ICAI to declare Results of CA Intermediate (Integrated Professional Competence) on 1st August

The Institute of Chartered Accountants of India (ICAI) is likely to announce the results of Chartered Accountants Intermediate (Integrated Professional Competence) Examination on 1st August, 2017. The exam was held in May 2017.

A recent announcement made in the Official website of the Institute said that “arrangements have also been made for the students of Intermediate (IPC) Examination desirous of having results on their e-mail addresses to register their requests at the above website, i.e., from 27th July, 2017. All those registering their requests will be provided their results through e-mail on the e-mail addresses registered as above immediately after the declaration of the result.”

It further said that in order to access the result at the above website i.e. icaiexam.icai.org the candidate shall have to enter his registration no. or PIN no. along with his roll number.

Further facilities have been made for candidates of Intermediate (IPC) Examination held in May 2017 desirous of knowing their results with marks on SMS. The service will be available through India Times,” it said.

CBDT Notifies Tax Exemption to ‘Haryana Electricity Regulatory Commission’ [Read Notification]

The Central Board of Direct Taxes ( CBDT ) notified income tax exemption to ‘Haryana Electricity Regulatory Commission’ under section 10(46) of the Income Tax Act, 1961.

Haryana Electricity Regulatory Commission is an independent statutory body corporate as per the provision of the Haryana Electricity Reform Act, 1997 established in the year 1998.

The main objects of the Commission are to consolidate the laws relating to generation, transmission, distribution, trading and use of electricity and generally for taking measures conducive to development of electricity industry, promoting competition therein, protecting interest of consumers and supply of electricity to all areas, rationalisation of electricity tariff, ensuring transparent policies regarding subsidies, promotion of efficient and environmentally benign policies, constitution of Central Electricity Authority, Regulatory Commissions and establishment of Appellate Tribunal and for matters connected therewith or incidental thereto.

As per section 10(46) of the Income Tax Act, exemption can be provided to income earned by a notified body, authority, board, trust or commission which is set up or constituted by a Central State or Provincial Act or constituted by the Central Government or State Government with the object of regulating or administering an activity for the benefit of the general public.

As per the present notification, the receipts by the HERC by way of grants and loans made by the Government of Haryana, fees received under the Electricity Act, 2003 (36 of 2003) and interest earned on government grants and loans and fees received under the Electricity Act, 2003 (36 of 2003) are exempted from income tax subject to conditions specified in the Act.

Read the full text of the Notification below.

GST Council may Take up certain Tax Issues at August Meet

Reportedly, the GST Council at its meeting in August is likely to take up certain taxation issues raised by sectoral bodies along with a review of the implementation of the new tax regime.

Smt. Vanaja Sarna, present Chairperson of the Central Board of Excise and Customs (CBEC)  also said the department is keeping track of revenue trends post implementation of the GST, but actual positions will be known after returns are filed in September.

The GST Council, chaired by Finance Minister Arun Jaitley and comprising state counterparts, will meet on August 5 to review implementation of the new tax regime.

Different issues will be coming to the table (at the next Council meeting). Things that have been brought to our notice may be on the rules and the implementation. Maybe, even on rates,” Sarna said.

Certain textile traders have been protesting against 5 per cent GST rate on fabric. They want the tax rate to be zero. Surat-based traders who have been protesting, however, withdrew the strike earlier this week.

Whatever issues have been raised… will be taken up (by the Council). When you roll out something as mammoth as GST, I would say you will always find problems or issues probably coming in till six months or a year,” She said.

SC Quashes Proceedings against CA since Disciplinary Committee couldn’t prove manipulation of figures in Certificate [Read Order]

In ICAI v. M.S Rathi, a two judge bench of the Supreme Court upheld the order of the Bombay High Court wherein the High Court held that professional misconduct cannot be alleged against CA if the Disciplinary Committee couldn’t prove manipulation of figures in Certificate.

In the instant case, disciplinary action was taken by the disciplinary committee of the appellant, Institute of Chartered Accountants of India (ICAI) against a Chartered Accountant for issuing certificates for consumption of raw materials showing the value of imported raw material as CIF value to the units without seeing the records since imported value of the raw materials should have been shown as value of the raw materials and not the CIF value. Further, the units did not maintain any record for past production, still the certificates were issued which shows that the figures were manipulated and the certificates issued were not correct.

