No Section 271(1)(c) Penalty For Breach Of s. 50C: ITAT Ahmedabad

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From: editor@itatonline.org <itatonline.org@gmail.com>
Date: Fri, Jun 29, 2012 at 10:01 AM
Subject: Message from EGroup of SolapurCAs No s. 271(1)(c) Penalty For Breach Of s. 50C: ITAT Ahmedabad
To: editor@itatonline.org

 

Dear Subscriber,

 

The following important judgement is available for download at itatonline.org.

Chimanlal Manilal Patel vs. ACIT (ITAT Ahmedabad)

S. 271(1)(c) penalty not levaiable for breach of s. 50C

 

The assessee sold land of which he was the owner for Rs.36 lakhs and offered capital gains on that basis. The AO reopened the assessment u/s 147 on the ground that the assessee ought to have taken the consideration at the market value of the land as per s. 50C. The assessee accepted and offered capital gains as per s. 50C. The AO levied penalty u/s 271(1)(c) which was confirmed by the CIT (A) on the ground that the assessee's action of offering capital gains u/s 50C was after the s. 148 notice and not voluntary. On appeal by the assessee to the tribunal, HELD allowing the appeal:

(Click Here To Read More)

Regards,

Editor,

itatonline.org

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Latest:

Download Draft General Anti-Avoidance Rules (GAAR) Guidelines

LLP Stamp Duty Payable on Supplementary Deed in case of Increase in Capital / Contribution

---------- Forwarded message ----------
From: CS Manish Buchasia (Practising Company Secretaries , Ahmedabad) <manishbuchasiacs@gmail.com>
Date: Fri, Jun 29, 2012 at 1:19 PM
Subject: {jalgaoncas} LLP Stamp Duty Payable on Supplementary Deed in case of Increase in Capital / Contribution
To:

FACT:

• Existing LLP with a Capital of Rs 1.5 lacs, Existing Stamp Duty paid rs 1500/-
• Registered office Maharashtra
• want to increase capital / contribution to rs 5= 1.5+3.5=5 lacs by Admitting new partner.

Query:

• What is the stamp duty payable on the Supplementary  Deed ?
• All the Partner Will execute the deed (old and New) ?
• Notarization of deed is compulsory ?

Thanks

-- 

Best  Regards:
Manish Buchasia / M. S. Buchasia & Associates

(Practising Company Secretaries)
410, "SATYAM MALL" Nr Kameshwar School, Opp Samman,
Jodhpur, Satellite , Ahmadabad -380015, Gujarat
(M) 09898055367 (O) 079-30023620 
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ITR (TRIB) VOL 17 PART 1

 

ITR'S TRIBUNAL TAX REPORTS (ITR (TRIB))

Volume 17 : Part 1 (Issue dated : 9-07-2012)

SUBJECT INDEX TO CASES REPORTED IN THIS PART

Advance tax --Interest--Tax deducted at source to be taken into account--Matter remanded for recomputation--Income-tax Act, 1961, ss. 234A, 234B-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Capital gains --Exemption--Investment of consideration in specified bonds within six months of transfer--Receipt of consideration in subsequent years and investment within six months of receipt--Exemption allowable--Income-tax Act, 1961, s. 54EC-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

----Exemption--Investment of proceeds in agricultural land--No material to show land was put to other use--That assessee had ventured into real estate business--Not ground to infer land would be put to non-agricultural use--Exemption not to be denied --Income-tax Act, 1961, s. 54B-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

----Transfer--Date of transfer--Agreement between assessee and builders for development of land--Agreement registered in later year--Transfer took place on date of agreement--Income-tax Act, 1961, ss. 2(47), 45(3)-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

Depreciation --Rate of depreciation--Computer accessories--To be allowed at 60 per cent.--Income-tax Act, 1961-- Cushman and Wakefield India P. Ltd. v. Asst. CIT (Delhi) . . . 48

Interest on excess refund --Provision not applicable for assessment year 2003-04--Income-tax Act, 1961, s. 234D-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

