Exposure Draft of General Purpose Financial Reporting XBRL Taxonomy Based on Revised Schedule VI for Commercial and Industrial Companies

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The Ministry of Corporate Affairs (MCA) has laid down a new format of Schedule VI to the Companies Act, 1956 applicable for the Financial Statements prepared for the accounting year commencing on or after 1st of April, 2011.

With the new reporting format, the taxonomy also needed to undergo a change. Accordingly, the new taxonomy, based on the Revised Schedule VI requirements, for the Commercial & Industrial (C&I) companies has been developed by ICAI. The new taxonomy is a general purpose taxonomy capable of being used for filing annual financial statements for any Commercial & Industrial companies. It covers the financial statements, viz. Balance Sheet, Statement of Profit and Loss and Cash Flow Statement and the related notes and the non-financial information. The draft taxonomy has been developed conforming to the requirements of the Revised Schedule VI, existing notified Indian Accounting Standards and Guidance Notes on Accounting issued by ICAI while adapting the architectural features of the IFRS general purpose taxonomy 2011. MCA specific requirements have also been added to the taxonomy so as to meet their reporting requirements.

Comments are invited on the draft general purpose financial reporting XBRL taxonomy based on Revised Schedule VI for commercial and industrial companies

S.32 Business information, contracts, records are “intangible assets” & eligible for depreciation

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HIGH COURT OF DELHI

Date of decision : 30th March, 2012

ITA No.315/2010

Areva T & D India Ltd. V/s. DCIT

ITA No.1151/2010

CIT Vs. Jai Parabolic Spring Ltd.

AND

ITA No.1152/2010

CIT Vs. Jai Parabolic Spring Ltd

The assessee has not claimed depreciation on goodwill it acquired commercial rights to sell products under the trade name and paid consideration in dispute for acquiring marketing and territorial rights to sell through dealers and distributors i.e. the network created by the seller for sale in India. Under the agreement. It become entitled to use of infrastructure developed by the seller. Rights were acquired since 1.4.1998 and these rights have all along been treated as an asset entitled to depreciation and depreciation was actually allowed in the past. The learned Assessing Officer, in our view was not correct in making a departure from the past and in holding that payment was made for acquisition of “goodwill”. Payment had been made for acquisition of commercial rights on which depreciation is permissible. The Assessing Officer was further not justified in treating entries in the books of account as conclusive and in taking payment in dispute as consideration for acquisition of goodwill. It is now more of less settled that entries in books cannot be treated as conclusive and true nature of transaction has to be determined with reference to law. The learned CIT(A) in the impugned order examined the issue with reference to agreement and found that payment was made for acquisition of commercial rights. On facts and circumstances of the case, we do not find any error in the approach of the learned CIT(A). His action is hereby confirmed.”

In view of the foregoing discussion, it is seen that the assessee in the present appeals had not claimed depreciation on „goodwill‟ but on the commercial rights acquired to sell products under the trade name and through the network created by the seller for sale in India. It is further observed that the AO was not correct in holding that payment was made for acquisition of „goodwill‟. Payment had, in fact, been made for acquisition of commercial rights on which depreciation is permissible. In the circumstances, these appeals are dismissed in favour of the assessee and against the Revenue.

CA CS CWA to pay Service Tax on Accrual Basis if Turnover exceeded Rs. 50 Lakh

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From 01.04.2012 CA, CS, CWA, Advocate, Interior Decorators, Architect, Scientific or Technical Consultants, Consulting engineers to pay Service Tax on Bill Basis if Turnover exceeded 50 Lakh in Previous Financial Year

With the Amendment in  Point of Taxation Rules, 2011 vide Notification No.  4/2012 – Service Tax dated 17.03.2012 individuals and firms providing eight specified services  who were eligible to pay service tax on receipt basis will now have to on the basis of Date of Bill or Date of Payment whichever is earlier.   However there is an exception to this rule which has been extended to not only these eight service but also to all service liable for service tax vide  Notification No.3/2012 – ST, dated 17-3-2012 which is as follows:-
 
In case of individual / partnership firms (including LLPs) whose aggregate  value from one or more premises is 50 lakhs or less in previous financial year , the service provider may pay tax on receipt basis upto 50 lakhs  taxable value.  Beyond 50 lakhs, service tax will have to be paid on the mercantile basis on the basis of issue of invoice.