The Disciplinary Committee found that while issuing the certificates to the units, the respondent CA had failed to obtain sufficient information to warrant the expression of his opinion and found him guilty of professional misconduct which would attract Clauses (7) and (8) of Part I of the Second Schedule to the Chartered Accountants Act, 1949 r/w Sections 21 and 22 of the said Act.

Subsequently, the Institute recommended to the High Court that the Respondent be reprimanded wherein the Court set aside the findings of the Disciplinary Committee and held in favour of the respondent.

While doing so, the High Court held that the allegation regarding non-maintenance of books of accounts was without any basis for the reason that neither the complainant nor the Disciplinary Committee have chosen to call for those books of accounts.

Aligning with the above findings of the High Court, a bench of R K Agarwal and Abhay Manohar Sapre observed that “the High Court has considered the statements made on behalf of the Respondent to hold that there is no material on record to establish that the units had paid an amount more than what was mentioned in the CIF value or purchase vouchers and merely because the sellers from whom the units had purchased the goods had imported the same, it does not mean that the units in question had paid the custom duty. Thus, no adverse inference can be drawn against the Respondent on this ground.”

Read the Full Text of the order Below

Post Demonetization: More than 1100 Searches and Surveys were conducted, more than 5100 Verification Notices issued

The undisclosed income detected in these actions was more than Rs. 5400 crore.

Disclosure of information regarding law flouters/specific taxpayers is prohibited except as provided under Section 138 of the Income-tax Act, 1961.

Appropriate actions including searches, surveys, and enquiries were taken by the Income Tax Department (ITD) for serious violations of the provisions of the Income Tax Act, 1961. Further, disclosure of information regarding specific taxpayers is prohibited except as provided under Section 138 of the Income-tax Act, 1961.

During the period from 9th November 2016 to 10th January 2017, more than 1100 searches and surveys were conducted by the ITD, apart from issuing more than 5100 verification notices in the cases of suspicious high value cash deposits or related activities. These actions led to seizure of valuables of more than Rs. 610 crore which includes cash of Rs. 513 crore. Seizure of cash in new currency notes was about Rs 110 crore. The undisclosed income detected in these actions was more than Rs. 5400 crore.

Operation Clean Money was launched on 31st January 2017 with the mission to “Create a tax compliant society through a fair, transparent and non-intrusive tax administration where every Indian takes pride in paying taxes”. In the process, about 18 lakh persons were identified whose cash transactions did not appear in line with their tax profile. Such persons were approached through SMS/email (non-intrusive method without even a notice).The contacted persons were required to submit their responses by logging into a specified website. As an outcome, more than 9.27 lakh responses were received providing information on 13.33 lakh accounts involving cash deposits of around Rs.2.89 lakh crores. Appropriate action under direct tax law in the remaining cases has been taken. Subsequently, advance data analytics tools were deployed and 5.56 lakhs new cases were identified for online verification.

Whenever a complaint against a bank official(s) is received and any irregularities are found or observed on the part of Banks’ official(s), the Banks initiate action as per their extant rules and commensurate punishment is awarded to the delinquent employees based on the seriousness of the wrongdoings as per Bank’s disciplinary rules.

The data available from the National Crime Records Bureau (NCRB) indicates that 1,57,818 numbers of Fake Indian Currency Notes (FICN) having a face-value of Rs.11,24,04,980 have been reported by States/UTs Police for the period 9.11.2016 to 14.7.2017.

This was stated by Arjun Ram Meghwal, Minister of State for Finance and Corporate Affairs in written reply to a question in Lok Sabha today.

GSTN Registration crosses 77.5 lakhs, says MoS Santosh Kumar Gangwar

The total number of GSTN registration has crossed is 77,55,416 till the 18th July, 2017 said Santosh Kumar Gangwar Minister of State for Finance in written reply to a question in Lok Sabha today.

No major problems have been reported post Goods and Services Tax (GST) from the field offices across the country

Internet is not required for doing/conducting business. It would be required only for the purpose of filing of returns under GST. The Government has ensured that the return filing process is made convenient for all taxpayers by setting up help desks in every Commissionerate and by appointing GST Suvidha Providers.

