The Reserve Bank of India ( RBI ) decided to stop the practice of issuing Letters of Undertaking (LoUs) and Letters of Comfort (LoCs) for Trade Credits with immediate effect.
A Notification issued by the RBI in this regard said that “On a review of the extant guidelines, it has been decided to discontinue the practice of issuance of LoUs/ LoCs for Trade Credits for imports into India by AD Category –I banks with immediate effect. Letters of Credit and Bank Guarantees for Trade Credits for imports into India may continue to be issued subject to compliance with the provisions contained in Department of Banking Regulation Master Circular No. DBR. No. Dir. BC.11/13.03.00/2015-16 dated July 1, 2015 on “Guarantees and Co-acceptances”, as amended from time to time.”
The changes are applicable from 13th March 2018 itself.
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In a bid to increase the direct tax revenue, the Central Board of Direct Taxes (CBDT) will conduct a country-wide review of tax collection, especially for advance tax, tax deduction at source (TDS), arrears, and black money.
The Board had revised the direct tax revenue target to Rs 10 trillion, which includes personal income tax and corporate tax.
A report said that the department has already identified some tax defaulters who had shown differences between the income and expenses to defer the payment. The cases where the assessees were unable to justify the earnings and source of money, used for investments during this financial year, had been directed to pay the full amount, he said. Besides, the agency will analyze top TDS defaulters in the country and follow-up action or disposal of matter in such cases, the report said.
It was also reported that the Board is very much concerned over the shortfall in TDS collections. The meeting will also verify the pending tax arrears till January this year. The cases of cash collection, out of the total tax arrears demands, will also be taken up during the meeting. The Board will also check the current status of black money cases under the ‘Operation Clean Money’ (OCM) under which it has, already has sent 6000 notices to the persons in who received more than 2.5 lakhs in their bank accounts during the window period after demonetization.
The IT Department has conducted 9000 searches between November 2016 and March 2017, leading to detection of undisclosed income of Rs 93 billion.
The Ministry Of Corporate Affairs (MCA) has nominated the following members to the disciplinary committee of the Institute of Chartered Accountants of India (ICAI).
The nomination is in terms of the provisions of Section 21B of the Chartered Accountants Act, 1949, for the term of the 23rd Council or till further orders, whichever is earlier:-
Disciplinary Committee – Bench II [Under Section 21B]
Disciplinary Committee – Bench III [Under Section 21B]
The Institute also communicated that Shri Amit Chatterjee and Ms. Bindu Agnihotri would continue to be the Government Nominees on Bench I of the Disciplinary Committee.
The Finance Bill, 2018 has been passed by the Lok Sabha today without any discussions by applying the guillotine process.
The guillotine process allows for a vote on outstanding demands for grants, whether discussed or not, once the time frame allotted for the discussion is overdue to ongoing political issues.
The bill containing tax proposals for the coming financial year was introduced by Union Finance Minister Arun Jaitley on 1st February.
One of the significant proposal made in the Finance Bill was to grant indexation benefit in case of unlisted securities.
With the passage of the Finance Bill and the Appropriation Bill, the budget exercise is complete in the lower house. Technically, the two Bills also have to go to Rajya Sabha but since they are money bill they would be considered approved if the Upper House of Parliament does not return them within 14 days. The Opposition has an upper hand in the Rajya Sabha.
In the Case, Vinod Kumar Gupta vs Deputy Commissioner of Income Tax, Delhi High Court recently ruled that no separate search warrant is required to brothers who are involved in common business and also upholds the addition made by the Assessing Officer.
The assessee is an individual in the instant case Mr.Vinod Kumar Gupta has filed his return of income for the relevant assessment year and declared total income at Rs. 3,80,610.
During the year a search was conducted by issuing the notice at the premises of the Assessee and his brother Mr Suresh Kumar Gupta who were engaged in a common business and certain documents were seized from the premises of S.K. Gupta, from his residential and office premises. While completing the assessment the AO made some additions based on the seized documents and recomputed the total income at Rs. 92,16,098. He was of the opinion that the overall facts and circumstances of the case, the percentage of the income based on the statements made, were attributable to the income of the assessee and he also made the addition of Rs. 92,16,098 on account of unaccounted expenditure on the marriage of the son and daughter of the assessee was made.