International transactions --Arms length price--Determination--Transfer pricing study--Transactional net margin method --Rejection of comparables selected by assessee without mentioning how they were not functionally comparable and without considering assessee objections--Selection by Transfer Pricing Officer of companies not engaged in similar business--Companies selected by him not functionally comparable--Arms length price determined by assessee not liable to adjustment--Income-tax Act, 1961, s. 92C--Income-tax Rules, 1962, r. 10B(2)-- Carlyle India Advisors P. Ltd. v. Asst. CIT (Mumbai) . . . 24

----Arms length price--Expenditure cannot be disallowed merely because in opinion of Transfer Pricing Officer it was unnecessary--Amended formula brought for first time before Tribunal--Reasonableness to be determined by authorities below--Matter remanded--Income-tax Act, 1961, s. 92CA-- Ericsson India Private Ltd. v. Deputy CIT (Delhi) . . . 79

----Arms length price--Reimbursement of expenses to associate enterprises--Addition on ground that services not intra-group services and no remuneration paid--Assessee furnishing details of expenses paid of work done--Addition to be deleted--Income-tax Act, 1961, s. 92CA-- Cushman and Wakefield India P. Ltd. v. Asst. CIT (Delhi) . . . 48

----Transfer pricing--Arms length price--Referral fee--Reference to Transfer Pricing Officer--Finding of Transfer Pricing Officer that transaction at arms length price--Assessing Officer has no jurisdiction to re-determine and make addition--Income-tax Act, 1961, s. 92CA(4)--CBDT Circular No. 3 dated 12-3-2008-- Cushman and Wakefield India P. Ltd. v. Asst. CIT (Delhi) . . . 48

Non-resident --Taxability in India--Non-resident awarded contract but assigning it to Indian subsidiary--Subsidiary lacking technical expertise and resources and non-resident providing co-ordinating and facilitating services--Payments by Indian subsidiary corresponding to invoices--Cost allocation not explained--Element of profit not ruled out--Non-resident taxable on payments as fees for technical services--Income-tax Act, 1961, s. 9(1)(vii)--Double Taxation Avoidance Agreement between India and the Netherlands, arts. 5, 12(5)(b)-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Reassessment --Income escaping assessment--Original assessment done by mere processing of intimation--Facts cumbersome and complicated--Reopening of assessment proper--Income-tax Act, 1961, ss. 143(1), 147, 148-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Search and seizure --Block assessment--Limitation--Date from which reckoned--Last of panchnamas, meaning of--Last of panchnamas in respect of any of warrants of authorisation not necessarily in respect of last warrant of authorisation--Requirements of panchnama--Panchnama not recording any search or statement but mere formality for lifting prohibitory order--Not panchnama from which time limit of assessment to be reckoned--Income-tax Act, 1961, s. 158BE, Expln. 2 -- CIT (Asst.) v. Shree Ram Lime Products Ltd. [SB] (Jodhpur) . . . 1

SECTIONWISE INDEX TO CASES REPORTED IN THIS PART

Double Taxation Avoidance Agreement between India and the Netherlands :

Art. 5 --Non-resident--Taxability in India--Non-resident awarded contract but assigning it to Indian subsidiary--Subsidiary lacking technical expertise and resources and non-resident providing co-ordinating and facilitating services--Payments by Indian subsidiary corresponding to invoices--Cost allocation not explained--Element of profit not ruled out--Non-resident taxable on payments as fees for technical services-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Art. 12(5)(b) --Non-resident--Taxability in India--Non-resident awarded contract but assigning it to Indian subsidiary--Subsidiary lacking technical expertise and resources and non-resident providing co-ordinating and facilitating services--Payments by Indian subsidiary corresponding to invoices--Cost allocation not explained--Element of profit not ruled out--Non-resident taxable on payments as fees for technical services-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Income-tax Act, 1961 :

S. 2(47) --Capital gains--Transfer--Date of transfer--Agreement between assessee and builders for development of land--Agreement registered in later year--Transfer took place on date of agreement-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

S. 9(1)(vii) --Non-resident--Taxability in India--Non-resident awarded contract but assigning it to Indian subsidiary--Subsidiary lacking technical expertise and resources and non-resident providing co-ordinating and facilitating services--Payments by Indian subsidiary corresponding to invoices--Cost allocation not explained--Element of profit not ruled out--Non-resident taxable on payments as fees for technical services-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 45(3) --Capital gains--Transfer--Date of transfer--Agreement between assessee and builders for development of land--Agreement registered in later year--Transfer took place on date of agreement-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

