TIOL-DDT 1494 · the untouched capture
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<p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3">TIOL-DDT 1494 </font><br>
25.11.2010 <br>
Thursday</strong></font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Employees can also become 'Tax return Preparer' - Scheme Amended</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> CBDT has amended the Tax Return Preparer Scheme, 2006. The amendments are:</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>a) for the proviso to sub-paragraph (f) of paragraph 2, the following proviso shall be substituted, namely :-</em></font></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"<strong>Provided</strong> that a person being a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 shall not be entitled to act as Tax Return Preparer;"; </font></em></p>
</blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">(b) for clause (xii) of sub-paragraph (1) of paragraph 11, the following shall be substituted, namely :-</font></em></p>
<blockquote>
<p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">" (xii) if he, after issue of Tax Return Preparer Certificate to him under clause (viii) of paragraph 4 of the Scheme, becomes a person referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288 of the Act." </font></em></p>
</blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Para 2(f), earlier read as, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">"Tax Return Preparer" means any individual who has been issued a "Tax Return Preparer Certificate" and a "unique identification number" under clause (viii) of paragraph 4 of this Scheme by the Partner Organisation to carry on the profession of preparing the returns of income in accordance with the provisions of this Scheme: </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Provided that a person being a person- </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> (i) referred to in clause (ii) or clause (iii) or clause (iv) of sub-section (2) of section 288; or </font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"> (ii) who is in employment and income from which is chargeable to income-tax under the head "salaries" shall not be entitled to act as "Tax Return Preparer" </font></strong></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this second proviso is deleted. </font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Similar is the amendment to Para 11(1)(xii). </font></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">In effect what this means is, earlier, the following categories of persons were not eligible to become Tax Return Preparer. </font></strong></p>
<ol>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 1.Any officer of a Scheduled Bank with which the assessee maintains a current account or has other regular dealings; or </font></p>
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<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 2.Any legal practitioner who is entitled to practice in any civil court in India; or </font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> 3. An accountant </font></p>
</blockquote>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">II. who is in employment and income from which is chargeable to income-tax under the head "salaries" </font></p>
</ol>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now the second disqualification is removed – that is employees whose income is chargeable to tax under the head 'salaries' can also become tax return preparer. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not084.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 84/2010 [F.NO. 142/16/2010-SO (TPL)], DATED 22-11-2010 </font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Income Tax – Exempted Allowance – Rules Amended </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>AS</strong> per Section 10(14) of the Income Tax Act, certain special allowances are not included in computing the total income. Rule 2BB prescribes the allowances which are exempted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Sl. No. 4 of the list, "<em>Any allowance granted to an employee working in any <strong><font color="#FF6633">transport system</font></strong> to meet his personal expenditure during his duty performed in the course of running such transport from one place to another place, provided that such employee is not in receipt of daily allowance</em>", to the extent of 70 percent of the allowance up to a maximum of Rs. 6000 per month, is exempted. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Now this maximum limit of Rs. 6000 is enhanced to Rs. 10,000 retrospectively with effect from 1st day of September, 2008. </font></p>
<p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2010/it10not085.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 85/2010 [F. NO. 149/45/2010-SO (TPL)], DATED 22-11-2010</font></strong></a></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">CBI Arrests Top Bankers - Finance Ministry seeks Report</font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> a quick action, the Finance Ministry has sought reports from the Banks and Financial Institutions. According to the reports received by Finance Ministry, </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>LIC of India:</strong> The CEO of LICHFL Shri Nair and Shri Naresh Chopra, Secretary (Investment), LIC have been arrested. Senior executives of a financial services company have also been arrested in this case. LICHFL has issued a press release assuring its investors, customers and business associates that all necessary steps would be taken to ensure that interests of various stake holders are fully protected. It has also indicated that all loans have been secured by underlying assets to the full satisfaction of the appropriate authority. