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May 6, 2013

Amendments to Finance Bill, 2013 as passed by Lok Sabha

Amendments to Finance Bill, 2013 as passed by Lok Sabha

Posted: 05 May 2013 08:43 PM PDT

Interest payable to Foreign Institutional Investors (FIIs) and Qualified Foreign Investors (QFIs) on rupee denominated corporate bonds or government securities The proposal made in the Finance Bill 2013, to provide that the concessional rate of TDS on payment of interest will be available where a...

Exemption u/s 54EC can be claimed in respect of Depreciable asset

Posted: 05 May 2013 08:26 PM PDT

It is true that section 50 is enacted with the object of denying multiple benefits to the owners of depreciable assets. However, that restriction is limited to the computation of capital gains and not to the exemption provisions. In other words, where the long­term capital asset has availed of...

Amount received on execution of a will of deceased relative cannot be considered as income

Posted: 05 May 2013 06:49 PM PDT

It is apparent that the assessee received the said sum of Rs. 1,05,00,000/- as inheritance from her father. This would become clear from the fact that late Sh. A P Bajaj had clearly indicated in his Will that in case the property is sold, 30% of the sale proceeds would be given to the assessee....

Ignorance of law not 'reasonable cause' for failure to pay service tax so as to warrant waiver of penalties

Posted: 05 May 2013 11:14 AM PDT

The show-cause notice had invoked Sections 76 and 78 for imposing penalties on the party but the adjudicating authority chose to refrain from imposing such penalties. It held that the assessee's failure to pay duty was due to the dilemma whether the service tax was payable or sales tax was...

CESTAT cannot review its own order and can only rectifiy apparent mistake

Posted: 05 May 2013 11:12 AM PDT

In the case of Oswal Petrochemicals Ltd. (supra), the Hon'ble Supreme Court has categorically held that the statute does not provide any remedy by way of review. There are other decisions of the Hon'ble Supreme Court to the effect that in the absence of specific statutory provision....

No Service tax on Road Toll Charges under BAS

Posted: 05 May 2013 11:09 AM PDT

If on the basis of an agreement between the State authority and the concessionaire for construction of roads, the contractor is authorised to collect the toll charges from the users of the roads for the services rendered and the entire activity is done on Build-Own/Operate-Transfer basis, there is...

Security services used for securing office premises are eligible as input service

Posted: 05 May 2013 11:08 AM PDT

The appellant being an IT related service provider, undisputedly, the recruitment of manpower was, obviously for rendering those services and what further details were required by the department are not forthcoming. Similarly, the 'security agency services' are used for securing their...

CBEC circular on recovery of dues during pendency of stay application is within power of Board

Posted: 05 May 2013 11:01 AM PDT

Section 37 of the Central Excise Act, 1944 is a rule making power of the Government. Sub-section (1) of section 37 provides that the Central Government may make rules to carry into effect the purposes of the Act. Sub-section (2) of section 37 provides that in particular and without prejudice to the...

Incentive for promotion of capital investment is capital receipt

Posted: 05 May 2013 10:55 AM PDT

Incentive scheme was framed as a part of Government's initiative to encourage modernization of existing industries in under-developed areas. The main purpose of the scheme was to accelerate the industrial development and to disperse industries to under-developed areas as well as to provide...

Rental income from business centre is business income

Posted: 05 May 2013 10:32 AM PDT

The undisputed fact is that the property in question is an I.T. Park, with all infrastructure facilities and services. This is not a simple building. The Ministry of Commerce and Industries, notifies certain building as I.T. Park only if various facilities and infrastructure, as specified by the...

Partnership deed can be rectified with retrospective effect

Posted: 05 May 2013 10:19 AM PDT

The partnership is governed under the provisions the Indian Partnership Act, 1932. Section-4 defines partnership as "Partnership is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all". Section-5 provides that...

No disallowance can be made U/s. 14A with regard to investment in foreign subsidiaries

Posted: 05 May 2013 10:07 AM PDT

We find that with regard to the investment of Rs. 5907.18 lakhs in foreign subsidiaries, no disallowance can be made under section 14A because dividend income from foreign subsidiaries is taxable in India. Regarding balance investment of Rs. 38 crores approximately in Indian subsidiaries, we find...

Penalties to be waived if assessee had bona fide belief for non-payment of service tax

Posted: 05 May 2013 10:02 AM PDT

Appellant is a registered mandap keeper and was issued a show cause notice. There could be a situation where the appellant could be under a bona fide belief as to not to discharge the Service Tax liability on the advance amount received, during the material period, the issue of Service Tax...

Ownership of land not must to be eligible for deduction u/s. 80-IB(10)

Posted: 05 May 2013 09:58 AM PDT

Tribunal relying on its decision in case of Radhe Developers v. ITO [2008] 23 SOT 420 (Ahd.) held that respondent assessee would be eligible for deduction under section 80-IB(10) of the Act on the housing project development though the assessee may not be the owner of the land.

Cash seized during search can be adjusted only against existing tax liability

Posted: 05 May 2013 12:05 AM PDT

In the present case, admittedly there is no past demand which has remained unpaid. Therefore only when the Assessee files a return of income quantifying his total income for the assessment years in question can it be said that there has arisen tax liability for the relevant AYs. The due date for...

Urgency to ensure honouring of cheque constitute a reasonable cause u/s. 273B

Posted: 04 May 2013 11:32 PM PDT

Director of assessee company Mr. Varun Sarup Agarwal issued a cheque on 1.2.2007 on behalf of the assessee company for payment of rent and assessee company opened its account after issuance of this cheque. The amount of Rs. 2 lakh was deposited in the bank account of Mr. Varun Sarup Agarwal with a...

If assessee exonerated, on merits, criminal prosecution on same issue cannot be allowed to continue

Posted: 04 May 2013 11:02 PM PDT

Although there is no automatic closure or quashing of the criminal complaint, in the event, there is a favourable verdict in the departmental or the adjudicatory proceedings in favour of an accused but in case the adjudicatory proceedings culminate into a favourable order in favour of the accused...

Companies, whose employees or directors are involved in fraud, should not be accepted as comparable

Posted: 04 May 2013 10:24 PM PDT

(d) Companies having super normal profit may have to be examined further to determine the reason for the extra ordinary profits. (e) Companies whose employee or directors are involved in fraud should not be accepted as the financial results are not reliable. (f) Companies having the turnover of...

Tribunal can allow credit u/s. 90 which was inadvertently mentioned as 'Advance tax'

Posted: 04 May 2013 10:17 PM PDT

It is observed that the claim of the assessee about wrong classification of double taxation credit was rejected by the AO because the assessee did not file a revised return. This view was canvassed by the AO on the basis of the afore-referred judgment in the case of Goetze India Ltd. (supra)...

After accepting wife as owner of business, revenue cannot tax the income from same business as income of husband

Posted: 04 May 2013 09:57 PM PDT

It will be appreciated from the above that the Revenue had accepted the order of the CIT (Appeals) in which she was held to be the owner of M/s Trans World International from the assessment year 1997-98 and that her husband, the assessee before us, was the owner of the said concern only upto the...

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