AS 32-Financial Instruments: Disclosures

CLICK HERE:AS 32

Circular No. 04/2009 Remittances to non-residents under section 195 of the Income-tax Act –– matters connected thereto - reg.

CLICK HERE :CIRCULAR

CHECK YOUR CPE HOURS

check your cpe hrs from www.cpeicai.org

GST Reforms and Intergovernmental Considerations in India

CLICK HERE: GST

Latest books of facts on FBT April 2009

Just click here:FBT BOOK

S. 14A & Daga Capital cannot put assessee in worse position

The assessee earned dividend income of Rs. 7.57 lakhs but the AO disallowed Rs. 20.73 lakhs u/s 14A as being relatable to the said income. The CIT (A) gave part relief. In deciding cross appeals, HELD

 

As the assessee had earned tax-free dividend income, s.14A was applicable. The question of determination of the disallowable amount has to be worked out by the AO as per Rule 8D as held the Special Bench judgement in ITO Vs. Daga Capital Management Pvt. Ltd. (2008) 119 TTJ (Mum) (SB) 289. However, the disallowance u/s 14A in the fresh proceedings cannot exceed the original amount disallowed by the AO in the assessment order.

 

Ex-ITAT Members cannot practice before ITAT

Friends, I draw your attention to the following amendment to the Income Tax Appellate Tribunal Members (Recruitment and Conditions of Service) Rules, 1963.

  “13E. The President, the Senior Vice-President, the Vice-President and the Members of the Tribunal shall not practice before the Tribunal after retirement from the service of the Tribunal.

   

  13F. The President, the Senior Vice-President, the Vice-President and the Members of the Tribunal shall not undertake any arbitration work while functioning in these capacities in the Tribunal.”

GERMANY-law limiting executive compensation

This week the German parliament ("Bundestag") passed a law limiting executive compensation ("Gesetz zur Angemessenheit der Vorstandsvergütung" or VorstAG). The law is a reaction by the German government to the financial crisis and the excessive bonus and/or compensation payments to top executives in several firms.

The law mainly applies to listed companies. It does not give any explicit restrictions on compensation agreements, but rather requires bonus agreements with top executives (i.e., members of the board of directors) to have a long-term basis. For example, stock options may be exercised no earlier than four years after they have been issued.

Additionally, the law gives the members of the supervisory board who fix the compensation contracts with the top executives much more leeway to reduce variable or fixed compensation (even pensions in the first three years) if the company faces bad times (e.g., has to lay off people and cannot pay any profits to the stockholders anymore).

The law also increases the supervisory board's liabilities, i.e., the members of the supervisory board are liable towards the stockholders if top executive compensation is inflated. 

With respect to disclosure, the law requires comprehensive disclosure of top executive compensation.

Finally, the law stops the German practice of directors becoming members of the supervisory board immediately after leaving the board of directors. From now on, a cooling-off period of two years is required. 

Asstt. CIT v. Suman Construction(Quantification of remuneration : Whether necessary in partnership deed )

Quantification of remuneration : Whether necessary in partnership deed 

In Asstt. CIT v. Suman Construction (2009) 27 (II) ITCL 329 (Pune 'A'-Trib), the assessing officer had noticed that the assessee had claimed salary to partners of Rs. 2,20,000. However, in his opinion as per the partnership deed filed along with the return in the past assessment year, there was no specification of this salary payable to the partners. According to assessing officer, there was neither the quantification of the salary payable to the partners nor it was prescribed the manner in which such quantification would be done. By referring CBDT Circular No. 739, dated 25-3-1996 the assessing officer said that the provisions of payment of salary have been made clear and since there was no specified quantification therefore, assessee was not entitled for claim of deduction under section 40(b) of the Act regarding salary to partners.

It was held that by Finance Act, 1992 with effect from 1-4-1993 an insertion was made in section 40 vide clause (b) which prescribes that in the case of a firm assessable as such any payment of remuneration to any partners who is a working partner, if not authorized by the terms of the partnership deed shall not be entitled for deduction in computing the income chargeable under the head "Profits and gains of business or profession". This section also contains sub-clause (v) which prescribes that any payment of remuneration to any partner who is a working partner who is authorized by and is in accordance with the terms of the partnership deed, then the amount of such payment of partnership should not exceed the aggregate amount as prescribed in this sub-clause. Meaning thereby that section 40, clause (b), sub-clause (ii) and another sub-clause (v) prescribes that a deduction in the case of a firm can be allowed in respect of salary or remuneration to working partners if it is duly authorized by the terms of a partnership deed, however, to the extent of prescribed limit as has also been prescribed in the statute. Therefore, on plain reading of this section, it is understood that the section does not make it mandatory to quantify the amount of salary in one of the clauses of the partnership deed because of the main reason that the monetary limit or ceiling is otherwise prescribed in the statute itself.

The statute has used the term "authorize" and not used the term "quantify". On the other hand, the AO had made the disallowance mainly because of the reason that the amount of salary was not quantified in the clause of the partnership deed and in support he had relied upon CBDT Circular No. 739, dated 25-3-1996. Since the statute has used the term "authorize", therefore, the CBDT had no jurisdiction to substitute the term "authorize" by the term "quantify". While interpreting the clause of a statute there is no scope for importing into the statute some other words which are not there. Such an interpretation, if any, made by any of the authority would amount to an amendment in the statute which is a prerogative of the legislative body, i.e., Hon'ble Members of the Parliament. Even if there be a situation of casus omissus even then the defect can be cured only by a proper legislation and not by any interpretation. There appears no justification to deviate from the general principles of interpretation according to which the intention of the legislature is to be interpreted from the terms used or the words contained in a statute. It is not permissible to add words into a taxing provisions which are not there or exclude words which are there. So, the words contained in a provision must be given a natural meaning as commonly understood in legal parlance.

ACIT vs. Hindustan Mint (ITAT 5 Member Special Bench)

s. 80-IA relief has to be deducted before computing s. 80-HHC relief

 

In ACIT Vs Rogini Garments 108 ITD 49 the Special Bench at Chennai held that relief allowed u/s 80-IA had to be deducted from profits and gains of assessee’s business on which relief u/s 80HHC of the Act is to be computed. Subsequently, the Madras High Court in SCM Creations 304 ITR 319 took a contrary view. The question whether Rogini Garments was impliedly overruled was referred to a five Member Special Bench which upheld the correctness of Rogini Garments and held:

 

(1) SCM Creations is not an authority on how s. 80-IA (9) is to be applied because the effect and implementation of above provision was neither raised, nor examined nor decided by the Court. A decision is an authority for the proposition that it decides and not what can logically be deduced there from. A point not raised nor argued at the Bar cannot be said to be the ratio of the decision. Accordingly SCM Creation does not impinge upon the ratio of Rogini Garments.

 

(2) On merits, Rogini Garments was correctly decided and did not require reconsideration. The language of s. 80-IA (9)/80-IB (9A) was clear and unambiguous and was required to be given effect to. Deduction of profit and gains allowed u/s 80-IA/80-IB had to be deducted from profits and gains of assessee’s business on which deduction u/s 80HHC had to be computed.

