TIOL-DDT 2382 · the untouched capture
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<!DOCTYPE HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN" "http://www.w3.org/TR/html4/loose.dtd"> <html> <head> <title>Untitled Document</title> <meta http-equiv="Content-Type" content="text/html; charset=iso-8859-1"> </head> <body> <p><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="3"><s><strong><font size="2"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><a href="http://www.taxindiaonline.com/RC2/inside2.php3?filename=bnews_detail.php3&newsid=20079"><img src="http://www.taxindiaonline.com/RC2/image/stories/limca_book2014_1.jpg" alt="DDT in Limca Book of Records - Third Time in a row" width="250" height="123" hspace="5" border="0" align="right"></a></font></strong></font></strong></font></strong></font></strong></font></strong></s>TIOL-DDT 2382 </font><br> 25.06.2014 <br> Wednesday </strong></font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Wealth Tax - Electronic Return made mandatory </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>CBDT</strong> has amended the Wealth Tax Rules to, among other things, prescribe a new Return Form BB in respect of the assessment year 2014-15 and any other subsequent assessment year. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">This return is to be furnished electronically under digital signature. However certain persons are exempted from filing electronic return for the Assessment Year 2014-15. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Individual or HUF to whom the provisions of section 44AB of the Income - tax Act are not applicable, the return of net wealth may be furnished for assessment year 2014 - 15 in a paper form. </font></p> <blockquote> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As per Section 44AB, every person carrying on business having gross receipts of more than one crore rupees and every person carrying on profession having gross receipts of more than Rs. 25 lakhs are required to get his accounts audited by a chartered accountant. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">So, businessmen with turnover less than a crore of rupees and professionals with less than Rs. 25 lakhs receipts need not file the electronic return for this year and can file a paper return. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The Electronic Return shall <strong>NOT</strong> be accompanied by a statement showing the computation of the tax payable on the basis of the return, or proof of the tax and interest paid, or any document or copy of any account or form of report of valuation by registered valuer required to be attached with the return of net wealth under any provisions of the Act. </font></p> <p align="justify"><a href="http://www.taxindiaonline.com/RC2/subCatDesc.php3?subCatDisp_Id=35&filename=notification/cbdt/2014/it14not032.htm" target="_blank"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">CBDT Notification No. 32/2014, Dated: June 23, 2014 </font></strong></a></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">MoCA issues draft Notification for Public Comments </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> Ministry of Corporate Affairs has issued a draft notification for Public Comments till 1st July 2014. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Section 462(1) of the Companies Act, 2013 (Act) empowers the Central Government to direct, by notification, in the public interest, that any of the provisions of this Act shall not apply to such class or classes of companies, or shall apply to the class or classes of companies with such exceptions, modifications and adaptations as may be specified in the notification. The said draft notification<strong> is required to be laid</strong> before each House of Parliament in accordance with section 462(2) of the Act. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The proposed draft notification under Section 462 of the Act in respect of exemptions, exceptions, modifications or adaptations from relevant provisions of the Act for private companies has been prepared and released. Suggestions/Comments on the proposed draft notification may be sent latest by 1st July, 2014 through email at <a href="mailto:exemptions@mca.gov.in"><strong>exemptions@mca.gov.in</strong> </a></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Ministry has requested that the name, Telephone number and address of the sender should be indicated at the time of sending suggestions/comments. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">But isn't a week too short a time to send in Suggestions/Comments? </font></p> <p align="justify"><strong><font size="2" face="Verdana, Arial, Helvetica, sans-serif">MoCA <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/DraftNot_24062014.pdf" target="_blank">Notice</a> and <a href="http://www.taxindiaonline.com/RC2/pdfdocs/wnew/DraftNot_24062014_1.pdf" target="_blank">Draft Notification</a> Dated: June 24, 2014 </font></strong></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">Why can't Revenue follow suit? </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>WHY</strong> can't the Revenue Department emulate this example of the MoCA and issue draft notifications and circulars instead of retrospectively amending notifications? Now that the same Minster of State in Corporate Affairs is the MoS in Finance, she should try to implement this in the Revenue Department too. Actually, like the Companies Act, there should be provisions made in the Acts like Customs, Central Excise, Income Tax … that no circular or notification will be valid unless its draft is placed in public domain for at least 15 days or in case of emergency, the Minister concerned certifies that the draft could not be placed before the public due to urgency and he is personally satisfied that it is absolutely essential to issue the notification/circular. