments
Five essential skills today's employers want
In a competitive job market, a degree that highlights your core competencies and skills is not enough to get you a job. Employers are now looking for candidates with not only the right attitude, but also the right aptitude while hiring. Here are some of the essential skills that fresh graduates will need to cultivate to secure a job:
Communication skills:
The most significant step towards getting through the interview process is to polish your communication skills, both written and verbal. This is the best way to stand out in the crowded candidate market and it also aids in building a strong professional network.
Also read: How to win over your boss
Aptitude for leadership:
It is not just the academic record and domain expertise that matter these days, but also your proficiency to be a leader that companies look out for. Not everyone can master this skill; however, one can work on building their inherent leadership qualities by taking initiatives and responsibility.
Being a people's person and a team player:
Good interpersonal skills are a key to securing your dream job. Having this skill reflects that you are sociable and can work harmoniously with others. Interviewers will most likely test your ability of being a team player through questions relating to real-life scenarios . Some interviewers give a lot of importance to the extra-curricular abilities of the interviewee - excellence in sports, participation in student organization activities, community assistance roles with NGOs, etc - to judge the individual's ability to work in teams and inspire innovative ideas.
Also read: Thinking of quitting your job to head back to studies? You are not alone!
Problem solving and analytical skills:
Impromptu thinking and problem solving skills are the qualities that prospective employers look for in candidates. So it is essential to build on these capabilities and flaunt them when you present yourself in the job market as this will help you gain bonus points.
Open to learning and being proactive:
It is vital for a candidate to come across as independent and not someone who needs to be pushed for a task to be completed. In addition to this, out-of-the-box thinking and innovative ideas can get you the competitive corporate advantage. Interviewers will also try to gauge if a candidate is open to maintaining a continuous learning curve to re-skill themselves in a dynamic workplace and stay ahead.
Interviewers are impressed not with how much you know, but with how well you can convince the opposite person to think and accept your point of view. By demonstrating the right qualities and by marketing yourself efficiently, you can certainly land your first big career break!
By Moorthy K Uppaluri (The author is CEO, Randstad India) - As told to Ruchi Chopda
Source : ET wealth
- 10:32 pm
- 0 Comments
Avail Benefit of Intermediate Default Communications and Avoid Intimations from CPC (TDS)
Deductor can promptly avail the Online Correction facility at web-portal TRACES, after receipt of “potential PAN/ Challan errors in TDS statement” through Intermediate Defaults Communication. Your corrective action during the course of processing of Original TDS Statements helps you immensely in following ways:
Avoid TDS Defaults in the TDS Statements filed by you
Avoid issuance of Intimations by CPC (TDS)
Avoid filing of Correction Statements later after the Defaults have been computed by CPC(TDS)
Improved TDS Compliance
The Online Correction feature provisioned at TRACES is a significant offering from CPC (TDS), which has added a new dimension to improve web-based deductor services. The web-based functionality highly weighs over the traditional Correction filing process due to it’s Intelligence, Simplicity and Convenience:
Online Correction facility provides ease of convenience and can be availed on anytime anywhere basis by Logging into TRACES.
The user requesting the correction is authenticated by the system through KYC or Digital Signature Certificate providing assurance of Data Integrity to the TAN holder.
Web-based service, without any fee, substantially reduces costs associated with traditional Correction filing process.
Saves manpower effort by doing away with the hassles of submitting the Correction statements through TIN Facilitation Centre.
All relevant information at the portal is pre-populated along with flags for incorrect entries , which assists in avoidance of Data Entre errors by the user.
Online Correction is a quick and easy way for closure of Defaults in TDS Statements and correcting PAN/ Challan Errors.
Improved trun-around for Corrections submitted online, which are usually processed within 24 hours of submission.
As you may be aware by now that the Centralized Processing Cell (TDS) is informing you of PAN and Challan Errors, through an Intermediate Communication, during processing of Original Quarterly TDS Statements, before Defaults are finally computed and Intimations are generated.
On receipt of the above communication, deductors are encouraged to take corrective action within 7 days of receipt of such communication. With this, deductors will be able to avoid PAN Errors and Intimations from CPC (TDS) on account of Short Payment and Short Deduction Defaults in the relevant TDS Statement.
Central point of the process:
Identify errors in PANs or Challans in preliminary check, owing to inadvertent Data Entry errors
Facilitate their corrections before CPC (TDS) computes defaults in TDS statements
You are notified of the Defaults through the Intermediate Default communication by way of the following:
e-mail at the Registered e-mail address at TRACES
SMS at Registered Mobile Number with TRACES
Message will be delivered to the Deductor’s Inbox in TRACES
The above correction needs to be carried out by using Online Correction feature at TRACES after 24 hours of the receipt of the Intermediate Communication and must be availed within 7 days of receipt of such communication.
What are the advantages:
You would have information of PAN and Challan Errors, before the Original Statement is completely processed for Defaults and Intimations are generated.
Correction to above errors using Online Correction can be submitted before final processing of statements and you will be able to avoid Short Payment and Short Deduction Defaults.
Saves your Administrative Costs, as above action will facilitate avoidance of multiple Correction Statement filing later, after the defaults are identified CPC (TDS) and Intimations have been sent.
Help your Deductees to get Correct Tax Credit in their 26AS statements, at the earliest opportunity.
Save Paper, Save Environment! The life of One crucial tree can be saved by avoiding use of 8,000 sheets of paper. Avoidance of Intimations from CPC (TDS) resulting into savings in respect of paper, printing and postage costs. This also supports the “Green Initiatives” of CPC (TDS).
What actions to be taken:
Please use the Intelligence, Simplicity and Convenience of Online Correction facility at TRACES to correct errors notified through the communication.
Online Correction facility provides ease of convenience and can be availed on anytime anywhere basis by Logging into TRACES. Online Correction is a quick and easy way for closure of Defaults in TDS Statements and correcting PAN/ Challan Errors.
All relevant information at the portal is pre-populated along with flags for incorrect entries, which assists in avoidance of further Data Entry errors by the user
Source : taxguru
- 10:30 pm
- 0 Comments
Avail Benefit of Intermediate Default Communications and Avoid Intimations from CPC (TDS)
Deductor can promptly avail the Online Correction facility at web-portal TRACES, after receipt of “potential PAN/ Challan errors in TDS statement” through Intermediate Defaults Communication. Your corrective action during the course of processing of Original TDS Statements helps you immensely in following ways:
Avoid TDS Defaults in the TDS Statements filed by you
Avoid issuance of Intimations by CPC (TDS)
Avoid filing of Correction Statements later after the Defaults have been computed by CPC(TDS)
Improved TDS Compliance
The Online Correction feature provisioned at TRACES is a significant offering from CPC (TDS), which has added a new dimension to improve web-based deductor services. The web-based functionality highly weighs over the traditional Correction filing process due to it’s Intelligence, Simplicity and Convenience:
Online Correction facility provides ease of convenience and can be availed on anytime anywhere basis by Logging into TRACES.
The user requesting the correction is authenticated by the system through KYC or Digital Signature Certificate providing assurance of Data Integrity to the TAN holder.
Web-based service, without any fee, substantially reduces costs associated with traditional Correction filing process.
Saves manpower effort by doing away with the hassles of submitting the Correction statements through TIN Facilitation Centre.
