INCOME TAX APPELLATE TRIBUNAL, NEW DELHI CONSTITUTION OF BENCHES FROM 22.07.2013 TO 25.07.2013 AND 29.07.2013 01.08.2013

[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL, NEW DELHI CONSTITUTION OF BENCHES FROM 22.07.2013 TO 25.07.2013 AND 29.07.2013 01.08.2013 {ad} For more information...

E-filing of income tax returns to surge on new norms

Electronic filing of income tax returns is likely to jump sharply this year as the government has brought down the mandatory limit of online filing to income above Rs 5 lakh from the earlier Rs 10 lakh.

"A large number of people come under Rs 5 lakh to Rs 10 lakh category. The lowering of income limit for mandatory e-filing will give a boost to online filing of returns," Vineet Agarwal, a director at KPMG India, said.

He said online filing was becoming increasingly popular and it has helped in reducing cost and time required for processing the returns.

"It is good for both the taxpayers as well as the government. It is cost effective, takes less time and the processing is faster," Agarwal said.

The government has made electronic filing mandatory for all those taxpayers whose taxable income exceeded Rs 5 lakh in the financial year 2012-13 or assessment year 2013-14. The assessment year is always one year ahead of the financial year.

Until financial year 2011-12, this mandatory limit was for the taxable income exceeding Rs.10 lakh.

Ankur Sharma, co-founder and chief executive officer of TaxSpanner.com, a leading e-return intermediary, said the number of electronic filing of returns is estimated to jump by almost 50 percent this year.

"Last year, nearly 50 percent of tax returns were filed electronically. This year, with the mandatory online filing for individuals earning more than Rs.5 lakh, the penetration of e-filing is expected to be more than 75 percent," Sharma said.

He said the increase in penetration of e-filing in India has been far more sharper than even the countries like the US.

"It took more than two decades for e-filing penetration to reach this level in the US. India has achieved this remarkable feat in just over 5 years," he said.

"Of the e-returns filed, nearly 73 per cent have been filed voluntarily by taxpayers indicating the broader acceptance of the convenience of e-filing," Sharma added.

As always, the deadline for filing income tax return is July 31. There is usually a huge rush among the taxpayers in July to file the returns.

Sharma said although there is no procedural changes introduced by the government, e-filing portals have taken several steps to make the process simpler. The new features include e-filing by email, automatic Form 26AS matching and automatic return preparation from digital brokerage statements.

Taxpayers can either file the returns themselves by logging on to the Income Tax Department website incometaxindiaefiling.gov.in, or through e-return intermediaries.

Filing of return through the department's website is free of cost, while e-return intermediaries charge a fee of around Rs 250 to Rs 1,000, depending on the kind of services.

The popular e-return intermediaries are TaxSpanner.com, Taxsmile.com, myITreturn.com, Taxyogi.com, and taxshax.com.

On estimated growth in income tax mop-up, Agarwal said the revenue from the income tax would rise sharply despite a sluggish economic growth, as the government is taking measures to tap tax evaders.

"Revenue will be higher from tax despite sluggish 5-6 per cent GDP growth. It will depend more on how the tax evaders and black money is being brought into the tax net," Agarwal said.

Nearly 34 million or just around three per cent of the 1.2 billion people in India filed tax returns in 2012-13.

In the union budget, Finance Minister P. Chidambaram has set a direct tax collection target of Rs.6,68,109 crore for the financial year 2013-14, 19.69 per cent higher than the last year's figure.

Direct taxes include personal income tax, corporate taxes and Securities Transaction Tax. Income tax contributes more than half of the total direct tax collections

Undue delay in serving an order hints ‘backdated’ order

IT : Where Assessing Officer passed rectified order under section 154 on 31-3-2004, i.e., on last date of limitation, and served same on assessee dasti on 18-10-2005, since there was no explanation why order allegedly dated 31-3-2004 could be served on 18-10-2005, impugned order was in fact backdated and, therefore, barred by limitation

Differences in claim over arm’s length prices couldn’t be assigned only to purchases made from AE

IT/ILT : Difference in arm's length cost and cost claimed by assessee cannot be assigned only to one purchase transaction from AE

Rupee Down 40 Paise Against Dollar In Early Trade

The rupee on Thursday fell by 40 paise to 59.74 in early trade on the Interbank Foreign Exchange market (Forex), weighed down by the US dollar’s gains against other currencies.

Forex dealers said besides dollar’s gain against other currencies overseas after US Federal Reserve chief Ben Bernanke said the bank had no plan to wind down its stimulus until the economy was back on track, increased demand for the American currency from importers put pressure on the rupee.

They said, however, a higher opening in the domestic equity market, capped the rupee’s losses.

The rupee had lost three paise to close at 59.34 against the US dollar on Wednesday, failing to sustain gains driven by the easing of FDI norms in various sectors and the RBI’s liquidity-tightening measures.

