"06 June 2020" Archive

GST on Cash Basis

There is no doubt that COVID-19 will have a large impact on Indian economy and presently it looks like that due to Covid-19 crises the Indian economy is in ICU. Even after the government has announced Rs. 20 lakh crores of stimulus package we fell it isn’t enough. Recently Moody has also downgraded Government of […]...

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Tax on Resident Welfare Association /Apartment Association/Society

This article is an attempt to educate on regulatory, accounting, direct and indirect tax compliance to be done by Resident Welfare Association (RWA)/Apartment Association. In Tamilnadu as per The Tamilnadu Apartment Ownership Act, 1994, a Deed of Apartment containing description of the land on which the building is located along with deta...

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Income Tax Relief Measures by Govt. due to COVID-19 pandemic

“What’s the use of a fine house if you haven’t got a tolerable planet to put it on.” A very famous quote of poet and philosopher Henry David Thoreau which holds so true in the present crisis this world is facing. The global pandemic and proliferate increase in its outspread has led the common man to face […]...

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Share transfer without consideration under family arrangement cannot be treated as sham transaction

Glebe Trading Pvt. Ltd. Vs ITO (ITAT Delhi)

The issue under consideration is whether A.O. is correct in holding that shares of listed companies received by the appellant company as gift without consideration, as part of internal family realignment amongst members of the family, could not be regarded as valid "gift", and further considering the same to be sham and colorable transact...

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MSME Benefits under Atma Nirbhar Bharat Abhiyan

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.  Objective of ATMA- NIRBHAR BHARAT ABHIYAN Interim measures such as liquidity infusion and direct cash transfers for the poor. long-term reforms in growth-critical sectors to make them globally compet...

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Stay of Demand- AO must consider prima facie case, Financial Stringency & Balance of Convenience

Smt. Saroja Vs ITO (Madras High Court)

The issue under consideration is the rejection of stay of demand by the assessing authority without offering an opportunity of heard is justified in law?...

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Non consideration of sale value approved by Charity Commissioner by Collector of Stamps in adverting value of trust property was not justified

Crystal Construction Company Vs Additional Controller of Stamps (Bombay High Court)

Collector of Stamps committed a manifest error in not at all adverting to the fact that the Charity Commissioner had determined the value of the trust property by following requisite process to ensure the best value, and determining the market value of the trust property on the sole premise that there was a vast difference in the value de...

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Same transaction can’t be taxed in the hands of two assessees

Rajesh Gupta Vs ITO (ITAT Delhi)

ITAT state that the issue where one turnover can be taxed in the hands of two different assessee one being partnership firm M/s. Satyam Builders and another being proprietary concern of the assessee namely satyam Builders. The answer is emphatically No....

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No Section 271D Penalty for cash received from commission agent against sale of crops

Hardeep. Singh Vs JCIT (ITAT Chandigarh)

Transactions between the assessee and the Commission Agent were relating to the sale of agriculture crops, therefore, there was no receipt or repayment of loan or deposit, accordingly penalty levied by the A.O. and sustained by the Ld. CIT(A) under section 271 E of the Act is also deleted....

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If Control & Management rests with individual, then tax must be levied on individual capacity

ADIT Vs Persys Punj Lloyd JV (ITAT Delhi)

The issue under consideration is whether the appellant was to be assessed in the capacity of an Association of Person (AOP) or the members of the AOP were assessable to tax separately in their individual capacity?...

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Maintenance service charges cannot be taxed as House Property Rental Income

DCIT Vs Jagatjit Industries Ltd. (ITAT Delhi)

The issue under consideration is whether the maintenance service charges is charged under head income from house property along with rent?...

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Brief on Internal Control Over Financial Reporting (ICFR) design & testing

Internal Financial Control came into existence to promote risk management and governance process within the organization so that we don’t have another Satyam case in the future. In this article we have discussed the Internal Financial Control (IFC) from the Business perspective and from Auditor’s perspective:...

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“Reasons to believe” – Is this concept considered crucial while conducting search and seizure?

