It is well esteblished principle that the power to levy penality under taxation laws is incidental and ancillary to the power of collection of tax and is provided to make sure the compliance of tax deposits by the assessees. Taxation laws are welfare laws i.e they are for the welfare of the general public at large.
The Institute of Chartered Accountants of India (ICAI), the apex regulator of accountancy profession in the country, will propose a time line to dispose of the complaints that arise against its members. The institute had recently recommended disciplinary action against two of its member chartered accountants after they were charged with professional misconduct while conducting the audit of Global Trust Bank for the year 2000-01.
A scheme for issue of Foreign Currency Convertible Bonds and Ordinary shares (through Depository Receipts Mechanism) was notified in 1993 to allow the Indian Corporate sector to access global capital markets through issue of Foreign currency Convertible Bonds (FCCBs) / Equity Shares under the Global Depository Receipt Mechanism (GDR) and American Depository Receipt Mechanism (ADR). The scheme has been amended from time to time since then.
Financial year 2009-10 is coming to an end but this does not mean one can take things easy in the last few weeks. Several other essentials on the tax front have to be completed.Here are a few areas where one needs to pay attention to ensure that there are fewer headaches in the next financial year.
It was held in this case that where it is found that for earning exempted income no expenditure has been incurred, disallowance under section 14A cannot stand. In view of the finding of the Tribunal, it is clear that the expenditure on interest was set-off against the income from interest and the investment in the share and funds was out of the dividend proceeds. In view of this finding of fact, disallowance under section 14A was not sustainable.
The Empowered Committee of State Finance Ministers unveiled the First Discussion paper on Goods and Service Tax in India on 10th November 2009. This discussion paper provides us with broad contours of dual GST to be implemented in India.
From the above, it can be clearly seen that there is no blanket restriction on the powers of the Tribunal to enhance the assessment but the restriction on enhancement is in light of the judge – made law, or to put it differently, in light of the ratio decidendi of the binding judicial pronouncements. Further this view has been confirmed by various judicial pronouncements viz., Pathikonda Balasubha Setty (Decd.) Vs. CIT 1967 – 65 – ITR- 252 (Mys), and in the latest Supreme Court judgment in the case of MCorp Global Pvt. Ltd. Vs. Commissioner of Income Tax, Ghaziabad 2009-(222)-CTR -0110 -SC.
Give the known challenges, every central bank has to move in the direction of taking right steps that it may feel as appropriate despite lack of consensus on many critical issues, without waiting for the global system to move. It would be wrong, however, as noted by Mr. Stephen Roach, to presume that “best global policies are the sum of the best national policies”.
Section 14A was introduced in the Income Tax Act, 1961 by the Finance Act 2001 with retrospective effect from 1st April 1962. The intent of introducing this section was reiteration of the well settled legal principle that when an assessee incurs any expenditure in relation to income which is not liable to tax under the Act, he would ideally not be allowed the benefit of claiming such expenditure. The need for introduction of this section had arisen to negate the decision of Supreme Court in Rajasthan State Warehousing Corporation vs. CIT [2000] ITR 450.
As per well settled law and also according to canons of taxation only that expenditure which is relatable to taxable income should be deducted in computing the total income. Expenditure which has a bearing on exempt income should not be considered in the computation of total income as otherwise this would result in double advantage to the assessee.