Meanwhile, the BSE benchmark Sensex regained 20,000-points level by rising 104.12 points, or 0.52 per cent, to 20,052.85 in early trade today.

Source:-www.thehindu.com

Indian Pharma Equipments Manufacturers Urge Dumping Duty On Chinese Imports

The Indian government has received requests from several pharma machinery producers to curtail the free flow imports of Chinese machineries by imposing anti dumping duty.

Presenting a set of recommendations to the country's union commerce ministry, the domestic makers claimed that unrestricted imports have threatened the survival of their businesses, as reported by Pharmabiz.com.

Urging the government to dictate some regulatory framework on par with the WHO-GMP standards for the pharma machinery manufacturing sector, the industry leaders also asked government support for R&D, export promotion schemes, funding for foreign market development.

The industry has also sought government help for financing and risk coverage for exports to under developed countries, relaxations for import of design and technology, education on patent laws and process to protect designs.

They also requested that pharma machineries should be made a part of bilateral agreements with LAC countries, European and other countries for duty free imports at purchaser's side.

It is estimated that around 800 Indian pharmaceutical machine manufacturing and allied utility service units in the small and medium sector (SME) are engaged in processing, packaging, material handling, R&D equipment & instrumentation, and API/bulk drug plant machineries.

A study has highlighted that Indian pharma machinery industry is developing at 15 to 20% annually, with a reported projected revenue of about INR60bn ($1.01bn), out of which INR18bn ($303m) account for exports.(Published 16 July 2013)

Source:-manufacturing.pharmaceutical-business-review.com

Strongroom At Airport Will Boost Diamond Export

17-Jul-2013

SURAT: Surat's gain is Mumbai's loss. Diamantaires in the Rs 80,000-crore world's biggest diamond cutting and polishing centre would no longer require to send their precious diamonds for export to Mumbai.



Surat airport is all set to be equipped with a strongroom to handle precious cargo by July-end. Airport Authority of India (AAI) has given its approval to the proposal.



Surat Hira Bourse (SHB), the lone custom clearance centre in the city, is all prepared to operate the strongroom at the airport to facilitate the transit of the precious cargo from Surat to around the world.



KK Sharma, chief executive officer (COO), SHB, told TOI, "The SHB handles import of rough diamonds worth Rs 30,000 per annum. We are prepared to set up strongroom at Surat airport to facilitate the merchants and diamantiares for direct export."



According to Sharma, the SHB would provide custom clearance of the precious diamonds and jewellery and that the goods would be stored at the airport's strongroom. The goods would be loaded in the domestic flight to Mumbai for direct export to foreign countries.



The SHB would offer a wide range of facilities like import and export of precious cargo, strongroom with vaults, full custom service, complete security and adequate insurance cover for the safety of parcels etc.



Sharma said, "Since there is no international connectivity from Surat, we cannot set up a custom clearance facility at Surat airport. Diamantiares will have to get custom clearance of their goods from SHB office at Katargam and then store it at the airport strongroom."



Around Rs 75,000 crore of polished diamonds processed in the city annually are sent to Mumbai through angadias. They are then exported to different destinations in the world after custom clearance at Mumbai airport.



SD Sharma, Surat airport, director, told TOI, "We will be allotting the space for the strongroom at the airport by July end. Custom clearance facility is to be set up by the Surat Heera Bourse. The diamantaires will then be exporting diamonds directly to the world markets."



Dinesh Navadia, president, Surat Diamond Association, told TOI, "We have been doing all the procedures relating to custom clearance and other documentation for the export of polished diamonds from Mumbai. Once Surat is equipped with the strongroom, most of the diamantaires would be exporting their goods directly from the airport."

Source:-timesofindia.indiatimes.com

Sensible Export Policy Would Have Saved The Day

17-Jul-2013

There is something moronic about the utterances of economists who they see in the current rupee-dollar exchange rate crisis a silver lining. They aver it would spur the nation to export more.



If only it was so simple! China, the world’s largest exporter, has about 50 per cent of its GDP coming from exports with the comparable figure for us being less than 15 per cent, which does not place us in the category of leading exporters.



Indeed, we are not. In the rough and tumble of the export market, there are no quick fixes or shortcuts. There are both endogenous and exogenous factors that operate in determining the strength of a country’s currency, with exogenous factors often exerting greater influence.



All floating currencies of the world have perforce to yield to the US dollar, which was foisted as the global currency by the US in 1944 through a combination of trickery, audacity and technological and military supremacy.



Indeed, the US dollar defies all theories and truisms.



A country suffering from perennial Current Account Deficit (CAD) would willy-nilly have to live with a weak domestic currency.



This, however, does not apply to the US. Despite leading the pack in having the highest CAD, it has a fairly strong currency.