All relevant information at the portal is pre-populated along with flags for incorrect entries , which assists in avoidance of Data Entre errors by the user.
Online Correction is a quick and easy way for closure of Defaults in TDS Statements and correcting PAN/ Challan Errors.
Improved trun-around for Corrections submitted online, which are usually processed within 24 hours of submission.
As you may be aware by now that the Centralized Processing Cell (TDS) is informing you of PAN and Challan Errors, through an Intermediate Communication, during processing of Original Quarterly TDS Statements, before Defaults are finally computed and Intimations are generated.
On receipt of the above communication, deductors are encouraged to take corrective action within 7 days of receipt of such communication. With this, deductors will be able to avoid PAN Errors and Intimations from CPC (TDS) on account of Short Payment and Short Deduction Defaults in the relevant TDS Statement.
Central point of the process:
Identify errors in PANs or Challans in preliminary check, owing to inadvertent Data Entry errors
Facilitate their corrections before CPC (TDS) computes defaults in TDS statements
You are notified of the Defaults through the Intermediate Default communication by way of the following:
e-mail at the Registered e-mail address at TRACES
SMS at Registered Mobile Number with TRACES
Message will be delivered to the Deductor’s Inbox in TRACES
The above correction needs to be carried out by using Online Correction feature at TRACES after 24 hours of the receipt of the Intermediate Communication and must be availed within 7 days of receipt of such communication.
What are the advantages:
You would have information of PAN and Challan Errors, before the Original Statement is completely processed for Defaults and Intimations are generated.
Correction to above errors using Online Correction can be submitted before final processing of statements and you will be able to avoid Short Payment and Short Deduction Defaults.
Saves your Administrative Costs, as above action will facilitate avoidance of multiple Correction Statement filing later, after the defaults are identified CPC (TDS) and Intimations have been sent.
Help your Deductees to get Correct Tax Credit in their 26AS statements, at the earliest opportunity.
Save Paper, Save Environment! The life of One crucial tree can be saved by avoiding use of 8,000 sheets of paper. Avoidance of Intimations from CPC (TDS) resulting into savings in respect of paper, printing and postage costs. This also supports the “Green Initiatives” of CPC (TDS).
What actions to be taken:
Please use the Intelligence, Simplicity and Convenience of Online Correction facility at TRACES to correct errors notified through the communication.
Online Correction facility provides ease of convenience and can be availed on anytime anywhere basis by Logging into TRACES. Online Correction is a quick and easy way for closure of Defaults in TDS Statements and correcting PAN/ Challan Errors.
All relevant information at the portal is pre-populated along with flags for incorrect entries, which assists in avoidance of further Data Entry errors by the user
Source : taxguru
- 10:30 pm
- 0 Comments
New Initiative in E-filing program- some testimonials from taxpayers
Taxpayers have appreciated the new initiative of Electronic Verification of the Income Tax Return through Aadhaar linkage and Net-banking and the testimonials affirm the user-friendliness and removal of the hassle of sending the paper copy of the ITR-V form to Bengaluru. Taxpayers have also reported that the process of e-verification shortens the time taken for processing of the return and issue of refund.
Details regarding e-verification are available at in Notification 2/2015 in issued on 13th July 2015 at
http://taxguru.in/income-tax/electronic-verification-code-evc-electronically-filed-income-tax-return.html
Taxpayers are requested to use Electronic Verification facility in view of the convenience and flexibility offered. Taxpayers are, requested to e-file their returns early to avoid the rush closer to the last date.
Comments E filing is possible within minutes. Year by year, improvement in efiling is visible. xml utility and e verification of filed return are welcome additions worthy of all praise. Work of I.T. team is commendable. This procedure is very excellent instead of munual ruturn New verification mode is really very helpful for us. It reduces time and also sending paper in hard copy was difficult. This new format is really appreciated and helps the salaried employ save their time and money. It is so easy for every invvidual to fill their return own and get verified. My experience is good. especially when you can do e verification & no need to send ITRV. Good initiative ITR-V e-verification Great work and really efficient software which is easy for any layman to file returns I am really happy with this significant improvement on e-Filing process topped with EVC through Net Banking. It took me just 30 minutes file return. I would like to thank the entire team of this portal and I congratulate you on this super feat. Thank you guys and the government of India. Excellent move from IT dept.E filing for a salaried person like me takes hardly 10 minutes altogether. Thanks for making it simple and easy. it will be nice if items covered under respective sections i.e. 80c 80cc are abbreviated and shown on mouse hovering the item which will helpful.E verification through Aadhar is welcome.
What next? efiling through android tablets?
Congratulations to all of you.
Very easy and fast system for filling and submitting income tax return online. I am sure this will encourage a lot more people to fill income tax return. Satisfied with current system. e filling updated one is excellent thank you Income tax return processed in record time. Excellent. Great to see the process improvement.. in terms of itr submission and hassle free processing. Excellent Work!!! Amazing service !!! Everything is so easy and with high security, loved it !! e-filing, e-verification and ITR processing and refund payment is very very fast and excellent. E filing is fantastic. And I got my refund credited to my bank account in 11 days after e
filing. Simply superb! The online ITR form submission and verification works like a charm. Thanks! Thumbs up team!
Medical Policy of my mother was due for refund.The refund has been recd yesterday.This is absolutely fantastic,excellent prompt service by IT Team. I am very thankful to IT dept for such Fast service especially being a Govt service. Great Job . Pls keep up the good work IT dept… Apart from the user friendly interface of filing the Tax Returns, I am also surprised to see the quickness of the Return processed and Refund given. Thank you very much and hoping to receive similar services in the future as well. Thank you for very fast action of refundable due to online submission and return. Impressive. Good to see that everify using netbanking. Thanks IT team for this and the initiator Superb e filing forms. Easy to file return in less than a minute. I.T. Department is one of the most efficient government department who is progressing year by year. Getting assessment done in less than 15 days time of return submission is highly appreciated. Awesome. The new Electronic verification and ITR upload are very fast and simplified the process like anything. I got my tax refund in two weeks. Thanks for making it so fast. i think even in USA it would take two months you did it with two weeks. great job. keep going. Mind Boggling. Hat off to IT dept. for creating such a robust site Excellent work done by the IT dept. EVC option is excellent!. I am proud to be an Indian and the Tax Filling through is amazing. Not a single problem and everything for very smooth. Thanks to Income Tax Department. I would suggest that the Govt should show this in Public media so that everyone can realize how easy is Income Tax filing now.Thanks
Source : taxguru
- 10:28 pm
- 0 Comments
At Least After Death, No Excise Duty – SC
Hon’ble Supreme Court in the case titled as “Shabina Abraham & Ors. Vs. Collector of Central Excise & Custom” in Civil Appeal No. 5802 of 2005 decided on 29.07.15 has held that assessment proceeding under the Central Excise and Salt Act, 1944 cannot be continued against the legal representative/estate of a sole proprietor/manufacturer after he is dead.
