Allowability of Interest U/s. 244A on MAT credit

PrintPDF ACIT Vs Bank Of India (ITAT Mumbai) As per the provisions of section 115JAA(2), the amount of tax credit of MAT to be carried forward is determined and it is not provided therein that first the taxes paid are to be adjusted and then credit of MAT is to be given. In the case of Chemplast Sanmar, cited supra, the Chennai Bench of the Tribunal has held while deciding he issue u/s.234B and 234C that the tax credit u/s.115JA(2) is advance tax retained by the Department for being set off against the tax liability of future years. We are in agreement with the ld. CIT that the assessee is entitled for interest u/s.244A on the refund given to it. We are also of the view that it was a mistake which could be rectified u/s. 154. So from this is is clear that MAT credit has to be given right at the beginning and if ultimately the calculation leads to a refund, then such interest has to be paid u/s.244A.

Depreciation can be allowed even if the machinery is not put to use

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ITO V/s. Tropicana Beverages Company(ITAT Delhi)- when it is established that the machinery on which depreciation has been claimed by the assessee, had been provided by the assessee to Dynamix for the purpose of manufacturing the product of the assessee, necessarily the machinery was used for the purpose of the business of the assessee. That being so, “used for the purposes of the business” in section 32 of the Act is applicable to the assessee.

The words “used for the purposes of the business” in section 10(2)(iv) of the Indian Income Tax Act, 1922, which expression is the same as that employed in section 32 of the I.T. Act, 1961, under which the assessee has made the claim of depreciation in the present case, meant that the machinery and plant is used for the purpose of enabling the owner to carry on the business and earn profits in the business; and that therefore, the assessee was entitled for claiming depreciation.

Repayment of capital to the partners in the form of uncrossed cheque would not be liable to penalty u/s 269T

PrintPDF ITO Vs M/s Universal Associates (ITAT Ahemedabad) - Considering the facts of the case in the light of the above decisions, we are of the view that the at least the assessee has been able to explain reasonable cause for failure to comply with the provisions of law. The ex-partners have introduced their capital in the assessee firm and on retirement they were given their amount back through bearer cheques and, therefore, the assessee is able to prove that it had reasonable cause for failure to comply with the provisions of law.The finding of fact given by the learned CIT(A) show that the assessee made payments bona fide and the default was highly technical in nature, therefore, the learned CIT(A) was justified in canceling the penalty. Consequently, penalty imposed by the AO merely on technical mistake if any committed by the assessee which has not resulted in any loss of revenue, the levy of penalty was harsh and could not have been sustained in law.

MCA – Revised Form 23AC and Form 23ACA applicable from 12th August 2011

PrintPDF Revised Form 23AC and Form 23ACA will be available on the MCA Portal, effective 12th August, 2011. All Stakeholders are requested to use new version w.e.f. 12th August, 2011 (6.00 AM) as the current version of these forms will be discontinued on MCA Portal.

Government considering proposal to extend EPF to all companies with over 10 employees

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The government is considering a proposal to extend Employees Provident Fund Scheme to all companies with over 10 employees, the Parliament was informed today. “The proposal is under examination and consideration of the government,” Labour and Employment Minister Mallikarjun Kharge said in a written reply.

At present the EPF Act has provisions that any factories or establishments having 20 or more employees have to contribute to the EPF.

To a different question about existing pension scheme and whether it has become non-sustainable, the minister said they are considering a report of an expert committee constituted by the Ministry to review the scheme.

Depreciation on the capital assets was allowable even when capital expenditure on the acquisition of the corresponding assets had already been allowed

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CIT v Market Committee, Tohona (Punjab and Haryana HC) – Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in allowing depreciation on the capital assets even when capital expenditure on acquisition of thecorresponding assets had already been allowed as ‘application of income’ for the purpose of allowing exemption under section 11 of the income-tax Act and as such further allowing of depreciation of these capital assets will amount to double deduction for the same expenditure?

Whether allowing of depreciation on the capital assets by Hon’ble ITAT is justified in the light of the Hon’ble Apex Court decision in Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure?

CIT v Market Committee, Tohona

High Court of Punjab and Haryana

I.T.A. No. 186 of 2011

Decided on: 12 July 2011

Judgment

This appeal has been preferred by the revenue under section 260A of the Income Tax Act, 1961 (for short, “the Act”) against the order of Income Tax Appellate Tribunal, Delhi Bench “E”, New Delhi dated 25.6.2010 in I.T.A. No.1335/DEL/2010 for the assessment year 2007-08 proposing following questions of law:-

1. “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT is justified in allowing depreciation on the capital assets even when capital expenditure on acquisition of thecorresponding assets had already been allowed as ‘application of income’ for the purpose of allowing exemption under section 11 of the income-tax Act and as such further allowing of depreciation of these capital assets will amount to double deduction for the same expenditure?