Govt Extends Time limit for Filing Intimation for Composition Levy [Read Circular]

The Central Government today extended the time limit for filing intimation for composition levy for the small businesses with a turnover of up to Rs 75 lakh under the Central Goods and Services Tax Act.

Earlier, the GSTN Network today said that can opt for composition scheme under the Goods and Services Tax regime till July 21. This has been now extended to 16th August 2017.

Under the composition levy scheme, traders, manufacturers, and restaurants whose annual turnover is below 75 lakhs can pay tax at one percent, two percent and five percent, respectively in the new Goods and Services Tax (GST) regime.

In order to avail the benefit of the scheme, the traders had to file intimation in Form GST CMP-01 to the Government before the due date.

Read the full text of the Circular below.

Govt Constitutes Central Monitoring Committee headed by Cabinet Secretary to monitor Impact of GST

The Government of India has setup a Central Monitoring Committee headed by the Cabinet Secretary P.K Sinha.

Three meetings of the Central Monitoring Committee have been held on 2nd July, 11th July and 18th July. The reports include the details of feedback received from various Ministries and Departments regarding the following issues:

Further, the Government vide DoPT OM dated 4th July 2017 and 6th July 2017 [F.NO.36/30/2017-EO(SM I)] has appointed 209 Joint/Additional Secretary Level Officers to monitor the implementation and effects of GST across the country through District Level Clusters and submit weekly reports. A Nodal Feedback Centre has been setup under the Ministry of Finance to collect, collate and analyze the feedback being received from the district level Nodal Officers.

Further, GST Feedback and Action Room (FAR) was constituted by CBEC w.e.f.26 June, 2017 with the purpose of reviewing the information received from Ministries, State governments, field formations and social media, newspapers, news channels, e-mail, etc. and report it on Real Time basis to the Revenue Secretary, CBEC, GSTN and other concerned authorities. A team of officers monitor various media reports for any GST related news/issues and also take further necessary action. FAR has multi-line telephone numbers which are available in the control room and these numbers have been informed to the Central and State GST officers. The emails received from the Ministries, State Governments and field formations are forwarded to the respective sections for information and feedback purpose.

The immediate and long term benefits of GST are as under:

This was stated by Santosh Kumar Gangwar, Minister of State for Finance in written reply to a question in Lok Sabha today.

Treatment of Income by the Dept for Past Years cannot be the Sole Basis of Addition: Jammu & Kashmir HC [Read Judgment]

While remitting a matter back to the files of the Appellate Tribunal, the Jammu and Kashmir High Court held that the department cannot treat the income from share transaction as Assessee’s “Business Income” or “Capital Gain” merely on the basis of conclusion made in the past years.

The question before the Court was that whether the income earned by the assesse from sale/purachse of shares constitutes his business income or investment.

While pronouncing the order, Chief Justice Badar Durrez Ahmed said that the issue is a mixed question of facts and law.

He further noticed the Gujarat High Court decision in the case of Commissioner of Income Tax v. Rewashanker A. Kothari, wherein the Court laid down various tests were in order to determine whether an assesse could be said to be carrying on the business of sale and purchase of various securities or whether the said assesse was holding them as an investment.

One of the most important tests outlined in that decision was as to whether the transactions in the shares were of a large volume and were frequent and whether there was continuity and regularity in such transactions of purchase and sale. It was noted that if there was repetition and continuity coupled with the magnitude of the transactions bearing a reasonable proportion to the holding then it would be an important circumstance in considering such activity to be in the nature of trade and business.”

The bench further noted that the aspect pertaining to the volume of transactions, the frequency of transactions and the continuity and regularity of the purchase and sale of the shares which was formulated by the Gujarat High Court and the Delhi High Court was not been examined by the Tribunal in the present case.

“It appears that the tribunal was impressed by the fact that a similar treatment had been given and accepted by the department in earlier assessment years. But in our view, that alone cannot form the basis of the conclusion as to whether the said shares were bought and sold as a part of trading activity or as a part of investments. All the circumstances outlined in the decision of the Delhi High Court and that of the Gujarat High Court as also the guidelines of the Central Board of Direct Taxes referred to in the impugned order needed to be considered and then a view was required to be taken on the totality of circumstances. Unfortunately, that has not been done. It is for this reason that we feel that the present appeal ought to be disposed of by setting aside the impugned order and by remitting the matter to the tribunal for a fresh consideration in the manner indicated above.”