Brief facts are that one Shri George Varghese was the sole proprietor of Kerala Tyre and Rubber Company Limited. By October, 1985, this proprietary concern had stopped manufacturer and production of tread rubber. By a show cause notice dated 12.06.1987, for the period January, 1983 to December, 1985, it was alleged that the assess had manufactured and cleared tread rubber from the factory premises by suppressing the fact of such production and removal with an intent to evade payment of excise duty. The Provisions of Section 11A, as they stood, of the central excise and salt act were invoked and duty amounting to Rs. 74,35,242/- was sought to be recovered from the assessee together with imposition of penalty for clandestine removal.
On 14.03.1989, the said Shri George Varghese died. As a result of his death, a second show cause notice issued on 18.10.1989 to his wife and four daughters for demand of duty made in the earlier show cause notice. In reply it was submitted that the proceedings initiated against the deceased abated on his death in the absence of any provisions in the Central Excise and Salt Act to continue assessment proceeding against a dead person in the hands of the legal representatives.
Thereafter, Legal representative approached Hon’ble High Court under article 226 of the constitution by filing writ petition in January, 1990. The learned Single Judge of the High Court quashed the proceeding against the legal heirs stating that the Central Excise and Salt Act did not contain any provisions for continuing assessment proceeding against a dead person. Against this, revenue went in Appeal. The Division Bench of the High court of Kerala reversed the Single Judge Judgement.
Legal heir challenged the Division Bench order before Hon’ble Supreme Court. Hon’ble Supreme Court allow the appeal and set aside the order of Division Bench by stating as “8. On a reading of the aforesaid provisions, it is clear that Shri Rajshekhar Rao, Learned Cousel appearing on behalf of the appellants is correct there is no separate machinery provided by the Central Excise and Salt Act to proceed against a dead person when it comes to assessing him to tax under the Act.”
By Anish Jain
- 10:27 pm
- 0 Comments
Procedure for Registration of Section 8 Company
Section 8 Company
Introduction
Section 8 Company is a Company licensed under Section 8 of the Companies Act, 2013 (the Act), erstwhile known as Section 25 Company under the Companies Act, 1956, which has main object;
For promoting commerce, art, science, sports, education, research, social welfare, religion, charity, protection of environment or any such other object,
provided the profits, if any, or other income is applied for promoting only the objects of the company and
No dividend is paid to its members.
Therefore, Section 8 Company is a company registered for charitable or not-for-profit purposes.
Section 8 Company is similar to a Trust or Society; exception is that a Section 8 Company is registered under the Central Government’s “Ministry of Corporate Affairs (MCA)”whereas the Trusts and Societies are registered under State Government regulations.
Section 8 Company has various advantages when compared to Trust or Society. Section 8 company also has higher credibility amongst donors, Government departments and other stakeholders.
Further, the key feature of a Section 8 Company is that name of the Company can be incorporated without using the word “Limited” or “Private Limited” as the case may be.
Procedure for Registration of Section 8 Company
Minimum two people required for registration of Section 8 Company
Obtaining Digital Signature Certificate (DSC) for proposed Directors not having Directors Identification Number (DIN)
Obtaining DIN from Ministry of Corporate Affairs by filing Form DIR-3, if not having DIN
Filing of Form INC-1 for Reservation of Name
Post approval of name from the concerned Registrar of Companies, file Form INC-12 {pursuant to Section 8 (1) of the Act and Rule 19 of Company (Incorporation) Rules, 2014} (the Rules)
Attachments to Form INC-12
Draft Memorandum of Association of the proposed company in Form INC-13
Draft Articles of Association of the proposed company
Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14
Declaration from each person making application in Form INC-15
Estimated Income and Expenditure for next 3 years
(Note: Form INC-12 is in physical mode and the e-form is not yet available on MCA21 Portal. Thus, the same needs to be filed in Form RD-1 with prescribed fees).
Attachments to Form RD-1
Form INC-12
Draft Memorandum of Association of the proposed company in Form INC-13
Draft Articles of Association of the proposed company
Declaration by Practicing Chartered Accountant / Practicing Company Secretary / Practicing Cost Accountant in Form INC-14
Declaration from each person making application in Form INC-15
Estimated Income and Expenditure for next 3 years
The Central Government after examining grants the license in Form INC-16
After obtaining the license, following forms need to be submitted with prescribed attachments
Form INC-7
Form INC-22
Form DIR-12
Post Scrutiny of the submitted forms and documents the Corporate Identification Number (CIN) will be issued by the concerned Registrar of Companies.
List of documents required:
Identity Proof: Copy of Permanent Account Number (PAN) of all Directors/Promoters (Mandatory)
Address Proof: Copy of valid Passport/Driving Licence/Aadhar/Telephone Bill/Electricity Bill (not older than 2 months)
Latest passport size photographs of all Directors/Promoters
Rent Agreement or Leave & Licence Agreement, if registered office premise is taken on rent
Utility Bills of proposed registered office
Consent to act as Director in Form DIR-2
Directors Directorship details in other Companies/LLPs, if any.
(Note: A Company incorporated will be active as long as the annual compliances under the Act and the Rules made thereunder are complied with. In case annual compliances are not complied with, the company will be a Dormant Company and maybe struck off from the register.)
Disclaimer: The article has been prepared considering the relevant provisions of the Companies Act, 2013 and the rules made thereunder. The contents of the article are personal views of the author and the readers are requested to cross-check the provisions before acting upon the same. The author is not responsible for any damages or penalties caused.
Source : taxguru
- 10:26 pm
- 0 Comments
Applicability of Section 206AA in case of Non Resident
Motichand Gupta
Section 206AA has been brought into Act from 1.4.2010. This section talks about furnishing of Permanent Account number (PAN) by any person entitled to receive any sum or income or amount on which tax is deductible under Chapter XVIIB. This provision cast a obligation on any person receiving an income to furnish PAN to deductor, failing on which tax shall be deducted at the higher of following;
a. At the rate specified in the relevant provision of this Act; or
b. At the rate or rates in force; or
c. At the rate of twenty percent.
Section 206AA is non substance clause i.e. it over rites other provision of this Act as far as any person receives any income on which tax is deductible under Chapter XVIIB.
Now, controversy arose in case of non resident who is not obliged to obtain PAN U/s 139A and section 90(2) is applicable.
Section 90 – ‘Agreement with foreign countries or specified territories’ is beneficial provision applicable to non resident assessee as far as DTAA vis-à-vis this Act is concerned.
In the absence of any judgement on section 206AA and with abundant caution, assessee was forced to withhold TDS @ 20% in spite of favourable TDS rate available in the DTAA.
However, we have two Tribunal judgements, from ITAT Pune and ITAT Banglore.
Dy. Director of Income Tax V/s Serum Institute of India Limited, ITAT- Pune, delivered on 30th March, 2015
DCIT (International Taxation) V/s M/s Infosys BPO Limited, ITAT Banglore, delivered on 29th June, 2015.
In both cases, Tribunal held that 206AA is not a charging section but it is a part of a procedural/ machinery provisions dealing with collection and deduction of tax at source. The provision of section 195 of the Act which casts a duty on the assessee to deduct a tax on payment to a non resident can not be looked upon as a charging section. In-fact, in the context of section 195 of the Act also, the
Hon’ble Supreme Court in the case of CIT vs. Eli Lily & Co., (2009) 312 ITR 225 (SC) observed that the provisions of tax withholding i.e. section 195 of the Act would apply only to sums which are otherwise chargeable to tax under the Act.
