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Archive: 07 April 2011

Posts in 07 April 2011

Losses arising to Foreign Institutional Investors due to cancellation of foreign exchange forward contract are capital in nature

April 7, 2011 1558 Views 0 comment Print

The Mumbai bench of the Income-tax Appellate Tribunal, (“Tribunal”) in a ruling’ in the case of Citicorp Banking Corporation, Baharain v. Addl. Director of Income Tax (I.T.)-Range 1-[2011-T11-40-1TAT-MUM-INTL] , held that losses arising on cancellation of foreign exchange forward contracts entered into by the assessee for protecting it against the risk of currency fluctuation would be characterised as capital loss and the said loss can be set-off against other capital gains under the provisions of the Income-tax Act, 1961 (the “Act”). Further, the Tribunal also held that section 115AD provides for tax rates on income from securities or capital gains and it has nothing to do with determination of the nature of gain or loss i.e. capital or revenue.

Lending of shares cannot be construed as transfer within the definition of "transfer" giving rise to capital gains tax

April 7, 2011 2767 Views 0 comment Print

Section 2(47) of Income-tax Act defines transfer, which, inter alia includes sale, exchange, relinquishment of the asset or extinguishment of any rights therein. In the case of Phulchand Sons Investments Pvt. Ltd. v. ACIT the Mumbai Bench of Income Tax Appellate Tribunal observed that the assessee had undertaken a loan transaction and not sale of shares during the subject assessment year. The revenue authorities were unable to bring any evidence on record to establish that the assessee had engaged in a sale transaction and not a loan transaction. Accordingly, the Tribunal held that lending of shares is not a ‘transfer’ within the meaning of section 2(47) of the Act, and hence, is not taxable.

Filing of an income-tax return mandatory for a foreign company even if the income is not taxable in India under the provisions of DTAA

April 7, 2011 6137 Views 0 comment Print

VNU International B. V., AAR No. 871 of 2010, order dated 28 March 2011- Whether capital gains earned by the applicant on transfer of shares of the Indian company would be liable to tax in India as per the provisions of the Income-tax Act, 1961 („the Act‟) and the Tax Treaty between India and The Netherlands? If the capital gain is not taxable in India, whether the applicant is required to file any return of income under section 139 of the Act? Whether the transfer of shares by the applicant would attract transfer pricing provisions under sections 92 to 92F of the Act? Whether the purchasers were liable to withhold tax at source under section 195 of the Act and if so, on what amount should the tax have been deducted?

Changes in Service Tax and CENVAT Credit related to Point of Taxation Rules, Service Tax Rules 1994 and CENVAT Credit Rules 2004

April 7, 2011 3069 Views 0 comment Print

Amendments in Point of Taxation Rules- The Point of Taxation Rules (POTR) which shall come into effect from April 1, 2011 have been amended as under: The point of taxation in terms of Rule 3 of POTR would be the date of invoice or payment, whichever is earlier. In cases where invoice is not issued within 14 days of completion of the provision of service, the point of taxation shall be the date of such completion or receipt of payment whichever is earlier.

Tax collection exceeds revised target for 2010-11- Finance ministry

April 7, 2011 781 Views 0 comment Print

The government today said the total tax collections-both direct and indirect-for 2010-11 have exceeded even the revised estimate on the back of strong economic activities. “I am reasonably sure that we will cross Rs 4.50 lakh crore in direct taxes…I am reasonably confident that it (indirect tax) will be around Rs 3.43 lakh crore-Rs 3.44 lakh crore,” Revenue Secretary Sunil Mitra told reporters on the sidelines of an IPPAI conference.

Clarification Regarding Easy Exit Scheme (EES) – General Circular No-12/2011

April 7, 2011 1652 Views 0 comment Print

Ministry has received certain proposals for simplification in the procedures of Easy Exit Scheme (EES), 2011. The proposals have been examined in the Ministry and the revised simplified procedures for dealing with applications under Easy Exit Scheme (EES), 2011 are enclosed herewith.

Hasan Ali's CA claims threat, seeks police protection

April 7, 2011 448 Views 0 comment Print

Sunil Shinde, Pune Stud farm owner Hasan Ali’s charted accountant, today claimed to have received a threat letter asking him to name some political leaders and a 2G spectrum scam accused in connection with the money laundering case against Ali. “I received the letter in the morning and the letter said that I should hold a press conference and name the political leaders and an accused in 2G spectrum scam”, said Shinde.

Allotment of Director Identification Number (DIN) under Companies Act, 1956 – General Circular No.11/2011

April 7, 2011 2680 Views 0 comment Print

PAN Mandatory for obtaining DIN, Those Already having too need to Submit PAN by 31st May, 2011. The Ministry of Corporate Affairs has already simplified the process for obtaining DIN online, if the DIN-1 eform has been digitally signed by the practicing Chartered Accountant, Company Secretary or Cost Accountant, verifying the particulars of the applicants given in the application. However, in other cases, where the DIN form is digitally singed by the applicant only, the applications are being disposed off with in one or two days after examination by the Central Government.

Employee not liable to pay interest U/s. 234B for employers failure to deduct TDS on Salary

April 7, 2011 8521 Views 0 comment Print

DIT vs. Maersk Co Ltd as agent of Mr. Henning Skov – In the instant case, it was held that the assessee was not liable to pay interest under section 234B upon failure on the part of the employer to deduct tax at source as the obligation to deduct tax at source is upon the employer. The assessee was only liable to pay tax directly under section 191 of the Act.

Service Tax – CENVAT Credit can be utilized for paying Service Tax on GTA service

April 7, 2011 3788 Views 0 comment Print

Whether a person who is not actual service provider, but discharges the Service tax liability on the Taxable Services, under Section 68(2) of the Finance Act, 1994, as a deemed service provider, is entitled to avail the Cenvat Credit on inputs/inputs services/Capital Goods for payment of GTA Services tax, even if he is not using such inputs/input services/capital goods for providing taxable services? Counsel for the revenue fairly states that the matter is covered against the revenue by order of this Court dated 6.5.2010 in CEA No.99 of 2008 CCE v. M/s Nahar Industrial Enterprises Ltd . etc . Appeal Dismissed

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April 2011