Decalred goods except wheat and paddy still taxable @ 4.4% in Punjab after ordinance dt 17-08-2011- Section 8(1) and 62(5) of PVAT amended

0 comments Tuesday, August 30, 2011
Punjab Government has promuglated an Ordinance dated 17-08-2011 vide Notification No. 33-Leg/2011 whereby proviso to section 8(1) and section 62(5) of Punjab VAT Act, 2005 have been amended. Proviso to Section 8(1) deals with rate of tax on declared goods whereas section 62(5) deals with pre-deposit of 25% before entertaining of any appeal under PVAT Act, 2005.
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No pre-deposit u/s 62(5) of PVAT Act, 2005 required in time barred assessments

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Punjab VAT Tribunal in an very important case namely Saguna Industries Vs.State of Punjab has observed  that there is no need to deposit 25% of demand u/s 62(5) of Punjab VAT Act, 2005 before entertaining appeal in cases of time-barred assessments. It is to be noted hereby that section 62(5) of Punjab VAT Act, 2005 provides that 25% of total tax, penalty and interest must be deposited before the appeal is being entertained.
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No Penalty leviable in cases where matter is of interpretational nature-Supreme Court

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I have found the following Judgement of Supreme Court as very important one where the Apex Court has held that where the matter involved is of interpretational nature then no penalty can be levied in such cases
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New Revised procedure for correction in OLTAS of Income TAX/TDS Challan after payment

0 comments Monday, August 29, 2011
Challan Correction Mechanism
Under OLTAS (On Line Tax Accounting System), the physical challans of all Direct Tax payments received from the deductors / taxpayers are digitized on daily basis by the collecting banks and the data transmitted to TIN (Tax Information Network) through link cell. At present, the banks are permitted to correct data relating to three fields only i.e. amount, major head code and name. The other errors can be corrected only by the assessing officers.
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Efiling of service tax returns made mandatory for all assessees

0 comments Friday, August 26, 2011
In a major change in the manner of filing of Service tax returns the electronic filing of service tax returns have been made madatory for all the assessees. Rule 7 of Service Tax Rules 1994 has been amended to provide for a new sub-rule 3 in the said rule which runs as under:  
“(3) Every assessee shall submit the half-yearly return electronically”.
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Input Tax Credit to purchaser cannot be denied merely on the basis of an affidavit of seller unless opportunity of cross-examine is given

0 comments Friday, August 19, 2011
Punjab VAT Tribunal has held in a very important case namely Malkeet Trading Company, Jalalbad Vs State of Punjab(2011) 17 STM (JS) 153 that Input Tax Credit to purchasing dealer cannot be denied merely on the ground of an affidavit by the selling dealer to the effect that he has not made any sales to the purchasing dealer, without giving an opportunity to purchasing dealer of cross examining the deponent-selling dealer.
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Repayment of capital to partners other than by account payee cheques is not a violation of Section 269T

0 comments Tuesday, August 16, 2011
I have found the following order of Ahmedabad ITAT very useful wherein it has been held that repayment of capital to retiring partners through bearer cheques is not violation of section 269T of Income Tax Act, 1961. Section 269T prohibits repayment of loans and deposits of Rs. 20000 or more otherwise than by an account payee cheque or draft.
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No Demand draft of Rs. 50000 or above against cash payment-Reserve Bank of India

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RBI has issued a letter clarifying that demand draft,mail transfers, telegraphic transfers and travellers cheques of Rs. 50000 or above will be issued only from the customer's bank account or through cheques or other instruments but not against cash. This step will help in checking the flow of black money.  I find it a very useful information to share with the readers. The letter is being produced herebelow:
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Powers of Inspection, Search & Seizure under Punjab VAT act, 2005.

0 comments Sunday, August 14, 2011
Power of inspection, search, seizure can be easily found to be in every taxation law. The purpose of these powers is always to detect any tax evasion on the part of dealers but these powers are always ancilliary to the power of collection of tax of the State and are provided only for the proper collection of tax. While exercising these powers one must keep in mind the objects of such powers.

Here the Power of inspection of accounts, search and seizure under the Punjab VAT Act, 2005 have been discussed. The powers of inspection, impounding of documents, search and seizure have been provided under section 46 of  Punjab VAT Act, 2005.
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DTC set to miss deadline again

0 comments Friday, August 12, 2011
The implementation of the Direct Taxes Code appears set to miss its deadline once again.

The Direct Taxes Code (DTC) Bill, introduced in Parliament on August 30 last year, proposes to replace the 50-year-old Income Tax Act.

Initially proposed to come into force from April 2011, the code’s deadline had been extended to April 2012 as the draft Bill was referred to a Parliamentary standing committee.
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Time limit of assessment for year 2007-08 of some dealers enhanced in Punjab

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Time limit of assessment year 2007-08 cases of certain dealers has been enhanced to six years by Excise and Taxation Department, Punjab. Ussualy time limit for assessment is three years unless extended by Commissioner. The opportunity of being heard to contest such extension order has been provided by a public notice being displayed on the official website of the Department. The question is whether such alternative service of public notice on the website is valid in view of Rule 86 of PVAT Rules, 2005 (which deals with manner of service of notice), especially when all the dealers may not be computer/internet literate.
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Get ready for more Tax surveys -Finance Minister

0 comments Wednesday, August 10, 2011
Faced with sluggish industrial growth and its impact on revenue collections, the government today said it would step up “surveys” to maintain the tax buoyancy. 