The Hon’ble Supreme Court in the case of GE India Technology Centre Pvt. Ltd. vs. CIT, (2010) 327 ITR 456 (SC) held that the provisions of DTAAs along with the sections 4, 5, 9, 90 & 91 of the Act are relevant while applying the provisions of tax deduction at source.
Therefore, in view of the aforesaid schematic interpretation of the Act, section 206AA of the Act cannot be understood to override the charging sections 4 and 5 of the Act. Thus, where section 90(2) of the Act provides that DTAAs override domestic law in cases where the provisions of DTAAs are more beneficial to the assessee and the same also overrides the charging sections 4 and 5 of the Act which, in turn, override section 206AA of the Act.
Therefore, in our view, where the tax has been deducted on the strength of the beneficial provisions of section DTAAs, the provisions of section 206AA of the Act cannot be invoked by the Assessing Officer to insist on the tax deduction @ 20%, having regard to the overriding nature of the provisions of section 90(2) of the Act.
The CIT(A), in our view, correctly inferred that section 206AA of the Act does not override the provisions of section 90(2) of the Act and that in the impugned cases of payments made to non-residents, assessee correctly applied the rate of tax prescribed under the DTAAs and not as per section 206AA of the Act because the provisions of the DTAAs was more beneficial.
- 10:25 pm
- 0 Comments
CBDT notifies New ITR-3, ITR-4, ITR-5 ITR-6 & ITR -7 for A.Y. 2015-16
[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)
NEW DELHI
S.O. 2070 (E).- In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-
1. (1) These rules may be called the Income-tax (Tenth Amendment) Rules, 2015.
(2) They shall be deemed to have come into force with effect from the 1st day of April,
2015.
2. In the Income-tax Rules, 1962, in Appendix-II, for FORM ITR-3, FORM ITR-4, FORM ITR-5, FORM ITR-6 and FORM ITR-7, the following FORMS shall respectively be substituted, namely:-
F.No.142/1/2015-TPL
(Gaurav Kanaujia)
Director to the Government of India
Note.- The principal rules were published in the Gazette of India, Extraordinary, Part-II, Section 3, Sub-section (ii) vide notification number S.O.969(E), dated the 26th March, 1962 and last amended vide notification number S.O.1683 (E), dated 24.06.2015.
Source : taxguru
- 10:24 pm
- 0 Comments
No denial of refund on non-realisation of export proceeds
CA Bimal Jain
We are sharing with you an important judgement of the Hon’ble CESTAT, Delhi in the case of P&P Overseas Vs. Commissioner of Central Excise, Delhi-III [(2015) 59 taxmann.com 226 (New Delhi – CESTAT)] on the following issue:
Issue:
Whether refund of accumulated Cenvat credit filed under Rule 5 of the Cenvat Credit Rules, 2004 (“the Credit Rules”) can be denied on the ground that the sales proceeds in respect of goods exported have not been realised by the Appellant?
Facts & Background:
P & P Overseas (“the Appellant”) being a 100% EOU could not utilize the Cenvat credit attributable to the Input services namely, Custom House Agent’s services and Courier services (“Impugned services”), used in or in relation to manufacture of the finished products. Accordingly, the Appellant filed two claims for the period from July 2008 to September 2008 and October 2008 to December 2008 for cash refund of the accumulated Cenvat credit under Rule 5 of the Credit Rules. The Department denied the refund claims on following two grounds:
Impugned services are not eligible for Cenvat credit; and
Sales proceeds in respect of goods exported have not been received by the Appellant
On appeal being filed to the Ld. Commissioner (Appeals), denial of refund claims was upheld. Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Delhi.
Held:
The Hon’ble CESTAT, Delhi held that denial of refund claims on ground that the sale proceeds in respect of goods exported have not been received, is not sustainable as there is no such condition neither in Rule 5 of the Credit Rules nor under Notification No. 5/2006-C.E. (N.T.) dated March 14, 2006 (“Notification No. 5”) issued there under.
The Hon’ble Tribunal further held that pertaining to denial of refund claims on ground that Impugned services are not eligible for Cenvat credit, the matter stands decided in favour of the Appellant in its own case by the Ld. Commissioner (Appeals) and is no longer valid.
Accordingly, the Hon’ble Tribunal allowed the refund claims filed by the Appellant.
Important to Note
Here it is pertinent to note that vide the Union Budget 2012, Rule 5 of the Credit Rules got substituted, by a new rule, resulting into various changes in the refund mechanism available for exporter of goods/ services.
Following the amendment in Rule 5 of the Credit Rules, the Central Board of Excise and Customs (“the CBEC”) had issued Notification No. 27/2012–CE(N.T.) dated June 18, 2012 (“Notification No. 27”) which has superseded earlier Notification in this regard i.e. Notification No. 5.
Notification No. 27 prescribes new procedures, safeguards, conditions and limitations with respect to the manner in which the refund would be claimed by the exporter of goods/ services. Accordingly, the substituted procedures, conditions etc., are now required to be adhered for filing refund under Rule 5 of the Credit Rules.
Further, it is worthwhile to note the changes made in Rule 5 of the Credit Rules in the Union Budget, 2015 vide Notification No. 06/2015-C.E. (N.T.) dated March 1, 2015 (Effective from March 1, 2015), in term of which Export goods have been defined by inserting a Clause (1A) in Explanation 1 to Rule 5 of the Credit Rules, which is reproduced as under:
“(1A) “export goods” means any goods which are to be taken out of India to a place outside India“.
Accordingly, with the insertion of the words “taking goods out of India to a place outside India”, fate of refunds/ rebate in case of Deemed exports [which is defined under Para 7.01 of Chapter 7 of the Foreign Trade Policy 2015-20 (Para 8.1 of Chapter 8 of the erstwhile Foreign Trade Policy 2009-14)] becomes doubtful as “Deemed Exports refer to those transactions in which goods supplied do not leave country, and payment for such supplies is received either in Indian rupees or in free foreign exchange”.
However, the CBEC vide Circular No. 1001/8/2015-CX dated April 28, 2015 has clarified that clearance from DTA to SEZ is export and eligible for rebate of duty. In other words, the benefit under Rule 5 of the Credit Rules will not cover the clearances made from DTA to EOUs.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons)
BY CA Bimal Jain
- 10:23 pm
- 0 Comments
- 9:04 pm
- 0 Comments
- 9:02 pm
- 0 Comments
- 9:02 pm
- 0 Comments
- 11:58 pm
- 0 Comments
- 11:56 pm
- 0 Comments
- 11:52 pm
- 0 Comments
Top 10 wealth-creating ideas by experts with a holding period of 1-5 years
The S&P BSE Sensex may have come off its lifetime high of 30,024.74 reached in March, but global brokerages remain overweight on India on the view that long-term investors have nothing to worry and that equities will remain a preferred bet for years to come.
The Sensex had returned 30 per cent in the calendar year 2014, but is only marginally up this year, having retreated from its March highs.
Analysts across brokerages and research firms advise investors to build their portfolio by accumulating quality stocks on every fall and say that equities will be a preferred bet in the next 10 years as well.
"If you have a 3, 5, 7, 10 years' view, definitely equities are likely to do relatively far better than most of the other asset classes," says Navneet Munot, CIO, SBI MF in an interview with ET Now.
