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Dec 31, 2012

Redefinition of Business Affairs through Limited Liability Partnership Route

Redefinition of Business Affairs through Limited Liability Partnership Route

Posted: 30 Dec 2012 07:47 PM PST

Limited Liability Partnership (LLP) is a corporate business vehicle, identifiable by entity's name containing 'Limited Liability Partnership' or 'LLP' as suffix, a new business structure in Indian Corporate, that enables professional expertise and entrepreneurial initiative to combine, organize and...

No Penalty for showing share trading income under the Capital Gains instead of Business

Posted: 30 Dec 2012 02:57 AM PST

In view of this circumstance, that the assessing officer chose to treat the income under some other head cannot characterize the particulars or reported in the return as an inaccurate particulars or as suppression of facts.

Partners Remuneration cannot be disallowed as excessive if within the limit prescribed under the Partnership deed and

Posted: 30 Dec 2012 02:49 AM PST

Whether the provisions of section 40A can be applied, in case the section 40(b) had already been applied - Whether when the partnership deed is complete with regard to all the details regarding remuneration and salary etc, disallowance can be made on the basis that it was excessive - Whether...

Ship broker is not a commission agent and not liable to Service Tax

Posted: 30 Dec 2012 02:29 AM PST

A ship broker, as the name itself suggests, is essentially a broker. Ship brokers are specialist intermediaries for negotiations between ship owner and charterers who use the ship to transport some cargo or between the buyers and sellers of the ship.

No Service tax chargeable if services are not at all rendered in India

Posted: 30 Dec 2012 02:20 AM PST

Respondents are not liable to pay any service tax under reverse charge mechanism on the services availed by them from their parent company as they have not paid any remuneration for the training charges. If at all any charges were paid for training outside India is not chargeable to service tax as...

Service tax Penalty to be waived off when there exists no mala-fide intentions of assessee for non-payment of ST

Posted: 30 Dec 2012 02:15 AM PST

It is not disputed by the adjudicating authority that the appellants were in correspondence with the Ministry of Finance seeking exemption on the maintenance and repair services of aircrafts pertaining to Ministry of Defence. Such correspondence resulted in denial of said request for exemption by...

Internet services fall in stipulated services for sec. 80-IA deduction

Posted: 30 Dec 2012 02:06 AM PST

The assessee holds a VSAT license to establish, maintain and operate closed users group, an Internet license to establish, maintain and operate internet services and a license/permission from the Ministry of Information and Broadcasting for providing uplinking services.

Deemed dividend provision not applicable on loan received from company engaged mainly in lending business

Posted: 30 Dec 2012 01:36 AM PST

As provided in the said clause, any advance or loan made by a company to a shareholder or concern in which the shareholder has a substantial interest would not be regarded as a deemed dividend u/s 2(22)(e) if lending of money is a substantial part of the business of the lending company and the loan...

Whether casual contract workers can be considered as regular workers u/s. 80-IB(2)

Posted: 30 Dec 2012 01:26 AM PST

The authorities below have held that the assessee had not fulfilled the conditions relating to the minimum engagement of workers and use of new plant and machinery in setting up of industrial undertaking as required in section 80-IB(2).

Share premium cannot be stated to be commercial profits to apply deemed dividend provisions

Posted: 30 Dec 2012 01:19 AM PST

Hon'ble Supreme Court in case of P.K. Badiani v. CIT [1976] 105 ITR 642 observed that accumulated profits would mean profit in the commercial sense and not assessable taxable profits. In that case development rebate reserve created by the company by charging profit and loss account was held to be...

Subsidy towards power generation plant is to be reduced from actual cost of plant for allowing depreciation u/s. 32

Posted: 30 Dec 2012 12:55 AM PST

According to Explanation 10 and proviso to sub-section (1) of section 43, the subsidy amount shall be deducted in the actual cost of the asset of the assessee. Thus, the contention of the assessee that the subsidy received towards the power generation plant would not be reduced from the actual cost...

