Finance Budget 2014-15 Highlights

High Lights of Budget 2014-15

A. DIRECT TAX PROPOSALS: -

1. Tax Exemption limit for individuals earning

Rate	Old Position	New Position	Remark
Nil	Rs.2.00 Lacs	Rs.2.00 Lacs	Exempt slab increased by Rs.50,000
10%	Rs.2.00 Lacs to 5 Lacs	Rs.2.50 Lacs to 5 Lacs
20%	Rs.5.00 Lacs to 10 Lacs	Rs.5.00 Lacs to 10 Lacs	No change
30%	Above Rs.10.00	Above Rs.10.00	No change

2. Investment limit under section 80C of the Income-tax Act raised from Rs. 1 lakh to Rs1.5 lakh. So now you can get exemption upto Rs.1.50 lakhs by investing in LIC, PPF etc

3. Deduction limit on account of interest on loan in respect of self occupied house property raised from Rs. 1.5 lakh to Rs. 2 lakh.

4. PPF savings limited enhanced from Rs. 1 lakh to Rs. 1.5 lakh

5. Conducive tax regime to Infrastructure Investment Trusts and Real Estate Investment Trusts to be set up in accordance with regulations of the Securities and Exchange Board of India.

6. Expenditure on Corporate Social Responsibility are not deductible U/S 37.

7. Limit of investment under capital gain bonds is capped at Rs. 50 lac irrespective of Number of years.

8. Investment allowance at the rate of 15 percent to a manufacturing company that invests more than Rs. 25 crore in any year in new plant and machinery. The benefit to be available for three years i.e. for investments upto 31.03.2017.

9. Investment linked deduction extended to two new sectors, namely, slurry pipelines for the transportation of iron ore, and semi-conductor wafer fabrication manufacturing units.

10. 10 year tax holiday extended to the undertakings which begin generation,  distribution and transmission of power by 31.03.2017.

11. Income arising to foreign portfolio investors from transaction in securities to be treated as capital gains.

12. Concessional rate of 15 percent on foreign dividends without any sunset date to be continued.

13. The eligible date of borrowing in foreign currency extended from 30.06.2015 to 30.06.2017 for a concessional tax rate of 5 percent on interest payments. Tax incentive extended to all types of bonds instead of only infrastructure bonds.

14. Introduction of a "Roll Back" provision in the Advanced Pricing Agreement (APA) scheme so that an APA entered into for future transactions is also applicable to international transactions undertaken in previous four years in specified circumstances.

15. Introduction of range concept for determination of arm's length price in transfer pricing regulations.

16. To allow use of multiple year data for comparability analysis under transfer pricing regulations.

17. Long term capital gain tax on debt mutual fund increased from 10% to 20 % & tenor increased from 12 months to 36 months .

18. Income and dividend distribution tax to be levied on gross amount instead of amount paid net of taxes.

19. In case of non deduction of tax on payments, 30% of such payments will be disallowed instead of 100 percent.

20. Government to review the DTC in its present shape and take a view in the whole matter.

21. 60 more Ayakar Seva Kendras to be opened during the current financial year to promote excellence in service delivery.

B. INDIRECT TAXES PROPOSALS: -

1. Cheaper : -

Item Name	2013-14	2014-15
Computer TV LAD LCD19"below	10%	Nil
Solar Energy Plant Machinery		5% reduced
EVA Sheet & back Sheet & Flat Copper Wire PV Ribbons	5%	Nil
Forged steel rings	10%	5%
Anthracite coal, bituminous coal, coking coal, steam coal and other coal	2.5%	2%
Ship scrap	5%	2.5%
Export precious and semi-precious stones	10%	Nil
Food packaging	10%	6%
Footwear	12%	6%
Plastic waste	10%	Nil

2. Costlier

Item Name	2013-14	2014-15
Stainless Steel	5%	7.5%
Metallurgical coke	0%	2.5%
Diamonds	0%	2.5%
Readymade Garments	3%	5%
Bauxite	10%	20%
Cigarettes	11%	72%
Panmasala	12%	16%
Tobacco	50%	55%
Gutkha and Chewing tobacco	60%	70%

3. General

i. 24X7 customs clearance facility extended to 13 more airports in respect of all export goods and to 14 more sea ports in respect of specified import and export goods to facilitate cargo clearance.

ii. 'Indian Customs Single Window Project' to facilitate trade, to be implemented.

iii. The scheme of Advance Ruling in indirect taxes to be expanded to cover resident private limited companies. The scope of Settlement Commission to be enlarged to facilitate quick dispute resolution.

iv. Customs and Central Excise Acts to be amended to expedite the process of disposal of appeals.