Global accounting standard: Challenges ahead

IFAC PAIB office requested ICWAI to prepare a note on the implications of IFRS on historical cost statements. The issue came up as ICWAI took a stand in IFAC meeting that if cost statements are made based on ledger balances which are subject to IFRS the impact of fair value estimates would have changed the recorded transaction costs or historical costs. This may change the paradigm of historical costing. But we are not sure if this can really happen.
Two meetings were conducted at Kolkata and Chennai with a small group of interested professionals. Chennai meeting was led by Mr T.P.Ghosh with particpation from various experts and the Kolkata meeting by Prof Asish Bhattacharyya of IIM Calcutta..
The crux of the discussions are as below :
IFRS fair value affected expense balances can make serious impact on historical costing. This is true of many standards like, employee costs, inventory valuation, depreciation, some intangible expenses etc.
Regulated industries will have give misleading cost structure if cost statements are submitted on the basis of fair value influenced IFRS.
Board of directors should be told about the difference in profitability between historical cost structure based profitability and IFRS based.
Due to the potential hazards all companies beyond a threshold limit should maintain profitability measured by cost accounting standards as a discipline whether coming under section 209(1)d) or not .
It is very very very relevant like fertilisers wherein Govt decides subsidies based on historical cost structure.
Views of the portal members are solicited on this subject.
A.N.Raman
CCM ICWAI

ICAI to ban guilty Satyam auditors

June, 25th 2009
Institute of Chartered Accountants of India (ICAI) came under immense public scrutiny after the auditor's role being questioned in the whole of Satyam fiasco.

Now, almost after six months after the Satyam story came to light, ICAI is ready with its investigations on the auditor's role and is all set to give its verdict soon.

The needle of suspicion in the entire Satyam scam lay on the two auditors of Price Waterhouse, S Gopalakrishnan and S Talluri, who are now set to be banned for life from practicing.

ICAI, whose panel has found them guilty, will be taking the harsh decision.

The disciplinary committee, whose report will be submitted soon, is set to declare that both the individuals are guilty of gross lapses in the auditing of Satyam's day-to-day transactions and it wants them banned from practice for life.

Meanwhile, Price Waterhouse refused to comment on the decision. Initially, the firm had backed the auditors, but then later on suspended them. ICAI also declined to comment on the findings, but it is now clear that the lapses in auditing were serious.

What still remains unclear is—why is it only the individual and not the firm, which is held guilty?

MORE THAN ONE ITR -V IN ONE ENVELOPE

From: Aaykar Sampark Kendra
Date: Jun 22, 2009 2:01 PM
Subject: RE: E filing query
To: vedraj agarwal

 
 
 

Dear Sir/Madam,

 

This is to inform you that you can send more then one ITR-V in single envelop and you need to send the copy of ITR-V only for A/Y 09-10.

  

Thanks & Regards
Aaykar Sampark Kendra
Dial: 0124-2438000
 

Rates of depreciation under companies act

depreciation rates

Circular dated 21st May of TDS (Extract)

Extract from Circular Dated 21st May 2009 is as below for ready reference:

(viii) With a view to enabling the Income Tax Department to monitor compliance by the deductor with the TDS provisions, every person (including Central Government and State Government) who has obtained a Tax Deduction or Collection Account Number (TAN) shall electronically furnish a quarterly statement of compliance with TDS provisions in Form No. 24C. It is mandatory for all TAN holders to furnish this form irrespective of whether any payment liable to TDS has been made or not. This form shall be furnished on or before the 15th July, the 15th October, the 15th January in respect of the first three quarters of the financial year, respectively, and on or before the 15th June following the last quarter of the financial year.

This e-form No. 24C has to be furnished at http://incometaxindiaefiling.gov.in. The first quarter in respect of which Form 24C is required to be furnished is the quarter ending on 30th June, 2009. 

(ix) In order to enable the deductor to furnish the UTN to the deductee, the existing Form 16 and Form 16A have been appropriately modified.

(x) The quarterly returns of TDS and TCS hitherto required to be filed in Form No. 24Q, Form No. 26Q, Form No. 27Q and Form No. 27EQ shall now be required to be filed for all quarters on or before the 15th June following the Financial Year. Effectively, the quarterly returns have now been replaced by an annual return.

13. The above new system will be effective for all tax deducted at source or tax collected at source on or after the 1st April, 2009. However, any TDS or TCS effected on or after the 1st April, 2009 but not later than 31st May, 2009 shall continue to be paid to the credit of the Central Government by using the old challan form. The TDS or TCS effected on or after the 1st June, 2009 shall be required to be paid electronically by electronically furnishing income tax challan in Form No. 17.

14. Where the payment of TDS or TCS effected on or after the 1st April, 2009 but not later than 31st May, 2009 is paid to the credit of the Central Government by using the old challan form, the deductor / collector shall, nevertheless, be required to fill up Form No.17 in respect of such payments any time between 1st July, 2009 to 15th July, 2009. Therefore, the deductors/collectors are advised to prepare the schedule relating to details of TDS / TCS from deductees in Form No..17 in advance (in an excel sheet) and be in a state of preparedness to file the same by 15th July, 2009 so that the UTNs relating to TDS / TCS transactions carried out in the month of April and May can be generated / obtained for onward transmission to the deductees. 

visit http://www.taxmannindia.blogspot.com/

for recent tax amendments

CIT vs. Singapore Airlines (Delhi High Court)

TDS required even on commission retained by agent

Where the assessee-airline supplied blank tickets to the travel agent, on terms that the same be sold at a minimum price and the difference between the said minimum price and the price at which the tickets were sold to the passenger was retained by the travel agent and the question arose whether the amount so retained by the agent was “commission” and whether the assessee was required to deduct tax thereon u/s 194-H of the Act, HELD, reversing the decision of the Tribunal:

 

(a) The relationship between the airline and the travel agent was that of a principal and agent as all the requirements of s. 182 of the Contract Act were fulfilled by the PSA. By the acts of the travel agent, a legal relationship was created between the airline and the passenger;

 

(b) The monies retained by the travel agent in the form of supplementary commission is not a “discount” because the travel agent never obtains proprietary rights to the tickets and has never paid a “price” for the same. Instead, the same is “commission” because it is received for services rendered on behalf of the assessee-airline and the airline ought to have deducted tax u/s 194-H;

 

(c) The argument that the assessee-airline is unable to deduct tax at source since it is unaware of the commission retained by the agent till a billing analysis is done is not acceptable because once an obligation is cast, it is for the assessee-airline to retrieve the necessary information from the travel agent and put itself in a position to deduct tax. The assessee cannot take up the stand that the machinery for deduction of tax has failed;

 

(d) However, in respect of the issue of “concessional” tickets to the agents, the difference between the full value and the concessional price was not “commission” because though it was a reward for services, title to the ticket passes to the agent and the relationship was that of a principal to principal. The difference was a “discount”. 

 
Note: The Bombay High Court has taken a contrary view in CIT Quatar Airways.

CIT vs. Eli Lilly (Supreme Court)

TDS on foreign salary is reqd even though assessee is not the payer
 

Where the assessee-employer obtained expatriate-employees from a foreign company and the said employees, continuing to be employees of the foreign company, received salary and allowance in their home country in foreign currency and the question arose whether the assessee was obliged to deduct tax thereon at source u/s 192 and the High Court held that the assessee was not obliged to deduct tax at source on the ground that the payment was by the foreign company and not by the assessee, HELD, reversing the High Court that:

 

(i) Though the payment of salary to the expatriate was made by the foreign company outside India, the TDS provisions did apply as the Act had extra-territorial operation as there was a nexus between the said salary and the rendering of services in India;

 

(ii) U/s 9 (1) (ii), salary received abroad is deemed to arise in India if it is for services rendered in India. This charging provision has to be read with the machinery provision of s.192 and both are part of an integrated code;

 

(iii) S. 192 requires the employer to deduct tax after “estimating” the salary payable to the employee. The act of “estimation” is akin to computation of income. In making the estimate, s. 9 (1) (ii) has to be taken into account;

 

(iv) On facts, as it was found that the salary paid by the foreign company was for services in India the same was deemed to accrue in India u/s 9 (1) (ii) and the assessee ought to have deducted tax u/s 192 though it was not the payer;

 

(v) Levy of interest u/s 201 (1A) is mandatory and has to be calculated from the date of default to the date of payment either by the assessee or the payee-employee; 

 

(vi) However, levy of penalty u/s 271C is not mandatory or compensatory or automatic. Penalty can be levied only if there is no good and sufficient reason for the failure to deduct tax at source. On facts, as the issues were controversial and the assessees acted bona fide, penalty could not be imposed. 

