CIT(Appeals) has inherent powers to grant stay on disputed income tax demands0 comments Monday, January 23, 2012The HC held: “The powers of the appellate authorities are indisputably concurrent and co-extensive with that of the Assessing Authority but wider and superior in nature. Section 251 of the Act clearly stipulates that in disposing of an appeal, the CIT (Appeals) can confirm, reduce, enhance or annul the assessment. Section 251(1)(c) of the Act further provides that in other cases, he may pass such orders in appeal as he thinks fit. Peak Credit and telescoping theories in assessment proceedings under Income Tax.2 comments Sunday, January 15, 2012There may be some cases under Income Tax Assessment proceedings where there are a large number of unexplained credit and debit enteries of a person standing in books of account of an assessee. In such case the AO may tend to add all the aggregate enteries as unexplained income. Changed rate of tax on certain goods under Punjab VAT Act, 20050 comments Saturday, January 14, 2012Punjab Government has changed rate of VAT on certain items under Punjab VAT Act, 2005. These items with changed rate of tax are as follows:
Sales made to Punjab State Power Corporation Ltd. and Punjab State Transmission Corporation Ltd.for generation, transmission and distribution of electrical energy against a certificate duly filled and signed by the Designated officer 5% Powers of Excise & Taxation Inspectors equivalent to ETOs extended till 31-12-20120 comments Wednesday, January 11, 2012The powers of excise and Taxation Inspectors under Punjab VAT Act, 2005 to act as designated officers u/s11,13,14,26,27,28,29,30,31,32,36,38,39,40,41,45,46,47,48,49,52,53,54,55,56,57,
58,59,60,66,76,77,83, have been extended from 31st December, 2011 to 31st December, 2012. The above powers include important powers like to make assessments, levy penalties and interest, Power of audit, Provisional assessments, grant & withhold refunds, Power to search & seizure, survey etc. Due date of service tax return for period ending Sept. 2011 extended to 20-1-20120 comments Tuesday, January 10, 2012F. No. 137/99/2011 – Service Tax Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs, ****** ORDER NO 1 /2012 – Service Tax Deduction of depericiation on machinery and tools from the works contract should be allowed.1 comments Sunday, January 8, 2012There are two components in every works contract one is material component and other is labour component. Material incorporated in a works contract is considered as deemed sales to the contractee and hence is liable to VAT or sales tax. To arrive at the material component involved in a works contract deductions for labour component are allowed. Specified provisions of Income Tax Act which shall apply to Centralised Processing of Returns Scheme, 20110 comments Saturday, January 7, 2012Section 143 of the Income-tax Act, 1961 – Assessment – General – Specified provisions of the Act which shall apply to Centralised Processing of Returns Scheme, 2011 Notification No. 3/2012 [F. No. 142/27/2011-SO (TPL)], dated 4-1-2012 In exercise of powers conferred by sub-section (1B) of section 143 of Income Tax Act, 1961 (43 of 1961), for the purpose of giving effect to the Centralised Processing of Returns Scheme, 2011 made under sub-section (IA) of section 143 of the said Act, the Central Government hereby directs that, the following provisions of the Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as specified hereunder, namely: - CBDT notifies Centralised Processing of returns scheme 20110 commentsCBDT has notified Centralised Processing of Returns Scheme, 2011, wherein the various terms and conditions relating to the Centralised processing of returns have been prescribed.