2. Whether allowing of depreciation on the capital assets by Hon’ble ITAT is justified in the light of the Hon’ble Apex Court decision in Escorts India Ltd. (199 ITR 43), wherein it has been held that in the absence of clear statutory indication to the contrary, the statute should not be read as to permit an assessee two deductions on the same expenditure?”

2. Learned counsel for the appellant fairly states that the matter is covered against the revenue byjudgment of this Court dated 5.7.2010 in I.T.A. No.535 of 2009 in CIT v. Market Committee, Pipli.

3. Accordingly, this appeal is dismissed.

MCA introduces Company Law Settlement Scheme, 2011 for default in filing of Annual Return, balance Sheet, P/L a/c, Compliance Certificate

PrintPDF General Circular No.59 /2011, Dated the 05th Aug, 2011
Subject: Company Law Settlement Scheme, 2011
It has been observed that a large number of companies are not filing their due statutory documents (i.e. Balance Sheets and Annual Returns) timely with the Registrar of Companies. Due to this, the records available in the electronic registry are not updated and thereby are not available to the stakeholders for inspection. Further, due to not filing the documents on time, companies are burdened with additional fee, facing the prosecutions and being debarred from filing other documents electronically as provided in Circular No. 33/2011 dated 01.06.2011 also.
2. In order to give an opportunity to the defaulting companies to enable them to make their default good by filing such belated documents and to become a regular compliant in future, the Ministry, in exercise of the powers under Section 611(2) and 637B (b) of the Companies Act, 1956 has decided to introduce a Scheme namely, “Company Law Settlement Scheme, 2011,” condoning the delay in filing documents with the Registrar, granting immunity from prosecution and charging additional fee of 25 percent of actual additional fee payable for filing belated documents under the Companies Act, 1956 and the rules made there under. The details of the Scheme are as under:-
(i) The scheme shall come into force on the 12th Aug, 2011 and shall remain in force up to 31st Oct, 2011.
(ii) Definitions – In this Scheme, unless the context otherwise requires, -
(a) “Act” means the Companies Act, 1956 (1 of 1956);
(b) “company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act;
(c) “defaulting company” means a company registered under the Companies Act, 1956 and a foreign company falling under section 591 of the Act, which has made a default in filing of documents on the due date(s) specified under the Companies Act, 1956 and rules made there under;
(d) “designated authority” means the Registrar of Companies having jurisdiction over the registered office of the company.
(iii) Applicability: – Any “defaulting company” is permitted to file belated documents, which were due for filing till 30.06.2011, in accordance with the provisions of this Scheme:
(iv) Manner of payment of fees and additional fee on filing belated document for seeking immunity under the Scheme – The defaulting company shall pay statutory filing fees as prescribed under the Companies Act and rules made there under along with an additional fee of 25 percent of the actual additional fee standardised under sub­section (2) of Section 611 of the Companies Act, 1956, payable on the date of filing of each belated document;
(v) Withdrawal of appeal against prosecution launched for the offences- If the defaulting company has filed any appeal against any notice issued or complaint filed before the competent court for violation of the provisions under the Act in respect of which application is made under this Scheme, the applicant shall before filing an application for issue of immunity certificate, withdraw the appeal and furnish the proof of such withdrawal along with the application;
(vi) Application for issue of immunity in respect of document(s) filed under the scheme - The application for seeking immunity in respect of belated documents filed under the Scheme may be made electronically in the Form annexed, after closure of Scheme and after the document(s) are taken on file, or on record or approved by the Registrar of Companies as the case may be, but not after the expiry of six months from the date of closure of the Scheme. There shall not be any fee payable on this Form;
(vii) Order by designated authority granting immunity from the penalty and prosecution - The designated authority shall consider the application and upon being satisfied shall grant the immunity certificate in respect of documents filed in the Scheme;
(viii) Scheme not to apply to certain documents –
(a) This Scheme shall not apply to the filing of documents other that following documents:-
Form 20 B - Form of filing annual return by a company having a share capital
Form 21 A – Particulars of annual return for the company not having share capital
Form 23AC & 23ACA – Form for filing Balance Sheet and Profit & Loss account
Form 66 - Form for submission of Compliance Certificate with the Registrar
(b) This Scheme shall not apply to companies against which action under sub-section (5) of section 560 of the Act has been initiated by the Registrar of Companies;
(ix) After granting the immunity, the Registrar concerned shall withdraw the prosecution(s) pending if any before the concerned Court(s);
3. At the conclusion of the Scheme, the Registrar shall take necessary action under the Companies Act, 1956 against the companies who have not availed this Scheme and are in default in filing of documents in a timely manner.