TAX UPDATES ON 20TH NOVEMBER 2015
* TAX UPDATES ON 20TH NOVEMBER 2015
INCOME TAX ACT
SECTION 9
INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA
Interest : Where assessee issued FCCB to foreign investors and remitted interest to them, since said money was utilized for overseas business of assessee, no income could be said to have accrued or arisen in India in hands of non-resident investors and, therefore, no TDS was deductible – [2015] 63(Ahmedabad – Trib.)
Section 143 of the Income-tax Act, 1961 – Assessment – General – Constitution of Local Committees to deal with taxpayers grievances from High-Pitched Scrutiny Assessment
SECTION 28(i)
BUSINESS INCOME – CHARGEABLE AS
Business income v. Other sources : Interest income of finance co. not taxable as other sources of income if it was held as business income in earlier yrs – [2015] 63 (Mumbai – Trib.)
SECTION 37(1)
BUSINESS EXPENDITURE – ALLOWABILITY OF
Buy back of shares : Where in terms of directions issued by CLB, assessee-company paid certain amount over and above face value of shares to departing group of shareholders, amount so paid was to be allowed as revenue expenditure – [2015].1(Bombay)
SECTION 115JA
MINIMUM ALTERNATE TAX
Reassessment : Retro amendment in section 115JA can’t be deemed as reasons to believe that income has escaped assessment – [2015] (Bombay)
SECTION 145
METHOD OF ACCOUNTING – REJECTION OF ACCOUNTS
Other : Where Commissioner (Appeals) without considering contention of assessee that rejection of account books was not proper decided issue in ad hoc manner, matter required to be sent back to Commissioner (Appeals) to decide as to whether rejection of account book was proper or not and then to decide issue afresh -[2015] 8 (Lucknow – Trib.)
SECTION 268A
FILING OF APPEAL OR APPLICATION FOR REFERENCE BY INCOME-TAX AUTHORITY
Instruction No. 3 of 2011 : Instruction No. 3 of 2011, dated 9-2-2011 providing monetary limit should not be applied by High Court ipso facto, particularly when matter had a cascading effect – [2015] (SC)
SECTION 271(1)(c)
PENALTY – FOR CONCEALMENT OF INCOME
Disallowance of claim, effect of : Imposition of penalty upon assessee under section 271(1)(c) on basis of ad hoc and estimated disallowance/addition, without bringing any clinching material suggesting concealment of income or furnishing of inaccurate particulars of income, was not justified – [2015] (Lucknow – Trib.)
SERVICE TAX
SECTION 65(27)
TAXABLE SERVICES – COMMERCIAL TRAINING OR COACHING SERVICES
Courses in : (i) Mass Communication, (ii) International Business Management, (iii) Telecom Management, (iv) Information Technology, (v) Management Studies, (vi) Geo-informatics and (vii) Operational Management are ‘vocational courses’ and exempt from service tax – [2015]. (Mumbai – CESTAT)
SECTION 65(91a)
RESIDENTIAL COMPLEX SERVICES
Where assessee-real estate company appointed sub-contractors for construction of residential complex for principal company which intended same for personal use of staff, and sub-contractors fulfilled all service taxcompliances, assessee-contractor could not be liable to services tax – [2015] (Bangalore – CESTAT)
CST & VAT
SECTION 12 OF THE TAMIL NADU VALUE ADDED TAX ACT, 2006
TAX INCIDENCE AND LEVY – PURCHASE TAX – LEVY OF
Where assessee set up a unit in SEZ area in Tamil Nadu for trading and warehousing services for mobile phones, etc. and during year it purchased goods from another company located in same SEZ area and supplied them to its branches in other States by way of stock transfer, levy of purchase tax on inter-State stock transfer effected by assessee was justified – [2015]. (Madras)
CENVAT CREDIT RULES
RULE 6
CENVAT CREDIT – EXEMPTED AND DUTIABLE GOODS OR EXEMPTED AND TAXABLE SERVICES, OBLIGATION OF ASSESSEE
Semi-finished goods removed under job-work without payment of duty do not amount to “exempted final product” under Rule 6 of Cenvat Rules; hence, credit of capital goods exclusively used in such job-work cannot be denied. – [2015]. 366 (Madras)
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