C. Service Tax: -

1. No change in basic rate

2. New Services Covered :

i. Sale of space or time for advertisements in broadcast media, extended to cover such sales on other segments like online and mobile advertising.

ii. Service provided by radio-taxis brought under service tax.

iii. Services by air-conditioned contract carriages and technical testing of newly developed drugs on human participants brought under service tax.

3. Beneficial Provisions:

i. Services provided by Indian tour operators to foreign tourists in relation to a tour wholly conducted outside India to be taken out of the tax net and Cenvat credit for services of rent-a-cab and tour operators to be allowed to promote tourism.

ii. Service tax exempted on loading, unloading, storage, warehousing and transportation of cotton, whether ginned or baled.

iii. Services provided by the Employees' State Insurance Corporation for the period prior to 1st July 2012 exempted, from service tax.

iv. Exemption available for specified micro insurance schemes expanded to cover all life micro-insurance schemes where the sum assured does not exceed 50, 000 per life insured.

v. For safe disposal of medical and clinical wastes, services provided by common biomedical waste treatment facilities exempted.

D. GENERAL:

1. Women Safety:

• Outlay of Rs. 50 crores for a pilot scheme on road safety

o Another 150 crores to be spent by MHA on safety on women in larger cities Beti Bachao, Beti Padhao Yojana' - 100 crores

o 8000 crores for national housing banking programme – for rural housing

o 100 crores for training sportsmen and women for upcoming Commonwealth and Asian Games

2. Education:

o All 6 additional AIIMS have become operational Plan to set up 4 more AIIMS in Andhra Pradesh, West Bengal, Vidharbha and Purvanchal.

o Rs. 500 crore allocated Pandit Madan Mohan Malviya New Teacher's Training Programme launched. 5 more IITs and IIMs to be set up - Rs. 500 crores allocated

o FTII Pune, SRFTI Kolkata will be accorded the status of institute of national importance

• 100 Crores for modernizing Madrasas

3. Agriculture:

• Urgent need for investment in agro-technology and development.

• 100-crore Agri-Infrastructure fund Horticulture University in Telangana and Haryana

o 50-crores for indigenous cattle breeding. 8 lakh crores set aside for Agriculture credit Allocation of 5000 crores to address the need to scientific warehousing\ Long-term rural credit fund to be set up in NABARD with initial support of 5000 crores Overall performance

Budget – 2014 has proposed the following income tax rates

For Individuals below 60 years age (including Woman Assessees): 

Income	Tax Rate
Upto 2,50,000	Nil
250,000 to 5,00,000	10% of the amount exceeding 250,000
500,000 to 10,00,000	Rs.25,000 + 20% of the amount exceeding 5,00,000
10,00,000 & above	Rs.1,25,000 + 30% of the amount exceeding 10,00,000

For Individuals aged 60 years and above but below 80 years (Senior Citizen):

Income	Tax Rate
Upto 3,00,000	Nil
3,00,000 to 5,00,000	10% of the amount exceeding 3,00,000
5,00,000 to 10,00,000	Rs.20,000 + 20% of the amount exceeding 5,00,000
10,00,000 & above	Rs.1,20,000 + 30% of the amount exceeding 10,00,000

For Individuals aged 80 years and above (Very Senior Citizen):

Income	Tax Rate
Upto 5,00,000	Nil
5,00,000 to 10,00,000	20% of the amount exceeding 5,00,000
10,00,000 & above	Rs.1,00,000 + 30% of the amount exceeding 10,00,000

Plus 3% education cess on the tax calculated as above.  Further, limit to get deduction under section 80C is increased to Rs. 1,50,000/- from Rs. 1,00,000/-

Now, we will study certain income scenarios based on above mentioned budget proposals.