 

Note: The judgement of the High Court is reported as CIT vs. Eli Lilly 297 ITR 300 (Del).

CIT vs. Woodward Governor (Supreme Court)

Foreign Exchange fluctuation losses are allowable on accrual basis

Where the assessee carrying on the mercantile system of accounting claimed that: 

 

(i) The additional liability arising on account of fluctuation in the rate of exchange in respect of loans taken for revenue purposes was allowable as deduction u/s 37(1) in the year of fluctuation in the rate of exchange and not in the year of repayment of such loans; and

 

(ii) The actual cost of imported assets acquired in foreign currency is entitled to be adjusted u/s 43A (prior to the amendment by the FA 2002) on account of fluctuation in the rate of exchange at each balance sheet date, pending actual payment of the varied liability HELD approving the claim that:

 

(a) The term “expenditure” in s. 37 covers an amount which is a “loss” even though the said amount has not gone out from the pocket of the assessee. The “loss” suffered by the assessee on account of the exchange difference as on the date of the balance sheet is an item of expenditure u/s 37(1) ;

 

(b) Profits and gains are required to be computed in accordance with commercial principles and accounting standards (AS-11);

 

(c) Accounts and the accounting method followed by an assessee continuously for a given period of time needs to be presumed to be correct till the AO comes to the conclusion for reasons to be given that the system does not reflect true and correct profits;

 

(d) The fact that the department taxed the gains on fluctuation on the basis of accrual while disallowing the loss is important and indicates the double standards adopted by the Department;

 

(e) U/s 43A (pre-amendment), the change in the rate of exchange subsequent to the acquisition of asset triggers the adjustment in the actual cost of the assets. Actual payment of the liability as a consequence of the exchange variation is not required. The amendment of s. 43A by the FA 2002 w.e.f. 1.4.2003 is not clarificatory. 

 

Note: The judgement of the ITAT Special Bench in ONGC vs. ITO 83 ITD 151 has the unique distinction of being affirmed by the Delhi High Court in Woodward Governor 294 ITR 451 and being reversed (after being termed “perverse”) by the Uttaranchal High Court in CIT vs. ONGC 301 ITR 415. With the present verdict of the apex court, the judgement of the Special Bench stands approved and that of the Uttaranchal High stands impliedly overruled.

Genom Biotech vs. DIT (Bombay High Court)

Reasons for search action u/s 132 need not be given to the assessee

Search & seizure action u/s 132 was undertaken at the assessee’s premises. Thereafter an order of provisional attachment u/s 281B was passed. The assessee filed a writ petition challenging the validity of the search and the provisional attachment. HELD dismissing the Petition:

 

(1) Search action u/s 132 can be initiated only if the designated authority forms a reasonable belief on the basis of information that one of the three conditions of s. 132 exist. However, it is not the mandate of s. 132 that the reasonable belief recorded by the designated authority must be disclosed to the assessee. 

 

(2) On facts, the search was justified as the information received showed that the assessee had evaded tax by claiming deduction of business expenditure of Rs.170 allegedly paid to Cyprus / UK based companies towards marketing and advertisement expenses, but which were in fact credited by the said Cyprus & U.K. based companies in the private bank account of the assessee’s CMD in Cyprus.

 

(3) Attaching the properties of an assessee u/s 281B even before crystallization of the demand is a drastic step and has to be exercised only in extreme circumstances. On facts, as the incriminating documents prima facie established large scale tax fraud and as the assessee and as the assessee had failed to explain the same, the provisional attachment to protect the revenue’s interests was justified.

 

(4) Provisional attachment u/s 281B can be levied even where proceedings are yet to be initiated. Accordingly, the fact that notice u/s 153A and the order u/s 281B were issued on the same date did not affect the validity of the provisional attachment.

NSDL Annual Information Return Preparation Utility (AIR RPU)

Income Tax Department has notified the file format (data structure) for preparation of Annual Information Returns. Filers can prepare the AIR as per the file format using in-house software or any other third party software or the return preparation utility developed by NSDL (AIR RPU) and submit the same to any of the TIN-FCs established by NSDL or directly upload through the NSDL-TIN website

AIR RPU (ver 2.2)

View Tax credit whether given or not here (TDS)

Status of Tax refund can be seen here

SMS BASED SERVICE FOR CHALLAN STATUS

National Securities Depository Limited (NSDL) provides CIN (Challan
Identification Number) based view of direct tax challans to taxpayers to know
the status of challan on its web-site. In addition to the above facility, NSDL has
launched a Short Message Service (SMS) based facility to know the status of its
challans. The procedure for availing this facility is as under:

The tax payer can send an SMS to 575758 with a message containing

For e.g., if the tax payer input “CSI 0510001,11032009,5,5000” where in
“0510001” is the BSR code of the collecting branch,
“11032009” is the Challan tender date,
“5” is the Challan serial number and
“5000 is the amount paid by the taxpayer.

There will be special charges for these SMS. These charges may vary from one
mobile service-provider to another. The charge structure can be obtained from
the concerned service-provider.

Government notifies delisting rules

Government Notifies Delisting Rules

 

The Securities Laws (Amendment) Act enacted in 2005, incorporated section 21(A) in the Securities Contract Regulation Act (SCRA) to allow delisting of securities necessitating the creation of a delisting Framework. In order to provide statutory backing for the delisting framework, Rules dealing primarily with the substantive aspects and Regulations dealing primarily with the procedural aspects for delisting are also being notified simultaneously by the Government and Securities & Exchange Board of India respectively. 

Delisting Rules include the following provisions: 

I. Grounds for Delisting of Securities by a Recognized Stock Exchange: Delisting of securities may be done by a recognised exchange on any of the following grounds: 

(a) the company has incurred losses during the preceding three consecutive years and it has negative net worth; 

(b) trading in the securities of the company has remained suspended for a period of more than six months; 

(c) the securities of the company have remained infrequently traded during the preceding three years; 

(d) the company or any of its promoters or any of its director has been convicted for failure to comply with any of the provisions of the Act or the Securities and Exchange Board of India Act, 1992 or the Depositories Act, 1996 (22 of 1996) or rules, regulations, agreements made thereunder, as the case may, be and awarded a penalty of not less than rupees one crore or imprisonment of not less than three years; 

(e) the addresses of the company or any of its promoter or any of its directors, are not known or false addresses have been furnished or the company has changed its registered office in contravention of the provisions of the Companies Act, 1956 (1 of 1956); or 

(f) shareholding of the company held by the public has come below the minimum level applicable to the company as per the listing agreement under the Act and the company has failed to raise public holding to the required level within the time specified by the recognized stock exchange 

II. Grounds for Voluntary Delisting: Voluntary Delisting can be done through a request by the company to delist any securities provided (a) the securities of the company have been listed for a minimum period of three years on the Recognized Stock Exchange; (b) the delisting of such securities has been approved by the two-third of public shareholders; and (c) the company, promoter and/ or the director of the company purchase the outstanding securities from those holders who wish to sell them at a price determined in accordance with Regulations made by Securities and Exchange Board of India” under the Act.. 