Read the full text of the Judgment below.

TDS not Applicable to ‘Octroi’ Collected by Municipal Corporations through its Agents: Bombay HC [Read Judgment]

While upholding an order passed by the Mumbai ITAT, the Nagpur bench of the Bombay High Court held that TDS provisions of section 206C(1C) of income Tax Act, 1961 is not applicable to ‘Octroi’ collected by the Municipal Corporations through its agents since the provision is applicable to parking lots, toll plazas and mine or quarry only.

Assesse, in the present case is the Municipal Corporation for the town Akola. For the year under consideration, assesse appointed agent to provide services of collecting octroi on its behalf as per the agency agreement. The rate of octroi was fixed by the assesse and the receipts were issued in their name. Assessing Officer treated them as assesse-in-default for not collecting tax at source for the amount of octroi collected by the agent appointed by the assesse.

On appeal, the Appellate Tribunal accepted the contentions of the assesse finding that the obligation under section 206C of the IT Act is restricted to parking lots, toll plazas and mine or quarry. It therefore, held that “octroi” collectible by the assessee is different than “toll” and thus is not within the ambit of 206C(1C) of the Income Tax Act, 1961.

The department carried the matter before the High Court contending that there is no difference between “octroi” and “toll” and Section 206C(1C) of the Act which obliges a person to collect tax in respect of toll collected by an agent/licensee is equally applicable to collection of octroi by an agent.

A bench comprising Justices M S Sanklecha and Manish Pitale observed that there is basic constitutional difference between that two levies since the power to levy octroi is specified under Entry 52 of List II and toll under Entry 59 under the Seventh Schedule of the Constitution.

Concurring with the findings of the Appellate Tribunal, the bench observed that Section 206C(1C) of the Income Tax Act only obliges a person to collect tax from its agents/licensee who collects a toll on its behalf and the same cannot be extended to collection of octroi.

The legislature when it brought in section 206C(1C) of the Act has not authorised the collection of tax at source in respect of octroi. It specifically restricted its obligation to only three categories namely parking, toll plaza, mining and quarrying. It is not open to the Revenue to extend the ambit and scope of section to also include contracts, license or lease for collection of items other then toll, parking fees and for mining and quarrying. Therefore, there is no legislative mandate to collect tax at source or the octroi collected under Section 206C(1C) of the Act.”

Read the full text of the Judgment below.

Supplier should Obtain Registration in Case of Inter-State irrespective of Turnover: Govt Issues FAQs on GST Queries

While addressing queries of stakeholders from various sectors, the Government last day issued Frequently Asked Questions (FAQs) on provisions relating to registration, transition etc under the new indirect tax law.

As per it, a supplier having turnover below Rs. 20 lakhs is liable to take registration while supplying the goods from one State to another under the new Goods and Services Tax (GST) law.

It clarified that a Firm registered under the GST has an option to cancel its registration if it is dealing with exempted goods only. However, it is bound to file returns till de-registration.

To a question whether franchisor Company will have to take registration in each States where outlets are located, it answered in negative and stated that such a Company need not take registration in a States where its franchisee is located.

It also stated that person having excise registration will not get the benefit of input tax credit when they migrated to GST by using the composition scheme. In such a case, their ITC lying in balance would also lapse, it said.

One of the stakeholder asked “if I use my credit card to pay utility bills, I will end up in paying GST twice. One for the service and second time for the credit card bill.?”

To this, it answered that “GST is not leviable on the entire credit card bill. It is charged only on the fee/commission levied by the credit card company.”

Read the full text of the FAQs here.

GST Compensation Cess Not Payable on Intra-State Supply of Second Hand Goods under RCM [Read Notification]

The Central Government last day notified that intra-State supply of second hand goods for which reverse charge is applicable are exempted from the levy of GST Compensation Cess.

GST Compensation Cess is levied on certain goods to compensate the loss of the manufacturing States under the current Goods and Services Tax regime for first 5 years on some specified items.