The factor of 'reason to believe' is extremely crucial while conducting search and seizure proceedings. The same reasons are also required to be on record. Why are reasons to believe to be considered important? And what impact can it have?...

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Recent amendment in IFRS 16 & Proposed amendment of Ind AS 116 

Recent amendment in IFRS 16 and exposure draft (Proposed amendment) on Ind AS 116 – Leases for accounting of rent concession due to Covid-19 The pandemics of coronavirus, or COVID-19 has been here for a while and after the first shock of its quick spread and effect on people’s health, we are all seeing its […]...

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Section 14A applies to share of profit from partnership firm

Minal Industries Limited Vs DCIT (ITAT Mumbai)

The issue under consideration is whether Section 14A will be applicable on Profit sharing from Partnership Firm, which is exempt in the hands of partners?...

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Covid 19 Impact on Residential Status Under Income Tax Act

Circular No. 11/2020 - income tax (08//0/5/20)

Covid 19 Impact on Residential Status Under the Income Tax Act, 1961 for the F.Y 2019-20 Background 1. Section 6 of the Income Tax Act 1961, deals with the determination of residential status of a person (i.e resident, Non-resident and Not ordinary resident). 2. The taxability of income of person who is stay outside India […]...

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The Dark Side of Privatisation of Public Sector Banks

Dear Readers, You might be aware about the recommendations of the Niti Aayog to the central government about the privatisation of few Indian Public Sector Banks. Currently, the talk about the privatisation of 3 public sector banks namely, Punjab & Sind Bank, Indian Overseas Bank and Bank of Maharashtra is in the air. So, after [&helli...

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Proposed Changes In IND As 116 and Challenges Ahead

Exposure Draft on Covid-19-Related Rent Concessions (Proposed amendment to Ind AS 116, Leases) The first five months of this year have slipped under the shadows of COVID-19 and the rising numbers globally indicate that it is still a considerable way from being over. As countries worldwide battle this health crisis, striving to keep their ...

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Form 26AS in its new Aatmanirbhar Avtar

Budget 2020-21 introduced section 285BB in the Income-Tax Act to implement revised Form 26AS and include all information concerning taxpayer with the Income Tax during the year (Making it a ONE STOP)....

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Due Dates of ROC Return Filing (FY 2019-20)

Article explains due date for filing of ROC Forms for Financial Year 2020 which includes Form ADT-1 – Appointment of Auditor, Form AOC-4 and Form AOC-4 CFS (in case of consolidated financial statements) Filing of Annual Accounts, Form MGT-7– Filing of Annual Return, Form CRA-4- Filing of Cost Audit Report, Form MGT-14- Filing ...

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Govt suspends Section 7, 9 and 10 of IBC 2016

Suspension of Section 7, 9 and 10 of Insolvency Bankruptcy Code: The IBC (Amendment) Ordinance, 2020 Lately, on third day of June, 2020 Union Cabinet cleared the proposal for suspension of Section 7, 9 and 10 of Insolvency Bankruptcy Code, 2016 (Code) for the period of six months starting from 25th of March, 2020. Thus, […]...

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Analysis of IBC (Amendment) Ordinance, 2020

Analysis of  Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 i.e. IBC (Amendment) Ordinance, 2020 Reasons of Amendment: 1. The entire ecosystem for implementation of the Insolvency and Bankruptcy Code is in Place, 2. The Provisions relating to corporate insolvency resolution process and liquidation process for corporate person...

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Annual Return on Foreign Liabilities & Assets (FLA Return)

FLA Return is described as Foreign Liabilities And Assets Return which is required to be submitted by all the Indian Companies which have received Foreign Direct Investment (FDI) or made Overseas Investment abroad in the previous year(s) including the current year i.e. who holds foreign Assets or Liabilities in their Balance Sheets....

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MSME Registration- Benefits, Documents Needed, Steps

Micro Small and Medium Enterprises (MSME) has always been a backbone of Indian Economy. Around 63.4 million units of MSME all over India. MSME(s) contribute around 6.11% of the GDP form the manufacturing sector and 24.63% of the GDP form the service sector. Around 120 million employment is generated by these enterprises. By the new [&hell...