The above grounds laid down for the Delisting Rules have to be read with the Regulations made under the Act by SEBI. 

The SEBI (Delisting of Equity Shares) Regulations provide for voluntary delisting from either all recognised stock exchanges or from only some of the recognized stock exchanges. It lays down the procedure for delisting (a) where no exit opportunity is required (b) and where exit opportunity is required. It also lays down the procedure for compulsory delisting along with specifically stating the rights of public shares in such cases. The regulations also have special provisions, inter-alia, for delisting of small companies, delisting in cases of winding up of a company and de-recognition of stock exchange. 

The Delisting Rules will come into force on the date of issue of notification of the Regulations issued by the Securities & Exchange Board of India in this regard under the Securities Contracts (Regulations) Act, 1956 and Securities & Exchange Board of India Act, 1992.

ICAI to SIGN 2 MOU WITH ICA Australia and CA Institute canada

Dear all,

ICAI is going to SIGN 2 MOU WITH ICA Australia and CA Institute canada
on coming 3 rd july. and the both MOU are in favour of ICAI so wait for details.
i heard that MOU with ICA (aus.) a CA from india can directly become the member of australia and he does not require to pass or clear any paper.

great na

Table of Abatement

Banks can close old fraud cases of up to Rs 25 lakh: RBI

Banks can close old fraud cases of up to Rs 25 lakh: RBI

Mumbai
June 6, 2009

The Reserve Bank of India (RBI) has decided to relax the existing
norms on the closure of fraud cases by banks saying that banks would
be allowed, for limited statistical or reporting purposes, to close
those fraud cases involving amounts up to Rs 25 lakh, where the
investigation is on challan or chargesheet not filed in the court for
more than three years from the date of filing of first information
report (FIR) by the police or the trial in the courts, after filing of
charge sheet or challan by the police, has not started, or is in
progress.

“We had been receiving representations from various banks requesting
us to allow them to close the old cases of fraud in which all actions
at their end were completed but the investigation by police or court
cases filed by these agencies had been still pending for several
years. This has been resulting in accumulation of large number of
outstanding fraud cases in the records of banks, projecting an adverse
picture about the banks before the stakeholders or public, thereby
exposing them not only to reputational risk but also lower rating by
international agencies,” said the RBI in a notification.

With regard to the cases now being made eligible for closure, the
banks will have to submit their proposals, case wise, for closure to
the regional office of RBI under whose jurisdiction their head offices
are situated.

The cases may be closed after getting the approval of the respective
regional offices of RBI.

“The banks should maintain the record of details of such cases in a
separate ledger. Even after closure of the fraud cases for limited
statistical purposes, banks should vigorously follow up with the
investigating agencies to ensure that the investigation process is
taken to its logical conclusion. The banks should continue to ensure
that they are regularly and appropriately represented in the court
proceedings as and when required. All the relevant records pertaining
to such cases must be preserved till the cases are finally disposed of
by police or courts, as the case may be,” said the RBI.

The banks may, with the approval of their respective boards, frame
their own internal policy for closure of such fraud cases,
incorporating the above revised norms and other internal procedures as
deemed necessary, it added.

The RBI also mentioned that notwithstanding the fact that banks may
close cases of fraud even when police investigation is in progress or
cases are pending in the court of law, they should complete, within
the prescribed time frame, the process of examination of staff
accountability or conclude staff side actions.

In cases of frauds involving amounts above Rs 25 lakh, banks can close
fraud cases only after the fraud cases pending with police or court
have been finally disposed off, examination of staff accountability
has been completed, amount of fraud has been recovered or written off,
insurance claim, wherever applicable, has been settled and the bank
has reviewed the systems and procedures, identified the causative
factors, plugged the lacunae and the relative facts have been
certified by appropriate authority, which is the board or audit
committee.

[Source: The Financial Express]

I-T dept considering tax imposition on carbon credits

The Income-Tax department is mulling tax on carbon credit trade, estimated to yield for the exchequer an estimated Rs 1,000 crore.

The I-T department's preliminary study has found that large companies listed on stock exchanges are not making tax provisions against the profits out of the sale of carbon credits and are putting the money thus earned in other businesses.

India is the largest producer of carbon credits in the world.

"The sale of carbon credits and the subsequent payment of tax from the money earned is not strictly followed.

"More than 98 per cent of the companies are not following Section 28 of the Income-Tax Act, which requires profits and gains of business or profession to be parted as tax. This will fetch the exchequer around Rs 1,000 crore," a tax department source said.

The Kyoto Protocol has created a mechanism under which countries that emit more carbon than the quota allotted to them buy carbon credits from those that emit less, in accordance with standards set by the United Nations Framework for Climate Change.

Accounting guidelines on carbon credits effective from July 1 : ICAI

Accounting guidelines on carbon credits will come into force from July 1. "The Council of the Institute of Chartered Accountants of India (ICAI) has scheduled a meeting between June 18-20 to approve the accounting guidelines on carbon credits,'' S Santhana Krishnan, chairman, Accounting Standards Board, ICAI, told. Krishnan said that the guidelines will be made applicable to companies with effect from July 1.


This means, corporates will have to account for their issued carbon credits, as well as carbon credits which they may have sold in the current financial year, in the September quarter results.


For the current financial year, companies will have to account for carbon credits sold or issued to them by the United Nations Framework Convention on Climate Change (UNFCCC) from April 1 this year.


The core group, which framed the draft guidance note on the accounting guidelines, has concluded that carbon credits are "intangible assets'' and they need to be treated as "inventory'' in the balancesheet till they are sold.

Copy of ITR Acknowledgement for e-Filing Return after filling ITR V at bangalore

Thanks & regards
DHAVAL DESAI
website:http://taxmannindia.blogspot.com/

Prcedure to Register DSC with PFX File & USB Etoken

income tax calculator by income tax dept.

Merely because others follow the same accounting policy, it cannot be said to be beyond scrutiny

SUMMARY OF CASE LAW

Merely because other clubs follow the very same accounting policy, it cannot be said to be beyond scrutiny or verification as to the correctness and completeness of the accounting practice followed, and there is any deficiency in such accounting practice or policy, it can very well be tinkered with howsoever universally followed such policy is; there is no proposition in law to force the revenue to accept the accounting system, merely because it is followed by other clubs, more so, when it is proved to be not disclosing the true and correct picture of the state of affairs of the assessee so as to enable the Assessing Officer to deduce the correct income of the assessee.

CASE LAW DETAILS

Decided by: ITAT, HYDERABD BENCH `B' HYDERABAD, In The case of: Hyderabad Race Clubv.JCIT, Appeal No. ITA NO. 972 & 973/Hyd./08, Decided on: SEPTEMBER 26, 2008


RELEVENT PARAGRAPH 

34. We have considered the rival submissions in the light of the material available on record and plethora of decisions relied upon by both the parties before us. Admitted facts of the case are that the assessee is engaged in the business of conducting horse races for over four decades. On account of inherent nature of its business, it receives amounts from innumerable customers who are public at large by way of bettings in respect of each racing event, and immediately on completion of each event/race, it is required to make winnings payments on the wining tickets. All the transactions, whether receipts in the form of bettings or payments in the form of winnings are by way of cash. Assessee claims to be following from the beginning, a consistent accounting policy, in consonance with such policy by other race clubs all over the country, by which-it credits to the Profit & Loss Account only the net collections and not gross collections, viz. collections exclusive of winnings payments and Betting Tax payable to the State Government, which alone according to it is its income by way of commission. This accounting policy consistently followed by the assessee all along has been accepted by the Revenue in the earlier years. In support of this accounting policy, assessee claims itself to be only an agent whose income is only commission and'not all the receipts. According to the assessee, it is only for the first time that the book results of the assessee have been rejected, and" additions have been made primarily by making an ad-hoc disallowance out of winnings payments of less than. Rs.2,500 each on the ground of unverifiable nature of such expenditure, and disallowance under S.40A(3) in respect of winnings payments exceeding 'Rs.20,000" each". It Is;"""basically these" two disallowances that call for our adjudication in these appeals

New amended Form No. 16A - TDS Certificate in Excel Format

New amended form No. 16 Salary Certificate

Superb software for those paying direct taxes online by filling ITNS 280, ITNS 281, ITNS 282, ITNS 283

This is just a good software just check this out

In this utility you can save your details which you have to fill every time you pay tax online i.e. TAN, PAN, Name, Assessment, Year, Address Etc. Once you fill these deatils in this utility , NSDL e-Payment Web page automatically opens and details in Excel row get auto-filled in web page.

e-Payment Auto Filler advantages

» MS Excel based. Macros used.