"Equity looks very interesting and investors should look to identify the right kind of stocks which can actually give much better alpha as well. A good stock picker can identify," he added.
Munot is of the view that in the past five years, despite the challenges, there have been several companies that have performed well. "I do not see a scenario in the next five years, with better macro, better political leadership, it would be tough," he added.
Wealth in stocks can be created by identifying business that is scalable and efficient in operation, has established track record and is governed by good management.
"However, the hardest part is to find out who actually will be able to scale up the operations, and that too efficiently. Sometimes, government creates the trigger for sustainable growth and scalability," SAMCO Securities said in a note. Finding such stock ideas would likely create wealth for investors, they say.
India has managed to perform better than most of the other emerging markets in the past, supported by strong fundamentals. Analysts see the outperformance to continue in the future as well amid China woes.
Anant Shirgaonkar, Head of India Equities, UBS, in an interview with ET Now, say that UBS is overweight on India at these levels but they are also overweight on China. However, in the emerging markets space and the Asian space, India would perform well, he said.
He added that 8600 is a fair value for Nifty as we go towards December 2015; that is our target for the year end. "For a 12-18 month view, the market would show upside; but, in the immediate future, the market would remain choppy and volatile simply because of the earnings being tepid," added Shirgaonkar.
We have collated recommendations from various analysts on stocks which look good for a period of 1-5 years:
Analyst: Gaurang Shah, Geojit BNP Paribas Financial Services
PVR:
These are great opportunities to identify stocks and sectors wherein you see growth visibility. The first stock that we have with a positive coverage and a one-year plus time horizon is PVR. A great set of numbers and we believe that going forward, the number of screens, which as of now stands somewhere close to 474 with acquisition of DT Cinema, and the synergies that will evolve, the footprints are also going to throw in lot of positivities.
The average realisation per ticket and, of course, per screen is likely to shoot up considerably. Add to it the ad revenues and F&B revenues. We believe that on a conservative side, a price target of Rs 945 should be viable. We did see a rally and then post that rally, we saw the stock consolidate. We believe that this is a great opportunity to invest in PVR with a one-year-plus time horizon.
G Chokkalingam, Founder, Equinomics Research & Advisory pvt Ltd
Coromandel International Ltd: Target price set at Rs 300
It is my top pick because it is a highly beaten-down stock. It is down by about 25% from the recent peak. Coromandel International is a most efficient phosphoric fertiliser company. The capacity utilisation is just around 70%. Hence, there is a lot of scope for improving the output even in non-subsidiary business like pesticide and insecticide.
The company has got access to phosphoric acid - a core raw material - from Africa. It has got two joint ventures. It is supposed to supply its produce at reasonable prices.
There has been a 6% rainfall deficit at an all-India level so far this year, but the states to which this company caters have got reasonably good rainfall. Therefore, I firmly believe this stock can easily provide a target price of Rs 300 in a span of 6-12 months.
Reliance Communications Ltd:
I have picked up Reliance communications, which is also a beaten-down stock. Last year, the QIP was done at Rs 150; now it is down more than 50% from that level.
Not only is the stock cheap, I also firmly believe that the group would monetise assets like tower, real estate, the global fibre optic business, etc. The value potential from these assets is slightly more than the total debt it has at a consolidated level. Even if 50% of these assets are monetised, the earnings per share can jump beyond Rs 10.
Secondly, this particular group is coming close to China and Russia in terms of business alliances. Recently, we saw its defence business also getting into alliance with Russian ventures.
Now, this group has proposed to take over Shyam Telecom in which Russian telecom giant Sistema has got stakes. In case they take over Shyam Telecom, it will be an opportunity for the company to forge stronger relationship with the Russian telecom giant.
Considering all these facts, I firmly believe that RCom can be a wealth-creating idea for the next 1-2 years.
Research Firm: Sharekhan
Orbit Exports Ltd: Target price set at Rs 630
Orbit is a leading manufacturer and exporter of novelty fabrics exporting its products to over 32 countries. The company is a recognised star export house and operates in the niche area of high-end fancy fabrics, which are mainly used by designers in women's fashion apparels.
The brokerage firm expects its topline and bottomline to grow at a CAGR of 19.6% and 22.8% respectively over FY2015-18. Given the robust earnings potential and enviable return ratios, Orbit is expected to trade at higher multiples.
Thus, they expect the stock to get re-rated (in line with its peers like Kitex Garments). We initiate coverage on Orbit with a Buy rating and value the company at 22x its FY2017E earnings to arrive at a price target of Rs 630.
Research Firm: SAMCO Securities:
Inox Wind:
Power producers have started to line up plants to produce thousands of MW of wind power energy. The biggest beneficiary would be Inox Wind, which sold 578 MW in FY2015, amounting to Rs 1,390 crore sales. It has order book pending of 1,178 MW. This stock has visible growth and can be easily scaled up to deliver above-average growth rate for sustained wealth creation. There is tremendous potential in the sector and in the stock.
Solar Industries Ltd:
Completion of Coal mines auction and passing of Mines and Mineral (Development and Regulation) Act 2015 will aid growth in the sector. These events will unleash vibrancy in the entire mining sector. We believe that Solar Industries Ltd can be a large beneficiary of this bill as it is the largest maker of explosives in India, which are used in mining.
The company is expanding into the defence space, and is the first company in India to manufacture HMX explosives, which are used in warheads as well as composite propellants.
The company has been consistently growing at 15%-plus rate for the last few years with decent margins. Solar Ind has solid fundamentals in place to scale up its business efficiently due to growth triggers scripted by government.
IL&FS Transport Networks:
The $12.6 bn budget for road building and the importance placed on it by the government is also another play for investors. With a targeted 6,000 KM of roads to be completed before the year-end, IL&FS Transport Networks can be another beneficiary as it has all the core ingredients of a great company.
Last three years have been stagnant in terms of revenue growth due to slowdown in road building, but going forward, this will change the impetus given to infrastructure. IL&FS Transport Networks will perform and deliver growth to investors.
It is an efficiently-managed company with proven execution and management track record. If India has to grow, infrastructure has to be built, companies like this can prove to be true wealth creators from 3 to 5 years' perspective.
Analyst: Vivek Gupta, CMT - Director Research, CapitalVia Global Research Limited.
Sterlite Technologies:
Sterlite Technologies Ltd is an Indian manufacturer of optical fibres, telecommunication cables and power transmission conductors and exports optical fibre to overseas markets in China, Europe and South East Asia.
It is India's only fully-integrated Optical Fibre producer and one of the largest suppliers of Optical Fibres. PM Modi's initiative of digital India is a key opportunity for Sterlite, as it is undertaking Fibre-to-the-Home (FTTH) deployment in India to enable high-speed broadband connectivity and is developing several transmission infrastructure projects spanning over 5,000 circuit km across India.
It plans to invest Rs 300-400 crore in expanding its fibre and cable manufacturing capacities to cater to increased demand mainly due to the data network expansion of telecom operators and the government's National Optic Fibre Network project.
Technically, the stock is looking strong on charts, and has recently given a strong bounce-back from the lows. If Sterlite Technologies manages to cross the Rs 110-mark, a strong upmove can be seen and levels of Rs 180-200 can be expected in a span of 3-5 years.