S. 54B --Capital gains--Exemption--Investment of proceeds in agricultural land--No material to show land was put to other use--That assessee had ventured into real estate business--Not ground to infer land would be put to non-agricultural use--Exemption not to be denied-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

S. 54EC --Capital gains--Exemption--Investment of consideration in specified bonds within six months of transfer--Receipt of consideration in subsequent years and investment within six months of receipt--Exemption allowable-- Mahesh Nemichandra Ganeshwade v. ITO (Pune) . . . 116

S. 92C --International transactions--Arms length price--Determination--Transfer pricing study--Transactional net margin method --Rejection of comparables selected by assessee without mentioning how they were not functionally comparable and without considering assessees objections--Selection by Transfer Pricing Officer of companies not engaged in similar business--Companies selected by him not functionally comparable--Arms length price determined by assessee not liable to adjustment-- Carlyle India Advisors P. Ltd. v. Asst. CIT (Mumbai) . . . 24

S. 92CA --International transactions--Arms length price--Expenditure cannot be disallowed merely because in opinion of Transfer Pricing Officer it was unnecessary--Amended formula brought for first time before Tribunal--Reasonableness to be determined by authorities below--Matter remanded-- Ericsson India Private Ltd. v. Deputy CIT (Delhi) . . . 79

----International transactions--Arms length price--Reimbursement of expenses to associate enterprises--Addition on ground that services not intra-group services and no remuneration paid--Assessee furnishing details of expenses paid of work done--Addition to be deleted-- Cushman and Wakefield India P. Ltd. v. Asst. CIT (Delhi) . . . 48

S. 92CA(4) --International transactions--Transfer pricing--Arms length price--Referral fee--Reference to Transfer Pricing Officer--Finding of Transfer Pricing Officer that transaction at arms length price--Assessing Officer has no jurisdiction to re-determine and make addition--CBDT Circular No. 3 dated 12-3-2008-- Cushman and Wakefield India P. Ltd. v. Asst. CIT (Delhi) . . . 48

S. 143(1) --Reassessment--Income escaping assessment--Original assessment done by mere processing of intimation--Facts cumbersome and complicated--Reopening of assessment proper-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 147 --Reassessment--Income escaping assessment--Original assessment done by mere processing of intimation--Facts cumbersome and complicated--Reopening of assessment proper-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 148 --Reassessment--Income escaping assessment--Original assessment done by mere processing of intimation--Facts cumbersome and complicated--Reopening of assessment proper-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 158BE, Expln. 2 --Search and seizure--Block assessment--Limitation--Date from which reckoned--Last of panchnamas, meaning of--Last of panchnamas in respect of any of warrants of authorisation not necessarily in respect of last warrant of authorisation--Requirements of panchnama--Panchnama not recording any search or statement but mere formality for lifting prohibitory order--Not panchnama from which time limit of assessment to be reckoned-- Asst. CIT v. Shree Ram Lime Products Ltd. [SB] (Jodhpur) . . . 1

S. 234A --Advance tax--Interest--Tax deducted at source to be taken into account--Matter remanded for recomputation-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 234B --Advance tax--Interest--Tax deducted at source to be taken into account--Matter remanded for recomputation-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

S. 234D --Interest on excess refund--Provision not applicable for assessment year 2003-04-- Van Oord ACZ Marine Contractors BV v. Assistant Director of Income-tax (International Taxation) (Chennai) . . . 103

Income-tax Rules, 1962 :

R. 10B(2) --International transactions--Arms length price--Determination--Transfer pricing study--Transactional net margin method --Rejection of comparables selected by assessee without mentioning how they were not functionally comparable and without considering assessees objections--Selection by Transfer Pricing Officer of companies not engaged in similar business--Companies selected by him not functionally comparable--Arms length price determined by assessee not liable to adjustment-- Carlyle India Advisors P. Ltd. v. Asst. CIT (Mumbai) . . . 24

 

 

Form 23B- Now Fee Payable to ROC

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From: CA RUNGTA PD <pdrungta@gmail.com>
Date: Tue, Jul 3, 2012 at 1:41 PM
Subject: NashiCAs Form 23B- Now Fee Payable to ROC
To: nashicas@googlegroups.com

 Form 23B

 

Every statutory auditor appointed by the company in the Annual General Meeting under section 224(1) of the Companies Act, 1956 in this form has to intimate whether he has accepted the appointment or not to the concerned Registrar of Companies, within 30 days of the intimation received from the company by the auditor. 

