Date for Calculation of Interest U/s 234- Date of Cheque presentation or Clearing?

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MADRAS HIGH COURT

Commissioner of Income Tax Chennai.
Vs.
REPCO Home Finance Ltd.

T.C.(A).No.601 of 2014
DATED: 11.11.2014

Issue- Whether interest under Section 234C of the Act is to be calculated based on date of clearing of the cheque or date of presentation of the cheque.

Held- It is not the case of the department that the cheque issued by the assessee was dishonourned. Once the cheque issued by the assessee is encashed, in the light of the decisions referred supra, the payment relates back to the date of receipt of the cheque.

No processing of returns for I-T refund if selected for Scrutiny

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Government of India

Ministry of Finance

Department of Revenue

Central Board of Direct Taxes

North Block, New Delhi,

 Instruction No.1/2015

Dated -13th January, 2015

Subject: – Clarification regarding applicability of section 143(1D) of the Income-tax Act, 1961 -reg.

Sub-section (ID) of section 143 of the Income-tax Act, 1961 (‘Act’) provides that where a notice has been issued to a taxpayer under sub-section (2) of section 143 of the Act, it shall not be necessary to process the return in such a case.

 2.      Some doubts have been expressed, in view of the words “shall not be necessary”  used in the said sub-section, as to whether this provision permits processing of returns having a  refund claim, where notice under section 143(2) of the Act has been issued.

 3.        The matter has been examined by the Board.  Sub-section (1D) of section 143 of the Act was introduced by the Finance Act, 2012 with effect from 01.07.2012. The purpose of introduction of this sub-section has been stated in the Explantory Note to the Finance Act as under: “Under the existing provisions, every return of income is to be processed under sub-section (1) of section 143 and refund, if any, due is to be issued to the taxpayer. Some returns of income are also  selected for scrutiny which may lead to raising a demand for taxes although refunds may have been    issued earlier at the time of processing. It is therefore proposed to amend the provisions of the Income-tax Act to provide that processing of return will not be necessary in a case where notice under sub-section (2) of section 143 has been issued for scrutiny of the return.” Thus, in cases where an unprocessed return is selected for scrutiny, the legislative intent is to prevent the issue of refund after processing as scrutiny proceedings may result in demand for taxes on finalisation of the assessment subsequently.

4. Considering the unambiguous language of the relevant provision and the intention of law as discussed above, the Central Board of Direct Taxes, in exercise of the powers conferred on it under section 119 of the Act hereby clarifies that the processing of a return cannot be undertaken after notice has been issued under sub-section (2 ) of section 143 of the Act. It shall however, be desirable that scrutiny assessments in such cases are completed expeditiously.

5.     This may be brought to the notice of all concerned for strict Compliance.

6.     Hindi version to follow.

REVISED PATH OF IMPLEMENTATION FOR IFRS CONVERGENCE

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MINISTRY OF CORPORATE AFFAIRS

PRESS RELEASE

In pursuance of the Budget statement the Ministry of Corporate Affairs, after wide consultations with various stakeholders and regulators, has drawn up a revised Road Map for companies other than Banking Companies, Insurance Companies and Non- Banking Finance Companies ( NBFC’s) for implementation of Indian Accounting Standards (Ind AS) converged with the International Financial Reporting Standards (IFRS).

The Ind AS shall be applicable to the companies as follows:

(i)               On voluntary basis for financial statements for accounting periods beginning on or after April 1, 2015, with the comparatives for the periods ending 31^st March, 2015 or thereafter;

(ii)              On mandatory basis for the accounting periods beginning on or after April 1, 2016, with comparatives for the periods ending 31st March, 2016, or thereafter, for the companies

                    specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of 

 listing on any stock exchange in India or outside India and having net worth of Rs.

                          500 Crore or more.

(b)   Companies other than those covered in (ii) (a) above, having net worth of Rs. 500     

Crore or more.

(c)    Holding, subsidiary, joint venture or associate companies of companies covered 

under (ii) (a) and (ii) (b) above.