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Compounding of offences | Section 441 | Companies Act, 2013

Even though the companies act, 2013 talks about compounding of offences but the word compounding is defined under the companies act, 2013 and neither was it defined under the companies act, 1956. The legal meaning of compounding is “to settle a matter by payment of money, in lieu of other liability.” In terms of a […]...

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Rights of Unmarried Mother Over her child

Mother- the prime Nurturer Since the evolution of humanity towards civilization, genders have been bound in pre-defined roles for centuries but slowly things have changed for the better. Speaking of today, people are challenging and changing the old norms of society and both genders prefer to work in every sphere of life. Having said that...

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Major change in ITR V and acknowledgement

CBDT has released the ITR forms, ITR V and acknowledgement and has made major changes. Here, I’m discussing ITR V and acknowledgement for A.Y. 2020-21. So in earlier years, we have only ITR V i.e., acknowledgement generated after filing and verified ROI. Now in A.Y. 2020-21, after filing ROI, there will generate an ITR V […]...

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Money Transfer Service Scheme

WHAT IS MONEY TRANSFER SERVICE SCHEME (MTSS)? Money Transfer Service Scheme (MTSS) is a way of transferring personal remittances from abroad to beneficiaries in India. Only inward personal remittances into India such as remittances towards family maintenance and remittances favouring foreign tourists visiting India are permissible. Under ...

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Analysis of Dividend Distribution Tax & TDS on Dividend

Analysis of various aspects of Dividend Distribution Tax (DDT), TDS on Dividend as per Income tax Act, 1961 or DTAA Till FY 2019-20 the Company was required to pay Dividend Distribution Tax on Dividend declared or paid or distributed as per provision of section 115-O of Income tax Act, 1961 at the prescribed rate of […]...

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Bigger & Bolder Form 26AS- Annual Information Statement

In its new avatar, the new 'bigger and bolder Form 26AS, would be more of an 'Annual Information Statement' which will have comprehensive information on taxes paid, details of pending and completed income tax proceedings, status of income tax demand and refund along with details of specified financial transactions like purchase of shares ...

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Impact of ‘Force Majeure Clause’ In Rent or Lease Agreement

1. What do you understand by the doctrine of  ‘Force Majeure’? The Merriam Webster dictionary defines the word force majeure as ‘an event or effect that cannot be reasonably anticipated or controlled’, that it has been derived from a French word namely ‘vis major’ which means a superior force which is...

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All about NPS (National Pension Scheme) of Section 80CCD(1B)

All about NPS (National Pension Scheme) of Section 80CCD(1B) of the Income Tax Act, 1961 With this article, I am going to answer a few questions which come in your mind before making a proactive investment in NPS (National Pension Scheme) along with the deduction under section 80CCD(1B). Q 1. What does Section 80CCD talk […]...

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ITR 1-Sahaj for F.Y. 2019-20 (A.Y. 2020-21)

In this article we will discuss about the Sahaj (ITR- 1), its applicability and new changes in Sahaj (ITR- 1) which are appliable to A.Y. 2020-21....

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Secretarial Audit For Bigger Companies- Form No. MR-3

As per Section 204 read with rule The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 of the Companies Act, 2013 Applicability of Secretarial Audit 1. Every listed company In case of unlisted Public company: 2.Every public company having a paid-up share capital of fifty crore rupees or more; or 3. Every public...

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Important changes in ITR-1 Form for A.Y. 2020-21

Here in this article only ITR-1 has been discussed as to its applicability, new changes made in the forms and other matters requiring consideration before filing the ITR. Most of the salaried assessees  file their Income Tax Return in ITR-1....

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PRE-Packs: Next Step in Insolvency?

The term 'pre-pack sale' has been defined by the Association of Business Recovery Professionals in the United Kingdom as, 'an arrangement under which the sale of all or part of a company’s business or assets is negotiated with a purchaser prior to the appointment of an Administrator, and the Administrator affects the sale immediately on...