 

Earlier, the form was filed free of cost, but now wef.22^nd July 2012, it has to be filed through MCA 21, as per the fees mentioned in Schedule X of the Companies Act, 1956  

 

 

 

For bringing all the Professionals' on single platform for discussion, updation wrt. Taxation, Company Law Matters   a Google group named---

 

"forum4ca"  has been formed in 2008.

 

You all are invited to join usinGOOGLE GROUP, named---- "forum4ca"

 

To Join click the following LINK

 

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Provide your NAME, ADDRESS, M. NO., EMAIL, MOBILE NO: in the relevent box for approval of the requests to join.

No Service Tax on Renting if premises used for hotel, hostel, accomodation etc.

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From: Rebecca Andrews <rebecca.andrews88@yahoo.in>
Date: Wed, Jul 4, 2012 at 7:46 PM
Subject: Message from EGroup of SolapurCAs No Service Tax on Renting if premises used for hotel, hostel, accomodation etc.
To: ca.shreehari@yahoo.com

 

2012  (6)  TMI  490  (Tri)                                                                                       M/s PARADISE MEHAK PROPERTIES PVT LTD Versus COMMISSIONER OF CENTRAL EXCISE, JAIPUR-I                                                          Service of renting of immovable property - demand of service tax - Held that:- Considering the definition of immovable property, the same does not include building used solely for residential purposes and building used for the purpose of accommodation including hotels, hostels, boarding houses, holidays accommodation, tents, camping facility etc.- in favour of assessee.                                                                          No. - 1618 of 2011                               Order No. -   ST/S/446/2012-CUS                     Dated - April 13, 2012                                         Archana Wadhwa, Mathew John, JJ. For Appellant: Shri B L Narasimhan, Adv. For Respondent: Shri K K Jaiswal, DR Per: Archana Wadhwa: Service Tax of  Rs. 19,50,612/- stands confirmed against the applicant for the period June, 2007 to June, 2008 on the ground that they have rendered the taxable service of renting of immovable property to Royal Orchid Banjara Pvt. Ltd. and as such are required to pay the Service Tax. 2. The appellant took a categorical stand before the lower authorities that in terms of definition of immovable property, the same does not include building used solely for residential purposes and building used for the purpose of accommodation including hotels, hostels, boarding houses, holidays accommodation, tents, camping facility etc. 3. While dealing with the above submission of the advocate Commissioner (Appeals) has observed as under: "24.......The appellant had contested that hotels are exempted from payment of tax under the said category, I find that the appellant has rented out / lease of the land along with the entire building, swimming pool and restaurant, bar, parking etc. with all the facilities as provided in the base building and the amentias and facilities under an agreement on monthly rental basis and a hotel is being run in the said building by M/s. Royal Orchid Banjara Pvt. Ltd. The said building is admittedly not for accommodation purpose of the lessee. The building provided by the appellant is being used by M/s. Royal Orchid Banjara Pvt. Ltd. to run the hotel business which is commercial in nature. The building premises provided by the appellant on rental basis, is not used as residence by the lessee himself. The exemption under the explanation 1 (d) of the Section 65 (105) (zzzz) of the Finance Act, 1994, is available to the hotels, hostels etc. who provides rooms on rent to their clients and not in respect of immovable property which is rented out to run the hotel business which is without any doubt a commercial activity and is not governed by the exclusion clause (d) of the Explanation-1 to Section 65 (105) (zzzz) of the Act." 4. In this regard we find that commissioner(A) held in above para that the exemption is available to the hotels, hostels etc. who provides rooms on rent to their clients and not in respect of immovable property (building) which is rented out by a person to another person to run the hotel business, therefore, the argument advanced by the appellant has no force. 5. We do not find any force in the above reasoning adopted by the Commissioner (Appeals). The explanation-I to the entry is to the clear effect that for the purpose of said clause, immovable property does not include the following: "(d) building used solely for residential purposes and buildings used for the purpose of accommodation including hotels, hostels, boarding houses, holiday accommodations, tents, camping facilities." 6. In view of the above, we are of the opinion that the appellant had good prima facie case in its favour so as to allow the stay petition unconditionally. (Pronounced in the open court)