» Enter the PAN/ TAN details once.

» NSDL e-Payment Web page automatically opens and details in Excel row get auto-filled

» Utility is available for ITNS 280, ITNS 281, ITNS 282, ITNS 283

just click here to download it:E-payment software

while downloading you would be told to sign-in just to protect the identity.

Sample Representation letter by management to auditor on audit of company 1

New Return Forms for Assessment Year 2009-10 – ITR 1 to 8

click on the title for the circular

Income tax department is set to start an online 'judicial reference system'

The income tax department is set to start an online 'judicial reference system' in order to streamline thousands of departmental cases being fought in various courts and I-T tribunals across the country.

The facility, to be used by IT department officials initially, will put in place all the cases, petitions and Special Leave Petitions (SLPs) in an online server which will be developed by private vendors, a senior I-T official said today.

Tax payers can also avail the facility to check the orders and judgements given by the various I-T tribunals like the Income Tax Appellate Tribunal (ITAT) and courts after the successful implementation of the system.

"The tax department handles volumes of cases with a long time span at present being heard at various courts in the country. With this maiden service all the assessing officers and region commissioners will be able to know the exact status of the cases and take references from older cases," the official said.

However, the status of cases, replies filed by the department and other specific information can be accessed by the department officials only, the official said.

Income Tax Department will mail to individual assessees details of TDS

The Income Tax Department will now mail to individual assessees the details of the tax deducted at source (TDS) on their Income from different sources like banks, employers or post offices.Officials said the move is aimed at preventing any discrepancy between the TDS actually deducted and the TDS received by the tax department.

A circular to this effect has been sent by the Central Board of Direct Taxes (CBDT) to all offices across India.According to official sources, complaints were received by the department that TDS was being collected arbitrarily by the payers.While submitting the returns, it is not possible to scrutinise the TDS rate and amount collected at the collection centre.

Around 40-45 per cent of the total revenue of the government comes through TDS.

Another reason for this decision is that refunds from the department have also gone up. Sources said it should not affect the assessee who may be paying a high rate of TDS and is not compensated even after the employer or broking firm or any other organisation gets a refund on higher rate of TDS which may not be applicable to such income.

TDS is one of the ways of collecting tax from the taxpayers in India, directly at the source at which the income arises or generates. Some of the items which attract TDS are salary, interest, rental fee, interest on securities, insurance commission, dividends from shares and mutual funds, commission and brokerage, prize money won from lotteries, horse races, payments to non-resident sportsmen or sports associations, commission on sale of lottery tickets, fees for professional and technical services and the like, compensation for compulsory acquisition, income from units of an offshore fund and income from foreign currency bonds or shares of Indian companies (unless specified as tax-free).

There are numerous rates of TDS applicable to various classes of taxpayers, which has made TDS calculation cumbersome. In order to make TDS calculation easier, the CBDT in its Budget recommendations last year, had proposed a uniform rate of TDS for all tax payments.

RBI NBFCs - Treatment of Deferred Tax Assets/Deferred Tax Liabilities for Computaion of Capital

RBI/2008-09/494

DNBS.PD/ CC.No. 142 / 03.05.002 /2008-09 June 9, 2009

All NBFCs

Dear Sir,

Accounting for taxes on income- Accounting Standard 22- Treatment of deferred tax assets (DTA) and deferred tax liabilities (DTL) for computation of capital

NBFCs were advised vide DNBS (PD) C.C. No. 124/ 03.05.002/ 2008-09 dated July 31, 2008 that in terms of Accounting Standard 22, the tax effects of timing differences are included in the tax expense in the statement of profit and loss as deferred tax assets (DTA) (subject to the consideration of prudence) or as deferred tax liabilities (DTL) in the balance sheet.

Further that the balance in DTL account will not be eligible for inclusion in Tier I or Tier II capital for capital adequacy purpose and that DTA being an intangible asset, should be deducted from Tier I Capital.

2. In this connection it is further clarified that

a) DTL created by debit to opening balance of Revenue Reserves or to Profit and Loss Account for the current year should be included under ‘others’ of "Other Liabilities and Provisions."

b) DTA created by credit to opening balance of Revenue Reserves or to Profit and Loss account for the current year should be included under item ‘others’ of "Other Assets."

c) Intangible assets and losses in the current period and those brought forward from previous periods should be deducted from Tier I capital.

2

d) DTA computed as under should be deducted from Tier I capital:

(i) DTA associated with accumulated losses; and

(ii)The DTA (excluding DTA associated with accumulated losses) net of DTL. Where the DTL is in excess of the DTA (excluding DTA associated with accumulated losses), the excess shall neither be adjusted against item (i) nor added to Tier I capital."

3. NBFCs shall comply with all instructions as above and also contained in the circular dated July 31, 2008 in this regard meticulously.

Yours sincerely

(P Krishnamurthy)

Chief General Manager-In-Charge

Members Practising in Individual Name

The Council has, in its recent meeting, decided that the members holding Certificate of Practice on full time basis, without any break, and practising in individual names (i.e. without opting for firm/trade name) be allowed the benefit of merger, as a firm for the limited purpose of availing the benefits under the merger scheme, as a process of capacity building measure of the profession with retrospective effect i.e. from 1st April 2005.

An Appeal - Ensuring effective practical training

AN APPEAL

Re: Ensuring effective practical training

As you may be aware, in its endeavour to streamline and sustain the efforts of the Institute in providing effective training to articled assistants, the Council of the Institute has been taking different initiatives from time to time. One such recent initiative was to effectively curb the menace of dummy articles, so as to ensure that the articled assistants take the required training from their principal during the prescribed working hours of the firms/proprietor concerned. During the course of implementing the decision of the Council on the aforesaid issue, the Institute has come across situations where articled assistants are alleging about taking training beyond the normal working hours specified by the Council without any compensatory holiday or otherwise.

While taking stock of the initiatives taken by the Council in the matter of providing effective training to articled students by members and students also taking the training in the required manner, it has been felt that the members of the Institute training articled assistants be specifically requested to comply with the following decisions taken by the Council, in letter and spirit:-

• The minimum working hours for the articled assistants shall be 35 hours in a week excluding the lunch break.
• The office hours of the principal for the articled assistants shall not be generally before 9.00 a.m. or after 7.00 p.m.
• The normal working hours for the articled assistants shall not start after 11.00 a.m. or end before 5.00 p.m.

