AMIT BAJAJ ADVOCATE

The Chennai ITAT has held in  ITO Versus Shri Anupallavi Finance & Investments that Where tax has been deducted at source and paid to the Central Government and income is assessable over a number of years, credit for tax deducted at source shall be allowed across those years in the same proportion in which the income is assessable to tax.

In this case deductor deducted TDS on accrual basis of income whereas deductee was declaring such income on cash basis as and when it was recieved by the deductee. The deductee-assessee however, claimed the credit of whole of TDS in the year of deduction stating that TDS deducted represents his income and is automaticaly offered to assessment in the year of deduction. But the AO allowed claim of TDS on pro rata basis i.e on the basis of income offered for assessment.

If You have taken education loan for the higher education of your children or of your spouce or of your own, it can save your income tax. Section 80E of Income Tax Act provides for deduction of 100% interest amount on education loan taken from any financial institution or approved charitable institution, taken for one's own, or spouce's or children's higher education.   

This deduction is available to an individual assessee only. Before A.Y. 2006-07 section 80E also provided for deduction of the principal amount of education loan, repaid. But w.e.f A.Y 2006-07 deduction of only interest amount is available u/s 80E.

Punjab & Haryana High Court in an important case namely CIT V M/S Careers Education and Infotech Pvt. Ltd., has held that voluntarily surrender of income cannot exonerate the assessee of its liability to pay penalty if it can be held that there was concealment of Income or furnishing of inacurate particulars. But in every case of surrender, inference of concealment of income cannot be drawn by itself by applying section 58 of Evidence Act.

The AO must establish and prove the concealment of income even if there is surrunder of income by assessee and mere surrender cannot lead to levy of penalty u/s 271(1)(c) for concealment of income.

Punjab Government has imposed a new tax namely institutional and building tax by promuglating ordinace dated January 10, 2011 by the name The Punjab (Institutions and Other Buildings) Tax Ordinance, 2010.This tax has been imposed on Buildings and Institutions situated outside the municipal areas in the state of Punjab.

As we know the house tax is imposed by Municipal bodies on the commercial buildings situated within their limits, but no such tax is payable on the buildings and insitutions (like marriage palaces, hotels, Dhabas, schools, water parks, amusement parks etc), situated outside the municipal limits. To bring an end to this inequality this new tax has been imposed (this was asserted by the Governement at the time of introduction of this tax few months back)

In an interesting case namely Shanti Bhushan V CIT, Delhi High Court has held that a professional cannot be allowed deduction of the expenses incurred for his heart surgery u/s 31or 37(1) of Income Tax Act 1961. Interestingly the appellant (a lawyer) claimed that heart is a plant and expenses incurred on its surgery should be considered as expenses on current repairs.But High court rejected the claim of the appellant.

Brief facts: The assessee, a lawyer, claimed that his professional work had led to a heart attack and that the expenditure incurred by him on a heart operation was deductible u/s 31 on the ground that the heart was “plant” and the expenditure was incurred on “current repairs”. It was also claimed that as his professional receipts increased substantially after the operation, the expenditure was “wholly & exclusively” for profession and deductible u/s 37(1). The AO, CIT(A) & Tribunal rejected the assessee’s claim. On appeal to the High Court, HELD dismissing the appeal:

Mumbai Tribunal has held in an important case namely  The Tata Power Co. Ltd. Vs Addl. CIT that deduction u/s 54EC from long term capital gains will be allowed before set off of brought forward Capital losses.

Crux of the order: "The stage at which set off of carried forward long term capital loss is to be given is subsequent to the stage at which income under the head capital gains is computed and deduction u/s 54EC is to be given in the course of the latter. Accordingly, s. 54EC deduction has to be given before set-off of losses."  

There is a news that Punjab Government is planning to amend section 62(5) of Punjab VAT Act, 2005 to provide for prior minimum payment of 25% of additional demand before any appeal is entertained. The provision u/s 62(5) as existing now provides for prior minimum payment of 25% of total tax, penalty and interest, which the Hon'ble P & H High Court in Ahluwalia case and Punjab VAT Tribunal in many other cases have interpreted to mean that if additional demand is raised in any order under PVAT Act 2005 then 25% prior minimum payment will be of the total tax, penalty and interest  and not that of additional demand. Input Tax Credit and taxes paid in the returns by the assessee-dealer are presumed to be part of such 25% prior minimum payment.

I have found the order of Delhi ITAT in the case namely DCIT Vs Nalwa Investments Ltd. very important one wherein it  has been held that mere faliure to disallow expenses u/s 14A will not amount to levy of penalty u/s 271(1)(c) unless malafide is proved. In this case even the auditors did not suggest disallowance u/s 14A in respect of expenses relating to tax free income. Hence no malafide intention for not attributing expenses to tax free income was proved consequently no penalty u/s 271(1)(c) could be levied.

An accused can escape conviction for murder if he proves that there was no premeditation for the act, occurred in a heat of passion, no cruelty involved and undue advantage taken, the Supreme Court has ruled.
A bench of justices Asok Kumar Ganguly and Deepak Verma in a judgement said that the accused can seek immunity from murder only if all these four above circumstances are established in defence of the crime.

"In order to bring a case under Exception (4) to Section 300 IPC, the evidence must show that the accused acted without any premeditation and in a heat of passion and without having taken undue advantage and he had not acted in a cruel or unusual manner.

As per the new amendment in rule 114B of Income Tax Rules, now PAN will also have to be furnished in respect of payment of LIC premium of aggregating Rs. 50000 or more in a year. PAN will also be required to be furnished while making payment to a dealer of Rs. 5 Lakh or more or against a bill of Rs 5 Lakh or more for purchase of bullion or jewellery. The word Dealer has been mentioned in newly added clause (r) to Rule 114B, but who will be considered as dealer is a question to be asked, since no corresponding explanation defining the word dealer has been added in the rule.

Instructions for filing Sehaj form have been notified. Not only a layman but also every professional must go through these instructions before filing the form as many new things may come to picture which we might not be aware of.

CBDT has issued some instructions for bringing transparency in the Survey Operations carried under Income Tax Act 1961. As per the instructions now the survey party will inform the taxpayer on whom survey operations are carried on, before the start of survey proceedings  the name designation and contact numbers of the CCIT &Additional CIT/JCIT and also will inform the taxpayer that if he has any grivence he can contact the said authorities. The instructions as issued are  produced herebelow for ready reference.