"29 July 2015" Archive

Conversion of Private Limited or Unlisted Public Company into LLP and Taxability under Income Tax Act, 1961

CS Deepak Pratap Singh The Government of India has introduced various types of business structures for doing business. An entrepreneur can choose one from various business structures available according to their suitability. These are Proprietorship, Firm, AOP, One Person Company, Private Limited Companies, Public Limited Companies, Limit...

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Posted Under: Income Tax |

Development of Mechanism to Monitor Tendering by CAs

Tendering has been prohibited in the exclusive areas of practice of chartered accountants like audit and attestation services. i.e. those areas where the assignments can be performed only by chartered accountants. In those areas, where alongwith chartered accountants, the other professionals can also apply for the tender, there is no res...

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Posted Under: Income Tax |

How to pay Service Tax physically or online

An Assessee has to fill GAR-7 Challan [ Download GAR -7 Challan ] and payment can be made through bank. Now, the banker shall stamp the acknowledgement of GAR-7 with CIN- Customer Identification Number containing- BSR Code, Date of Deposit, Serial No of Challan, which can be the proof of tax payment....

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Posted Under: Income Tax |

Legality of Single Stage Taxation under the Punjab Value Added Tax Act, 2005

On 01-04-2005 Government of Punjab introduced Punjab Value Added Tax Act, 2005 (in PVAT Act, 2005) by abolishing the Punjab General Sales Tax Act, 1948. As the name suggests it’s a tax charged on portion of Value Addition at each stage. At each stage, tax calculated on sales (Outputs) and vendors are able to claim tax credits to recover...

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Posted Under: Income Tax |

CBDT notifies New ITR-3, ITR-4, ITR-5 ITR-6 & ITR -7 for A.Y. 2015-16

Notification No. 61/2015 - Income Tax (29/07/2015)

Notification No. 61/2015 - Income Tax 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:-...

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Set Off of Losses or Carry Forward and Set Off of Losses

SET OFF OF LOSS FROM ONE SOURCE AGAINST INCOME FROM ANOTHER SOURCE UNDER THE SAME HEAD OF INCOME (INTER SOURCE). SET OFF OF LOSS FROM ONE HEAD AGAINST THE INCOME FROM ANOTHER (INTER HEAD) ...

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Posted Under: Income Tax |

Gift to be treated as genuine if identity of donors is genuine & source of gift stays explained

Prem Kumar Chowdhary Vs CIT (Income Tax Appellate Tribunal “B” Bench, Kolkata)

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. ...

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Factoring charges on sale cannot be termed as interest & not comes within the purview of section 2(28A)

M. Sons Gems N Jewellery Pvt. Ltd. Vs Addl. CIT (ITAT Delhi)

The Tribunal upheld the contention of the Assessee and also relied upon the judgment of the Hon’ble Calcutta High Court in the case of CIT vs. MKJ Enterprises which held that factoring charges were not interest and as such, provisions of TDS are not applicable....

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Standards On Auditing- Compilation Of Important SA’s

Why Auditing Standards are Important?? Auditing Standards are mandatory to be by followed by practitioners under the direction issued by the council of ICAI. If not complied with Auditing Standards in performing Assurance Engagement...

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Posted Under: Income Tax |

GST Rates – An Unresolved Issue- GST Knowledge Series-3

One of the crucial issue for successful implementation of GST relates to the determination of the GST rate. Since the GST is primarily intended as an exercise in reforming the consumption tax in India and not an exercise for additional resource mobilisation through discretionary changes, the CGST and SGST rates should be such rates which ...

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Posted Under: Income Tax |

TDS applicable on Karigar/ Embroidery charges but not on Purchase of Sarees

ITO Vs Shreejee Sarees Pvt. Ltd. (ITAT Kolkata)

The assessee is a dealer of sarees and AO while framing the assessment disallowed karigar /embroidery charges by invoking the provision of section 40(a)(ia) of the act for non-deduction of TDS u/s 194C of the Act....

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Let-out Commercial Property is not to be considered as Asset for Wealth Tax purposes

D.C.I.T. Vs M/s. Kothari Metals Ltd., (Kolkata ITAT)

The Assessing Officer while computing the total wealth of the assessee added the value of the let-out properties i.e. godown and offices in the total wealth of the assessee for the purpose of calculating the wealth-tax....