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">It is not as if the Revenue Department is not aware of this system of drafts for public opinion. They have issued several drafts which do not get converted into final notifications/circulars for years and recently as reported by DDT, CBEC removed a draft manual from their website when an RTI question was asked. </font></p> <p align="center"><strong><font color="#006600" size="2" face="Verdana, Arial, Helvetica, sans-serif">International Day Against Drug Abuse and Illicit Trafficking - Drug use disorders are preventable and treatable </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>JUNE</strong> 26 is observed as the International Day against Drug Abuse and Illicit Trafficking - this year's theme is <em>Drug use disorders are preventable and treatable</em>. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The UN Secretary General says, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>Drug abuse and illicit trafficking have calamitous consequences for the world's efforts to deliver greater prosperity and equality for all. There are up to 200,000 preventable deaths each year from overdoses. Illicit drugs spawn criminal violence and weaken a state's essential institutions. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Countries emerging from conflict or escaping economic decline can be overwhelmed when illicit drugs pour across their borders. The United Nations, working across peacekeeping, law enforcement, health, human rights and other related areas, is strongly committed to helping them repel illicit drugs and prevent spill-over from becoming takeover. </font></em></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">In India, the National Academy of Customs Excise and Narcotics (NACEN) is organising the Day in a big way with both the Finance Minister Arun Jaitley and his deputy Nirmala Seetharaman participating. This would be the first public/departmental function for the new FM. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">As a part of the Drug Awareness Drive undertaken by the National Academy of Customs, Excise & Narcotics, several projects including publication of two books, release of a book of slogans for use in campaign, an academic seminar and a cultural fete are to be unveiled on the 26 June 2014 in observance of the International Day against Drug Abuse and Illicit Trafficking. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">A musical CD comprising of songs on the theme of drug abuse and prevention has also been compiled, incorporating songs in Hindi, English and regional languages across India. A bilingual song based on a poem by Dr. Sreekumar Menon, DG, NACEN, sung & composed by Aadesh Shrivastava and Sunidhi Chauhan is also a part of the collection. These songs would be played on the FM channels in Mumbai and Delhi on the 26th June to aid the spread of word against Drug abuse. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> NACEN has also prepared posters signed by celebrities with slogans. One such poster signed by Amitabh Bachchan.</font></p> <p align="center"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"> <img src="http://www.taxindiaonline.com/RC2/image/stories/amitabh.jpg" alt="Legal Corner Icon" width="373" height="497" hspace="5" border="0" align="center"></font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Finance Minister Arun Jaitley is well aware of this problem, as Amritsar from where he contested is one of the worst victims. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Jaitley blogged on 3.4.2014, </font></p> <blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><em>In the areas bordering Pakistan, drug trafficking is rampant. A large number of youngsters start with the thrill of experimentation and eventually become drug addicts. Several families have been destroyed due to this problem. The potential of young men has been damaged. The social fabric of the society has suffered badly. </em></font></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Even though it is primarily the responsibility of every family to inculcate such values in the children that keep them away from the forbidden path, nonetheless, Governments cannot abdicate their responsibility in this matter. </font></em></p> <p align="justify"><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both Central and State Governments have an onerous responsibility to discharge. </font></em></p> <p align="justify"><strong><em><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Addiction to sports rather than to drugs must be the aim. </font></em></strong></p> </blockquote> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Let us hope Arun Jaitley as Finance Minister has some concrete steps