AMIT BAJAJ ADVOCATE

Excise & Taxation Department, Punjab has made online filing of VAT-20 (annual statement) under Punjab VAT Act, 2005, for the year 2011-12, mandatory w.e.f 01-11-2012. A public notice to this effect has been issued.  

  

Rule 7 of the Service Tax Rules has been amended so as to provide that the Form ‘ST-3’ required to be submitted by the 25th day of October, 2012 shall cover the period between 1st April to 30th June, 2012 only.

It means that now the ST-3 return required to be filed by 25th October 2012 will be only for the period April-June, 2012 and not for the period of 6 months from April-September, 2012.

Due date of filing Income tax return for assessees who are liable to get their books of accounts audited is 30th September. Since the due date is nearing, lets get some points refreshed on section 44AB.

Who has to get his accounts audited compulsorily:

1.A Person carrying on business is required to get his books of account compulsorily audited u/s 44AB If the total sales, turnover or gross receipt in business for the previous year relevant to assessment year exceed or exceeds Rs. 60 Lakh for the Assessment year 2011-12 and 2012-13 (Rs. 1 Crore from the assessment year 2013-14).

Circular No. 164/15/2012-ST,   New Delhi, 28^th August, 2012

            Clarification has been sought in respect of levy of service tax on certain vocational education/training/ skill development courses (VEC) offered by the Government (Central Government or State Government) or local authority themselves or by an entity independently established by the Government under the law, as a society or any other similar body.

Briefly the facts are during the relevant previous year, the assessee has sold 1,10,000 shares for a consideration of Rs.96,36,519. Out of sale consideration of shares, the assessee invested a sum of Rs.55,68,662/- for purchasing a flat in the name of his minor daughter. The assessee claimed the amount invested in purchase of flat as a deduction u/s 54F (1) of the Act. The AO disallowed the deduction claimed on the ground that the flat was not purchased by the assessee in his own name. The AO relying upon different High Courts’ decisions and also a decision of ITAT, Nagpur Bench in case of ITO vs. Prakash Timaji Dhanjode 258 ITR (AT) 0114 held that the assessee is not entitled for deduction u/s 54F(i). Assessee being aggrieved by the assessmentorder filed an appeal before the CIT (A). Since the AR of the assessee or no one appeared before the CIT (A) on the last date fixed on 28-11-2011 the appeal was decided by the CIT (A) on the basis of statement of facts and grounds of appeal filed before him. The CIT (A) upheld the reasoning of the AO that since the property was purchased in the name of the assessee’s doughter and not in the name of the assessee himself, no deduction u/s 54F can be allowed.

Calcutta High court in Serajudding & Brothers vs CIT has held that Even if the income from other sources is included in the profit and loss accounts to ascertain the net profit in relation to book-profit for computation of the remuneration of the partners u/s 40(b)(v) the same cannot be discarded.

It means that book profits for the purpose of calculating remuneration of partners in a partnership firm u/s 40(b)(v) will include income from other sources as well if the same has been included in the Profit & Loss Account. In such case not the profits computed under the head Business alone to be considered as Book Profits for the purpose of section 40(b)(v) but other income included in P&L A/c has also to be considered as part of Book Profits for the purpose of section 40(b)(v).

The Punjab government, which is expecting to mop up Rs 500 crore by imposing a tax on the self-employed and salaried professionals, is looking up to Bihar to finalise the modalities. Bihar, governed by Nitish Kumar-led JDU-BJP combine imposed the professional tax in September last year and fund-starved SAD-BJP government in Punjab, led by Parkash Singh Badal, has decided to follow suit.

Punjab will be the tenth state to tax the professionals and, following the Bihar model, will be charging Rs 1,000 to Rs 2,500 depending on the salary of the employed. The slab, incidentally is one of the highest in comparison to the tax imposed in other states.

Section 54EC provides for exemption from tax on long-term capital gain when the capital gain arises from the transfer of long-term capital asset and the whole or any part of the said capital gain is invested in certain bonds within the period of 6 months. Section 54EC speaks of the actual capital gain which arises out of transfer of long-term capital asset and not deeming amount. Whereas section 50C provides for deeming fiction where value of consideration is adopted as per the stamp valuation authorities or any authority of the State Government. Even if the property has been sold at a lesserprice but under the deeming fiction of section 50C, the value adopted by the stamp valuation authorities is to be taken as sale consideration. Such a deeming fiction cannot be imported into section 54EC. Hence, the deemed value cannot be considered for the purpose of exemption under section 54EC. Thus, for the purpose of deduction under section 54EC, the sale value would be taken at Rs. 16 lakhs, which is the actual sale consideration and has been invested in the bond. At the same time, for the working of the long-term capital gain, the sale consideration will be taken up as per the value determined under section 50C, which is at Rs. 24.48. Thus, the sale value for the purpose of computation of long-term capital gain would be taken at Rs. 24.48 lakhs.