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All about Competition Act, 2002 – Part III

We have understood the concepts and some important definition under the Competition Act, 2002. As we have considered the charging provisions of Sections 3 and 4, we have learned that the main object of the act is to promote competition and restrict any activities by any entity or group of entities to restrict competition in the market....

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Posted Under: Income Tax |

Business claim allowable in the year in which it is incurred and not in the year of write off

M/s Nilgiri Cultivations Pvt. Ltd. Vs. DCIT (ITAT Delhi)

The assessee company was engaged in the business of real estate development. Vide order of Hon’ble High Court, 19 Group companies engaged in similar business were merged in the assessee company w.e.f 01.04.1999....

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Addition merely based on inference drawn from documents seized from third party is not valid

CIT, Delhi Vs Anil Khandelwal (High Court of Delhi)

The present case is related to search & seizure action carried out in case of Sh. S.K. Gupta (‘third party’) in respect of companies and other business entities which were controlled by him or owned by him or different individuals connected with him. ...

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Documents supporting a Transaction cannot be accepted as genuine where fundamental transaction is shown to be sham

CIT Vs Vishishth Chay Vyapar Ltd. (High Court of Delhi)

However, where the fundamental transaction is shown to be a sham transaction, the same cannot necessarily be accepted as genuine merely because a broker’s confirmation and invoices have been produced. Given the facts of this case, the decisions referred to by CIT(A) ...

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Section 154 can not be applied if a debatable point involved

Krishak Bharti Coop. Ltd. Vs CIT (Delhi High Court)

Mistake apparent on the record u/s 154 must be an obvious and patent mistake and not something which can be established by a long drawn process of reasoning on points on which there may be conceivably two opinions. ...

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Validity of summon order passed by trial court and criminal proceedings u/s 279(1) r.w. section 276D

Sharvan Gupta Vs ACIT (High Court of Delhi)

The petitioner by letter dated 17th November, 2011 had disclosed a foreign bank account which existed with the HSBC Private Bank, Geneva, Switzerland to the Director of Income Tax (Investigation-II). The peak amount lying in the said account during the year ending 31st March, 2007 was around US$ 1.3 million. ...

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Failure to supply reasons recorded by AO u/s 148 will make whole assessment proceedings void

M/s Jagat Talkies Vs DCIT, (ITAT Delhi)

It is an admitted fact, in the present case that the Department has failed to supply the assessee the copy of reasons recorded by the Assessing Officer for issuance of notice under Section 148 of the Act. Following the decision of Hon'ble Jurisdictional High Court in Haryana Acrylic Manufacturing Company, the issue was decided in favour o...

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Mere error would not confer jurisdiction to exercise revisional power U/s. 263

Shree Yogi Steels Pvt. Ltd Vs DCIT (ITAT Ahmedabad)

The condition precedent for exercising the revisional power under section 263 of the Act is that the order under revision should not only be erroneous, but such erroneous order should result in prejudice to the interests of the Revenue....

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Penalty u/s 271AAA not justified, if A.O. makes assessment on actual income disclosed u/s 132(4)

DCIT Vs M/s Evergreen Industries (P) Ltd., (ITAT Ahmedabad)

On this undisclosed income, A.O. vide penalty order, levied penalty of Rs.2.5 crore u/s 271AAA mainly for the reason of non disclosure of the particulars of income in the statement filed u/s 132(4) by the assessee. ...

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Onus to prove Third party documents found during search is on department

The ADIT Vs Smt. Jignaben Bipin Shah (ITAT Ahmedabad)

Document found during search was a third party document which was neither in the handwriting of the assessee nor bears her signature. Its inference has to be taken as stated by the person who possessed the document....

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Addition u/s 68 for mere high premium on issue of shares not valid

CIT Vs Anshika Consultants Pvt. Ltd. (High Court of Delhi)

Whether the assessee company charged a higher premium or not, should not have been the subject matter of the enquiry in the first instance Instead, the issue was whether the amount invested by the share applicants were from legitimate sources. ...