Person with Age of less than 60 years
	scenario - 1	scenario - 2	scenario - 3	scenario - 4
Gross Total Income	2,70,000	3,70,000	4,20,000	4,20,000
Less:Deductions u/s. 80C Eligible upto Rs. 1,50,000/-	0	1,00,000	1,00,000	1,50,000
Taxable Income	2,70,000	2,70,000	3,20,000	2,70,000
Tax on above income	2,000	2,000	7,000	2,000
Less: Rebate u/s 87A	2,000	2,000	2,000	2,000
Tax after Rebate	0	0	5,000	0
Add: Education Cess 3%	0	0	150	0
Total Tax Liability	0	0	5,150	0

Person with Age of 60 years or more but less than 80 years
	scenario - 1	scenario - 2	scenario - 3	scenario - 4
Gross Total Income	3,20,000	4,20,000	4,70,000	4,70,000
Less:Deductions u/s. 80C Eligible upto Rs. 1,50,000/-	0	1,00,000	1,00,000	1,50,000
Taxable Income	3,20,000	3,20,000	3,70,000	3,20,000
Tax on above income	2,000	2,000	7,000	2,000
Less: Rebate u/s 87A	2,000	2,000	2,000	2,000
Tax after Rebate	0	0	5,000	0
Add: Education Cess 3%	0	0	150	0
Total Tax Liability	0	0	5,150	0

Person with Age of 80 years or more
	scenario - 1	scenario - 2	scenario - 3	scenario - 4
Gross Total Income	5,00,000	5,10,000	6,10,000	6,60,000
Less:Deductions u/s. 80C Eligible upto Rs. 1,50,000/-	0	0	1,00,000	1,50,000
Taxable Income	5,00,000	5,10,000	5,10,000	5,10,000
Tax on above income	0	2,000	2,000	2,000
Less: Rebate u/s 87A	0	0	0	0
Tax after Rebate	0	2,000	2,000	2,000
Add: Education Cess 3%	0	60	60	60
Total Tax Liability	0	2,060	2,060	2,060

Two Important Judgements And Three Notices

 

 Dear Subscriber,

 

Smita Conductors Ltd vs. DCIT (ITAT Mumbai)

S. 50/ 112: Though gains on depreciable assets held for more than 3 years have to be treated as STCG u/s 50, the gains have to be taxed at the rate applicable to a LTCG

 

The assessee's stand that s. 50C does not apply to depreciable assets is not acceptable in view ofUnited Marine Academy 130 ITD 113(Mum) (SB). As regards the rate of tax, s. 50, which deems the capital gains as short-term capital gain is only for the purposes of sections 48 and 49 which relate to computation of capital gain. The deeming provisions have to be restricted only to computation of capital gain and for the purpose of other provisions of the Act the capital gain has to be treated as long-term capital gain. Consequently, though for the purpose of computation of capital gain, the flat has to be treated as short-term capital gain u/s 50, for the purpose of applicability of tax rate it has to be treated as long-term capital gain if held for more than three years (ratio of Ace Builders 281 ITR 410(Bom) & Manali Investments 139 TTJ 411(Mum) followed)

 

RW Promotions Pvt. Ltd vs. ACIT (ITAT Mumbai)

S. 254(2): Pendency of an appeal filed in the High Court u/s 260A bars the hearing of a MA filed u/s 254(2) even if the appeal is not admitted

 

The assessee has moved an instant Miscellaneous Application (MA) against the order of the !TAT. At the time of hearing, the AR for the assessee-appellant informed that the assessee has filed an appeal u/s 260A before the Hon'ble Bombay High Court, but is yet to be admitted. Since the appeal has been filed before the Hon'ble Bombay High Court, the judicial propriety does not allow the assessee to seek efficacious remedy simultaneously before two authorities and in particular where the issue is seized by a higher judicial forum, even if pending admission. On this ground, the instant MA is rejected

 

High Court Notice Requesting Details Of Pending Appeals On Deemed Dividend Issue

All members are kindly requested to provide the details of the appeals pending before the Hon'ble Bombay High Court where the issue involved is similar to ACIT vs Bhaumik (P) Ltd (2009) 118 ITD 1 (SB)(Mumbai) or CIT vs Universal Medicare (P) Ltd. (2011) 324 ITR 263 (Bom) as the Bench presided over by Hon'ble Justice Shri S.C. Dharmadikari and Hon'ble Justice Shri B.P Colabawalla is pleased to direct the registry to place all such appeals on board on the Friday the 4th July 2014. The matters would appear on the supplementary board to be published on Thursday, 3rd July, 2014. The details be provided to the staff of the lTAT Bar Association Library by Wednesday, 2nd July, 2014. The appeals pending for admission may be disposed of finally at the stage of admission and appeals which are admitted may be disposed of finally