(iii)            On mandatory basis for the accounting periods beginning on or after April 1, 2017, with comparatives for the periods ending 31st March, 2017, or thereafter, for the companies specified below:

(a)    Companies whose equity and/or debt securities are listed or are in the process of being

listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred Crore.

(b)   Companies other than those covered in paragraph (ii) and paragraph (iii)(a) above that 

is unlisted companies having net worth of two hundred and fifty crore or more but less than rupees five hundred Crore.

(c)     Holding, subsidiary, joint venture or associate companies of companies covered under paragraph (iii) (a) and (iii) (b) above.

However, Companies whose securities are listed or in the process of listing on SME exchanges shall not be required to apply Ind AS. Such companies shall continue to comply with the existing  Accounting Standards unless they choose otherwise.

 

(iv)              Once a company opts to follow the Indian Accounting Standards (Ind AS), it shall be required   to follow the Ind AS for all the subsequent financial statements.

(v)                Companies not covered by the above roadmap shall continue to apply existing Accounting Standards prescribed in Annexure to the Companies (Accounting Standards) Rules, 2006.

A notification on the above lines shall be issued shortly.

Dividend on shares held as stock is taxable as income from other sources

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HIGH COURT OF JUDICATURE AT ALLAHABAD

Income Tax Appeal No. 3 of 2003

Sangam Investments Limited

Versus

The Commissioner of Income Tax, Allahabad.

Dated: 03.09. 2014

Hon.Tarun Agarwala, J.
Hon. Dr. Satish Chandra, J.

it is immaterial whether the shares are held by the appellant as stock-in-trade. The dividend income derived from these shares is specifically chargeable under the head “Income from other sources”. Consequently, it is immaterial whether the appellant is a dealer or a trader and caries on business of purchase and sale of shares. We find that the Tribunal after relying upon the decisions of the Bombay High Court in Commissioner of Income-Tax, Bombay City-II Vs. D.G.Goenka, 1981 ITR (129), 260 and of the Gujarat High Court in additional Commissioner of Income-Tax Vs. Laxmi Agents P.Ltd.,1980 ITR (125), 227 had rightly come to the conclusion that the dividend income arrived at by the appellant was chargeable under the head “Income from other sources”. 

