Clarification-service tax on vocational education/training course

0 comments Wednesday, August 29, 2012
Circular No. 164/15/2012-ST,   New Delhi, 28th August, 2012

Subject:  service tax – vocational education/training course  — regarding.

            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.

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Doctor's remuneration to suffer TDS u/s 192 and not 194J, if he is governed by service rules of employer

0 comments Sunday, August 26, 2012

ITAT Ahemdabad in DCIT vs Wockhardt Hospitals Ltd. has held that Where assessee-hospital engaged some doctors on fixed monthly remuneration, and doctors were governed by its service rules, remuneration paid was taxable as 'salaries' and liable for deduction of tax under section 192.
In this case the assessee-company was running hospital with branches. It had engaged services of some doctors and was deducting TDS from payments made to them under section 194J. According to the assessee, the doctors were appointed as consultants whose remuneration was liable for TDS under section 194J and there was no employer and employee relationship. The Assessing Officer, however, treated the relationship between the doctors and the assessee as one of employer and employee and held that said payments were liable to TDS under section 192. The Commissioner (Appeals) allowed the assessee's appeal.

On the revenue's appeal it was held as under:

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No reopening in the absense of tangible material even when only intimation u/s 143(1) was issued originaly

0 comments Friday, August 24, 2012

Gujrat High Court in Inductotherm (India) Pvt. Ltd. vs CIT has held that reopening of aseessment u/s 147/148 would be invalid when no new material has come before the AO even when no assessment u/s 143(3) was framed earlier but only an intimation u/s 143(1)(a) was issued.

In this case: For AY 2002-03, the AO issued an Intimation u/s 143(1) accepting the return. Subsequently, based on objections raised by the audit, he issued a s. 148 notice to reopen the assessment. The AO set out four issues in the recorded reasons and for two he stated that the reopening was to “verify” the expenditure. The assessee filed a Writ Petition to challenge the reopening inter alia on the ground that there was no reason to believe that income had escaped assessment. 

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E-trip in Punjab-is it valid?

0 comments Monday, August 20, 2012
Excise and Taxation Department, Punjab has made it mandatory to furnish information regarding intra-state movement of goods (within Punjab) by all persons making sales of Rs. 3 Lakh or above in a single transaction except in the case of Iron and Steel where this threshold shall be Rs. 2 Lakh instead of Rs. 3 Lakh and above. 

This mandatory uploading of intra-state transaction has been made compulsory by merely a public notice. 
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Works contract services provided by sub-contractor in exempt works contract services, exempt from service tax

0 comments Friday, August 17, 2012
Recently I received a query that under the negative list of services regime whether in a works contract service which is exempt from service tax, sub-contractor would also be exempted from payment of service tax?

The answer to the above question is being provided under serial No. 29 sub-clause (h) of the mega Notification, which provides that service provided by following person in respective capacities are exempt from service tax :

(h) sub-contractor providing services by way of works contract to another contractor providing works contract services which are exempt[Notification No. 25/2012-ST, dated 20.06.2012]

The above entry makes it clear that if the principal contractor is providing an exempt works contract service [for example providing works contract service to Government] then in such case if some part of the works contract is sub-contracted then the sub-contractor would also be exempt from payment of service tax.
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Deduction u/s 54F available even if flat purchased in daughter's name

0 comments Wednesday, August 15, 2012

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.
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Income from other sources included in P&L A/c to be considered for calculating Book Profits for the purpose of section 40(b)(v)

0 comments Monday, August 6, 2012

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).
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CBDT clarifies, extended due date of 31-08-2012 applies to all returns which were due to be filed by 31-07-2012

0 comments Wednesday, August 1, 2012
The CBDT has issued the following Press Release dated 01.08.2012

 PRESS RELEASE [No. 402/92/2006-MC (20 of 2012)], dated 1-8-2012

A section of Media has reported that the Central Board of Direct Taxes has extended ‘due date’ of filing of returns to 31st August, 2012 in respect of only those returns which were to be e-filed by 31st July, 2012. It is clarified that the notification issued by the Board on 31st July, 2012 has extended the ‘due date’ of filing of all returns for the Assessment Year 2012-13 which were due to be filed by 31st July, 2012 to 31st August, 2012.

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Get ready to pay professional tax in Punjab


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.
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