Thereafter, the Assessee approached the Tribunal by appeal and contended that in the absence of any satisfaction recorded in terms of Section 153C(1) of the Act, since the seizures relied upon in the final assessment pertained to him but were made in the course of the proceedings and search of his brother’s premises the materials so seized became third-party material for which notice was mandatorily required. Further, he argued that in the absence of a notice under Section 153C of the Income Tax Act, the assessment was illegal.
However, the Tribunal refused to accept the contentions of the Assessee and also rejected the appeal filed by him. Then the Assessee carried the matter before the Court on further appeal.
The division bench comprising of Justice S.Ravindra Bhat and Justice A.K.Chawla observed that “the Assessee in the present case was challenged the invalidity of the search assessment in the absence of notice under Section 153C. While perusing the available material facts on records it is clear that the search warrant was issued in the name of S.K. Gupta. The panchnama drawn was signed by both the assessee and S.K. Gupta and the statements of both S.K. Gupta and Vinod Gupta were recorded on the same date”.
“Furthermore, the documents, cash and other books of accounts seized pointed to such circumstances that the Revenue was justified in arguing that a separate notice under Section 153C was unnecessary. These facts are that both the assessees are brothers. Both were involved in the common business and the assessee used to be in-charge of the accounts. Given these, there was no necessity of issuing notice under Section 153C and following the separate but elaborate procedure prescribed therein”, the bench added.
Subscribe Taxscan Premium to view the JudgmentThe Company Law Board (CLB) set up under Companies Act 1956 stands dissolved with the setting up of National Company Law Tribunal (NCLT). As on 12.03.2018, only one case under section 55(3) of the Companies Act, 2013 is pending before the NCLT.
A total of 9,073 cases are under consideration in NCLT as on 31.01.2018, including 1,630 cases of Merger and Amalgamation, 2,511 cases of insolvency and 4,932 cases under other sections of Companies Act.
All efforts are being taken to dispose of the cases as per the time limits laid down in the Companies Act, 2013 and the Insolvency and Bankruptcy Code, 2016. Systems and procedures including electronic/Information Technology systems are being used on the extensive basis to ensure quick disposal of cases.
This was stated by P.P. Chaudhary, Minister of State for Corporate and Law & Justice in Rajya Sabha today.
There is no reduction in the submission of resolution plans after enactment of The Insolvency and Bankruptcy Code (Amendment) Ordinance, 2017. 8 (Eight) resolution plans have been approved by National Company Law Tribunal (NCLT) after coming into effect of Ordinance as compared to 5 (Five) resolution plans approved earlier.
The said Ordinance was promulgated on 23.11.2017 to amend Insolvency and Bankruptcy Code, 2016 (Code) in order to further strengthen the insolvency resolution process by prohibiting certain persons from submitting a resolution plan who, on account of their antecedents, may adversely impact the credibility of the processes under the Code and further to make provisions to specify certain additional requirements for submission and consideration of the resolution plan before its approval by committee of creditors. The Ordinance was replaced by The Insolvency and Bankruptcy Code (Amendment) Act, 2018 on 18.01.2018.
This was stated by Shri P.P. Chaudhary, Minister of State for Corporate and Law & Justice in Rajya Sabha today.
The Government has introduced a Bill in the Lok Sabha to amend the Chit Funds Act, 1982. The Bill was introduced by Minister of State for Finance Shiv Pratap Shukla.
The Amendment is an initiative to protect the savings of the investors.
In order to facilitate the orderly growth of the Chit Funds sector and remove bottlenecks being faced by the Chit Funds industry, thereby enabling greater financial access of people to other financial products, the following amendments to the Chit Funds Act, 1982 have been proposed. The Key changes of Amendments as follows:
Amending Section 85 (b) of the Chit Funds Act, 1982 to remove the ceiling of one hundred rupees set in 1982 at the time of framing the Chit Funds Act, which has lost its relevance. The State Governments are proposed to be allowed to prescribe the ceiling and to increase it from time to time.
Subscribe Taxscan Premium to view the JudgmentA two-judge bench of the Supreme Court, on Tuesday, held that the transfer charges, non-occupancy charges and common amenity fund charges and certain other charges, collected by Co-operative Societies from Its members are not subject to income tax since the principle of mutuality applies to all these cases.