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If remand report given by AO is without any adverse comments then appeal of revenue would be dismissed

DCIT Vs Mohan Proteins Ltd, (ITAT Delhi)

ITAT held that CIT(A) had made detailed observations on the remand report of the AO who also in his report had not questioned any of the submissions made by assessee and in fact also had not made any adverse comments on the same....

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Transfer Pricing- Companies having abnormal cost cannot be taken as comparable

JCB India Limited Vs ACIT (ITAT Delhi)

Assessee had reduced its operating expenses to calculate ratio of operating profit/Total cost which was the base to calculate the value of export of goods in transfer pricing on the basis that it was its first year of operation ...

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In transfer pricing 2 companies can be compared only if they are functionally comparable

Xchanging Technologies Services India Pvt. Ltd. Vs ACIT (ITAT Delhi)

Assessee was engaged in the field of providing insurance & Human Resources services to its associated enterprise in UK. The Ld. AO /TPO made an addition to the income of the assessee by comparing the income of the assessee with the income of the comparable companies ...

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Provisions of Rule 8D applicable from A.Y. 2008-09 and is not retrospective

Shree Dinesh Mills Limited Vs ACIT (ITAT Ahmedabad)

AO had disallowed the expenses u/s 14A by applying the rule 8D for the A.Y 07-08 but the assessee argued and gave the supporting of the decided case law by Hon’ble High Court in its own decision in which it was decided that the sec 14A would be applicable from A.Y 08-09...

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Interest earned on idle funds raised through share capital for project establishment is capital receipt

ITO Vs M/s Factor Power Ltd,(ITAT Delhi)

ITAT Delhi has held in the case of ITO vs. M/s Factor Power Ltd that Interest Earned on Fund Raised Through Share Capital for installation of thermal power plant , which is been deposited temporarily in bank as fund were lying idle, with a motive to reduce the capital cost of thermal power plant ...

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SEBI issues list of 91 Companies in which investors are advised to not to invest

PR No. 194/2015- SEBI cautions investors not to invest in schemes offered by entities barred by SEBI from raising money or entities not registered with SEBI Certain Collective Investment Scheme(s) (CIS) have come to the notice of SEBI, which are offered by entities which are not registered with SEBI nor offer document of such schemes hav...

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Posted Under: Income Tax |

Notice for Empanelment of Prosecution Counsels

Applications are invited from advocates of substantial standing and repute and with good academic credentials for the empanelment of Prosecution Counsels for representing prosecution cases of the Income Tax Department in the Economic Offences Court or the appropriate court of Delhi in terms of Instruction No. 1925(F. No. 278113/88-ITJ Dat...

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Posted Under: Income Tax |

Timely Redressal of Tax Payer Grievances and Public Service Delivery

Grievance redressal is a major aspect of citizen centric governance and is an important feature of the activities of the Income Tax Department. The Central Action Plan 2015-16 of the Income Tax Department released during the Annual General Conference of senior officers held on 25-26 May 2015, has stressed on service delivery and timely gr...

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Posted Under: Income Tax |

Remarkable decision over tenders by ICAI but Clarification sought

I. Tendering has been prohibited in the exclusive areas of practice of chartered accountants like audit and attestation services. i.e. those areas where the assignments can be performed only by chartered accountants. II. In those areas, where along with chartered accountants, the other professionals can also apply for the tender, there i...

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Posted Under: Income Tax |

CA Practice- Be a Managing Director

A Chartered accountant in practice can also practice in corporate form. The Council permits a Chartered Accountant in practice to practice in Corporate Form also subject to compliance of Guidelines for Practice in Corporate Form. He can operate both the entities simultaneously. This is to empower the members to face the emerging challeng...

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Posted Under: Income Tax |

Preparation Strategy for CA Final Financial Reporting. .!!

Friends all of you are going to be a Chartered Accountant and a CA is supposed to be very much familiar with this subject at least. We are studying this subject from 11th standard and this is a subject in which you can secure the highest. ...

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Posted Under: Income Tax | ,

Reimbursement of expenses from Service / Income tax perspective

Whenever we are appointing any professional (be it chartered accountant, lawyers, consultant etc) then in addition to payment of fees we also reimburse them expenses (like travel ticket cost, hotel bills, local conveyance etc) that has been incurred by them in the course of providing services. ...

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Posted Under: Income Tax |

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