Provision of No Bail for offences Under Companies Act, 2013 Removed

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Relevant Extract from Unedited Speech of Minister of Corporate Affar Shri Arun Jaitley given in Lok Sabha on 17.12.2014 I would request any hon. Member, if he has a copy, to pick up section 212(6) of this Act. I am referring to an extraneous fact when in 2004 the UPA came to power, there was a law which the NDA had enacted called the Prevention of Terrorism Act (POTA). The UPA’s main criticism of POTA was that some of the provisions are very repressive and so they repealed POTA. When they repealed the anti-terrorism law, they incorporated most of the provisions under the Unlawful Activities Prevention Act. But one provision the UPA said that they would not agree to put in the Unlawful Activities Prevention Act was regarding a harsh bail provision. The POTA said that any person arrested for terrorism will not get bail till either the Public Prosecutor consents to the bail or the court gives a finding that the person is innocent on the face of it. Now finding of innocence is not possible till the trial is held. So, the UPA’s own case was that this is not a provision we can agree with and, therefore, they removed that provision from the anti-terrorism law. Having removed it from there, they brought in the POTA bail provision under Section 212 (6) of the Companies Act, which says: “Notwithstanding anything contained in the Code of Criminal Procedure… .the following offences which attract the punishment for fraud as provided in….to a person accused of those offences…no person shall be released on bail unless the prosecutor has been given notice where the prosecutor opposes it, the court is satisfied that reasonable grounds for believing that the person is not guilty of the offences.” Verbatim, full stop for full stop, comma for comma, they incorporated the POTA provision into the bail provision of this Act. Now this language exists in the narcotics law. When we invite the rest of the world to come to India, form a company, do business and invest in India, are we trying to say that in case you commit any of these offences you will never get bail or you will indefinitely never get bail? Therefore, most companies said that it is safer for them to switch over to a limited liability partnership than continue to do business. Now, if you look at the other provisions of the Act, all offences under grievous laws relating to terrorism, narcotics, sedition, prevention of corruption etc., they say that ordinary courts will not try these cases and there will be special courts. So, all offences against a company will go to a Special Court. The ordinary Magistrate’s jurisdiction is taken away. Are we trying to induce investors to come and invest in India or are we trying to scare them away from the country? We have, therefore, brought in an amendment that extremely harsh offences will be before a Special Court and the rest will be before the normal courts of the land. If a man wants to wind up a company, there has to be a provision in law. The case relating to winding up these days normally goes to a single judge of the High Court as one judge in every High Court is a company law judge. If somebody says that there is a commercial insolvency or any other reasoning or the company itself wants to be wound up, it goes to a single judge, there is a procedure to be followed and it gets wound up. This Bill says that simple company matters and other matters go to a single judge, appeals go to a Division Bench and some extraordinary matters also go to a Division Bench. A company to be wound up has to go to a full Bench of three judges. What is the rationale? That is why I said either some of the provisions are oppressive or some of the provisions like having one judge or two judges or three judges could have even come by an oversight. Now, let me give you another oversight provision. There are offences companies commit. If there is a company which does not follow the procedure and starts collecting deposits, it is a punishable offence. In the Act, we forgot to make it an offence. So it is the case of an oversight. If I run through each of these 14, the first two, requirement of capital and seal, the international standard practice now in corporate laws across the world is that you have done away with these requirements. So, here it has been brought at parity with international laws. The next provision, section 76 says, we forgot to provide for an offence where somebody collects deposits in violation of law. We did not make it an offence under the Companies Act; so it has been made an offence. 

Inclusion of Cost of insurance in Assessable Value for Excise Duty

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Commissioner of Central Excise, Belapur Vs. Kapoor Glass (I) Pvt. Ltd. [2014 (12)

TMI 491 – CESTAT MUMBAI]

Kapoor Glass (I) Pvt. Ltd. (the Assessee) cleared the goods from the factory to their customers and recovered cost of insurance from them. In the lorry receipts, the freight was on “to pay basis” and the buyer of the goods were shown as the consignee. The Revenue alleged that since the Assessee has collected the insurance amount from the customers, the place of delivery should be deemed to be the customer’s premises and therefore, duty demand was raised on the cost of insurance recovered from the customers. However, the Commissioner (Appeals) relying upon the Judgment of the Apex Court in the case of Escorts JCB Ltd Vs. CCE, Delhi-II [2002 (146) ELT 31 (SC)]held that duty demand on the cost of insurance incurred by the Assessee is not admissible, in as much as the goods have been delivered at the Assessee’s factory gate. Being aggrieved the Revenue filed an appeal before the Hon’ble CESTAT, Mumbai. The Hon’ble CESTAT, Mumbai after observing that the Department was unable to prove that the factory gate is not the place of removal, held that when the lorry receipts under which the goods were consigned indicate that the consignee is the buyer and the freight is on “to pay basis”, duty demand on the cost of insurance incurred by the Assessee is not admissible, in as much as the goods have been delivered at the Assessee’s factory gate.

Various situations and Surcharge /Cess applicable on TDS/TCS

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Payment to		payment	Surcharge	Cess
Resident	Non-corporate	salary(up to 1 crore)	No	yes(3%)
	Non-corporate	salary(> I crore)	yes (10%)	yes (3%)
	Non-corporate	other than salary	No	No
	Corporate	other than salary	No	No
Non-Resident	Non-corporate	salary(up to 1 crore)	No	yes (3%)
	Non-corporate	salary(> I crore)	Yes (10 %)	yes (3%)
	Non-corporate	other than salary up to 1 Crore	No	yes (3%)
	Corporate	other than salary (> 1 Crore to 10 crore)	yes(2%)	yes (3%)
	Corporate	other than salary > 10 Crore	yes(5%)	yes (3%)