 

ITAT Notice Inviting Objections For Weeding Out Old Appeal Records

The Assistant Registrar of the ITAT has issued a notice dated 25.06.2014 inviting objections, if any, from the assessees and the department with respect to the weeding out of old records

 

Bombay High Court Tax Bench Schedule For Hearing Tax Matters

IT IS HEREBY notified for the information of the Advocates and the parties appearing in-person that w.e.f. Monday, 23 June 2014, the Division Bench presided over by Hon'ble Shri Justice S.C.Dharmadhikari will take up the matters as under:

 

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Allahabad Bank vs. ITO (ITAT Agra)

S. 201/ 201(iA): The payer is not liable for TDS default if the Dept does not that the tax could not be recovered from the recipient

Six Important Judgements Of The Supreme Court, High Courts And Tribunal

 

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The following important judgements are available for download at itatonline.org.

 

Sanjeev Lal vs. CIT (Supreme Court)

S. 2(47)/ 54: If an agreement to sell is entered into within the prescribed period, there is a transfer of some rights in favour of the vendee. Fact that sale deed could not be executed within the time limit owing to supervening problem is not a bar for s. 54 exemption

 

Consequences of execution of the agreement to sell are very clear and they are to the effect that the appellants could not have sold the property to someone else. In practical life, there are events when a person, even after executing an agreement to sell an immoveable property in favour of one person, tries to sell the property to another. In our opinion, such an act would not be in accordance with law because once an agreement to sell is executed in favour of one person, the said person gets a right to get the property transferred in his favour by filing a suit for specific performance and therefore, without hesitation we can say that some right, in respect of the said property, belonging to the appellants had been extinguished and some right had been created in favour of the vendee/transferee, when the agreement to sell had been executed. A right in respect of the capital asset, viz. the property in question had been transferred by the appellants in favour of the vendee/transferee on 27.12.2002. The sale deed could not be executed for the reason that the appellants had been prevented from dealing with the residential house by an order of a competent court, which they could not have violated. As held in Oxford University Press vs. CIT [(2001) 3 SCC 359] a purposive interpretation of the provisions of the Act should be given while considering a claim for exemption from tax and one can very well interpret the provisions of Section 54 read with Section 2(47) of the Act, i.e. definition of "transfer", which would enable the appellants to get the benefit under Section 54 of the Act

 

CIT vs. Vector Shipping Services (P) Ltd (Supreme Court)

Dept's SLP against High Court's verdict that s. 40(a)(ia) disallowance applies only to amounts "payable" as of 31st March and not to amounts already "paid" during the year dismissed

 

In CIT vs. Vector Shipping Services (P) Ltd 357 ITR 642, the Allahabad High Court held that disallowance u/s 40(a)(ia) applies only to amounts "payable" as of 31st March and not to amounts already "paid" during the year. The majority judgement in Merilyn Shipping 136 ITD 23 (SB) was approved. The department filed a Special Leave Petition (SLP) in the Supreme Court. The said SLP has been dismissed by the Supreme Court in limine

 

 

Bombay Stock Exchange Ltd vs. DDIT (E) (Bombay High Court)

S. 147: Bald statement that assessee has failed to make a full & true disclosure of material facts not sufficient. Details must be given as to which fact was not disclosed

 

It is true that the reasons for initiating re-assessment proceedings do in fact state that there was a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment. However, merely making this bald assertion was not enough. In Hindustan Lever Ltd. v/s R.B. Wadkar 268 ITR 332 it was held that the AO must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. On facts, there are no details given by the AO as to which fact or material was not disclosed by the Petitioner that led to it's income escaping assessment. There is merely a bald assertion in the reasons that there was a failure on the part of the Petitioner to disclose fully and truly all material facts without giving any details thereof. This being the case, the impugned notice is bad in law and on this ground alone the Petitioner is entitled to succeed in this Writ Petition

 

CIT vs. Saurabh Enterprises (Allahabad High Court)

S. 269SS/ 269T is not attracted to book entries not involving cash transactions

 

As the transactions of loans & advances were not cash transactions and were merely book entries by way of adjustment entries, there is no violation of Section 269SS/269T of the Act and no question of levy of penalty u/s 271D/ 271E.