Addition for benami property justified if property document found in possession of Assessee & not respond to summons

Posted: 30 Dec 2012 12:48 AM PST

The Tribunal overlooked the fact that though the property dealer filed an affidavit before the Assessing Officer, but owner of the property did not respond to the summons issued by the Assessing Officer. There is no plausible explanation from the assessee why the documents relating to the property...

TPO cannot be asked to establish motive behind transfer of profit before ALP determination

Posted: 30 Dec 2012 12:00 AM PST

It is not necessary for the TPO to demonstrate tax avoidance and diversion of tax/ income before invoking the provisions of section 92C and 92CA . To determine the arm's length nature of any international transactions. Consequently, it is wrong in attaching importance to the fact that the assessee...

To claim business loss, assessee not required to establish for each successive A.Y. that it has commenced its business

Posted: 29 Dec 2012 11:44 PM PST

This Court is of the opinion that reasoning given by the AO in his order for the assessment year 1998-99 is clear and conclusive. It accepted the assessee's contentions with regard to having commenced business with effect from 01.01.1997. It was only on the basis of such a fundamental premise...

Failure to disclose expenditure on foreign travel is a valid a ground for reopening the assessment

Posted: 29 Dec 2012 10:38 PM PST

Assessing Officer in the present case, it is difficult to say that the Assessing Officer erroneously assumed jurisdiction to reopen the petitioner's assessment. The source of the complaint or the tax evasion petition is not relevant; it is the substance of the contents of the tax evasion petition...

Grant of registration u/s. 12AA is a condition precedent for claiming exemption u/s. 11

Posted: 29 Dec 2012 10:31 PM PST

Since grant of registration is a condition precedent for grant of exemption under section 11 and in this case, there is no registration granted under section 12AA in favour of the assessee, no relief or exemption can be granted to the assessee under section 11.

S. 271A penalty justified for non maintains book of account U/s. 44AF

Posted: 29 Dec 2012 10:27 PM PST

According to section 271A, if the assessee fails to keep and maintain any such books of account and other documents as required by section 44AA and the Rules in any previous year, penalty is leviable. Section 44AA(2)(i) and (ii) provides that every person carrying on business shall keep and...

For transfer of Cenvat Credit rule 10 not stipulates shifting of factory to an altogether new site

Posted: 29 Dec 2012 09:46 PM PST

imply On reading of Rule 10(1) of Cenvat Credit Rules, 2004, it is clear that a manufacturer of final product shall be entitled to transfer of the unutilized cenvat credit to the transferred factory provided he shifts his factory at another site and also fulfills the requirement of Rule 10(3) of...

issue of Credit on inputs used in generating electricity for exempted goods to be decided by larger bench of SC

Posted: 29 Dec 2012 09:40 PM PST

In Gujarat State Fertilizers & Chemicals Ltd. (supra) a view has been taken that modvat credit can be taken on LSHS used in the manufacture of fertilizer exempt from duty. Although this decision was rendered in the context of availing modvat credit under the Central Excise Rules, 1944 as they...

HC held seed certification work of a State Agency a business activity and denied registration

Posted: 29 Dec 2012 09:26 PM PST

HC held that CIT had rightly rejected the application of the petitioner for approval under Section 10 (23C) (iv) of the Act on the ground that the petitioner has not rendered its services directly to the farmers but is rendering its services directly to its clients/agents who are engaged in...

ICAI President's Message – January 2013

Posted: 29 Dec 2012 09:15 PM PST

Suggestions on Draft Rule 11UA of Income-tax Rules, 1962 Accepted: I am happy to inform you that our suggestions have found favour with the Government, which we had submitted in response to the CBDT's request on the draft Rule 11UA for determination of fair market value for the purpose of Section...