• If the exigencies or nature of training so warrants, the articled assistant shall work beyond the normal office hours. However, the maximum working hours for the articled assistant should not exceed normally 35 hours in a week excluding the lunch break and in any case or circumstances should not exceed 45 hours per week. In case the articled assistant is required to work beyond 35 hours per week, he is entitled to compensatory leave calculated with reference to the number of completed hours worked over and above 35 hours per week. The principal shall ensure that long working hours are not imposed on the articled assistants on a regular basis and only in case of exceptional circumstances where time bound work is to be delivered the articled assistants may be required to work longer hours which will still be subject to a maximum of 45 hours per week. The principal shall be free to allow compensatory leave or off hours in lieu of extra working beyond 35 hours.

I am confident that as a valued member of the noble profession, you would be complying with the requirements of the Council. It may, however, be noted that non-compliance with the above would be viewed very seriously.

CA. Uttam Prakash Agarwal
President

8th June, 2009

Procedure for Online Submission of application for the Statutory Forms under the Central Sales Tax Act, 1956 and Delivery at the Place of Business of

TRADE CIRCULAR

Dated: 31.03.2009

No. VAT/U.O.R.No. 646/JC (Reg.)
Trade Circular No.12 T of 2009

Sub.: Procedure for online submission of application [Statement of Requirement ] for the statutory forms (C/F/H/EI/EII) under the Central Sales Tax Act, 1956 and delivery at the place of business of the dealer.
———— ——— ——— ——— ——— ——— ——— ——— ——— —–
Extention of date for existing mannual system for accepting applications for declarations prior to 1/04/2008.

Ref.: 1. Trade Circular No.4T of 2006 dated 09/01/06.
2. Trade Circular No.10T of 2006 dated 29/03/06.
3. Trade Circular No.17 T of 2006 dated 28/06/06.
4. Trade Circular No.1 T of 2008 dated 25/01/08.
5. Trade Circular No.15 T of 2008 dated 19/04/08.
6. Trade Circular No.2 T of 2008 dated 23/01/09.

Dear Sir/Madam,

The representations are received from the organisations for extention of time for applying for declarations prior to 31/03/08. The request has been considered and the date is extended as follows:-

Any application seeking declarations for the period prior to 01/04/2008 may be made as per the existing manual system (on CD) or available on new online system. However such application shall be made prior to 30/06/09. It may please be noted that the declarations prior to period 01.04.2008 will not be issued after 01/07/2009.

This circular cannot be made use of for legal interpretation of provisions of law. If any member of the trade has any doubt, he may refer the matter to this office for clarification.

You are requested to bring the contents of this circular to the notice of all the members of your association.

Yours faithfully,

(SANJAY BHATIA)

Commissioner of Sales Tax,

Maharashtra State, Mumbai

Relaxation of the due date for the uploading of e-returns for the period ending March 2009

TRADE CIRCULAR

Mumbai, Dt.30.04.2009

No. VAT/VAT Ret/

Trade Cir. No. 16 T of 2009

Sub: Relaxation of the due date for the uploading of e-returns for the period ending March 2009

Ref: Trade Circular No 16T of 2008 dated 23-4-2008.

Gentlemen/Sir/Madam,

The due date for filing of returns of all periodicities for the period ending March 2009 is 21st April 2009, as provided in Rule 17 under the Maharashtra Value Added Tax Rules, 2005.

2. After the introduction of the e returns, the dealers were required to make the payment of tax within the periodicity prescribed for the returns, but were permitted to upload the e returns within 10 days from the due date prescribed in the said Rule 17 (Please refer Trade Circular No 16T of 2008) The dealers, who paid the tax within the due date and uploaded the e return within the aforesaid period were not treated as late filers.

3. In April 2009, dealers with six monthly tax liability are also being covered under the scope of e returns for the period ending 31st March 2009. Thus, in the month of April 2009, all the VAT dealers in Maharashtra would be uploading e returns. Perhaps, this could be first time in the history of Indian taxation, that such a large number of dealers would be filing e returns.

4. We have received certain representations requesting that quite a sizeable number of dealers could not file the e returns up to 30th April 2009, even though they were willing to file the same due to various factors such as not being conversant with the electronic process, load shedding in certain parts of the state, lack of awareness etc. We have received the requests that the time limit for uploading the e returns may be extended up to 10th May 2009.

5. In view of the above situation, the dealers are now being permitted to upload the e returns up to 10th May 2009. It goes without saying that the penalty shall not be levied only if the dealer has paid the taxes for the said period within the due date prescribed under Rule 17 of the MVAT Rules. The dealers who have failed to pay the taxes within the prescribed period could always be liable to the penalty for late filing of returns.

6. This circular cannot be made use of for legal interpretation of provisions of law, as it is clarificatory in nature. If any member of the trade has any doubt, he may refer the matter to this office for further clarification.

7. You are requested to bring the contents of this circular to the notice of the members of your association.

Yours faithfully,

(SANJAY BHATIA)

Commissioner of Sales Tax,

Maharashtra State, Mumbai.

Latest MICR codes

Summary of Major Changes in TDS Payment Challan and TDS return Applicable from 01.04.2009

just click here to view all details:Summary of major changes in TDS

Complaints relating to matters of dummy articles and coaching classes during non-permissible hours. - (05-06-2009)

The following email ids have been configured for lodging complaints relating to matters of dummy articles and coaching classes during non-permissible hours.

complaints.dummyarticles@icai.in Complaints/matters relating to dummy articles complaints.coachinghours@icai.in Complaints/matters relating to coaching classes during non-permissible hours (i.e. between 9.30 A.M. and 5.30 P.M)

Secretary

Date: 5th June 2009

IASB Exposure Draft on Fair Value Measurement

IASB Exposure Draft on Fair Value Measurement

This Exposure Draft on Fair Value Measurement, has been issued by the International Accounting Standards Board keeping in view the following objectives:

To establish a single source of guidance for all fair value measurements required or permitted by IFRSs to reduce complexity and improve consistency in their application;

To clarify the definition of fair value and related guidance in order to communicate the measurement objective more clearly; and

To enhance disclosures about fair value to enable users of financial statements to assess the extent to which fair value is used and to inform them about the inputs used to derive those fair values.

The proposed IFRS does not require additional fair value measurements.

Invitation to comments

ASB inviting comments on the said Draft from the public. The downloadable version of the draft is available at http://www.iasb.org/NR/rdonlyres/C4096A25-F830-401D-8E2E 9286B194798E/0/EDFairValueMeasurement_website.pdf. Whereas the Basis for Conclusions and Illustrative Examples are available at http://www.iasb.org/NR/rdonlyres/D55E0BA1-5420-456B-8CCC EB488BAD5B80/0/EDFairValueMeasurementBC_website.pdf and http://www.iasb.org/NR/rdonlyres/8C24627A-3E1B-49EB-9740 E6EB67C0C594/0/EDFairValueMeasurementIE_website.pdf respectively. Comments would be most helpful if they indicate the specific paragraph or group of paragraphs to which they relate, contain a clear rationale and, where applicable, provide a suggestion for alternative wording.

Comments should be submitted in writing to the Secretary, Accounting Standards Board, The Institute of Chartered Accountants of India, ICAI Bhawan, Post Box No. 7100, Indraprastha Marg, New Delhi-110002, so as to be received not later than August 21, 2009. Comments can also be sent by e-mail at asb@icai.org or edcommentsasb@icai.org

Forms For students of ICAI

just click on the headline to download it.

Compilation of Suggested Answers

Suggested Answers for November, 2008 Examinations

Revision Test Papers for June, 2009 Examinations

Tax Deptt. Cant Force Anyone To Divulge Info If Computer Has Data Of Others Too

Laptops of Auditors seized during search of an assessee – Income Tax
Department cannot force auditors to part with information of other
parties stored in computers: Delhi HC

By TIOL News Service

NEW DELHI, JUNE 04, 2009: THE present writ petition has been filed by
the Petitioner, S.R. Batliboi & Co., reputed Auditors and Accountants
against the Department of Income Tax entreating the issuance of an
appropriate writ to prevent the Respondents from forcibly gaining or
securing access to the data contained in two laptops belonging to
them.