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Refund to Indian Exporters under GST Law

Dated: 13.05.2020 Introduction: Under GST Law, when exporter, who are registered under the law, supplies goods or services or both to outside India such supplies are known as Zero Rated Supplies. [S. 16 – IGST Act, 2017] Such an exporter may make Zero Rated Supplies and claim refund pursuant to S. 54 of CGST Act, […]...

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Advance Payment of ICAI Membership Fee for 10 years

The ICAI Council has decided to give an option to pay advance Membership/COP fee in exact amount for 10 years along with GST as a final payment and in case of any shortfall owing to revision of fee in future; their Name/COP will not be removed from the register of members on account of such revision....

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Economic Measures to salvage India from COVID-19 Crisis: An Analysis

The Novel Coronavirus has affected normal life across the world in an unprecedented manner. The governments are forced to take stringent measures like Lockdown to tackle the Pandemic. Human life is prioritized over the state of the economy across the world. However, the lockdown is presupposed to affect the business activities and thus im...

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Holding of EGM Through VC By A Private Limited Company

Given the difficulties faced by the stakeholders on account of the threat posed by COVID-19, the Ministry of Corporate Affairs (MCA) have issued a circular (No.14/2020) on 8th April 2020 for allowing the conduct of members meeting through video conferencing (VC)or other audio visual means (OAVM). The Companies Act, 2013 (Act) does not pro...

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Having a Demat account as your trading account

Dematerialised or Demat account, is a digitized form of account which holds a customer’s portfolios of shares and other securities. It has annulled the requirement of holding physical share certificates. Demat is a trading account which was introduced in India in the year 1996, for National Stock Exchange (NSE) transactions. As per th...

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No Section 271AAB Penalty on Income voluntarily admitted during Search

Ajanta Pharma Limited Vs DCIT (ITAT Mumbai)

The issue under consideration is whether the penalty levied u/s 271AAB of the Act is justified on Income voluntarily admitted during Search by Appellant?...

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Cenvat Credit cannot be denied for Invoices prior to ISD registration

Mafatlal Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)

Mafatlal Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad) Demand of Rs. 39,60,634/- was confirmed on the ground that same was wrongly availed on ISD invoices issued by the appellant’s Ahmedabad and Mumbai branch for services availed prior to the date of ISD registration was granted for the said unit. ...

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Brief notes on Income from other sources

As per section 56(2)(i), dividends are always taxed under this head. However, dividends from domestic company other than those covered by section 2(22)(e) are exempt from tax under section 10(34). Winnings from lotteries, crossword puzzles, races including horse races, card game and other game of any sort, gambling or betting of any form ...

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MSME: The Unsung Hero

MSME Registration is a 12-digit number issued by the Ministry of MSME. It can be applied physically as well as electronically. However, the process of registering MSME can be made at https://udyogaadhaar.gov.in/ instantly after providing few details....

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Indexation of Inherited Property

A big question arise in the mind of every professional that whether benefit of Indexation can be claimed on Inherited Property ; if yes then second half thought is whether it can be claimed from the year in which it is first held by the assessee or from the year in which it is occupied by the Previous Owner or predecessor. ...

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Concept and Tax effect of Switching in Mutual Funds

Article explains What is Switching, Benefits of Switching, Tax effect of Switching If the units are held as stock-in-trade and Tax effect of Switching  If the units are held as investments. Hi, almost all of us are aware of investing in Mutual Funds and their respective Tax effects. However, some areas still remain Grey for […]...

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Traders Registration As MSME’S – Possible Soon?

During a meeting of Shri Nitin Gadkari, Union Minister for MSME and Road Transport and Highways with the representatives of Council of Leather Export, FICCI-‘NBFC Program’ and IMC Chamber of Commerce and Industry on impact of COVID-19 on MSMEs, Some of the questions asked and the suggestions given included Major Points discussed : Inc...

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GST implementation issues- CBIC issues 3rd Clarification

Circular No. 138/08/2020-GST (06/06/2020)

It has been represented that the IRP/RP are facing difficulty in obtaining registrations during the period of the lockdown and have requested to increase the time for obtaining registration from the present 30 days limit....

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