Capital gains exemption u/s 54EC of Income tax Act, 19612 comments Sunday, March 4, 2012Section 54EC of Income Tax Act, 1961 provides an option to save tax on capital gain arising from transfer of long term capital asset subject to fulfillment of certain conditions. Provisions of section 54EC are being discussed hereinbelow for the benefit of all concerneds. Circumstances under which deduction u/s 54EC is available: The deduction u/s 54EC will be available subject to the following conditions: No denial of exemption u/s 54F merely because sale deed not registered or construction of house not completed within statutory period0 comments Friday, March 2, 2012High court of Karnataka in a very important following case has held that Condition precedent for claiming benefit under section 54F is that capital gains realized from sale of capital asset has been parted with by assessee and invested either in purchasing a residential house or in constructing a residential house. If after making entire payment, merely because a registered sale deed has not been executed and registered in favour of assessee before period stipulated, assessee cannot be denied benefit under section 54F. Income from towers/antennas on roof, or from display of signage/parking space rent not income from house property but from other sources0 commentsDelhi ITAT has held in the following case that Income from installation of towers/antennas on roof top/from display of signage/parking space rent is not income from house property but income from other sources. In this case the assessee claimed income from parking rent, terrace rent, signage rent and licence fee as income under the head house property and consequently claimed deduction u/s 24(1). The AO took the view that such incomes are income from Business and not from house property. However the CIT(A) considered such incomes as income from other sources. On appeal to Tribunal the order of CIT(A) is upheld. Income Tax Scrutiny criterias for F.Y. 2011-12/A.Y. 2012-131 comments Thursday, March 1, 20121. Where value of international transaction as defined u/s. 92B exceeds Rs.15 Crore. 2. Cases where there was addition of Rs.10 Lacs or more in earlier assessment year and question of law or fact is confirmed in appeal or pending before appellate authority. 3. Cases in which addition of Rs.10 Crore or more was made in earlier assessment year on the issue of transfer pricing. No Scrutiny for senior citizens and small tax payers having income upto 10 lakhs0 commentsNo.402/92/2006-MC (07 of 2011) Government of India / Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi dated the 14th March 2011 PRESS RELEASE Streamlining procedure for scrutiny of income-tax returns Adjustment of service tax paid under wrong accounting code is to be allowed0 comments Thursday, February 23, 2012Ahemdabad CESTAT has held in the following case that adjustment of service tax paid under wrong accounting code is to be allowed. In this case assessee was manufacturing a 'diesel generating set'. Besides that it was also providing maintenance of diesel generating sets to its clients. Before taking service tax registration under 'management, maintenance or repair' service, it paid service tax under wrong service tax code relating to 'erection, commissioning or installation' service. PVAT-Three cheques required to be deposited alongwith new VAT-2 form while making payment of VAT by cheque0 commentsRecently a new single challan form namely VAT-2 has been introduced for payment of VAT in Punjab. This form has replaced the earlier three challan forms i.e VAT-2, VAT-2A and VAT-2B. Now for depositing VAT, Punjab Municipal Fund(PMF) and Punjab Municipal Infrastructure Development Fund(PMIDF) only one challan form i.e VAT-2 is required to be filled up.
No Service Tax on Toll collected for user of roads-Clarification of CBEC0 commentsCBEC has clarified in the following circular that Toll collected by SPV for users of roads under an agreement between NHAI or State Authority and concessionaire under PPP or BOT/Operate-transfer model is exempt from service tax. It has been clarified that TOLL is a subject of State List under Constitution hence is not liable to service tax. However if Toll is collected by an independent entity engaged by SPV and for which purpose any commission/charges is paid to such agency by SPV then such commission/charges will be liable to service tax under Business Auxiliary Service. Foreign Lawyers cannot practice in India-Madras High Court0 commentsMadras High Court has held in A.K.Balaji Vs. GOI has held that foreign Lawyers cannot practice law in India but are entitled to visit India for short periods to advice on foreign law & conduct international commercial arbitration Calculation of cost of indexation in case of gifted or inherited capital asset0 comments Tuesday, February 21, 2012Bombay High Court has held in following case that benefit of indexation shall be available from the year when previous owner acquired a capital asset in case such capital asset is acquired under a gift or will. In this case assessee acquired the capital asset under a gift. The donor acquired the capital asset on 29-01-1993 whereas the capital asset was gifted to the assessee on 01-02-2003 and the assessee sold such capital asset on 30-06-2003. Clarification of CBEC-Commitment charges recovered by banks liable to service tax0 comments Sunday, February 19, 2012CBEC has issued following clarification relating to taxability of commitment charges recovered by banks for keeping available the undistributed balance of a loan committment, under the Banking and Financial service. It has been clarified that commitment charges charged by banks is liable to service tax as these are not in the form of interest but they are directly linked to the provision of service provided by the banks under the Banking and Financial Service covered by section 65(105)(zm) of Finance Act, 1994. CBDT exempts salaried persons upto 5 lakh income from return filing in A.Y 2012-130 commentsNOTIFICATION NO 