While conducting an audit of EMAAR on 11.9.2007, the laptops of two
employees of the Petitioner were seized by the Deputy Director, Income
Tax (DDIT) in the course of conducting a Search and Seizure operation
against EMAAR. Subsequently on 17.9.2007, the DDIT issued summons
under Section 131 of the Income Tax Act, to Ms.Sandhya Sama and Shri
Sanjay K. Jain, the employees of the Petitioner firm and their
statements were recorded on 18.9.2007. On the request of the DDIT
these employees provided him with the electronic data relating to
three companies of the EMAAR Group together with the print copies of
the data. Nevertheless, the DDIT insisted on securing total and
unrestricted access to the laptops obviously in order to gain
information and data of all the other clients of the Petitioner. This
request was refused by the employees. The seized laptops were sent by
the Respondents to Central Forensic Science Laboratory (CFSL) who,
however, could not ascertain the password and accordingly could not
access the entire data on the laptops. The Petitioner was thereupon
asked to disclose the password, which it again declined and thereafter
the laptops were sealed in the presence of the said employees of the
Petitioner.

In its Order dated 18.11.2008, the previous Division Bench passed the
following orders:

"The learned counsel appearing on behalf of the respondent submits
that as per his instructions he would like to argue the matter with
regard to de-sealing of the laptops and having access to the data in
the laptops. He submits that to ascertain as to whether the data
relates to EMAAR-MGF, the entire data available on the laptops would
have to be examined. On the other hand, the learned counsel for the
petitioner submits that the data concerning EMAAR-MGF is available on
different and distinct files and has nothing to do with its 47 other
clients. We had suggested that the laptops be de-sealed and the data
be examined by the Assessing Officer in the presence of
representatives of the petitioner as well as of the assessee. It was
also suggested that the entire inspection of the data on the laptops
be done without copying the data in any form for the purposes of
informing the Court as to which files were connected with EMAAR-MGF
and would be required by the Assessing Officer. Unfortunately, this
suggestion is not acceptable to the respondents though the petitioners
had accepted the same. Consequently, this matter would have to be
heard. The learned counsel for the petitioner requests for some other
date for advancing arguments inasmuch as today the respondents were
only to report as to whether the suggestion was to be carried out or
not".

The High Court observed that sub-section 132 (1)(iib) casts a
compulsion on the owner of the laptops to provide the Department with
the password to the computer to enable inspection of the Books of
Account maintained in electronic form in the laptops. The authorized
officer of the Department may, after inspection of the documents,
seize such documents and Books of Account obviously connected with the
Assessee in respect of whom steps under the other parts of Section 132
have been initiated.

It would be perilous and fatal to lose sight of the reality that the
powers of the Search and Seizure are very wide and thus the
legislature has provided a safeguard that the Assessing Officer should
have reasons to believe that a person against whom proceedings under
Section 132 are to be initiated is in possession of assets which have
not been or would not be disclosed. Secondly, the authorized officer
is also required to apply his mind as to whether the assets found in
the Search have been disclosed or not, and if no undisclosed asset is
found no action can be taken under Section 132(1)(iii) or(3). An
arbitrary seizure cannot be maintainable even where the authority has
seized documents with ulterior motives.

For a search or seizure to be legal it should not be firstly ordered
for mala fide, extraneous or for oblique reasons. Secondly, it must be
predicated on information received by the Authority who would have
reason to believe that it is necessary to conduct such an operation.
Thirdly, it should not be in the nature of a roving or fishing
exercise. These three factors must be observed rigorously and even
punctiliously since the exercise of such powers invariably results in
a serious invasion of the privacy and freedom of the citizen. However,
search and seizure operations may not be illegal if the seized
documents pertain to transactions of allied concerns, since they would
have a bearing on the case of evasion of income tax by the assessee
concerned.

In Manish Maheshwari –vs- Assistant CIT - 2007-TIOL-24-SC-IT one of
the provisions which was at the fulcrum of discussion was Section
158-BD of the Act in the context of the legitimacy of ordering a
Block-Assessment. This provision has also been relied upon by Revenue
in order to vindicate the stance of the Revenue that information that
can be gleaned from the seized computers belonging or relating to
other clients of the Petitioner, even those who have had no dealings
whatsoever with the assesses against whom the search and seizure
operations are directed, can legitimately be demanded and acted upon.
The argument is that the Act contemplates that all such information
should be forwarded by the Authority carrying out the search and
seizure to the Assessing Officer of those third parties. The High
Court was unable to accept such an extreme stand. The words "other
person" employed in the Section must only be construed as referring to
the 'other person' having dealings or transactions with the party who
is being searched or whose material is being seized. Otherwise, the
provisions may well be seen as violative of the fundamental rights
enshrined in Articles 14 and 19.

Over two score years ago the Division Bench of this very High Court
had opined in N.K. Textiles Mills –vs- CIT, that it was "necessary and
essential for these officers to take into custody only such books as
were considered relevant to or useful for the proceedings in question.
It was not open to them to indiscriminately, arbitrarily and without
any regard for relevancy or usefulness, seize all the books and
documents which were lying in the premises, and, if they did so, the
seizure would be beyond the scope of the authorization".

The High Court observed,

1. The authorized officer must have reasonable grounds for
believing that anything necessary for the purpose of recovery of tax
may be found in any place within his jurisdiction;

2. he must be of the opinion that such thing cannot be otherwise
got at without undue delay;

3. he must record in writing the grounds of his belief; and

4. he must specify in such writing, so far as possible, the thing
for which search is to be made.

Where material or document or assets belong to a third party, totally
unconcerned with the person who is raided, none of these conditions
are fulfilled.

An indiscriminate seizure deracinates the personal liberty and privacy
of the citizen and is anathematic to law. It can be proscribed under
Article 226 of the Constitution. The question of "indiscriminate
search" has to be answered by the Court by looking into the evidence
and the facts of each case.

In District Registrar and Collector, Hyderabad –vs- Canara Bank, the
Supreme Court observed,

"In the Income Tax Act, 1961 elaborate provisions are made in regard
to "search and seizure" in Section 132; power to requisition books of
account, etc. in Section 132-A; power to call for information as
stated in Section 133. Section 133(6) deals with power of officers to
require any bank to furnish any information as specified there. There
are safeguards. Section 132 uses the words "in consequence of
information in his possession, has reason to believe". (emphasis
supplied) Section 132(1-A) uses the words "in consequence of
information in his possession, has reason to suspect". Section 132(13)
says that the provisions of the Code of Criminal Procedure, relating
to searches and seizure shall apply, so far as may be, to searches and
seizures under Sections 132(1) and 132(1-A). There are also Rules made
under Section 132(14). Likewise Section 132-A(1) uses the words "in
consequence of information in his possession, has reason to believe".
(emphasis supplied) Section 133 which deals with the power to call for
information from banks and others uses the words "for the purposes of
this Act" and Section 133(6) permits a requisition to be sent to a
bank or its officer. There are other Central and State statutes
dealing with procedure for "search and seizure" for the purposes of
the respective statutes.

The High Court referred to several decisions of different High Courts
where the material which was not found as a result of search and
seizure was discarded for the purposes of assessment under Chapter
XIV-B.