Centralised processing of returns is being going on in CPCs for some years now, but the scheme for such centralised processing has been finally made now, which answers a lot of questions regarding processing of efiled returns, which many people had in their minds unanswered. No penalty merely because audit report is not furnished in time, unless deliberation on part of assessee0 comments Friday, January 6, 2012I have found the following order of ITAT Mumbai as very important as it has been held that Merely because, the assessee did not furnish the report before the due date of filing of the return, that may not automatically attract the penalty. Addition referable to previous year's loans in subsequent year not justified0 commentsMumbai ITAT has in the following case deleted the additions made on account of opening balances of unsecured loans and the notional interest on such loans. The Tribunal held that only fresh loans or additions to the loans during the year in question can be considered for the purpose of addition. Previous years loans cannot be added to subsequent year's income by claiming them to be unexplained. This is one case law which I will suggest everyone to go through. The AO has made arbitrary additions during assessment proceedings, which the Tribunal has deleted by taking strict note of the same and the appeal has been dismissed with costs to the revenue. The AO in this case has made additions on irrelevant grounds. Undisclosed contract receipts are not income but gross receipts0 commentsKolkata ITAT has held in the following case namely ITO Vs. M/s St. Joseph Construction that where contract receipts are not disclosed in the return of income, the whole receipt cannot be added to the income of assessee as its a part of gross receipts only, It is the net profit arising or estimated from it, should be added to the income. In this case ITO added the whole of undisclosed contract receipts to the income of the assessee but CIT(A) deleted the addition and added only 8% of such receipts to the income of the assesee, which was upheld by the Tribunal on subsequent appeal. The facts of the case are not complicated and it can be simply understood even by a student studying income tax that contract receipts are always the gross receipts wherefrom the expenses are borne by the assessee and net profit is arrived at thereby. But how the assessing officer fails to understand the same? The assessee had to go for appeal to get the justice. It is generally seen that AO decides the case prima facie only and whenever the question of interpretation of law or fact comes before the AO, they tend to interpret the same in the favour of revenue as if they are representatives of the revenue only. One basic thing should be understood that the assessment proceedings are quasi judicial in nature and the assessee should be met with justice while concluding the proceedings. The AO should not favour either revenue or the assessee, but the case in hand should be decided on the merits. INCOME TAX APPELLATE TRIBUNAL , KOLKATA I.T.A No. 1057/Kol/2011- Assessment Year: 2008-2009 Income Tax Officer Vs M/s. St. Joseph Construction Date of Pronouncement: 26.12.2011 ORDER Per Shri S.V. Mehrotra, Accountant Member This appeal filed by the Revenue is against the order of ld. Commissioner of Income- Tax (Appeals)-XXXVI, Kolkata dated 18.05.2011 for the assessment year 2008-09. 2. Brief facts of the case are that in the relevant assessment year, the assessee-firm derived income from business of civil construction. The assessee had filed its return of income declaring total income of Rs. 68,970/-. The Assessing Officer noticed from the audited Balance sheet and Profit & Loss A/c. the total receipt shown by the firm was at Rs. 57,73,804/-. In support of its receipts, the assessee-firm had filed TDS certificates received from Missionaries of Charity, which certified making a total payment of Rs. 57,73,804/- during the financial year 2007-08. The Assessing Officer observed that while examining the 26AS of the assessee-firm generated from the Departmental data base, it was found that the assessee-firm received the following amounts during the financial year 2007-08 from different organizations and TDS had been deducted accordingly as per chart below :-
From these information’s, the Assessing Officer concluded that the assessee had not disclosed receipts totaling to Rs. 54,55,543/- in its accounts. The Assessing Officer issued summons under section 131 to the Accountant of The Roman Catholic Diocese of Krishnanagar, Nadia, who produced following documents before the Assessing Officer :- (1) Work order of The Roman Catholic Diocese of Krishnanagar given to assessee vide Memo No. CM(K) 2006 dated 20.02.2006, (2) Photocopy of TDS certificate; (3) Photocopy of payment certificate for the financial year 2007-08; (4) Provisional receipt copy of submission of TDS return in Form No. 26Q. From these documents, the Assessing Officer concluded that the assessee-firm had received an amount of Rs. 50,00,000/- from The Roman Catholic Diocese of Krishnanagar during the financial year 2007-08, but the assessee-firm did not disclose this gross receipt as well as income to the revenue. The Assessing Officer has also examined the date of issue of cheque by The Roman Catholic Diocese of Krishnanagar, and also deposit in the assessee’s Bank a/c., the details of which are given at pages 5-6 of assessment order and from these details, he pointed out that the partners of the assessee-firm admitted that an additional amount was received besides the amount specified earlier in the return filed for the assessment year 2008-09. He has reproduced the details from the written submissions of the partners. The Assessing Officer also examined the purchases made by the assessee and from all the details after considering the assessee’s explanation concluded that the assessee concealed the receipts from different organizations amounting to Rs. 54,55,53/- and made an addition of Rs. 54,55,543/-. He also observed that the details of purchases furnished by the assessee from Hindustan Hardware, Krishnanagar, Nadia amounting to Rs. 17,56,021/- were genuine and, therefore, no action was called for on this account. 3. Ld. CIT(Appeals) after considering the assessee’s submissions directed the Assessing Officer to reject the books of accounts of the assessee-firm since the assessee had concealed huge contractual receipts to the tune of Rs. 54,55,543/-. He also directed the Assessing Officer to estimate the profit @ 8% on the entire receipts of Rs. 1,12,29,347/- equivalent to Rs. 8,98,348/-, net of all expenses including salary and interest payments to partners. 4. At the time of hearing, none appeared on behalf of the assessee. Learned Departmental Representative relied on the order of Assessing Officer. 5. We have considered the submissions of ld. D.R. By considering the totality of the facts and circumstances of the case, in our opinion, no interference is called for in the order of ld. CIT(Appeals) as he has directed the Assessing Officer to compute net profit at 8% on the entire receipts including the receipts found to have been concealed by the assessee. In any case, the entire receipts, as added by the Assessing Officer, could not be added because it is not disputed that the impugned amount had been received from the contract work carried on by the assessee. It is not the case of Assessing officer that the source of impugned sum of Rs. 54,55,543/- was other than the business. Therefore, we confirm the order of ld. CIT(Appeals) and reject the ground of appeal taken by the Revenue. 6. In the result, the appeal filed by the Revenue is dismissed. Download new VAT-2 form under PVAT Act, in excel format6 comments Monday, January 2, 2012
Excise & Taxation Department, Punjab has notified new VAT 2 challan form for tax deposits under Punjab VAT Act, 2005. Earlier there were three challan forms namely VAT-2, VAT-2A and VAT-2B, which the dealers had to fill up for depositing tax under PVAT Act, 2005.
