To revise claim made in Original Return filing of revised return is must

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IN THE ITAT CHENNAI BENCH ‘C’

Assistant Director of Income-tax (International Taxation)

v.

Litostroj

IT APPEAL NOs. 1241, 1429 & 2132 TO 2135 (mad.) of 2010

[ASSESSMENT YEARS 2004-05, 2006-07 & 2007-08]

MARCH 30, 2012

 

 Assessees had filed revised computation during the course of assessment proceedings, applying Section 44BBB for computing their respective income, whereas initially they had returned their income based on the audited books of accounts. Application of Section 44BBB of the Act for computing the income was first made through such revised computation. Hon’ble jurisdictional High Court in the case of CIT v. Shriram Investments (TCA 344 of 2005 dated 16.6.2012) relying on the decision of Hon’ble Apex Court in the case of Goetze (India) Ltd. v. CIT [2006] 284 ITR 323 has clearly held that for making a claim other than what was originally made in return of income, filing of a revised return is mandatory. Neither the A.O. nor the CIT(Appeals) have considered these fundamental aspects regarding status and validity of a claim made other than through revised return. Further, assessees had also not placed before A.O. various details regarding erection charges received and break-up of the work done by them to M/s TNEB for verifying whether their billings included any fee for technic service. We are, therefore, of the opinion that the matter requires a re-visit by the A.O. for considering the issues de novo. We, therefore, set aside the orders of authorities below and remit it back to the file of the A.O. for consideration afresh in accordance with law.

Service tax paid on maintenance of garden eligible for input service credit

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CESTAT, BANGALORE BENCH

BASF India Ltd.

v.

Commissioner of Central Excise, Mangalore

FINAL ORDER NO. 70 of 2012

APPEAL NO. ST/560 of 2008

FEBRUARY 3, 2012

 

Landscaping of factory or garden certainly would fall within the concept of modernization, renovation, repair, etc. of the office premises. At any rate, the credit rating of an industry is depended upon how the factory is maintained inside and outside the premises. The Environmental law expects the employer to keep the factory without contravening any of those laws. That apart, now the concept of corporate social responsibility is also relevant. It is to discharge a statutory obligation, when the employer spends money to maintain their factory premises in an eco-friendly, manner, certainly, the tax paid on such services would form part of the costs of the final products. In those circumstances, the Tribunal was right in holding that the service tax paid in all these cases would fall within the input services and the assessee is entitled to the benefit thereof.

Tribunal cannot consider validity of retrospective amendment

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HIGH COURT OF KERALA

M. Abdul Rehuman Kunju

v.

Assistant Commissioner of Income-tax, Circle-I, Kollam

I T Appeal Nos. 50 & 63 of 2012

August 3, 2012

 

The validity of a provision cannot be considered or adjudicated upon by the Tribunal constituted under the Act. Section 260A provides for an appeal from every order passed by the Appellate Tribunal. If it involves a substantial question of law, such question of law should arise from the order of the Tribunal. If the Tribunal cannot consider the validity of a retrospective amendment, no doubt such question does not arise from its order and the jurisdiction conferred on the High Court under section 260A cannot also enable the High Court to consider such validity or otherwise.

Interest on bad & doubtful debts kept in reserve account eligible for deduction u/s. 43D

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IN THE ITAT MUMBAI BENCH ‘L’

American Express Bank Ltd.

v.

Additional Commissioner of Income-tax

IT APPEAL NO. 5374 (MUM.) OF 2001

INT. T.A. NO. 97 (MUM.) OF 2001

[ASSESSMENT YEAR 1998-99]

AUGUST 10, 2012

 

Mere crediting of the interest to a reserve cannot be said to be an incidence by which the said interest could be charged to tax. Whatever has been recovered by the assessee has been shown as income. Therefore, the assessee is entitled to claim of such interest under the provisions of section 43D and the claim of the assessee cannot be rejected simply on the ground that interest had been credited on such type of debts in the reserve account. However, for the verification of the figures, the Assessing Officer is directed to see that what has actually received by the assessee during the year has been offered to tax. Thus, the matter is restored to the file of the Assessing Officer for such verification. This ground of the assessee is allowed for statistical purposes in the manner aforesaid.