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Bank of India:</strong> The CBI at Chennai had enquired about particulars of Shri Tayal, General Manager, Mumbai Large Corporate Branch who was earlier working in Chennai Large Corporate Branch and sought information on three accounts viz. OPG Power, BGR Energy and Ashapura Minechem, Mumbai. Of these three accounts, Bank of India has reported that only one is at present NPA on account of derivative losses. Shri Tayal was interrogated by CBI in Delhi on 23.11.2010 on the above three accounts. He has been arrested by CBI. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Central Bank of India</strong>: The Chartered Accountant, Director on the Board of the Bank Shri M.S. Johar has been arrested by CBI in this case. No official of the bank has been arrested. CMD, Central Bank has confirmed that as per information available there is no impact of the above development on asset quality. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <strong>Punjab National Bank</strong>: Shri V.K. Gujjal, DGM of the Bank has been arrested. Mr. Gujjal is working as Chief Operating Officer of PNB Investment Services Limited, a merchant banking subsidiary set up by the Bank and headquartered in Delhi. Prior to this he was working as DGM in-charge of Large Corporate Branch, Delhi from 30th May, 2009 to 22nd May, 2010. CMD of PNB has said that there is no information linking the above incidence to any loan account of the bank. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">According to the Government, this is not a serious issue as the advances by Banks are in the range of about 40 Lakh Crores and this is a very small percentage of that amount and it happened because of personal greed and not system failure. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">We were discussing in our Edit Meeting last night about how difficult it was to get a loan of Rs. 15 to 20 Laks rupees from a Bank, which we have all faced, a colleague suggested – the trick is we have to try for a loan of a 100 Crores and not small amounts.</font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">There seems to be only two reasons for honesty: </font></p>
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<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Lack of opportunity, and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. Fear of police. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Budget 2011 will address CENVAT Credit Anomalies - JS TRU, CBEC </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Joint Secretary, TRU in CBEC, Vivek Johri, while addressing a conference on CENVAT Credit organised by the PHD Chamber of Commerce and Industry, yesterday said that Budget 2011 will look into the problems with regard to<em> CENVAT Credit</em>. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It was pointed out that unending disputes were being generated in respect of Outward transportation, Mobile Phones, Catering Services, Health Insurance for staff, and Repair and Maintenance of residential quarters for staff. The other issues that came up in the meeting were: </font></p>
<blockquote>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">1. Non-availability of <em>CENVAT credit</em> when abatement is allowed under the service tax, thus defeating the very purpose of <em>CENVAT Credit</em>, and when manufacturers are also engaged in trading. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">2. In the case of payment of service tax against <em>CENVAT Credit</em> under reverse charge leading to huge accumulation of Credit; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">3. Condition for availing <em>CENVAT Credit</em> only on payment of value of services and services tax whereas in associated enterprises, tax is payable on accrual basis; </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">4. Levying of penalty merely means wrong availment of credit even though there was no utilisation of credit; and </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">5. Non-availability of <em>CENVAT Credit</em> to the service provider for renting immovable property and to the builders providing service related to building/ flats entitled for sale. </font></p>
</blockquote>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Bar Council of India - Committee on entry of foreign LAW FIRMS </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Madras High Court was informed yesterday that the Bar Council of India has constituted a committee to go into the issue of permitting foreign law firms to practice in India and the consequent amendment to the Advocates Act. The Madras High Court is dealing with a Public Interest Litigation (PIL) filed by a practicing advocate in the High Court. The PIL has alleged that foreign law firms are undertaking corporate work as well as arbitrations in India and the professional fees get forwarded to their head offices situated abroad, resulting in loss of foreign exchange for the country. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Why should Indian lawyers be afraid of competition from foreign lawyers, if they are really competent? Like our software companies why can't Indian Law firms invade the world instead of trying to prevent foreign law firms coming to India. Maybe journalists and lawyers in India need a lot of protection! </font></p>
