No need to give indemnity bond for deferment of entry tax in Punjab- General circular earlier issued amended0 comments Tuesday, May 17, 2011Punjab Government has amended the General circular on deferment from payment of entry tax in Punjab earlier issued on 29-04-2011 in view of the directions of Punjab and Haryana High Court in Bhushan Steel case. In the circular issued on 29-04-2011 an indemnity bond was required to be submitted at the ICC barrier with ever bill which pass through the ICC barriers along with an undertaking and an affidavit to the concerned AETC of the concerned District. Section 44AB not applicable where income is declared u/s 44AE even though gross turnover exceeds audit limit0 commentsI have found the following judgment of Pune ITAT as very important one on deciding the issue where a person engaged in the business of plying leasing or hiring of goods carriages, is owning less than 10 goods carriages and also hiring some goods carriages, can he declare his income u/s 44AE in respect of goods carriages owned by him? The answer to it has been provided in affirmative by the Pune ITAT. Another important thing which is noticeable from the following order is that where a person is owning not more than 10 goods carriages but his gross turnover exceeds the audit limit u/s 44AB of Income tax Act,1961 even then he will not be required to get the books of account audited u/s 44AB, so long the income is declared u/s 44AE, in view of the provisions of section 44AE(5) of the Income Tax Act, 1961 ADDITIONS ON THE BASIS OF CASH CREDITS - SECTION 68 OF INCOME TAX ACT 19611 commentsAccording to section 68 of Income Tax Act 1961, where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source of the same or the explanation offered by him is not satisfactory in the opinion of A.O., the sum so credited may be charged to income tax as the income of the assessee of that previous year. An attempt here is made to understand the provisions of section 68 of Income Tax Act,1961 herebelow:There must exist books of accounts before making addition u/s 68: The addition under u/s 68 can be made on the basis of unexplained cash credit found in the books of the asseessee, hence existence of books of an assessee is a condition precedent before an addition u/s 68 can be made.Penalties under Punjab VAT Act 20051 comments Monday, May 16, 2011Chapter X of Punjab VAT Act 2005 deals with offences and penalties. Here below the penalty provisions under PVAT Act have been provided. Penalty for failure to register: Section 52 of the Act provides for penalty for a dealer who is required to get registered under Punjab VAT Act but he fails to make an application for registration as required u/s 21(2) of the Act (I.e within 30 days from the date he becomes liable to pay tax). No Penalty u/s 271(1)(c) on assessee for wrong advice of councel- P&H HC0 comments Sunday, May 15, 2011Commissioner of Income Tax, Karnal Versus Deepak Kumar Crux of the Judgment: Bonafide mistake or belief is more or less a question of fact. No litigant should suffer on account of the mistake committed by the councel because the advise tendered by the councel is accepted by the litigant, which is based on bonafide belief of being correct. Subsidy not part of sale price for VAT purposes0 commentsState of Punjab & another.Vs.M/s Morinda Cooperative Sugar Mills Ltd. Crux of the Judgment: Charging provisions under the Punjab VAT act provides for levy of VAT on turnover. If the assessee had received any further amount in addition to sale proceeds(Subsidy by State in this case), which is not part of the sale price, such amount could not be added to the turnover, consequently no VAT can be levied on the subsidy given by State. Procedure of Registration Under The Service Tax0 commentsAccording to Section 69 ,every person liable to make payment of service tax or any Other person notified by the central govt through a notification is required to get the registration under the service tax act On Line Registration On line registration has been mandatory for all kind of assesses w .e.f. 30-09-2009 Vide commissioner of service tax Trade Notice no. 14/ST/2009 dated 17-09-2009 Public notice of Punjab Govt dt 30/09/2010 to some extent is ultra vires- P&H HC0 comments Saturday, May 14, 2011As we know State Governments cannot levy any tax on the sale or purchased of goods exported outside India and the sale or purchase in the cource of export i.e Penultimate export as per section 5(3) of CST Act 1956 and Article 286 of the Constitution of India. For a sale to qualify as penultimate sale one of the conditions u/s 5(3) of CST Act is that the goods sold to the exporter must be the same goods as are being exported in pursuance of the export order in the hands of the exporter. State Governments are now free to levy VAT on Sugar and Textiles0 comments Friday, May 13, 2011The Union government has allowed the states to impose tax on sugar and textiles for the first time in 54 years. In the finance Act of 2011 the Additional Duties of Excise (goods of special importance) Act, 1957 has been