A bench of Justices R F Nariman and Navin Sinha was hearing a bunch of cases wherein the sole issue for consideration was that whether the above receipts by cooperative societies, from its members, are exempt from income tax based on the doctrine of mutuality.
Earlier, the ITAT held that the transfer fee paid by the transferee member was exigible to tax as the transferee did not have the status of a member at the time of such payment and, therefore, the principles of mutuality did not apply. The said order was quashed by the High Court on appeal. aggrieved by the order, the Revenue approached the Top Court.
The bench observed that the doctrine of mutuality, based on common law principles, is premised on the theory that a person cannot make a profit from himself. An amount received from oneself, therefore, cannot be regarded as income and taxable.
The bench noted that the receipts in the present cases have indisputably been used for mutual benefit towards the maintenance of the premises, repairs, infrastructure and provision of common amenities.
“Transfer charges are payable by the outgoing member. If for convenience, part of it is paid by the transferee, it would not partake the nature of profit or commerciality as the amount is appropriated only after the transferee is inducted as a member. In the event of non-admission, the amount is returned. The moment the transferee is inducted as a member the principles of mutuality apply. Likewise, non-occupancy charges are levied by the society and are payable by a member who does not himself occupy the premises but lets it out to a third person. The charges are again utilised only for the common benefit of facilities and amenities to the members. Contribution to the common amenity fund taken from a member disposing of the property is similarly utilised for meeting sudden and regular heavy repairs to ensure continuous and proper hazard free maintenance of the properties of the society which ultimately enures to the enjoyment, benefit and safety of the members. These charges are levied on the basis of resolutions passed by the society and in consonance with its bye-laws,” the bench said.
Subscribe Taxscan Premium to view the JudgmentIn a major relief to students preparing for Chartered Accountants exam, the Institute of Chartered Accountants of India ( ICAI ) is providing stipend to CA Final/ Intermediate Students undergoing Articleships.
The Board of Trustees has decided to provide financial assistance of Rs. 1500/- p.m, for articled assistants who are registered for Intermediate (IPC)/IPCC course and Rs. 2000/- P.M. for those students registered for final course and are currently undergoing articled/industrial training in accordance with The Chartered Accountants Regulations, 1988 and are poor, needy but meritorious to pursue the Chartered Accountancy course for one year with effect from 1st April, 2017 to 31st March, 2018 to be paid in lump sum, subject to filing of required application.
The eligibility criteria for obtaining financial assistance from CASBF are as under:
Students who are fulfilling the above criteria may apply for financial assistance from Chartered Accountants Students Benevolent Fund. Students may send their request in the prescribed Application form, duly filled in to the Member Secretary, Chartered Accountants Students Benevolent Fund at the following address so as to reach on or before 31st March 2018. The form can be downloaded from website of the Institute i.e. www.icai.org.
The Board of Trustees will consider each of such cases on merit basis and decide at their discretion on the amount to be granted from Chartered Accountants Students Benevolent Fund.
The division of assesses between Centre and State is decided by the Centre and State Governments. GSTN got an application developed using which Central and State tax authorities have uploaded the data on the allocation of migrated taxpayers in the GST System database. As on 8th March 2018 data on the division of 60,89,534 migrated taxpayers has been entered into GST System.
In order to ensure single interface for assesses under GST, the State Level Committees comprising of Chief Commissioner/ Commissioner of Central Tax and Commissioner of State tax have assigned the taxpayers to be under either the Central Tax or State Tax administration based on the turnover of the assesses on a proportionate basis. The assesses having the turnover above Rs. 1.5 crores are to be assigned in the ratio of 50:50 between the Centre and the respective State while those having the turnover less than Rs. 1.5 Crores have to be assigned in the ratio of 10:90 between the Centre and the respective State.
No choice has been given to assesses to opt for a particular tax administration i.e. Centre and State.
This was stated by Shri Shiv Pratap Shukla, Minister of State for Finance in the written reply to a question in Rajya Sabha today.
The government has decided to speed up input tax refund to exporters. As per Rule 91 of CGST Rules, 2017, ninety percent of the refund amount claimed shall be granted on a provisional basis within a period not exceeding seven days from the date of acknowledgement of the refund claim.