<p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Politics is all about Economics - Nitish shows the way </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>IN</strong> one of his Budget speeches, Dr. Manmohan Singh had said, "voting Congress is not only good politics, it is also good economics." </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The massive victory for Nitish Kumar in impossible Bihar, is a giant leap for Indian Democracy. An honest Chief Minister coming back to power, simply on the plank of economic development, leaving aside all considerations of caste, mandir, masjid etc, is a great victory for Democracy and the much maligned state of Bihar providing this great new direction, is marvellous. The growth in Bihar was a massive 11 percent in the last five years. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Bihar was once considered as a model State for administration, but somewhere down the line, everything slipped and Bihar became the butt of ridicule. Lalu Yadav wanted to make the roads of Bihar as smooth as Hema Malini's cheeks, but perhaps for him, the only way to do that was to make her cheeks as bad as Bihar's roads. Neither Hema nor the people of Bihar obliged Lalu. But Nitish brought roads, not the kind that Lalu promised – but certainly they were roads to development and that makes all the difference. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">At a time when the whole country is cynical and politics is associated with huge corruption, the massive victory of a simple honest Chief Minister is certainly is good news for all of us. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This is the greatness of India and this is how we survive the worst tragedies. </font></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Maybe this was what Lord Krishna was telling Arjuna a long time ago: </font></p>
<p align="left"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#FF6633"> Yada Yada Hi Dharmasya Glanir Bhavati Bharatha </font></strong></font></p>
<p align="left"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Abhyuthanam Adharmasya Tadathmanam Srijamyaha. </font></strong></font></p>
<p align="left"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Parithranaya Sadhunam Vinashayacha Dushkritham </font></strong></font></p>
<p align="left"><font color="#FF6633"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> Dharma Samsthapanarthaya Sambhavami Yuge Yuge. </font></strong></font></p>
<p align="justify"><font size="4"><strong><font color="#993300" face="Verdana, Arial, Helvetica, sans-serif">"Whenever there is a fall in Dharma and a rise in Adharma, I come". </font></strong></font></p>
<p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#006600">Jurispruden</font><font color="#FF6633" size="5">tiol</font><font color="#006600"> – Friday's cases</font></strong></font></strong></font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><img src="http://www.taxindiaonline.com/RC2/image/stories/ddt_hammer.jpg" alt="Legal Corner Icon" width="100" height="84" hspace="5" border="0" align="left">Income Tax</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Pledge of shares of Group Co received by Mukesh Ambani as security for interest-free loan to own company - Whether, without creation of pledge papers, it changes nature of transaction from pledge to sale, liable to be treated as deemed income subject to tax? - NO, says Tribunal </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> issue before the Tribunal is -Whether a pledge of shares of a group company received by the assessee as security for making an interest free loan to his own company, without creation of pledge documents, changes the nature of the transaction from a pledge to a sale, liable to be considered as deemed income subject to tax. Another query is - Whether bye-laws of SEBI (Depositories & Participants) Regulations 1996, Depositories Act and NSDL, to create a valid pledge of shares and to effect delivery of such shares in dematerialised form, are mandatory in nature or directory. The Tribunal's answer is NO.</font></p>
<p align="justify"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">Central Excise</font></strong></p>
<p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Notification 1/95-CE granting exemption to goods supplied to a 100% EOU is an end use based exemption - officer-in-charge of appellant's unit has no jurisdiction to re-determine or re-open the classification approved by officer-in-charge of supplying unit: CESTAT </font></strong></p>
<p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is a 100% EOU engaged in the manufacture of cotton yarn. They applied for CT-3 certificate for procuring ‘mobile storage system' under notification no. 1/95-CE dated 04.01.95. The jurisdictional officer-in-charge of the appellant unit issued the CT-3 certificate dated 20.06.1997 and based on the said certificate Godrej & Boyce Manufacturing Co. Ltd., who are the manufacturers, cleared the mobile storage system consisting of various parts and components falling under chapter 7216.50 & 7326.90 and the appellant received the same. </font></p>
<p><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif">See our columns Tomorrow for the judgements </font></strong></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong></font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice DAY. </font></p>
<p><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mail your comments to</font><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <a href="mailto:vijaywrite@taxindiaonline.com"><strong>vijaywrite@taxindiaonline.com </strong></a></font></p>
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