Small scale exemption has also been amended recognizing that the first clearances up to Rs 10 lakhs will be in terms of invoices and not mere payments received.

For computing the above limits, the turnover of the whole entity is required to be summed up and not any single registration.

Eight Specified Services Which were Eligible to Pay Service Tax on Receipt Basis till 31.03.2012 are as follows:-

·         Architect

·         Interior Decorator

·         Cost Accountant

.         Chartered Accountant

·         Company Secretary

·         Scientific or Technical Consultancy

·         Legal Service

Above seven were exempted from accrual basis vide Notification No. 25/2011–Service Tax, Dated : March 31, 2011

.        Consulting engineer services (Included Vide Notification No. 41/2011 – Service Tax, Date-    27th June, 2011)

Cheque Valid only for 3 months from Today

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Banks from today will stop honouring cheques and drafts if they are not presented within three months of the date of issue as against six months earlier. The decision to reduce the validity of cheques, bank drafts and other instruments to three months announced by the Reserve Bank of India (RBI) earlier will come into effect from today. With a view to mitigating frauds related with such instruments, the RBI in a directive had said with effect from April 1, 2012, banks should not make payments against cheques, drafts, pay orders or banker’s cheques if they are presented after the period of three months from date of issue

Individual HUF having income more then 10 lakh to File Return Online

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Central Government has vide Income tax notification 14 dated 28.03.2012 has Amended Rule 12 of income tax Rules has specified that an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds ten lakh rupees, shall furnish the return for the assessment year 2012-13 and subsequent assessment years in any of the following two modes :-

(i) furnishing the return electronically under digital signature;

(i) transmitting the data in the return electronically and thereafter submitting the verification of the return in Form ITR-V;

In addition to this for Assessment year 2012-13 Individual and HUF having assets (including financial interest in any entity) located outside India; or having signing authority in any account located outside India are also required to file there Income tax Return Online.

No More Incentive of 80% Depreciation on Wind Mills Installed after 31-3-2012

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INCOME-TAX (FOURTH AMENDMENT) RULES, 2012 – AMENDMENT IN THE TABLE OF THE NEW APPENDIX I

NOTIFICATION NO. 15/2012 [F.NO.149/21/2010-SO (TPL)]/S.O.694(E), DATED 30-3-2012

In exercise of the powers conferred by section 295 of the Income-tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income-tax Rules, 1962, namely:-

1. (1) These rules may be called the Income-tax (4th Amendment) Rules, 2012.

(2) They shall come into force on the 1st day of April, 2012.

2. In the Income-tax Rules, 1962, in the Table, in the New Appendix I, in Part-A relating to Tangible Assets, under the heading “III. Machinery and Plant”, in item (8), in sub-item (xiii), -

(a) In clause (l), after the words, “which run on wind mills”, the words, figures and letters, “installed on or before 31st day of March, 2012″, shall be inserted ; and

(b) In clause (m), after the words, “running on wind energy”, the words figures and letters, “installed on or before 31st day of March, 2012″, shall be inserted.

ITAT restricts disallowance u/s 14A for earning exempt dividend to 1% of dividend

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INCOME TAX APPELLATE TRIBUNAL, KOLKATA

ITA Nos. 2270 & 2271 (Kol) of 2010 -Assessment Years 2006-07 & 2007-08

DCIT Vs The Ashoka Trading Co. Pvt. Ltd.

Date of Pronouncement: 23 /03/2012

On the issue of disallowance u/s. 14A, this Bench of the Tribunal has been taking a consistent view that this disallowance should be restricted to 1% of dividend income. Following the same, in this appeal also we hold that the disallowance u/s 14A for earning exempt dividend income should be restricted to 1% of dividend income. The Assessing Officer is accordingly directed to do so and work out the quantum of disallowance. This ground of appeal of the assessee is allowed as directed above.