Further, as per Section 54(7) of the CGST Act, 2017, the final order for granting refund shall be issued within sixty days from the date of receipt of the complete application. Out of total taxpayers under GST, 64% were also registered under the previous tax regime. No specific study has been undertaken on the impact of GST transition.
64% of the total taxpayers registered under GST have transitioned from the previous tax regime to GST as on 2nd March 2018.
The processing of refund claim is being done after the claimant has filed the GST return and the grant of the refund shall be within sixty days from the date of receipt of the complete application.
This was stated by Shiv Pratap Shukla, Minister of State for Finance in the written reply to a question in Rajya Sabha today.
In the case of M/S Garware Wall Ropes Ltd, Delhi High Court recently held that the re-assessment by invoking section 24 of the Delhi Sales Tax Act without stating ‘reasons to believe’ in writing is bad in law.
Assessee in the present case M/S Garware Wall Ropes Ltd which was registered under the Delhi Sales Tax Act, 1975 and the Central Sales Tax Act, 1956 and engaged in the business of business of manufacture and sale of all kinds of ropes, cardage strings and twines has duly filed its return of income for the relevant assessment year and the Assessment was completed accordingly.
Thereafter, a notice has been issued by the Sales Tax Officer under section 24 of the Delhi Sales Tax Act, 1975 for reassessment without stating any reasons.
Thereafter, the Assessee approached the Court by challenging the validity of the notice that has been issued by the Sales Tax Officer for the purpose of re-assessment processing.
After considering the facts and circumstances, the Hugh Court justice Sanjiv Khanna and Justice Chander Shekar observed that “the recording of the reasons by the assessing authority officer before issuing a notice of reassessment under Section 24 of the DST Act is mandatory and the violation of this requirement would result in invalidating the entire reassessment proceedings”.
The Court further observed that it has been specifically mentioned in the Income Tax Act that there must be reasons to believe that a completed assessment must be reopened. This is also the interpretation given by this Court to Section 24 of the Delhi Sales Tax Act, 1975. The power to reopen an assessment is quite clearly not a plenary power, even though the power is wide. Therefore, it is mandatory for the Assessing Officer to have some material on record and also to consider that material and thereafter record reasons why a completed assessment is sought to be reopened.”
While perusing the available materials on records it is clear that in the present case the authority is unable to show and establish that reasons to believe were recorded in writing.
Subscribe Taxscan Premium to view the JudgmentThe Central Board of Excise and Customs (CBEC), today clarified the issues regarding the processing of refund applications for Unique Identity Number., UIN entities.
The GST Council, in its 23rd meeting held at Guwahati on 10th November 2017, has decided that the entities having Unique Identity Number (UIN) may be given centralized registration at the option of such entities. Further, it was also decided that the Central Government will be responsible for all administrative compliances in respect of such entities.
The CBEC missive clarified that entities having UINs are given a special status under the CGST Act as these are not covered under the definition of registered person. It said that Specialised agency of the United Nations Organisation or any Multilateral Financial Institution and Organisation notified under the United Nations (Privileges and Immunities) Act, 1947, Consulate or Embassy of foreign countries shall apply for the grant of UIN electronically by filling FORM GST REG-13.
An alternative mechanism has been developed by the Board to resolve the issues due to delay in making available FORM GST REG-13 on the common portal. Entities covered under clause (a) of sub-section (9) of Section 25 of the CGST Act may approach the Protocol Division, Ministry of External Affairs in this regard, who will facilitate grant of UINs in coordination with the Central Board of Excise and Customs (CBEC) and GSTN.
It further clarified that if a UIN entity is not claiming the refund for a particular period, it need not file the return in FORM GSTR-11 for that period.
With regard to refund claim, the Board further clarified that all the entities claiming refund shall submit the duly filled in print out of FORM RFD-10 to the jurisdictional Central Tax Commissionerate. All refund claims shall be processed and sanctioned by respective Central Tax offices. In order to facilitate processing of refund claims of UIN entities, a nodal officer has been designated in each State details of whom are given in Annexure A. Application for refund claim may be submitted before the designated Central Tax nodal officers in the State in which the UIN has been obtained.