Documents Required for service Tax Audit

Posted: 29 Dec 2012 09:15 PM PST

Require Document for Audit 1. Annexure I Questionnaire. 2. Annexure II List of addtional documents. 3. Annexure III FDSS. 4. Annexure IV Reconciliation. 5. Annexure V Cenvat Account Rule 9

Shipping Business -Insurance claim will qualify for deduction U/s. 33AC only if it represents business profits of assessee

Posted: 29 Dec 2012 08:56 PM PST

The Assessing Authority in the impugned year has not accepted the claim that the income from insurance claim is his income from business. Such a finding of fact though acquires finality, yet it does not meet out the direction given in clear terms by the earlier Tribunal to find out as to whether...

Direct credit of Refund/ Rebate to the Exporters' credit by way of Electronic payment under RTGS/ NEFT facility

Posted: 29 Dec 2012 08:55 PM PST

It has been brought to our notice that the present practice of issuing account payee cheques to the refund claimants is cumbersome and it also entails lot of paperwork, including return of cheques due to incomplete address and other clerical errors, leading to considerable delay in realisation of...

Two agreements with same bank details is reason good enough to to make AO believe that there has been under-assessment of income

Posted: 29 Dec 2012 08:52 PM PST

Once there are reasons for the AO to believe, whether such reasons originate out of the record already scrutinized or otherwise, he shall be within his competence to initiate the re-assessment proceedings. The formation of belief by the AO must always be tentative and not a firm or final conclusion...

MVAT Notification for TDS for Societies registered under Societies Registration Act, 1860

Posted: 29 Dec 2012 08:47 PM PST

No. JC (HQ)1/ VAT/2005/97.—In exercise of the powers conferred by sub-clause (i) of clause (b) of Sub section (1) of section 31 of the Maharashtra Value Added Tax Act, 2002 (Mah. IX of 2005), the Commissioner of Sales Tax, Maharashtra State, Mumbai, hereby, amend the Notification No. JC (HQ)1/...

Direct recruitee's entitlement to promotion is based on year of examination and not appointment – SC

Posted: 29 Dec 2012 08:46 PM PST

Having interpreted the effect of the OMs dated 7.2.1986 and 3.7.1986, we are satisfied, that not only the requisition but also the advertisement for direct recruitment was issued by the SSC in the recruitment year in which direct recruit vacancies had arisen.

Prior to 17th March 2012 No liability to pay interest if credit wrongly taken reversed before utilization

Posted: 29 Dec 2012 08:30 PM PST

The levy of interest is on the actual amount, which is withheld and the extent of delay in paying the tax from the due date. The interest cannot be claimed from the date of wrong availment of CENVAT credit and that the interest would be payable from the date CENVAT credit is taken or utilized...

MVAT Notification for Amendment in Form 231,232,233,234,235

Posted: 29 Dec 2012 07:22 PM PST

NO. VAT/AMD-1012/1B/Adm-8.—In exercise of the powers conferred by sub-rule (1) and (2) of Rule 17A of the Maharashtra Value Added Tax Rules, 2005, the Commissioner of Sales Tax, Maharashtra State, Mumbai hereby, amends the forms appended to the Maharashtra Value Added Tax Rules, 2005 as follows,...

For income tax Purpose Working of actuarial surplus in accordance with rule 2 of First Schedule to insurance Act is valid

Posted: 28 Dec 2012 12:02 AM PST

Looking at the issue in any way what is noticed is that the computation made by assessee is in accordance with rule 2 of the Insurance Act, 1938 according to which only Assessing Officer can base his computation. This also corresponds to the way incomes were assessed in earlier years, i.e., the...

income tax Notification No. 55/2012 Dated 28/12/2012 on Notified Infrastructure undertaking U/s. 80IA

Posted: 27 Dec 2012 07:23 PM PST

NOTIFICATION NO. 55/2012 Whereas the Central Government in exercise of the powers conferred by clause (iii) of sub-section (4) of section 80-IA of the Income-tax Act, 1961(43 of 1961)(hereinafter referred to as the said Act), has framed and notified a scheme for industrial park, by the...

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