Finally in view of the fact that the Respondents have rejected the
offer made by the Petitioner as recorded in the High Court Order dated
18.11.2008, the impugned summons, are set aside, and the Respondents
are directed to forthwith return the laptops to the Petitioner.

Fwd: S. 132 search reasons are not for assessee: Bombay High Court

Genom Biotech vs. DIT (Bombay High Court)

Reasons for search action u/s 132 need not be given to the assessee

Search & seizure action u/s 132 was undertaken at the assessee's
premises. Thereafter an order of provisional attachment u/s 281B was
passed. The assessee filed a writ petition challenging the validity of
the search and the provisional attachment. HELD dismissing the
Petition:

(1) Search action u/s 132 can be initiated only if the designated
authority forms a reasonable belief on the basis of information that
one of the three conditions of s. 132 exist. However, it is not the
mandate of s. 132 that the reasonable belief recorded by the
designated authority must be disclosed to the assessee.

(2) On facts, the search was justified as the information received
showed that the assessee had evaded tax by claiming deduction of
business expenditure of Rs.170 allegedly paid to Cyprus / UK based
companies towards marketing and advertisement expenses, but which were
in fact credited by the said Cyprus & U.K. based companies in the
private bank account of the assessee's CMD in Cyprus.

(3) Attaching the properties of an assessee u/s 281B even before
crystallization of the demand is a drastic step and has to be
exercised only in extreme circumstances. On facts, as the
incriminating documents prima facie established large scale tax fraud
and as the assessee and as the assessee had failed to explain the
same, the provisional attachment to protect the revenue's interests
was justified.

(4) Provisional attachment u/s 281B can be levied even where
proceedings are yet to be initiated. Accordingly, the fact that notice
u/s 153A and the order u/s 281B were issued on the same date did not
affect the validity of the provisional attachment.

Fwd: [aurangabad_ca] Text of SC Judgement Service Tax-Renting Commercial Property-File Refund

Supreme Court today declined to grant interim relief to the Govt. and
simply admitted the SLP, ordering issuance of notice to respective
parties. The High Court judgement therefore is now on firmer footing.
Landlords and tenants should take appropriate steps to protect their
interest, which are contradictory to each other. Same advise therefore
can not be given to both.
What is important is that those who have borne the burden of this tax,
whether landlord or the tenant, should immediately file for refund for
the full period from which they paid the tax, and not just ONE Year
u/s 11B.
ACT FAST. Time is running out.
I reiterate, that refund can be filed by either the landlord or the
tenant. If you are a tenant, and you do not have complete documents,
which are to be provided by the landlord, do not wait. File the claim
even with incomplete documents. This defect is curable. You will get
another opportunity to rectify deficiencies.
However, if you have already utilised the same as cenvat credit for
payment of tax on output service, then this advise is not applicable.
You have already, indirectly taken the refund.

Form of Refund Claim is attached.

ITEM NO.26 COURT NO.2 SECTION III

SUPREME COURT OF INDIA
RECORD OF PROCEEDINGS

Petition(s) for Special Leave to Appeal (Civil) No(s).13850/ 2009

(From the judgement and order dated 18/04/2009 in WP No. 1659/2008
of The HIGH COURT OF DELHI AT N. DELHI)

UNION OF INDIA & ORS. Petitioner(s)

VERSUS

HOME SOLUTION RETAIL INDIA LTD. & ORS. Respondent(s)

(With appln. for exemption from filing c/c of the impugned Judgment
and prayer for interim relief ))

Date: 02/06/2009 This Petition was called on for hearing today.

CORAM :
HON'BLE MR. JUSTICE MARKANDEY KATJU
HON'BLE MR. JUSTICE DEEPAK VERMA
(Vacation Bench)

For Petitioner(s) Mr.Biswajeet Bhattacharyya, Sr.Adv,
Mr.Debashish Mukherjee, Adv.
Mr. Ajay Singh, Adv.
Mr. Rupesh Kumar, Adv.
Mr. MPS Tomar, Adv.
Ms. Pamljiro Shrivastava, Adv.
Ms. Anil Katiyar, Adv.
Mr. Arvind Kumar Sharma,Adv.. .

For Respondent(s) Mr.Mukul Rohtagi, Sr.Adv.
Dr.A.M. Singhvi, Sr.Adv.
Mr. Ameet Naik, Adv.
Mr.Rishi Agrawala, Adv.
Mr.Gaurav Goel, Adv.
Mr. E.C. Agrawala,Adv.

UPON hearing counsel the Court made the following
ORDER

Issue notice.

[ Usha Bhardwaj ] [ Indu Satija ]
Court Master Court Master

MAHARASHTRA STATE ADDITIONAL BUDGET 2009

Dear All,
MAHARASHTRA STATE ADDITIONAL BUDGET 2009
presented on 4th June, 2009
HIGHLIGHTS AND CHANGES
An Additional Maharashtra State Budget is presented by Finance Minister Shri. Dilip Welse-Patil on 4th June, 2009 and the major highlights and changes proposed are noted below :
1.Penalty for late returns under MVAT Act reduced to Rs.5,000/- from Rs.10,000/-.
2.Exemption from Profession Tax for salary income upto Rs.5,000/- i.e increase from Rs.2,500/-.
3.Simplified VAT Refund Scheme for the dealers with refund below Rs.5 Lakhs.
4.Relief to Tax Payers not yet enrolled under Profession Tax.
5.Amnesty Scheme under Profession Tax for transport permit holders.
6.Tax Concessions and reduction in Taxes -
Tax reduced from 8 percent to 5 percent for Hotel dealers under Composition Scheme.
- Tax concession to timber upto 31st March 2010. - reduction in tax rate on Cotton Ginning and Pressing machinery
-Tax reduced on Solar energy devices and CFL
-Tax reduced on Plastic mats and Agarbatti. - Domestic LPG stoves, imitation jewellery, Shikakai and Ritha to have lesser rate
-Reduced tax on composting machines
-Reduced rate of tax on Medical Equipment
Increase in Taxes -
- Rate of VAT on liquor increased from 20 percent to 25 percent - Rate of tax on tobacco products, cigarettes increased from 12.5 percent to 20 percent - Hike in rate of tax on mobile phones, digital cameras, video camera, gypsum board
Four wheeler to pay price based tax under Motor vehicle tax.
Restructuring of Stamp Duty on various agreements.

HOW TO OPEN Acknowledgment AAAPA1111A_ITR-V.ZIP FROM www.incometaxindiaefiling.gov.in of A.Y. 2009-10

Dear User,

Please note that the pdf document is password protected to ensure it is accessed by the appropriate user.

The password is a combination of the PAN number and the date of birth in the format ddmmyyyy.

For example,
if the
PAN number is AAAPA1111A and the date of
birth is 10-Jan-2008,

then the password will be aaapa1111a10012008

In case you are unable to open the document,

please contact Efiling Income Tax Administrator at ask@incometaxindia.gov.in

providing the document along with pan number and assessment year.

ONLY E-Filing for AY 2009-10 has been enabled for ITR-1, ITR-2, ITR-3, ITR-4 forms.

Dear TaxPayers,

E-Filing for AY 2009-10 has been enabled for ITR-1, ITR-2, ITR-3, ITR-4 forms. Efiling for ITR-5, ITR-6, ITR-8 forms will be enabled shortly. Please furnish the Form ITR-V to the Income-tax Department by mailing it to Income Tax Department , CPC, Post Box No - 1, Electronic City Post Office, Bangalore - 560100, Karnataka within thirty days after the date of transmitting the data electronically. No Form ITR-V shall be received in any other office of the Income-tax Department or in any other manner. I HAVE GIVEN THE LINKS JUST CLICK THE TITLE.

Income Tax Department