__._,_.___

Fwd: iT Matter July-2012

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From: <admin@zawarassociate.com>
Date: Mon, Jul 2, 2012 at 6:32 PM
Subject: iT Matter July-2012

Dear Sir,

"Have a Great Day"

Please find the "iT Matter July-2012" We look forward to your valuable feedback/suggestion, as it will help us to improve & cover topics desired by you.

Regard

Click :

https://docs.google.com/open?id=16R-yDK5d_y5l0Bdb1rDDR85tHTwCYst183xBbUA5MwYKf204HAlJFkzeTiEH

Shri. Rajendra G. Zawar

ZAWAR ASSOCIATES

Credit for Taxes - Guidelines for the Assessing Officers as regards due Verification for allowing credit of TDS and Taxes Paid

---------- Forwarded message ----------
From: Bombay Chartered Accountants' Society <km@bcasonline.org>
Date: 23 June 2012 12:37
Subject: Credit for Taxes - Guidelines for the Assessing Officers as regards due Verification for allowing credit of TDS and Taxes Paid
To: All Members <km@bcasonline.org>

 

 

 

                                                                                                                         23^rd June 2012

 

Dear Members,

Credit for Taxes

Section 199 of the Income Tax Act has been amended with effect from April 2008, whereby credit for taxes deducted at source is to be granted in accordance with rules made by the Central Board of Direct Taxes. The Central Board of Direct Taxes has been issuing instructions for the last few years, regarding acceptance of TDS claims and grant of credit for taxes paid. As per the instructions, in many cases, credit is to be given after due verification. What is the process of due verification has not been clarified by the CBDT. Each assessing officer has been taking his own view as to the process of due verification.

To reduce this problem of inconsistency in the process of due verification, BCAS and CTC have been in discussions with the Chief Commissioners of Income Tax in Mumbai. Accordingly, the Chief Commissioners of Income Tax in Mumbai have agreed upon a consistent process of due verification to be followed by assessing officers falling within their jurisdiction. The agreed upon process is given below for the benefit of members.

Guidelines for the Assessing Officers as regards "due Verification for allowing credit of TDS and Taxes Paid"

Credit for TDS

1.         The Assessing Officers may allow credit in respect of claim of TDS made in the return on the basis of original TDS Certificate after verification of validity of TAN of the deductor. 

It is clarified that prior to introduction of Annexure less return, the assessees were filing original TDS certificates with their returns.  If the acknowledgement of return or some other evidence furnished by the assessee shows that original TDS certificate was filed with the return or thereafter, the AO may allow credit on the basis of self certified copy of TDS certificate.

2.         Indemnity Bond shall be obtained from the assessee in respect of cases where amount of refund involved is Rs. 25,000 or more (no indemnity bond in a case not involving issue of refund).

Credit for Taxes paid

3.         Credit for Advance Tax, Self Assessment Tax and Regular Tax may be allowed on the basis of Original Challan alone in respect of an amount of less than Rs. 10,000.

4.         In a case where claim of credit of tax paid is Rs. 10,000 or more, apart from Original Challan, the claim shall be supported by some proof of payment of tax.  For example, the payment could be proved by the assessee by producing copy of bank account reflecting payment or a certificate from the bank to that effect.

5.         Indemnity Bond shall be obtained from the assessee in respect of cases where amount of refund involved is Rs. 25,000 or more (no indemnity bond in a case not involving issue of refund).

 

Regards,

 

Pradip Thanawala                            Gautam Nayak

President                                          Chairman, Taxation Committee

 

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