PRESS RELEASE

Subject: Relaxation from compulsory e-filing of return of income for assessment year 2012-13 – for representative assesses of non-residents and in the case of private discretionary trusts -reg

Rule 12 of the Income-tax Rules, 1962 mandates that an individual or Hindu undivided family, if his or its total income or the total income in respect of which he is or it is assessable under the Act, during the previous year, exceeds ten lakh rupees, shall furnish the return electronically for the assessment year 2012-13 and subsequent assessment years.

Order under Section 119 of the Income Tax Act, 1961

order [f.no. 225/163/2012/ita-ii], dated 31-7-2012

On consideration of the reports of disturbance of general life caused due to failure of power and further in consideration of the fact that the e-filing of returns for a specified category of individuals and HUF has been made mandatory, the Central Board of Direct Taxes, in exercise of powers conferred under section 119 of the Income Tax Act, 1961, hereby extends the 'due date' of filing of returns of income for the Assessment Year 2012-13 to 31st August 2012 in respect of assessees who are liable to file such returns by 31st July 2012 as per provisions of section 139 of Income Tax Act, 1961.

Few days back there was a news that VAT on sugar has been imposed by Punjab Government @ 5%, but no notification publicly was available confirming the same. Now Excise & Taxation Department, Punjab has issued a public notice confirming that VAT @ 5% has been imposed on sugar w.e.f 25-07-2012.

It has also been clarified that surcharge will not be applicable on sugar hence rate of tax on sugar will be 5% only and not 5.5%.

A reading of the provisions contained in Section 54F(1), as it stood at the relevant point of time, shows that exemption from payment of tax on the capital gains arising on thetransfer of any long-term capital asset not being a residential house is available to an assessee being a Hindu Undivided Family or an individual, if the long-term capital gain is invested in purchasing a residential house or constructing the residential house within the time stipulated therein. Proviso to sub section (1) states that the exemption contemplated under sub section (1) would not be available where an assessee owns a residential house as on the date of thetransfer and that the income from the residential house is chargeable under the head “income from house property”. The Finance Act, 2001 amended the proviso with effect from 2001-02 to permit exemption under Section 54F, even if the assessee has owned one residential house as on the date of transfer, other than the new asset, or purchase in investments any residential house other than the new asset within a period of one year or three years as the case may be, but after the date of transfer of the original asset and the income from such residential house other than the one owned on the date of transfer of the original asset is chargeable under the head “income from house property”.

In the instant case, it is found that the eligible new asset was not purchased within one year before the date on which thetransfer of the original asset took place. Thus, the amount which is not utilized by the assessee for the purchase of new asset before the date of furnishing the return of income under section 139 was required to be deposited as per the provisions of sub-section (4) for availing deduction under section 54F in respect of those amounts also. In other words, as per the plain language employed in the above sub-section (4), only the amount which was actually utilized by the assessee for the purpose of purchase of the new residential house before the date of furnishing of the return of income under section 139 shall only be eligible forcomputation of deduction under section 54F(1). It is found that in the instant case it is not in dispute that the return of income for the relevant year was filed by the assessee on 9-1-2009, which is the date of furnishing of return of income under section 139 by the assessee. Thus, it is held that considered view, the amount utilized by the assessee for purchase of new residential house before 9-1-2009 qualifies for consideration with reference to which deduction under section 54F(1) is to be computed. Thus, the Commissioner (Appeals) was not justified in holding that only the amount which was utilized by the assessee before 31-3-2008 only qualifies for deductionunder section 54F. The assessee claimed that Rs. 15 lakh was utilized by him for the purchase of new residential flat on or before 9-1-2009. The orders of the lower authorities on this issue is, therefore, set aside and the Assessing Officer is directed to verify the amount which was invested by the assessee before the date of furnishing of return of income under section 139 by the assessee and, thereafter, allow the deduction under section 54F(1) with reference to the said amount as per law. Needless to mention that he shall allow reasonable and proper opportunity of hearing to the assessee before adjudicating the issue afresh.