Amtek Auto:
Amtek auto is one of the largest integrated automotive component manufacturers in India with a strong global presence. Modi's initiative of 'Make in India' will give a boost to the company's existing bull run.
Technically, the stock is looking bullish on long-term charts, and is very well sustaining below its falling trend line. It has tested its resistance zone of Rs 171-173, and if the stock manages to cross its trend line, it can further test the levels of Rs 221 in the coming session. Long-term prospects of the stock are bullish.
IRB Infrastructure:
IRB Infrastructure Developers Ltd is an Indian highway construction company. The stock is trading in a bull run and is forming a continuation pattern called flag on long-term charts. Breakout from the pattern at the level of Rs 260 can result in further upside move in the stock, as it is trading above its 50- and 200-day moving averages.
One can keep the strict stop loss of Rs 200 in the stock and can expect the targets of Rs 320-350.
(Views and recommendations expressed in this section are the analysts' own and do not represent those of EconomicTimes.com. Please consult your financial advisor before taking any position in the stock(s) mentioned.)
Source : ET wealth
- 11:13 pm
- 0 Comments
Gift to be treated as genuine if identity of donors is genuine & source of gift stays explained
Case Law Citation:
Prem Kumar Chowdhary vs CIT (Income Tax Appellate Tribunal “B” Bench, Kolkata), ITA No. 1103/Kol/2012, Date of decision – 16th June 2015, Assessment year: 2002-03
Brief Facts of the Case and Question of Law
Brief Facts:
The Appellant-assessee’s children (one minor son and three minor daughters) have received gifts of Rs. 5 Lakhs each. The Assessing officer has treated the same as not genuine and added back in the computation of income from concealed sources under the head “Other Sources”.
The gifts were received by children from four close friends of the assessee. The donors had received back share application money from various Private Limited companies. The donors had made multiple investments in share application money in cash in small quantities not exceeding Rs. 20000/-
Question of Law:
Whether the Assessing officer is right in treating the gifts as not genuine and contending that gifts can only be received from related person in the impugned year?
Whether, on the facts and in the circumstances of the case, the CIT(A) is right in law in upholding the additions made by Assessing officer?
Contention of the Revenue:
The Revenue was of the contention that the donors were not genuine and were not relatives of the Assessee.
Further he stated that as the share application money were paid in cash and were below 20000/-, the genuineness of the transactions could not be established.
The Revenue also contended that the Share application money was received back just before gifting the same. Hence the gifts were sham and were used as a tool to bring back money to the capital account of the Asseessee without paying necessary taxes.
Case Laws relied upon:
Hon’ble Delhi High Court in the case of K.L.Agarwal vs CIT 190 ITR 303 (Del)
Hon’ble Supreme Court in CIT v.P.Mohanakala [2007] 291 ITR 278
Contention of the Assessee:
The Assessee contented that the gifts were backed by sufficient documents like bank pass book, duly notarized gift deed, affidavit of the donors and also the confirmation by the donors explaining the source of such gifts; also no defect was pointed out by Assessing officer.
The Assessee also contented that law does not prohibit of making gift even with the person, who is not related in the impugned year as the genuineness of the transaction together with identity and capacity of the donors is relevant.
Case Laws relied upon:
Hon’ble Delhi High Court in the case of CIT vs Ms. Mayavati 338 ITR 0563
Held by the Tribunal:
The donors were examined u/s 131 of the Income Tax Act and therefore the identity of the donors and source of the gift remains explained.
In the impugned year the blood relation is not necessary for the gift to be a genuine gift, but the relationship matters a lot. In all the probabilities the gift is found to be genuine as the donors have explained the source of gift, copy of bank accounts, income tax return. Therefore the creditworthiness of the donor is proved by the assessee.
Therefore, the appeal is allowed.
Direct Link to download full text of the above Judgment/ Order from official website:-
http://www.itatonline.in:8080/itat/upload/-61021306574518755513%245%5E1REFNOITA.1103_of_2012_in_the_case_of_Prem_Kr.Chowdhury_vs_DCIT.Kol.pdf
Source : taxguru
- 11:09 pm
- 0 Comments
Set Off of Losses or Carry Forward and Set Off of Losses
CA Priya Fulwani
SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME (INTER SOURCE)
Section under Income Tax Act 1961
Interpretation Exceptions/Case laws Section 70:
(1) Save as otherwise provided in this Act, where the net result for any assessment year in respect of any source falling under any head of income, other than “Capital gains”, is a loss, the assessee shall be entitled to have the amount of such loss set off against his income from any other source under the same head.
(2) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any short-term capital asset is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset.
(3) Where the result of the computation made for any assessment year under sections 48 to 55 in respect of any capital asset (other than a short-term capital asset) is a loss, the assessee shall be entitled to have the amount of such loss set off against the income, if any, as arrived at under a similar computation made for the assessment year in respect of any other capital asset not being a short-term capital asset.]
a) If the net result for any Assessment year (herewith mentioned as “AY”), in respect of any source under any head of income, is a loss, the assessee is entitled to have the amount of such loss set off against his income from any other source under the same head of income for the same AY.
b) In other words,
i) loss from a house property can be set off against the income from any other house property;
ii) loss from a non-speculative business can be set off against income from speculative or non-speculative business;
iii) loss from a non-speculative business can be set off against income specified under section 35AD;
iv) short term capital loss can be set off against short/long term capital gain;
v) under the head “Income from other sources” loss from an activity (other than owning and maintaining race horses) can be set off against any income but other than winnings from lotteries, crossword puzzles, etc.
a) Loss in a speculation business can be set off only against the profit in a speculation business. – Refer Section 72(1).
b) Any loss, computed in respect of any specified business referred to in section 35AD, shall not be set off except against profits and gains, if any of any other specified business. (Applicable from AY 2010-11 onwards). – Refer Section 73A.
c) Long term Capital loss can be set off only against long term capital gain. – refer Section 74.
d) Loss incurred in the business of owning and maintaining race horses cannot be set off against any income except income from such business. – Refer Section 74.
e) By virtue of Section 58(4), a loss cannot be set off against winnings from lotteries, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature.
SET OFF OF LOSS FROM ONE HEAD AGAINST THE INCOME FROM ANOTHER (INTER HEAD)
Section under Income Tax Act 1961 Interpretation Exceptions/Case laws Section 71:
(1) Where in respect of any assessment year the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has no income under the head “Capital gains”, he shall, subject to the provisions of this Chapter, be entitled to have the amount of such loss set off against his income, if any, assessable for that assessment year under any other head.
(2) Where in respect of any assessment year, the net result of the computation under any head of income, other than “Capital gains”, is a loss and the assessee has income assessable under the head “Capital gains”, such loss may, subject to the provisions of this Chapter, be set off against his income, if any, assessable for that assessment year under any head of income including the head “Capital gains” (whether relating to short-term capital assets or any other capital assets).
[(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss and the assessee has income assessable under the head “Salaries”, the assessee shall not be entitled to have such loss set off against such income.]
(3) Where in respect of any assessment year, the net result of the computation under the head “Capital gains” is a loss and the assessee has income assessable under any other head of income, the assessee shall not be entitled to have such loss set off against income under the other head.]