Subscribe Taxscan Premium to view the JudgmentAssam Finance Minister Himanta Biswa Sarma presented the first E-Budget in the State on Monday with no new tax proposals for the next financial year.
Earlier, Andhra Pradesh had presented the first E-Budget in the country. Assam’s E-Budget is available on the Googles Play Store, giving access to everyone, Sarma said.
“We have taken great steps in making this Budget future ready, citizen-friendly and all-embracing through our e-Budget model that has easy to use provisions of SDG (sustainable development goal), gender, child and elderly related,” Sarma said.
Media persons covering the budget session were provided the budget speech on a pen drive.
Some of the key takeaways from the budget are the following;
The Indian Institute of Management Sambalpur has invited application for the post of Finance Advisor & Chief Accounts Officer.
The Indian Institute of Management Sambalpur (IIM-SBP) is an autonomous public Business School in Sambalpur, Odisha, India. Established in the year 2015, IIM Sambalpur is one of the Indian Institute of Management. The first batch of Post-Graduation Program (PGP) in Management at IIM Sambalpur started in September 2015.
Available Post:
Educational Qualification:
Experience Requirement:
Age Limit: below 50 years.
How to apply: Eligible and interested candidates may send their applications with necessary documents to the address given in the notification.
Last date to apply: 19.03.2018.
Subscribe Taxscan Premium to view the JudgmentThe Mumbai bench of Income Tax Appellate Tribunal has confirmed the penalty since Wealth Tax Return was filed after search proceedings.
The bench comprising of Judicial Member Mahavir Singh and Accountant Member Manoj Kumar Aggarwal was considering the case of Hardasmal H. Tharwani versus Assistant Commissioner of Wealth-tax.
In the case none has appeared for assessee despite notice and no adjournment application is on record. Left with no option, tribunal proceeded to dispose-off the same on the basis of material available on record and after hearing revenue.
A search was held in the office of Assessee, certain books, records and documents were found. Upon perusal of records, it was found that the assessee had taxable wealth. After that assessee filed wealth and consequently penalty proceedings u/s 18(1) (c) were initiated. The same upon, further appeal, has been confirmed by CWT(A) by relying on the order of Pune Tribunal rendered in Ranka Jewellers Pvt. Ltd.
Further Aggrieved assessee appealed the same before the tribunal and on careful observation, Tribunal found that the returned wealth has been accepted as such by the department.
Accordingly, bench dismissed the appeal and confirmed the penalty.
Subscribe Taxscan Premium to view the JudgmentThe Hyderabad bench of ITAT has denied the tax exemption of said concern and said that Trust created for benefit of a particular community or a religious group is not ‘Charitable Trust’.
In the consequential proceedings, the DIT (E) considered the issue and did not grant registration mainly on the reason that the trust is mainly for the prosperity of its members and for charitable and religious purposes. Since the object of running the said trust is meant for both purpose, the provision not permitted to grant the registration.
S. Rama Rao and P. Soma Sekhar Reddy appeared at the behest of Assessee and revenue respectively.
The bench including Judicial Member P. Madhavi Devi and Technical Member B. Ramakotaiah heard the contention Assessee that the Trust is having both charitable and religious projects and is for the general public and it is eligible for registration.
The bench before the said parties calls for the relevance of Section 11(1)(b) makes an exception for the mixed trust which is for partly religious and partly for other purposes, if they were created before the commencement of the Income Tax Act, 1961. There is no question regarding the commencement of the concern since the deed shows its running in the year of 1968.
Tribunal perused all the documents submitted by the trust and cited various case laws and the tribunal observed that “In the present case, the families of ‘SAMAJ’ cannot be considered as the section of general public and they are limited to the particular group and not for general public. The principles laid down in the above-said case for a particular group of police irrespective of their caste, creed or religious beliefs and are in general public employment are considered as public for the purpose of granting registration, whereas in the present case, the Members of the ‘SAMAJ’ has a single personal relationship either to the deity or to the ‘SAMAJ’ as can be seen from the clauses in the Trust Deed”.
The tribunal pressed the importance of law laid in the case of CIT Vs. Palghat Shadi Mahal Trust wherein Supreme Court held that there was no limitation in the Trust Deed in regard to which Muslims could avail the benefit of the Trust. The benefit was available to Muslims all over the world, none of whom except in Kerala were of backward classes. The Trust was not covered by Section 13(1)(b) and therefore held not entitled to exemption from tax.
