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Dec 6, 2009

UPDATES FROM TAX GURU 07.12.2009

UPDATES FROM TAX GURU (in this message: 18 new items)

Link to LEGAL & FINANCIAL  UPDATES FROM TAX GURU

Cost of granting stock options to employees is not deductible expenditure in the hands of employer

Posted: 06 Dec 2009 07:26 PM PST

The ITAT dismissed the appeal of the Revenue and the assessee by holding that the discount on stock options was notional in nature and was not deductible either in the year of grant or in the year when the option is exercised by the employees. In...

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BPO may be taxed in DTC as no provision in DTC to extend tax exemption benefit

Posted: 06 Dec 2009 07:18 PM PST

Business Processing Outsourcing (BPO) centers in India would be subjected to taxation under the new proposed Direct Tax Code (DTC) but some clarifications, especially on double taxation, were still needed, an expert said. The (tax) exception given...

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ED claimed to have proof of violation of FDI guidelines by Emaar MGF

Posted: 06 Dec 2009 07:11 PM PST

The Enforcement Directorate(ED) on Friday claimed to have found evidence of "large-scale" violations of Foreign Direct Investment(FDI) guidelines by real-estate major Emaar MGF in purchase of land. During its searches carried out at 13 premises of...

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STT is applicable on Mutual fund trading and profit is taxable too

Posted: 06 Dec 2009 07:07 PM PST

Buying and selling mutual funds units on the recently opened trading facility on stock exchanges will not be tax-free. While equity schemes would attract securities transaction tax, debt and liquid funds would face capital gains tax. Capital gains...

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No provision in DTC requiring filing of return of loss in time to carry forward losses

Posted: 06 Dec 2009 07:00 PM PST

The Direct Taxes Code Bill, 2009 breaks away from its predecessor in many significant ways when it comes to treatment of losses. While losses from the head capital gains remain a taboo and will have to be set off only against positive income under...

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Taxation of Hindu Undivided Family (HUF) and Family Arrangement

Posted: 06 Dec 2009 06:53 PM PST

The Hindu Undivided Family (HUF) is a special feature of Hindu society. Hindu Undivided Family is defined as consisting of a common ancestor and all his lineal male descendants together with their wives and unmarried daughters. Therefore a Hindu...

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Misuse of STPI Scheme for duty free import- CESTAT decision

Posted: 06 Dec 2009 06:28 AM PST

M/s. Converge Labs Software Technologies Pvt. Ltd. ('Converge') is a 100% export oriented unit ('EOU') operating under the Software Technology Parks of India ('STPI') Scheme and is engaged in the development and export of software. Notification No....

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Scope of the expression Customized Software, standard software and exemption from Indirect taxes

Posted: 06 Dec 2009 05:41 AM PST

Based on the aforementioned observation, the CESTAT held that the software imported by Appellant was only modified packaged software and not „Customized Software? and would not be eligible to the exemption under the subject notification, which...

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CESTAT decision – Service Tax on Management Consultant's Services (MCS)

Posted: 06 Dec 2009 04:14 AM PST

M/s. Nirulas Corner House Pvt. Ltd. („the Appellants?) were engaged in the food and confectionary business. They had entered into an agreement with M/s. Sagar to permit them to run restaurants in the name of "Nirulas" as per the specified plans with...

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Short-term capital loss from a transaction can be set-off against short-term capital gain from any transaction at the option of the taxpayer

Posted: 06 Dec 2009 04:06 AM PST

S. 70, 115AD; A/y 2005-06; in favor of taxpayer:- Taxpayer, a FII, earned short-term capital gains on sale of shares which it bifurcated as pre and post 30 September 2004 (pre and post STT), chargeable to tax at 30% and 10%, respectively under...

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Profits arising on transfer of rural agricultural land are not liable to MAT

Posted: 06 Dec 2009 04:01 AM PST

Ss. 2(1A), 115JB; A/y 2005-06; in favor of taxpayer: Profits arising on transfer of rural agricultural land amounts to agricultural income under section 2(1A). Such income cannot be included in the total income under section 10(1). Section 115JB...

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Disallowance u/s 14A is to be made even when exempt income is not earned or received during the year

Posted: 06 Dec 2009 03:42 AM PST

Special Bench of the Income Tax Appellate Tribunal, New Delhi holds that expenditure relating to exempt income to be disallowed even if assessee has not earned any tax-free income. Related posts:S. 14A disallowance to be made even if no tax-free...

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Procurement of orders by South African company for Indian company on commission basis is not taxable in India

Posted: 06 Dec 2009 03:19 AM PST

S. 9, Treaty with South Africa; in favor of taxpayer: - Z, a South African company, offered to promote and market the products of the taxpayer, an Indian company, on commission basis. Z will procure and negotiate orders and forward these to the...

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Profit element on sale of DEPB, i.e., the amount in excess of sale proceeds over the face value is covered u/s 28(iiid)

Posted: 06 Dec 2009 03:13 AM PST

S. 80HHC; in favor of taxpayer: Post the amendment by Taxation Law Amendment Act, 2005 (effective from 1 April 1998), controversy had arisen as to whether in case of an exporter having export turnover of more than INR100 million (where generally...

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Penalty levied with reference to revised return is bad in law when the revised return has been treated as non-est

Posted: 06 Dec 2009 03:07 AM PST

S. 271(1)(c); in favor of taxpayer : The taxpayer was a trust organized in the US and was a resident of the US. As regards India, it was registered with SEBI as a sub- account of M/s Fidelity Management Resources Co. It filed a return of income...

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Even under new s. 36 (1) (vii) assessee to prove that the debt written of was indeed a bad debt

Posted: 06 Dec 2009 01:32 AM PST

The assessee wrote off an amount as a "bad debt" in its accounts and claimed a deduction u/s 36 (1) (vii). The AO asked the assessee to furnish information as to the names and addresses of the debtors, copies of ledger accounts and efforts made to...

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Brokers need to keep documentary evidence of financial details provided by clients :SEBI

Posted: 06 Dec 2009 12:47 AM PST

In a move to bring greater transparency and discipline among market participants, the Securities and Exchange Board of India (Sebi) on Thursday put out mandatory requirements related to dealings between investors and stock brokers (including trading...

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Consumer court awarded compensation of Rs 15 lakh to widow for medical negligence of doctors

Posted: 06 Dec 2009 12:36 AM PST

The State Consumer Disputes Redressal Commission has awarded a Thane widow a hefty compensation of Rs 15 lakh—one of the highest given in the state in the recent past—after penalising three doctors for medical negligence that led to her husband's...

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With Regards, 
CA Sandeep Kanoi 
Website: http://www.taxguru.in/ 
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