[(4) Where the net result of the computation under the head “Income from house property” is a loss, in respect of the assessment years commencing on the 1st day of April, 1995 and the 1st day of April, 1996, such loss shall be first set off under sub-sections (1) and (2) and thereafter the loss referred to in section 71A shall be set off in the relevant assessment year in accordance with the provisions of that section.]
a) Where the net result of computation made for any AY in respect of any head of income is a loss, the same can be set off against the income from other heads.b) Before adjusting loss u/s 71, one has to set off the loss u/s 70.c) Any loss can be set off against income under other heads of income for the same year. For instance, house property loss can be set off against speculative profit.d) No order of priority is given in the Act. One should try to first set off those losses which cannot be carried forward to the next year. a) Loss in a speculation business cannot be set off against any other income.b) Loss, computed in respect of any specified business referred to in Section 35AD, cannot be set off against any other income.c) Losses under the head “Capital Gains” cannot be set off against income under other heads of income.d) Loss from business or profession (including unabsorbed depreciation) cannot be set off against income under the head “Salaries”.e) The section does not permit the assessee to have only a part of the loss to be set off against the income from other heads and carry forward the balance. Such computation would be wholly artificial, contrary to the accepted principles of accountancy and will not reflect the correct income of the assessee in any particular year – G. Artherton & Co. CIT 1989 Tax LR 13 (Cal.).
CARRY FORWARD AND SET OFF OF BUSINESS LOSSES.
Section under Income Tax Act 1961 Interpretation Exceptions/Case laws Section 72:
[(1) Where for any assessment year, the net result of the computation under the head “Profits and gains of business or profession” is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71, so much of the loss as has not been so set off or, where he has no income under any other head, the whole loss shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(i) it shall be set off against the profits and gains, if any, of any business or profession carried on by him and assessable for that assessment year ;
(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on :]
[Provided that where the whole or any part of such loss is sustained in any such business as is referred to in section 33B which is discontinued in the circumstances specified in that section, and, thereafter, at any time before the expiry of the period of three years referred to in that section, such business is re-established, reconstructed or revived by the assessee, so much of the loss as is attributable to such business shall be carried forward to the assessment year relevant to the previous year in which the business is so re-established, reconstructed or revived, and—
(a) it shall be set off against the profits and gains, if any, of that business or any other business carried on by him and assessable for that assessment year; and
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall, in case the business so re-established, reconstructed or revived continues to be carried on by the assessee, be carried forward to the following assessment year and so on for seven assessment years immediately succeeding.]
(2) Where any allowance or part thereof is, under sub-section (2) of section 32 or sub-section (4) of section 35, to be carried forward, effect shall first be given to the provisions of this section.
(3) No loss [(other than the loss referred to in the proviso to sub-section (1) of this section)] shall be carried forward under this section for more than eight assessment years immediately succeeding the assessment year for which the loss was first computed.
a) If there is a loss under the head “Profits and gains of business or profession” other than loss from speculation business, then such loss would be carried forward to next assessment year and would be set off against the profits and gains if any derived from any business or profession.
b) Proviso: If any industrial undertaking carried on in India is discontinued in any previous year by reason of extensive damage to, or destruction of, any building, machinery, plant or furniture owned by the assessee and used for the purposes of such business as a direct result of:
(i) flood, typhoon, hurricane, cyclone, earthquake or other convulsion of nature ; or
(ii) riot or civil disturbance ; or
(iii) accidental fire or explosion ; or
(iv) action by an enemy or action taken in combating an enemy (whether with or without a declaration of war),
And because of this there is a business loss and such business is re-established, reconstructed or revived, within 3 years then such loss would be carried forward to the assessment year in which the business is re-established, reconstructed or revived and it shall be set off against the business income if any.
Also if such loss is not wholly set off then such loss would be carried forward for next 7 immediately succeeding years.
c) The losses other than those mentioned in proviso to section 72(1) shall be carried forward for 8 assessment years.
a) Business income of wife or minor child, clubbed u/s 64 with the income of the assessee can be set off against any loss brought forward by assessee in respect of a business carried on by him – CIT v. J.H. Gotla [1985] 156 ITR 323 (SC).
b) If income from a particular source is exempt from tax, e.g., income exempt from tax u/s 10, loss from such source cannot be set off against income chargeable to tax. Loss of profits must be a loss of Taxable profits – Ramjilal Rais v. CIT [1965] 58 ITR 181 (All.).
c) Even current year’s loss can be set off against undisclosed income declared in a survey – CIT v. Shilpa Dyeing & Printing Mills (P.) Ltd. [2013] 219 Taxmann 279 (Guj.).
c) In case where profits are insufficient to absorb brought forward losses, current depreciation and current business losses, the same should be deducted in following order:
i) Current scientific research expenditure [Sec 35(1)].
ii) Current depreciation [Sec 32(1)].
iii) Brought forward business losses [Section 72(1)].
iv) Unabsorbed family planning promotion expenditure [Sec 36(1)(ix)].
v) Unabsorbed depreciation [Sec 32(2)].
vi) Unabsorbed scientific research capital expenditure [Sec 35(4)].
vii) Unabsorbed development allowance [Sec 33A(2)(ii)].
viii) Unabsorbed investment allowance [Sec 32A(3)(ii)].
LOSSES IN SPECULATION BUSINESS.
Section under Income Tax Act 1961 Interpretation Exceptions/Case laws
Section 73:
(1) Any loss, computed in respect of a speculation business carried on by the assessee, shall not be set off except against profits and gains, if any, of another speculation business.
(2) Where for any assessment year any loss computed in respect of a speculation business has not been wholly set off under sub-section (1), so much of the loss as is not so set off or the whole loss where the assessee had no income from any other speculation business, shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year, and—
(i) it shall be set off against the profits and gains, if any, of any speculation business carried on by him assessable for that assessment year; and
(ii) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on.
(3) In respect of allowance on account of depreciation or capital expenditure on scientific research, the provisions of sub-section (2) of section 72 shall apply in relation to speculation business as they apply in relation to any other business.
(4) No loss shall be carried forward under this section for more than four assessment years immediately succeeding the assessment year for which the loss was first computed.
Explanation.—Where any part of the business of a company (other than a company whose gross total income consists mainly of income which is chargeable under the heads “Interest on securities”, “Income from house property”, “Capital gains” and “Income from other sources”, or a company [the principal business of which is the business of trading in shares or banking] or the granting of loans and advances) consists in the purchase and sale of shares of other companies, such company shall, for the purposes of this section, be deemed to be carrying on a speculation business to the extent to which the business consists of the purchase and sale of such shares.
a) Any loss suffered from speculation business shall be set off from another speculation business only and not any other income
b) If such speculation loss is not wholly set off against the income from speculation business then such loss can be carried forward to next immediately succeeding assessment year and so on. These losses shall not be carried forward for more than 4 assessment years for set off.
c) There is no limit of number of years to carry forward loss arising from capital expenditure on scientific research and depreciation for set off.
d) If any part of the business of company is involved in purchase and sale of shares then such part of the business shall be deemed to be carrying on speculative business.
a) As it can be seen from Section 73, the explanation to Section 73 does not apply to following companies:
1) Companies whose gross total income consists mainly of income which is chargeable under the heads ‘Income from house property’, ‘Capital Gains’ and ‘Income from other sources’.