 

GE Energy Parts Inc vs. ADIT (ITAT Delhi)

Rule 29 of the ITAT Rules: Law on admission of additional evidence explained

 

(ii) On the issue regarding existence of a PE, a factual finding is required to be recorded on the basis of evidence on record and, if the Tribunal considers that additional evidence is relevant to the fact in issue, which is existence or not of PE, then in order to advance the cause of justice, the additional evidence should be admitted. In order to enable the Tribunal to decide disputes before it in a lawful, fair and judicious manner, it necessarily is required to look into and consider such and other material having a direct nexus and bearing on the subject matter of the appeal. Merely because the Linkedin profiles was available in public domain and was not referred to by the AO the department cannot be prevented from bringing that information on record so as to arrive at the correct factual finding on the issue regarding PE. This cannot be said to be a case of inordinate delay because the AO had drawn an adverse inference on account of non-furnishing of information by assessee and when assessee is trying to take mileage out of its conduct, the department is bringing on record additional evidence in the form of linkedin profile of employees to demonstrate that the conclusion drawn by department was fully justified. All the cases relied upon by the assessee & CIT(DR) are with reference to additional evidence brought before the Tribunal for the first time by assessee. But none of the cases deals with a situation where the assessee withholds some information from the department and then claims that information relevant to the facts in issue should not be admitted. The inordinate delay theory cannot be invoked in a case where cause of justice will be defeated rather than being sub-served;

 

Jai Surgicals Ltd vs. ACIT (ITAT Delhi)

Expl to s. 37: If the purpose of the expenditure is not an offense/ prohibited by law, fact that prior approval of the Govt. was not obtained cannot be basis of disallowance

 

The Explanation to s. 37(1) is a deeming provision and disallows expenditure incurred by an assessee for 'any purpose' which is either an offence or prohibited by law. The inquiry to determine the applicability or otherwise of the Explanation is restricted to ascertaining the purpose of the expenditure. In simple words, the investigation should be carried out to see the object and consideration for the expenditure incurred. If the purpose of the expenditure is neither to commit an offence nor is prohibited by any law, then there can be no question of disallowance. It means that the offence or prohibition under law should be judged with the 'purpose' of the expenditure on a standalone basis divorced from the fulfillment or otherwise of the procedural formalities attached with and necessary for the incurring of such expenditure. To put it in simple words, if the expenditure is otherwise lawful and neither amounts to offence nor is prohibited by law, but the procedural provisions attached for incurring it are not complied with, no doubt irregularity will creep in, but such irregularity would not make the expenditure itself as unlawful so as to be brought within the scope of the Explanation. On facts, the payment of job work charges is not an offence or prohibited by law. The fact that there was no prior approval from the Central Government u/s 297 of the Companies Act does not make the expenditure of job work charges disallowable (CIT vs. Dhanpat Rai & Sons (2014) 98 DTR (P&H) 209 distinguished)

 

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Lodha Builders Pvt Ltd vs. ACIT (ITAT Mumbai)

Though accepting/ repaying loans/ advances via journal entries contravenes s. 269SS & 269T, penalty cannot be levied if the transactions are bona fide & genuine. The time limit for penalty u/s 271D & 271E is governed by s. 275(1)(c) & not 275(1)(a)

Section 271(1)(c) Penalty: ITAT Hauls Up Deloitte For Bogus Claim For Deduction Of Expenditure

 

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

Deloitte Consulting India Pvt. Ltd vs. ACIT (ITAT Mumbai)

S. 271(1)(c): The giving up of a bogus claim for deduction to eschew inquiry by AO/ TPO is not voluntary & bona fide & attracts levy of penalty