9/2012, Dated: February 17, 2012 In exercise of the power conferred by sub-section (IC) of section 139 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby exempts the following class of persons, subject to the conditions specified hereinafter, from the requirement of furnishing a return of income under sub-section (1) of section 139 for the assessment year 2012-13, namely:- Consideration deemed to be received u/s 50C cannot be treated as consideration actually received0 comments Tuesday, February 14, 2012Legal fiction created by section 50C is limited to purposes of section 48 alone and does not displace legal fiction created by sections 69, 69A and 69B, this is a verdict which Chandigarh ITAT has given in the following case. The Tribunal in this case has held that a legal fiction u/s 50C cannot be so extended to create another legal fiction to effect that consideration deemed to be so received would also be deemed to generate cash/funds for making investments or meeting expenses, or otherwise displace legal fiction created by sections 69, 69A and 69B. ETO(Mobile Wing) of any district can check goods u/s 51 of PVAT Act anywhere in State of Punjab0 comments Sunday, February 12, 2012Section 51 of Punjab VAT Act, 2005 deals with the establishment of Information collection centres or check posts and inspection of goods in transit. Amongst other officials.Excise and Taxation officer(Mobile wing) have been given power u/s 3 of PVAT Act, 2005 to act as designated officer u/s 51. Which means that such Mobile wing officer can levy penalty and make inspection of goods in transit u/s 51 of Punjab VAT Act, 2005. In every district there is a separate Mobile Wing. In such case the question arises in mind do the powers u/s 51 of ETOs(MW) extend only to their respective districts to which they are posted or it extends to the whole of State of Service tax on construction services-clarification by CBEC0 commentsCBEC has issued following clarifications regarding service tax on construction services covered under clause zzq and zzzh of section 65 of Finance Act, 1994 i.e services in relation to commercial or industrial construction service and service in relation to construction of complex. No penalty where service tax along with interest and late fee deposited before issue of SCN0 comments Saturday, February 11, 2012Mumbai CESTAT has held in the following case that where assessee had paid service tax along with interest and penalty for late filing of return before issue of SCN, no penalty could be imposed on it.
Facts: In this case The assessee was engaged in providing maintenance or repair services. During relevant period though the assessee had collected service tax from service recipients but deposited same with the revenue belatedly along with interest. Besides that it also paid fees for late filing of return. Subsequent thereto, the Assistant Commissioner issued show-cause notice, and on adjudication of same, imposed penalties under sections 76, 77 and 78. The Commissioner (Appeals) upheld said order. Time barred assessment is void ab-initio,no need to deposit 25% u/s 62(5) under PVAT Act, 20050 commentsPunjab VAT Tribunal is a very important case namely Baba Ji Rice Mills, vs. State of Punjab (2012) 41 PHT 197 (PVT) has held that once the case is hit by point of limitation, payment of 25% of the additional demand not essentially to be adjudicated.
It is notable here that as per section 62(5) of Punjab VAT Act, 2005 prior payment of 25% of additional demand is mandatory before any appeal is being heard. No reassessment in the absence of new material even in case of intimation u/s 143(1)(a)0 comments Friday, February 10, 2012Mumbai ITAT has held in a very important following case that when only intimation u/s 143(1) is being issued and no assessment is framed u/s 143(3) even then reaaseessment u/s 147/148 shall be invalid in the absesnce of new material. In this case The AO accepted the ROI filed by the assessee u/s 143(1). He thereafter issued a notice u/s 148 on the ground that the assessee had claimed a deduction for ERP software and that although only 20% of the said expenses was debited to the P&L A/c, the entire amount was claimed as a deduction. The assessee claimed that the reopening was not valid as there was no “new material” in the AO’s possession. Income from licence of property is income from other source and not from house property0 comments Thursday, February 9, 2012I find the following judgement of Karnataka High Court to be an important one, wherein it has been held that income from licence of property should be treated as income under the head other source and not under house property, hence sharing for the readers of the blog. FACTS Under license agreement, the assessee granted license of the scheduled property to the licensee, which, in consideration, agreed to part with 25 per cent of room income collected from the room guests to the assessee. The assessee had shown the said income under the head 'other sources' and had claimed expenses. The Assessing Officer, however, treated that income as income from house property. The Commissioner (Appeals) allowed the assessee's appeal holding that having regard to the terms of the agreement and the facts and circumstances of the case the assessee had rightly shown the income derived under the licensing agreement as income from other sources and the Assessing Officer was not justified in treating the said income as income from house property. The Tribunal confirmed the order of the Commissioner (Appeals). Assessment order without signature of Assessing Officer is invalid1 commentsSection 292B of Income tax Act, 1961 provides that Return of income, etc., not to be invalid on certain grounds.—No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act. Thus if there is any mistake or omission or defect in any assessment, notice return, etc, then such notice assessment, return etc will not become invalid merely by such omission, defect or mistake.
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