The present Notification seeks to exempt intra-State supplies of second hand goods received by a registered person, dealing in buying and selling of second hand goods and who pays the goods and services tax compensation cess on the value of outward supply of such second hand goods, as determined under sub-rule (5) of rule 32 of the Central Goods and Services Tax Rules, 2017, from any supplier, who is not registered, from the whole of the goods and services tax compensation cess leviable thereon under section 8 of the Goods and Services Tax (Compensation to States) Act, read with sub-section (4) of Section 9 of the Central Goods and Services Tax Act.

Read the full text of the Notification below.

Delhi HC deletes Addition made on the basis of a Handwritten Loose Paper [Read Order]

A division bench of the Delhi High Court in CIT v. Praveen Juneja, has deleted addition made by the Income Tax department on ground that the same was made solely on the basis of a hand written loose paper without any supporting evidence.

An addition cannot be made on the basis of a handwritten loose paper which does not indicate if it pertains to the assessee and if AO has not brought on record any forensic evidence to prove the handwriting of the assessee. An addition cannot be made on the basis of suspicion and guesswork and without bringing corroborative material on record

The department made addition against the assesse on the basis of a piece of paper found during the course of search wherein certain figures were written.

On appeal, the ITAT quashed the order finding that the document was “silent as to the payer and payee of the amount in question nor does it disclose that the payment was made by cheque or cash nor it is proved that the document is in the handwriting of assessee or at least bears his signatures.

Aligning with the findings of the Appellate Tribunal, a bench of Justices S. Muralidhar and Prathibha M Singh deleted the assessment order and held that “the addition of Rs.80,50,000 merely on the basis of a single document without making any further enquiry was not justified. No attempt was made by the AO to find out if in fact it constituted estimates relating the construction of project of Omaxe Ltd.”

Read the full text of the Order below.

CBEC to Go Liberal in Enforcing Penal provisions for Initial Six Months of GST Implementation, says CBEC Chairman

“We look forward to assisting and facilitating industry in the adoption of GST in all possible ways. CBEC will help industry in the transition to GST and our enforcement machinery will be liberal in enforcement of the panel provisions for the initial three to six months of GST implementation”, said Ms Vanaja N Sarna, Chairperson, Central Board of Excise & Customs. Ms Sarna was delivering the keynote address at the CII Interactive Session on GST with the Ministry of Finance in Delhi.

The CBEC Chairperson further stated that CBEC has left no stone unturned to train all its officers, both in the Centre and at the States, before the introduction of GST. “We have undertaken a large number of awareness campaigns, which have been widely attended and well received by the tax payers. The CBEC has issued FAQs and formulated sectoral groups, some of which have already come out with their reports. We expect all our officers not only to be well conversant in the GST law and rules, but also be ready to handhold industry in the registration and report filing procedures,” she added.

Mr Navin Kumar, Chairman, Goods & Services Tax Network (GSTN) stated that out of the 80 lakh existing taxpayers, more than 70 lakh have already signed up for migration under the GST regime. He suggested that industry should make a real time entry of invoices and upload the same on the GSTN utility regularly. Mr Kumar further addressed the myths surrounding GST and clarified that GSTR 1, 2 and 3 are parts of the same return and not separate forms per se. Also, Mr Kumar emphasized that there will not be a regular internet connectivity needed for GST and uploading data is a matter of minutes. The process will be simple, easy to understand and assessee friendly, he stated.

Mr Harishanker Subramaniam, Chairman, CII Core Group on GST congratulated the Government on the successful implementation of GST. “While such a mammoth task is bound to have its share of glitches and concerns, the key to all such issues is the receptiveness of the Government. The Government has been actively encouraging and facilitation people towards the adoption of the biggest tax reform since independence, with an assurance to have a softer approach towards tax payers during the first few months of implementation”, said Mr Subramaniam.

Company can avail IT Deduction In Respect of Income from Generation of Electricity Which Was Captively Consumed: Rajasthan HC [Read Judgment]

In CIT, Ajmer v. M/s. RSWM Limited, a division bench of the Rajastan High Court held that the Assessee can avail the Benefit of s. 80-IA of Income Tax Act in respect of income from generation of electricity which was captively consumed by it.

In the instant case, the department challenged the order of the ITAT wherein it was held that income from generation of power, may that be in the nature of captive generation, make the assessee entitled for deduction under Section 80-IA of the Income Tax Act, 1961 in respect of notional income from generation of electricity which was captively consumed by the assessee itself in another unit of the same company.