The assessee entered into a software development service agreement with Deloitte Consulting, USA ("Deloitte"), to provide software related services to Deloitte. Deloitte enters into consulting assignments with its US clients. For such assignments, the areas pertaining to software development and information technology services are provided by the assessee. The assessee's income was eligible for 100% deduction u/s 10A. The assessee claimed a deduction towards reimbursement of marketing support services in the return of income. As the said arms length price of similar reimbursement had been determined by the TPO at Rs. Nil for the earlier years, the assessee, after the reference was made by the AO to the TPO, withdrew the claim for deduction and stated that no transfer pricing adjustment was required to be made. It also stated that its income should be enhanced by the disallowance and s. 10A deduction granted on the enhanced income. The AO & TPO rejected the withdrawal of the claim and determined the ALP thereof at Rs. Nil. The claim for s. 10A deduction on the said enhanced income was rejected by relying on s. 92CA(4). The said view of the AO was upheld by the Tribunal. In the s. 271(1)(c) penalty proceedings, the assessee claimed that no penalty can be levied on the basis that (a) there was merit in its claim for deduction of the marketing expenditure and that claim was voluntarily given up only to avoid litigation, (b) that in view of Gems Jewellery 330 ITR 175 (Bom), the enhanced income was eligible was s. 10A deduction and so there was no tax effect and (c) there was full disclosure of the material facts in the return. The AO & CIT(A) rejected the claim. On appeal to the Tribunal HELD dismissing the Tribunal:

(iv) The assessee's next plea is of a complete disclosure of material facts, made, adverting to the audit report u/s 92E. We are at loss to fathom even the import of the argument. It is only on failing, and abysmally at that, to demonstrate any business purpose of its relevant international transaction that a TP adjustment, valuing the same at nil, was advised by the TPO and came to be made. The disclosure per the audit report u/s 92E is thus both false and misleading. The argument of complete disclosure, unless the same is true, is of little consequence in law and, in fact, itself false. As such, looked at from any angle there has been both concealment as well as furnishing inaccurate particulars of income in the present case (Mak Data 352 ITR 1 (Del) affirmed in 358 ITR 593 (SC) referred)

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State of U. P. vs. S. K. Garg (Allahabad High Court)

High Court's order on complaint of contempt by Judicial Member of ITAT against CA reveals sorry state of inter-se in-fighting between Hon'ble Members of the ITAT and members of the Bar

Section 201: ITAT Lays Down Imp Law On Recovery Of Tax From Payer For TDS Default

 

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

 

Allahabad Bank vs. ITO (ITAT Agra)

S. 201/ 201(iA): The payer is not liable for TDS default if the Dept does not that the tax could not be recovered from the recipient

The assessee, a bank, was held liable u/s 201(1) and 201(1A) r.w.s. 194 A for failure to withholding TDS on interest paid by it to customers on deposits placed by them with the assessee. The assessee claimed that it could not be treated as an assessee-in-default as no steps had been taken to determine whether the recipients of the interest had paid tax thereon. HELD by the Tribunal allowing the appeal:

(i) A short deduction of tax at source, by itself does not result in a legally sustainable demand u/s 201(1) and u/s 201(1A). As held in Hindustan Coca Cola Beverages vs. CIT 293 ITR 226, taxes cannot be recovered once again from the assessee in a situation in which the recipient of income has paid due taxes on income embedded in the payments from which tax withholding requirements were not fully or partly, complied with. In Jagran Prakashan vs. DCIT 21 TM.com 489 (All) it was held that the deductor cannot be treated an assessee in default till it is found that assessee has also failed to pay such tax directly. Thus, to declare a deductor, who failed to deduct the tax at source as an assessee in default, condition precedent is that the recipient has also failed to pay tax directly;

(ii) S. 201(1) seeks to make good any loss to revenue on account of lapse by the assessee tax deductor. However, the question of making good the loss of revenue arises only when there is indeed a loss of revenue and the loss of revenue can be there only when recipient had a liability to pay the tax and he has not paid tax;

(iii) The onus is on the revenue to demonstrate that the taxes have not been recovered from the person who had the primarily liability to pay tax, and it is only when the primary liability is not discharged that vicarious recovery liability can be invoked. Once all the details of the persons to whom payments have been made are on record, it is for the AO, who has all the powers to requisition the information from such payers and from the income tax authorities, to ascertain whether or not taxes have been paid by the persons in receipt of the amounts from which taxes have not been withheld;

(iv) As regards the levy of interest u/s 201(1A), though the interest is compensatory in nature and is applicable whether or not the assessee was at fault, it is applicable for the period from the date on which tax was required to be deducted till the date when tax was eventually paid. In a case in which the recipient of income had no tax liability embedded in such payments, there will obviously be no question of delay in realization of taxes and s. 201(1A) will not come into play at all.