“We are trying to maintain (tax) buoyancy by enhancing/strengthening the tax collecting machinery; by bringing more people through surveys and other information within the tax net...”, Finance Minister Pranab Mukherjee said in the Lok Sabha. 
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C forms cannot be declared invalid if the purchaser ceased to exist while issuing and seller is unaware of it- Karnataka HC

0 comments Monday, August 8, 2011
Karnataka High Court has held in an important case namely Bell Ceramics Ltd. Vs DCCT that if the purchaser of goods issuing C forms has ceased to exist at the time of issuing C forms and such fact is not known to the seller of such goods claiming concessional rate of CST on the basis of such C forms then no disallowance of such concessional rate can be made to the seller on this ground.
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Finance Minister is confident of DTC implementation from 01-04-2012-study time ahead for tax professionals

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Union Finance Minister has said that there would be no difficulty to bring Direct Tax Code, DTC into operation from 1st of April next year. Mr. Pranab Mukherjee expressed hope that the Parliamentary Standing Committee will submit its report by Winter Session of Parliament. Speaking at a function in New Delhi, the minister said, since the Bill is still with the Standing Committee, stakeholders have time to give their views.
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Revised return can be filed after intimation u/s 143(1)(a)-AO must amend such intimation on the basis of revised return-Gujarat HC

0 comments Saturday, August 6, 2011

Gujarat High Court hjas held in an important case that if after the issuance of intimation u/s 143(1)(a), a revised return is furnished by an assessee under sub-section (5) section 139 it is incumbent upon the Assessing Officer to process the revised return and amend the intimation issued under section 143(1)(a) on the basis of the revised return.

The court further held that an intimation u/s 143(1)(a) of the Act cannot be equated with an assessment  framed u/s 143(3) of the Act and the Assessing Officer cannot refuse to process the revised return and modify the intimation in accordance with section 143(1B) of the Act
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Electricity tariff at commericial rates applicable on residential premises used purely as office by lawyers-Bombay HC

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Bombay HC has held in an important case that residential premises used by lawyers exclusively as office, will be charged electricity tariff at commercial rates and not at domestice rates. However In respect of the premises which are used by the professionals like lawyers and doctors for their own residence, the tariff for the electricity supplied to the premises would be charged on the basis of domestic use irrespective of the fact that the premises are used for whole or part of the day also for the purpose of carrying on their professional activity in the whole or part of the premises.
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SIM cards liable for service tax, not VAT-even if sales tax wrongly paid, service tax payable-Supreme Court

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Hon'ble Supreme Court has held in an inmportant case namely IDEA MOBILE COMMUNICATION LTD. C.C.E. & C., COCHIN that sale of SIM cards cannot be treated as sales of goods and hence not liable for any VAT but instead it will be liable for service tax. The sale of SIM card will form paret of taxable services for levy of service tax. The Apex Court also held that even if sales tax has already been paid on SIM cards by the appellant that would not absolve their liability to pay service tax.
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Rent received on Mobile Towers is liable for VAT and not service tax-Karnataka HC

0 comments Thursday, August 4, 2011

Karnataka High Court in a very important case namely  
Essar Telecom Infrastructure (P.) Ltd. Versus Union of India has held that giving Mobile Towers on rent is not a service but is a transfer of right to use goods and is liable to VAT by State Governments. Implications of this judgement would be that the rent received on mobile towers given from cellular companies would be considered as deemed sales and consequently VAT will be payable on such rent received. 
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Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal-Delhi HC

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Delhi High Court in an important case namely Ashok Chadha V Income Tax officer decided on 05/07/2011 has held that stree dhan in the form of jewellary received during the span of 25 years cannot be said to be unexplained investment u/s 69A of Income Tax Act, 1961. It is a normal custom for woman to receive jeweller in the form of "stree dhan" or on other occasions such as birth of child etc. Collecting jewellery of 906.900 grams by a woman in a married life of 25-30 years is not abnormal.
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Non-residents not entitled to benefit of section 112 of Income Tax Act, 1961-AAR

0 comments Tuesday, August 2, 2011
The applicant, a company based in Scotland sold shares of Cairns India Limited to Petronas Corporation Intl. Limited for a consideration of USD 241,426,379 in off-market-mode and not through a recognized stock exchange. The assessee filed an application for advance ruling claiming that it was entitled to the benefit of the Proviso to s. 112 (1) and liable to pay tax at 10% of the capital gains. The Revenue resisted the plea on the ground that the benefit of the Proviso to s. 112 was available only to assessees who were eligible to the benefit of indexation in the second proviso to s. 48 and as the assessee was not eligible for indexation, it could not claim the benefit of the lower rate of tax in the Proviso to s. 112. HELD upholding the Revenue’s plea:

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Gain from sale of Depericiable asset is short term even though no depericiation claimed in last two years-Kerala HC

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Kerala High Court in an important Judgement has held that gain arising from the sale of a depericiable asset on which depericiation was not claimed deliberately in last two years by the assessee will still be treated as Short Term Capital Gain. 

The assessee in this case did not claim the depericiation in the last two years on an asset which was depericiated in earlier years and such asset was used for business purposes in earlier years and formed part of block of assets. Gain arising out of sale of such asset was treated as LTCG by assessee,  claiming that in view of section 50 depericiation was not allowed/claimed on such asset and the said asset has ceased to be part of the block of assets.
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