The bench comprising Justices Govind Mathur and Vinit Kumar Mathur noted the decision of the Delhi High Court in the case of Commissioner of Income Tax Vs. DCM Shriram Consolidated Ltd, wherein it arrived at the conclusion that generation of electricity by setting up a fully independent and identifiable industrial undertaking and use of that captive power for its own other unit is also required to be dealt with as per provisions of Section 80-IA and is entitled for the deduction in the same terms. The order was later, confirmed by the Apex Court.

Dismissing the departmental appeal, the bench observed that “On perusal of the facts and all legal aspects of the matter, we are satisfied that the issue involved in this appeal is also required to be decided in terms of the judgment referred above. In view of it, this appeals preferred by the Revenue are dismissed with conclusion that Tribunal rightly declared the assessee entitled to claim deduction as prescribed under Section 80-IA of the Income Tax Act, 1961 and even for the purpose of computing the books of account as per Section 115-JA of the Income Tax Act, 1961. The question is therefore answered in favour of assesse and against the Revenue.”

Read the Full Text of the Judgment Below

CBEC to be renamed as CBIC in the Current Parliament Session

With the rollout of the Goods and Services Tax (GST), the apex policy making of indirect taxes, i.e, Central Board of Excise and Customs (CBEC) will be reorganized as Central Board of Indirect Taxes and Customs (CBIC).

Earlier there were reports that the government had announced the renaming of the tax authority for indirect taxes towards the end of March itself, but the process has still not been completed since it needs a legislative change.

The Board has already started functioning with the new reorganised structure ahead of the Goods and Services Tax (GST) roll-out. Reportedly, it will get the new name in the current Parliament session.

“CBEC is renamed, and CBIC is going to be the name. But it needs to be done as a legislative change, because it was part of the Central Board of Revenues Act, 1963. So it’s still in the process. It will happen in this Parliament Session,” CBEC Chairperson Vanaja Sarna told IANS in an interview.

The Parliament’s Monsoon Session commenced on July 17 and will come to an end on August 11.

“That change has taken place because it does not need legislative change. Only this one needs legislative change, so it will go to the Parliament. It has to be done formally,” she said.

CBEC underwent re-organisation of the field formations of CBEC for the GST implementation. It now has 21 zones, 101 GST taxpayer services commissionerates comprising 15 sub-commissionerates, 768 divisions, 3,969 ranges, 49 audit commissionerates and 50 appeals commissionerates.

“In CBEC, we have made the organisational changes. So we are already well into the restructured organisation. But we kept the same 3-tier structure, which is commissionerate, division and range,” she said.

Sarna said that CBEC officials have adapted well to the new GST regime and are in a comfort zone.

ICSI Modifies Syllabus to Incorporate GST laws: Changes Applicable to December 2017 Examinations [Read Notification]

The Institute of Company Secretaries of India (ICSI) recently modified its syllabus for December 2017 Exams incorporating a paper on Goods and Services Tax (GST) laws.

GST, a new tax reform was implemented on 1st July 2017 in the Country replacing all the indirect tax laws except the Customs Act.

This historical rollout of GST has infused optimism in the job market. With this path-breaking change in the law, the companies across sectors are rushing to get their GST teams in place, leading to a jump in demand for tax and technology professionals.

Company Secretaries, who are playing a pivotal role in corporate management as well as in practice has a very significant part under the new indirect tax law too.

In order to make maximum use of this opportunity for its students, the ICSI has announced a change in its syllabus.

In a notification issued by the Institute on Tuesday said that the selected topics of Part B of the syllabus for “Advance Tax Laws and Practice” (Module 3 Paper 7) of Professional Programme has been replaced with Goods and Services Tax (GST) for December, 2017 examinations.

It also released the detailed syllabus of Part B of Advance Tax Law and Practice Paper (Module – 3 Paper– 7) for Professional Programme for December, 2017 exam.

Read the Full Text of the Notification Below

Income from Letting of Building along with Furniture & Machineries is Assessable as “Other Income” under the IT Act; Delhi HC [Read Judgment]

A division bench of the Delhi High Court in Jay Metal Industries Pvt. Ltd v. CIT held that the income received by the assesse from letting of the building along with the furniture and machineries constitute “composite rent” which is taxable under the head “income from other sources” not under “income from house property” for the purpose of Income Tax Act.