2) Companies whose principle business is the business of banking or (w.e.f. from AY 2015-16) trading in shares or the business of granting loans & advances.
3) Companies not doing business in shares
4) Companies doing business in units of UTI (as units are not “shares”) – CIT v. Appollo Tyres Ltd. [1998] 101 Taxman 164 (Ker.) Porrits & Spencer (AsiaO) Ltd. V. CIT [2010] 190 Taxman 174 (Punj. & Har.).
5) Companies dealing in Government Securities – ANZ Grindlays Bank v. CIT [2004] 88 ITD 53 (Delhi).
b) Loss incurred in speculative business in banned items cannot be carried forward to the next year – CIT v. Kurji Jinabhai Kotecha [1977] 107 ITR 101 (SC).
Losses from certain specified sources falling under the head “Income from other sources”.
Section under Income Tax Act 1961 Interpretation Exceptions/Case laws
Section 74A:
(1) & (2) – Omitted.
(3) In the case of an assessee, being the owner of horses maintained by him for running in horse races (such horses being hereafter in this sub-section referred to as race horses), the amount of loss incurred by the assessee in the activity of owning and maintaining race horses in any assessment year shall not be set off against income, if any, from any source other than the activity of owning and maintaining race horses in that year and shall, subject to the other provisions of this Chapter, be carried forward to the following assessment year and—
(a) it shall be set off against the income, if any, from the activity of owning and maintaining race horses assessable for that assessment year :
Provided that the activity of owning and maintaining race horses is carried on by him in the previous year relevant for that assessment year; and
(b) if the loss cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the following assessment year and so on; so, however, that no portion of the loss shall be carried forward for more than four assessment years immediately succeeding the assessment year for which the loss was first computed.
Explanation.—For the purposes of this sub-section—
(a) “amount of loss incurred by the assessee in the activity of owning and maintaining race horses” means—
(i) in a case where the assessee has no income by way of stake money, the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by him wholly and exclusively for the purposes of maintaining race horses;
(ii) in a case where the assessee has income by way of stake money, the amount by which such income falls short of the amount of expenditure (not being in the nature of capital expenditure) laid out or expended by the assessee wholly and exclusively for the purposes of maintaining race horses;
(b) “horse race” means a horse race upon which wagering or betting may be lawfully made;
(c) “income by way of stake money” means the gross amount of prize money received on a race horse or race horses by the owner thereof on account of the horse or horses or any one or more of the horses winning or being placed second or in any lower position in horse races.
a) The amount of loss arising from activity of owning and maintaining race horses cannot be set off against any other income except that of owning and maintaining race horses only.
b) If the amount of loss cannot be wholly set off then the balance loss can be carried forward for next immediately 4 succeeding assessment years.
c)The amount of loss would be calculated as below:
i) if assessee has no income by way of stake income (i.e. prize money earned), then the whole of revenue expenditure laid out or expended wholly and exclusively for maintaining race horses.
ii) if assessee has stake income then the whole of revenue expenditure laid out or expended wholly and exclusively for maintaining race horses minus stake income.
a) The explanation to section 74A(3) refers to maintenance of race horses. If the horses are maintained for the purpose of racing, the requirement of Section 74A(3) is fully met. Further requirement that such horses should have participated in the race in the year relevant to the AY cannot be read into the section – CIT v. R.M.S. & Sons [2002] 120 Taxman 237 (Mad.).
b) Section 74A is applicable only in case of loss from the activity of owning & maintaining race horses. Loss from the activity of owning & maintaining other race animals is governed by section 72 and not be section 74A.
Carry forward and set off of losses in the case of certain companies.
Section under Income Tax Act 1961 Interpretation Exceptions/Case laws Section 79:
Notwithstanding anything contained in this Chapter, where a change in shareholding has taken place in a previous year in the case of a company, not being a company in which the public are substantially interested, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income of the previous year unless—
(a) on the last day of the previous year the shares of the company carrying not less than fifty-one per cent of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than fifty-one per cent of the voting power on the last day of the year or years in which the loss was incurred:
Provided that nothing contained in this section shall apply to a case where a change in the said voting power takes place in a previous year consequent upon the death of a shareholder or on account of transfer of shares by way of gift to any relative of the shareholder making such gift:
Provided further that nothing contained in this section shall apply to any change in the shareholding of an Indian company which is a subsidiary of a foreign company as a result of amalgamation or demerger of a foreign company subject to the condition that fifty-one per cent shareholders of the amalgamating or demerged foreign company continue to be the shareholders of the amalgamated or the resulting foreign company.
a) If the below mentioned conditions are satisfied the brought forward loss cannot be set off:
Condition 1: The Taxpayer is a company in which the public are not substantially interested
Condition 2: The persons beneficially holding 51% of the voting power on the following dates are different:
i) on the last day of the Previous year in which the loss was incurred
ii) on the last day of the previous year in which the company wants to set off the brought forward loss.
b) Amalgamation/Demerger of a foreign holding company:
Section 79 is not applicable if following conditions are satisfied:
Condition 1: The company in which loss is incurred is an Indian Company in which public are not substantially interested.
Condition 2: It is a subsidiary of a foreign company.
Condition 3: The foreign company is amalgamated/demerged with another foreign company.
Condition 4: Persons holding 51% or more shares in the amalgamating/demerged foreign company become shareholders in the amalgamated/resulting foreign company.
a) Section 79 does not specify change in directorship or change in management as a criteria – Sunanda Capital Services Ltd v. CIT[2009] 28 SOT 484 (Mum.).
b) Carry forward of losses cannot be denied on ground of change in shareholding due to merger if management of company continues to remain with same set of people – CIT v. Select Holiday Resorts (P.) Ltd. [2013] 35 taxmann.com 368 (Delhi).
c) Provisions of section 79 are applicable only in case of carry forward of losses. As carry forward of unabsorbed depreciation, capital expenditure on scientific research and family planning stand altogether on different footings, their carry forward and set off are not governed by Section 79 – CIT v. Concord Industries Ltd. [1979] 119 ITR 458 (Mad.).
Section 80 – Notwithstanding anything contained in this Chapter, no loss which has not been determined in pursuance of a return filed in accordance with the provisions of sub-section (3) of section 139, shall be carried forward and set off under sub-section (1) of section 72 or sub-section (2) of section 73 or sub-section (1) or sub-section (3) of section 74 or sub-section (3) of section 74A.
The table below highlights the rule for carry forward of loss:
a) By filing a loss return in pursuance of a notice u/s 148 but beyond time available for filing a voluntary return u/s 139(1), the assessee cannot be entitled to determination of loss for the purpose of carry forward and set off – Koppind (P.) Ltd v. CIT[1994] 207 ITR 228/77 Taxman 359 (Cal.).
b) However, CBDT has power u/s 119(2) to condone delay in case of a return which is filed late and where a claim for carry forward of losses is made – Lodhi Property Co. Ltd. V. Department of Revenue [2010] 191 Taxman 74 (delhi).
c) Moreover, disentitlement for carry forward of loss u/s 80 comes into play only when the original income tax return disclosing loss sought to be carried forward is not filed within time prescribed u/s 139(1); date of filing revised return is not to be considered for this purpose – CIT v. Ashok Walia [2013] 60 SOT 72 (Kol.).
- 11:08 pm
- 0 Comments