 

See also Ramakrishna Vedanta Math vs. ITO (ITAT Kolkata) on the same point

 

 

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Recent Important Judgements On Disallowance u/s 14A And Rule 8D

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AMENDMENTS - I.T.RETURN - A.Y.2014-15

Major changes in Income Tax Returns this year are as under:

1. All taxpayers filing E-Returns will have to compulsorily update correct mobile number and E- Mail ID's. Otherwise there will be login issues before uploading of return on income tax Depts Website.

2. Now onwards Income Tax Refund will be issued directly in the bank account of the taxpayer through ECS only, cheques are discontinued. Therefore at most care should be taken while mentioning Bank Account Number and IFSC Code in the income tax returns.

3. From this year while claiming TDS in Income Tax return facility has been given to carry forward the TDS of previous year and brought forward TDS to next year. Due to this reconciliation of TDS claimed on Income and total available TDS as per Form 26 can be made. Tax payers which follow cash system of accounting will be benefited, like Doctors, Advocates, CAs and other professionals.

4. As per newly inserted Section 87A if annual income of the taxpayer is up to Rs. 5,00,000/- then Tax relief of maximum of Rs. 2,000/- is given. For claiming this relief separate space has been inserted in the return.

5. As per newly inserted Section 80EE if taxpayer has purchased house up to Rs. 40 Lakh and taken housing loan of Rs. 25 Lakh then taxpayer can claim deduction of interest up to Rs. 1 Lakh. For claiming this deduction separate space has been inserted in the return.

 

6. If income of the taxpayer is more than Rs. 1 crore then surcharge of 10% is applicable. For this separate space has been inserted in the return.

7. All salaries taxpayers will now have to give now separate details of LTA (Leave Travel Allowance) and HRA (House Rent Allowance) and other allowances separately. This will help Govt. to track proper claim of such deductions, recent HRA and LTA fallacious claimed by some MPs and Govt. taxpayers may have forced for such changes.

8. From this year the details of short and long term capital gain will have to be given in three parts viz.

a) sale of plot / flat

b) sale of STT paid shares and mutual funds

c) sale of other assets.

Further in case of sale of land or building Stamp Duty Value will have to be mentioned. Further if taxpayer is availing exemption under capital gains then value of newly purchased asset, date of acquisition of the asset and if invested in capital gain account then its details will have to be mentioned.

9. Corporate or LLP assessee will have to mention Corporate Identification Number or LLP Identification Number. Further Director or Designated Partner Identification Number will have to be mentioned. This will help in cross check of information with other legal departments by income tax dept or visa a versa.

 

 

10. If assessee carrying on business is taking deduction of bad debts of more than Rs. 1 Lakh of single person, then his PAN will have to be mentioned.

11. As per newly inserted section 43 CA if, taxpayer have sold other than capital assets below stamp duty value (eg. builders / developers) then the difference between the two will be considered as deemed income of the assessee and tax will have to be paid on it. For this separate space has been inserted in the return.

12. If there is more than one owner of the house then, while mentioning details in the schedule of Income from House Property the percentage of co ownership will have to be given.

13. From this year e-filing of wealth tax return is compulsory and in this return the details of all wealth whether taxable or not, will have to be given in depth. Regards

Extention of date upto 10th July for updation of data for empanelled auditors of co-op. societies.

Dear Members,

 

The date is extended upto 10th July by the Co-op. Department for updation of data for empanelled auditors of co-op. societies. 

See the clarification hosted on their website:-

Clarifications : Online Auditor Enrolment

• Online Auditor Enrolment activity is extended up to Thursday i.e. 10th July,2014.

• Individual CA who do not have registered individual firm need to fill Auditor name 

under firm name and may provide dummy number under FRN number.

• Under Experience Details: Auditors may choose to upload any number of the 

audited society details. Please note that uploading of proof is not mandatory.

• Panel Number could be verified from SahakarAyukta website. On home page 

link with name of Auditor List is provided. User may search his/her panel number. 

You can visit the department on face book also.

Department of Cooperation, Marketing and Textiles, Maharashtra ने एक कड़ी साझा किया

30 जून

Enrolment of Empanelled Auditor is going to start on 2nd July,2014. 
Read More :http://mahasahakar.maharashtra.gov.in/Site/Upload/GR/Empanelled%20Auditor%20Online%20Enrolment%20Advisory.pdf

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