Appellant-assessee, in the instant case, let out their building along with all its furniture and machineries. AO held that the same is taxable under the head “income from other sources” against the claim of the Assessee that it is taxable as “income from house property.”

On appeal, the first appellate authority allowed the claim of the assesse. However, the ITAT reversed the order by stating that the rental income should be treated as ‘income from other sources’

After perusing the rental agreement, the bench found that letting is not merely of the building but a composite letting of both, the building as well as the equipment, furniture etc. and therefore, Section 56 (2) (iii) of the Act was attracted.

Applying the test laid down in Sultan Bros. (supra) the income from the letting in the hands of the Assessee was “a new kind of income” which could be considered to be income from house property since the income not from the ownership of the building alone “but an income which though arising from a building would not have arisen if the plant, machinery and furniture had not also been let along with it,” the bench said.

Read the Full Text of the Judgment Below

CBDT Notifies Revised Form 3CEFA for Opting Safe Harbour Rules [Read Notification]

The Central Board of Direct Taxes (CBDT) yesterday notified the revised form 3CEFA for opting Safe Harbour Rules under the Income Tax Act, 1961.

As per the 2013 rules, Safe harbor, i.e. minimum revenue/margin has been prescribed for certain sectors/transactions, implying that if an eligible taxpayer is earning not less than specified revenue/margins in respect of its transactions with its related parties (being non-residents), no further income shall be imputed to it by virtue of application of transfer pricing regulations. Transactions such as software development services, IT-enabled services, KPOs, Loan to 100% overseas subsidiaries, Corporate Guarantee for wholly-owned subsidiary etc were recognized as eligible international transactions under the rules.

A taxpayer, who wants to avail the benefit of the rules, is required to make an application giving necessary details of transactions to the appropriate authority before due date for filing return of income for the relevant year.

Recently, the Government CBDT had notified the Safe Harbour Rules incorporating some necessary amendments in the rules issued by the Board in the ear 2013.

Read the Full Text of the Notification Below

Cabinet approves MOC in respect of Tax Matters between India and BRICS Countries

The Union Cabinet chaired by the Prime Minister Narendra Modi has given the approval for the signing of Memorandum of Cooperation (MOC) in respect of tax matters between India and the Revenue administrations of BRICS countries namely, Brazil, Russian Federation, China and South Africa.

Objective:

The MoC aims to further promote cooperation amongst the BRICS Revenue administrations in international forum on common areas of interest in tax matters and in the area of capacity building and knowledge sharing. It envisages regular interaction amongst the heads of Revenue administration of BRICS countries to continue discussion on common areas of interest and strive towards convergence of views and meeting of the Experts on tax matters to discuss the contemporary issues in areas of international tax. In addition, the MoC accords confidentiality and protection to information exchanged under this MoC.

Impact:

The MoC will stimulate effective cooperation in tax matters. The collective stand of BRICS countries can prove to be beneficial not only to these countries but also to other developing countries in the long run in tax matters being steered by the G20.

Background:

The Heads of Revenue of the BRICS countries have been meeting regularly to discuss the potential areas of cooperation in tax matters and to exchange opinions and views based on the existing commitment to openness, solidarity, equality, mutual understanding, inclusiveness and mutually beneficial cooperation, as stated in the Goa Declaration issued on October 16, 2016. The BRICS countries have identified four areas of mutual interest on which understanding and cooperation can be further strengthened. The heads of Revenue of BRICS countries in their meeting held on the sidelines of FTA plenary at Beijing, China in May, 2016 decided to sign a MoC outlining these areas of cooperation.

Cabinet approves Integrated Goods and Services Tax (Amendment) Bill, 2017

The Union Cabinet chaired by Prime Minister Narendra Modi has given its ex-post facto approval for the promulgation of the Integrated Goods and Services Tax (Extension to Jammu & Kashmir) Ordinance, 2017 and replacement of the Ordinance by the IGST (Amendment) Bill, 2017.

The Ordinance has extended the provisions of the IGST Act, 2017 referred to as (IGST Act) to the State of Jammu & Kashmir.

The Ordinance has been promulgated on 8th July, 2017 and the Integrated Goods and Services Tax (Amendment) Bill, 2017 will be tabled in the current session of the Parliament.