amended. Sugar and textile have been removed from the first schedule of the said Act. After this amendment, states are free to levy value added tax on sugar and textile.These commodities were put under the scheduled commodities, with the enactment of the Additional Duties of Excise Act in 1957 by the Nehru government. Tax planning by conversion of stock in trade into capital asset0 commentsWhen a capital asset is converted into stock in trade then capital gain u/s 45(2) of Income Tax Act arises in the year of sale and not in the year of conversion. But in vice versa situation i.e conversion of stock in trade into capital asset there doesnot arise any capital gain. Fair Market rent on a house property u/s 23(1)(a) of Income Tax Act to be determined considering all relevant factors1 comments Wednesday, May 11, 2011I have found the following Judgment of Mumbai ITAT in the case namely Tivoli Investment & Trading Co. vs ACIT as a good one on determination of Annual Rental value u/s 23(1)(a) of Income Tax Act, 1961. As we know for determining annual value of a house property standard rent or municipal value, actual rent, Fair market rent all factors have to be considered. Where rent is reduced due to high security deposit by the tenant, then AO is not bound by standard rent or the municipal value. Prior payment of 25% before entertaining appeal u/s 62(5) of PVAT Act has to be of total tax penalty and interest.0 commentsSection 62(5) of Punjab VAT Act provides for a mandatory condition of minimum payment of 25% of the total tax, penalty and interest, if any before any appeal under Punjab VAT Act 2005 is entertained. Section 62(5) of PVAT Act runs as under: “No appeal shall be entertained, unless such appeal is accompanied by satisfactory proof of the prior minimum payment of twenty five per cent of the total amount of tax, penalty and interest, if any” Change of Tax rates in Punjab Tax on Lotteries Act 20050 comments Tuesday, May 10, 2011GOVERNMENT OF PUNJAB DEPARTMENT OF EXCISE AND TAXATION (EXCISE AND TAXATION II BRANCH) NOTIFICATION The 15th April 2011 Sale to All India Pingalwara charitable society Amritsar under PVAT made tax free0 commentsGOVERNMENT OF PUNJAB DEPARTMENT OF EXCISE AND TAXATION (EXCISE AND TAXATION II BRANCH) Notification The 25th April 2011 Circular clarifying some issues related to Short Term Accomodation and Resturant Service issued1 commentsCircular No. 139/8/2011-TRU F.No.334/81/2011-TRU Government of India Ministry of Finance Department of Revenue Central Board of Excise & Customs Tax Research Unit New Delhi, the 10th May 2011 Procedure for claiming Provisional refund under Punjab VAT Act notified0 commentsSection 39(1-A) of Punjab VAT Act, 2005 was added recently by an Ordinance dated 21-02-2011 whereby provisional refund upto one crores of rupees was allowed against an indemnity bond to those dealers who are not able to produce the statutory declarations forms under CST Act(i.e C,H, E1, EII forms etc.) as per the requirement of Rule 52(4) of PVAT Rules, for claiming the refund. No offence u/s 138 of N.I. Act is committed for dishonour of cheque given as security deposit0 commentsThe Bombay High Court in a very important judgment namely Joseph Vilangadan v. Phenomenal Health Care Services Ltd. & Anr. has given the verdict that if a cheque issued as security deposit gets dishonoured with remarks “insufficient funds” or “stop payment” as happened in the said case then no offence will be deemed to have been committed u/s 138 of Negotiable Instrument Act, 1881. Carry forward of unabsorbed depreciation allowed even return filed after due date-Delhi High Court.0 comments Monday, May 9, 2011Delhi High Court in an important judgment in a case namely CIT vs. Govind Nagar Sugar Limited (2011) ISI B-469 Del. (H.C.), has held that “The effect of Section 32(2) is that unabsorbed depreciation of a year becomes part of depreciation of subsequent year by legal fiction and when it becomes part of current year depreciation it is liable to be set off against any other income, irrespective of the fact that the earlier years return was filed in time or not.” Truck and Bus Body Fabrication are taxable @ 5% under PVAT Act 20050 commentsFabrication of Truck and Bus Body has been included in the schedule B of Punjab VAT Act whereby the said transaction has been made taxable @ 5%(after surcharge it will be 5.5%) under the Punjab VAT Act 2005. The relevant notification is produed herebelow for ready reference of all concerneds: VAT return forms changed in Punjab, condition of availability of ITC upto 4th stage also deleted0 commentsVAT 23 AND VAT 24 Return Forms under Punjab VAT Act 2005 have been amended vide notification dated 14-03-2011. By this notification the condition of allowing ITC on purchase of goods upto 4th stage of purchase from manufacturer or importer has also been done away with. The relevant provisions relating to it i.e Rule 21(7) and clause (m) of sub rule (4) of Rule 54 which were added last year vide notification dated 17-03-2010, have been deleted.
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