This new form replaces all the earlier three forms, now only one form is required to be filled up. This new form is applicable w.e.f 01-01-2012. The new form in excel format can be downloaded herebelow: Due date for efiling of service tax returns for the period April-Sept 2011 further extended to 6.01.20122 comments Thursday, December 29, 2011F. No. 137/99/2011 – Service Tax Government of India Ministry of Finance Department of Revenue Central Board of Excise and Customs, ********** New Delhi, the 29th December 2011 Import of Milk and Milk products from China further prohibited0 comments Tuesday, December 27, 2011Central Government has extended the prohibtion date till 24.06.2012 for importing Milk and Milk Products (including chocolates and chocolate products and candies/ confectionary/ food preparations with milk or milk solids as an ingredient) from China. Warlier such prohibtion was imposed by a notification dated 03.01.2011.
I think the govt has taken the right step. we all know the quality of products imported into India from China. Such eatable products, if their quality is doubtable, must be barred. The step taken is in the right direction. No penalty u/s 76 or 78, if there is bonafide mistake in calculation of service tax-Delhi HC0 comments Saturday, December 24, 2011Delhi High court has held in an important following case that if the assessee makes a bonafide mistake in calculation of service tax then no penalty u/s 76 or 78 can be levied, as it constitutes a reasonable cause for the faliure to deposit due tax. In this case the defence was that it was paying service tax as per its bona fide understanding that the service tax was to be paid on the commission retained by the appellant. It was pleaded that the matter of calculation was not clear to it. Therefore, it had been filing its service tax returns on the basis of the commission retained by it and the correct method of computing the service tax was pointed out by the visiting team of the department. Therefore, the allegation of suppression, mis-statement were wrongly attributed to it. ITR not to be treated invalid, merely because ITR-V is not received at CPC, if no faliure on the part of assessee-Bombay HC0 comments Friday, December 23, 2011Bombay High Court has given an important decision in Crawford Bayley & Company Vs. Union of India & Others wherein it has been held that where the assessee has bonafidely sent ITR-V form to CPC by ordinary post, but it has not been received there with CPC, the return of Income cannot become invalid on this ground. The assessing officer can allow the assessee to file ITR-V u/s 139(9) of Income Tax Act, 1961, if assessment has not been completed as yet. CBEC's order regarding documents required for service tax registration0 comments Friday, December 16, 2011CBEC has issued an order under Rule 4(1A) of Service Tax Rules, 1994 stating certain documents whioch are rtequired to be produced along with the service tax registration. These documents are: Copy of PAN Proof of residence Constitution of the applicant Power of attorney in respect of authorised person(s) Stay of disputed income tax demands-some important points0 comments Sunday, December 4, 2011In scrutiny assessments it is sometimes seen that huge demands are created against the assessee by framing high pitched assessments due to difference in opinion on interpretation of law or interpretation of facts or due to the fact that AO is not satisfied with the explanations offered by the assessee in regard to loan creditors or cash credits or gifts etc. Sales to sez unit exempted as zero rated sale and rate of tax deduction on works contractors enhanced to 5% in Punjab0 comments Friday, December 2, 2011Section 17 of PVAT Act, 2005 which defines export sales within the scope of section 5 of CST Act i.e export sales as zero rated sales, has been amended so as to add sub-section 2 of section 17 which provides that sale to a unit or developer in special economic zone and inter-unit transaction of goods within SEZ as also a zero rated sales. No output tax is payable on such zero rated sales.
No reversal of ITC on sale lower than purchase price in pursuance of administered prices of oil companies-Rule 21 of PVAT Rules amended0 commentsRule 21 of Punjab VAT Rules 2005 has been amended so as to provide a new proviso to Rule 21(2-A) which provides that input tax credit will not be reversed by the taxable person where the sale is effected at lower price than the purchase price in pursuance of the administered prices of oil companies, that is to say Indian Oil Corporation, BPCL, HPCL and HPCL Mittal Energy limited.
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