Likewise, bench found no merits in the question raised by Assessee and dismissed their appeal.
Subscribe Taxscan Premium to view the JudgmentThe Allahabad High Court has ruled that Incentive Bonus is deductible under Section 37 of the Income Tax Act 1961.
The Assessee Company M/s D. S. M. Agro Products Ltd has filed its return of income for the relevant assessment year and claimed the deduction on account of production incentive bonus paid to its workers as a reward of their good performance and efficiency.
While completing the assessment proceedings the Assessing Officer (AO) made an addition of Rs. 5,54,037 and Rs.5,32,238 on account of production incentive bonus and the same brought into tax and accordingly disallowed the claim of the Assessee.
On appeal both the lower authorities such as CIT (A) and Income Tax Appellate Tribunal (ITAT) granted relief to the Assessee by deleting the addition made by the AO after legally justified the facts and circumstances. Consequently, the Tribunal passed an order in favour of the Assessee by allowing the deduction claimed by the Assessee Company.
Thereafter the Revenue approached the Court on further appeal against the order passed by the lower authorities and compiled that the Tribunal has erred in allowing the deduction towards the production incentive bonus which was claimed by the Assessee.
After considering the facts and circumstances of the present issue, the High Court division bench Justice Bharati Sapru and Justice Neeraj Tiwari rejected the findings of the Revenue and held that “where incentive bonus has been paid as a reward of good attendance and efficiency to the workers, it would be deductible under section 37 of the Income Tax Act 1961 and the Tribunal has not erred in allowing deduction in respect of the incentive bonus in the present case”.
Subsequently, the Court also upheld the order passed by the Tribunal and accordingly dismissed the appeal filed by the Revenue while concluding the issue.
Subscribe Taxscan Premium to view the JudgmentThe Kerala Transport Development Finance Corporation Limited has invited application for vacancies of Assistant Manager (Finance) and Assistant Manager (Accounts).
KTDFC is a Non-Banking Financial Company fully owned by the Government of Kerala and having a valid certificate of Registration issued by Reserve Bank of India under section 45-IA of the RBI Act, 1934. KTDFC accepts deposits from the public and the deposits are guaranteed by the Government of Kerala, which ensures 100% security and extra earnings.
Number of vacancies:
Eligibility Criteria: Associate Chartered Accountant (ACA)/Associate Member of Cost and Management Accountants (ACMA) and at least 2 Years post qualification experience in Public/Private sector.
How to apply: Interested and eligible candidates may send their application along with necessary certificates to the address given in the notification. Application sent through email or any other electronic means will not be accepted.
Last date of apply: 26.03.2018
Subscribe Taxscan Premium to view the JudgmentWhile hearing a special leave petition challenging the constitutional validity of Section 35AC(7) of the Income Tax Act, 1961, the Supreme Court held that persons who want to donate money for construction of the specified hospital by the petitioner, Prashanti Medical Services And Research Foundation, can claim tax exemption.
Section 35AC of the Income Tax Act, 1961, provides for a deduction in computing the business income of an assessee, of the amount paid by him to a PSU or a local authority or to an association or institution approved by the National Committee for carrying-out any eligible project or scheme.
The amendment to the said provision, inserted w.e.f. 1st April, 2017 provided that the benefit of the said section would not get
Before the Apex Court, the counsel for the petitioner, Senior Advocate Arvind Datar submitted that the effect of the amendment is that no donors are coming forward to donate the amount which is required for construction of the specified hospital etc. Therefore, even if the petitioner succeeds in the matter, the petitioner is left with no donors in the Financial Year 2017-18 i.e. Assessment Year 2018-19.
After hearing the submissions, Justice R K Agarwal and Justice Abhay Manohar Sapre held that “the donors who want to donate some money to the petitioner for construction of the specified hospital by the petitioner may claim exemption under Section 35AC of the Income Tax Act. However, in case the petitioner does not succeed here, the petitioner will be liable to pay the amount of tax and applicable interest so claimed by the donors as per the undertaking given by Shri Arvind Datar, learned senior counsel on behalf of the petitioner.”
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