to announce tomorrow. </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"> - Thursday's cases</font></strong></font></strong></font></p> <p align="justify"><font 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"><strong><font color="#663399">Service Tax </font></strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Mandap keeper Service or Convention Service - Neither SCN, primary authority nor Appellate order had alleged or concluded that renting appellant's Banquet Hall to pharmaceutical, insurance and other companies was for holding formal meetings or assembly which is not open to general public, specific ingredients for transaction to fall within ambit of "convention": CESTAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> appellant is registered for providing Mandap Keeper service. The period in question is 24.7.2001 to 10.6.2004 and during this period they were remitting service tax under the category of "Mandap Keeper" after availing abatement in terms of exemption <em>Notification No.12/2001-ST</em> dated 20.12.2001 and filing regular returns. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Invoking the extended period of limitation, the Revenue vide SCN dated 3.1.2006 alleged that the services are properly classifiable under ‘Convention Service' and demanded Service Tax of Rs.1,98,038/-, apparently by denying the exemption. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Income Tax </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Whether principle of apportionment embedded in Sec 14A has any application when no expenditure has been incurred in relation to exempt income and primary object of investment was to acquire controlling stake in Group Concern and not earning any income out of investment - NO: ITAT </font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> assessee received dividend income of Rs. 36,90,456/- which is exempt from the Income Tax. The assessee worked out the disallowance u/s 14A at Rs. 103915/- and added back the same in the statement of the total income. The Assessee claims that no borrowed funds was used and the interest expenditure is on the bank term loans, therefore, there is no nexus between the interest expenditure and the investment in shares. The AO disallowed the administrative expenses by applying Rule 8D. The AO accordingly worked out the disallowance at Rs. 8,83,569/- on administrative expenses. The CIT(A) has confirmed the disallowance made by the AO. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">The issues before the bench are: Whether principle of apportionment embedded in section 14A has any application when no expenditure has been incurred in relation to the exempt income and the primary object of investment was to acquire controlling stake in the group concern and not earning any income out of investment and whether depreciation has to be allowed on written down value (WDV) after reducing the actual depreciation allowed in the earlier years. And the verdict favours the assessee. </font></p> <p align="justify"><font color="#663399" size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>Central Excise </strong></font></p> <p align="justify"><strong><font color="#FF6633" size="2" face="Verdana, Arial, Helvetica, sans-serif">Exemption under Notification No 3/2001 CE to Paper and Paperboard - Two registrations given for same plot having common facilities cannot be treated as two factories for benefit of exemption - Tribunal confirms demand for normal period.</font></strong></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong>THE</strong> respondent is engaged in manufacture of paper and paper board chargeable to central excise duty. Sometime in the year 1994, they made a declaration to the jurisdictional central excise authorities that they have set up another factory for manufacture of the same products and applied to the jurisdictional central excise authorities for separate excise registration. The plot location of both the units I &II is the same. The jurisdictional Superintendent of Central Excise, after verification issued central excise registration to the other unit also. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif">Both the units, were manufacturing the same final products and both of them were availing of exemption under notification no.47/97-CE dated 1.3.97 and its successor notifications no.5/98-CE dated 2.6.98, no.6/2000-CE dated 1.3.2000 and no.3/2001-CE dated 1.3.2001 respectively which exempted paper and paper board and articles made thereof in a factory starting from the stage of pulp, which contains not less than 75% by weight of pulp other than bamboo, hardwoods, soft wood, reeds (other than sarkanda) or rags. This exemption was available in respect of first clearance in a financial year upto a specified limit as mentioned in the notification. </font></p> <p align="justify"><font size="2" face="Verdana, Arial, Helvetica, sans-serif"><strong><font color="#663399">See our Columns Tomorrow for the judgements</font></strong> </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Until Tomorrow with more <strong>DDT</strong> </font></p> <p align="justify"><font color="#FF6666" size="2" face="Verdana, Arial, Helvetica, sans-serif">Have a nice day.</font></p> <p align="justify"><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> </body> </html>