The inclusion of aforesaid amount of interest in the taxable interest was challenged by the assessee on the basis of proviso to section 5 of the Interest-tax Act read with section 43D according to which interest on such non-performing assets was to be charged to interest tax only in the year in which the said interest is credited to the profit and loss account or in the year of receipt, which is earlier. It is already noted that section 43D is applicable to the case of the assessee and interest can only be charged to the extent it is actually received during the year.

It has already been mentioned that interest on non-performing assets as described in section 43D can be assessed only in a condition that either they are credited to profit and loss account or it is actually received. In the present case of the assessee since interest is not credited on such assets to the profit and loss account, therefore, whatever interest is actually received on such assets is taxable. The same principle will be applicable to interest tax also.

Due date to FILE XBRL Statement for FY 2011-12

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The Ministry of Corporate Affairs vide Notification Number GSR 748 (E) dated 05.10.2011 had mandated filing of financial statements of select class of companies with Registrar of Companies using extensible Business Reporting Language (XBRL).

Vide Ministry’s General Circular No. 16/2012 dated 06.07.2012, select class of companies having their financial year commencing on or after 01.04.2011 have been mandated to file their financial statements (based upon new Schedule VI) for Financial Year 2011 -12 using extensible Business Reporting Language (XBRL). The applicable Taxonomy, Business Rules and Validation Tool have been finalized and are available on the MCA XBRL website (http://www.mca.qov.in/XBRL/) The XBRL filings of financial statements (based upon new Schedule VI) for F.Y. 2011-12 on MCA website is enabled with effect from 14th October, 2012.
Kindly note that all eligible companies may file their financial statements (based upon new Schedule VI) in XBRL till 15th November, 2012 or within 30 days from date of its AGM, whichever is later, without any additional fees. For further details, visit MCA website www.mca.gov.in

Trust deed is to be treated as settlement deed & would be chargeable to stamp duty

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HIGH COURT OF MADRAS

P.N. George Wilson v. State

W.A. NO. 1197 OF 2012

M.P. NO. 1 OF 2012

JULY 17, 2012

 

It is to be noted that a settlement is an admixture of gift or partition or trust. In law, a family arrangement/settlement is accepted as a transfer of interest in the property in favour of an individual between whom the family arrangement or settlement is so made. Just because a deed/instrument answers the description of a ‘Trust Deed’, it does not cease to be a ‘settlement’ for the purpose of stamp duty, if it answers the description of ‘settlement’ also. As a matter of fact, a deed of trust/trust deed can also be a settlement deed.

In the present case, the Chief Controlling Authority, Inspector General of Registration, passed an order on 31-5-2008 among other things observing that as per the deed the property is transferred to the trust and held that the deed is settlement outside the family and hence stamp duty leviable as per section 58(a)(ii) and dismissed the revision upholding the orders of the District Registrar.

Looking at from any point of view, on an over all assessment of the facts and circumstances of the present case in a cumulative fashion, it is concluded and held that the trust deed dated 14-7-2003 in issue is chargeable to stamp duty as per article 58 (ii) of the 1899 Act treating it as a settlement deed as per section 2(24) of the 1899 Act.

Levy of Service Tax on Transportation of Goods by Rail from 1st October 2012

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In compliance of the provisions contained in Finance Bill 2010 and subsequent notifications issued by Ministry of Finance, the Service Tax in case of transportation of goods by rail, which was exempted upto 30th September 2012, would now be levied on total freight charges with effect from 1st October 2012.

Since an abatement of 70% has been permitted on freight for the taxable commodities by the Ministry of Finance, the Service Tax will be charged on 30% of the total chargeable freight inclusive of all charges (like busy season charges, development charge etc.,) would be calculated as follows:-

(i) Service Tax of 12% will be charged on 30% of freight (equivalent to 3.6% on the total freight charges)

(ii) Education Cess of 2% on Service Tax will be added (equivalent to 0.072% on total freight) and

(iii) Higher Education Cess of 1% on Service Tax will also be added (equivalent to 0.036% on total freight)

(iv) Total Service Tax implication will be (i)+(ii)+(iii)=3.708% on the total freight charges.

Certain commodities have been exempted from payment of service tax as per Ministry of Finance notification. The list of such commodities and further details on the modalities of levy and collection of Service Tax on transportation of goods by rail, may be ascertained from Indian Railways’ web site i.e. www.indianrailways.gov.in

The amount of Service Tax collected by Railways would be deposited with the Ministry of Finance as per prescribed procedure.