Policy Paralysis



It is not as if we have been done in by the external environment alone. The rot could have been stemmed through several policy initiatives, such as:



The only area we reined supreme for a while was IT and IT-related exports but somewhere down the line we allowed that advantage to slip through, though the world-wide recession admittedly was also responsible.



Countries like Vietnam and Philippines were snapping at our heels through furious cost-cutting and catching up on English language skills but we buried our heads in the sand, ostrich-like.



Our IT companies, instead of preserving our advantages, set up shop in these countries in the sobering realisation that if you cannot beat them, better join them.



We were once upon a time a leading cotton garments exporter. But the Johnny-come-lately, Bangladesh, has not only stolen a march over us but has been giving the more dogged Chinese a taste of their own bitter medicine — furious under-cutting of price. What the government must do immediately, now that India grows cotton in enormous quantities, is to throw open the garment industry to the large-scale sector.



Huge economies of scale and the much-needed resilience to cope up with the ever-changing fashions are attributes uniquely present only with the large companies, which have the resources to import the most modern machines.



Reviving the cotton textile industry should be the government’s priority that would give fillip to the downstream garments sector.



Employment opportunities would get a leg-up.



This, however, does not mean the rupee would turn the tide, immediately because there would always be a lag between investments and exports.



Export markets are notoriously difficult to prise open especially when faced with under-cutting of quotations and devaluation of currency, adopted by China.



Our captains of industry were itching to invest abroad. It is one thing for students to itch to study abroad but quite another for industries to invest abroad. Of course, they were not entirely to blame.



The government drove them to take this extreme step when back home investment was becoming a tough proposition — the ‘economy versus ecology’ dichotomy, among others, was making investments difficult. And the government played ball with them in facilitating the exodus, whereas it should have restrained them through tough norms.



The rather easy norms for outbound foreign investments have depleted our precious forex reserves; besides, Indian ended up buying a pig in a poke. Yes, many of the outbound investments have gone sour for two reasons — the recession there and winners’ curse of paying an excessive price for acquisitions abroad in the anxiety to prevent competitors from stealing a march. Domestic investments, by contrast, have a multiplier effect like creation of employment opportunities, greater revenue for governments and better infrastructure.



Making External Commercial Borrowings (ECB) laughably simple through the automatic route through which a company can borrow as much as the equivalent of $700 million in a financial year was suicidal even without the benefit of hindsight. The economy is paying through its nose now that the rupee has dropped steeply from what the dollar fetched at the time of borrowings.



Huge redemption losses stare the borrowing companies in particular, and the economy, in general. Mercifully, the RBI put its foot down on borrowings from abroad for less than three years.



Revolving door mechanism extended to FIIs. FIIs bring hot money and are fair weather friends. They must be reined in. We need to take steps that would make us a manufacturing nation, so that we have an export surplus.



Right now, our exports have a huge import content, be they petroleum products or gems and diamonds. The government is now giving a pep talk to the industry, exhorting it to increase steel production. But it has to walk the talk.

Source:-www.thehindubusinessline.com

Indian Coffee, Tea, Meat, Spice Exports For June 2013 Fall To $276.67M

July 18, 2013

one of the country's premier import-export market research company, announced that in June 2013, India's coffee, tea, meat and spice exports fell to $276.67 million, a decrease of 9.86 per cent compared to May 2013.



These findings are based on the data about India's exports of coffee, tea, meat and spices available on InfodriveIndia.com and on export shipping bills filed at Indian Customs by exporters from India at over 110 ports in India.



These include the Jawaharlal Nehru Port Trust (JNPT), Mumbai's air and seaports, Chennai's air and seaports, Delhi's Indira Gandhi International (IGI) Airport, Delhi's Tughlakhabad inland container depot (ICD), Delhi's Patparganj, Kolkata's air and seaports, Bangalore airport, etc.



Pradeep, chief research associate, InfodriveIndia.com, provided an analysis and break-up of the major product categories (coffee, tea, meat and spices), the major countries to which they are exported and the major Indian ports.

Source:-www.fnbnews.com

Rupee Depreciation Not Helping Exporters: Eepc India

A sharp dip in rupee value against dollar and other major currencies has yielded no gains to exporters who are reeling under a severe slowdown in global demand and have seen their shipments drop, calling for very urgent measures from the government and the industry, EEPC India Chairman Aman Chadha said Wednesday.



"We are facing considerable demand problem in external markets and there is, so far, no visible impact of the currency depreciation on our exports," Chadha said in his presentation before senior officials of the Commerce Ministry in New Delhi on Wednesday.



While rupee has depreciated about 10 per cent in the last two months against the US dollar and other major currencies, exports of engineering products, among the largest segments of the Indian merchandise export basket, too sent went down almost in the same ratio, instead of benefitting from currency erosion, EEPC India, formerly known as Engineering Export Promotion Council said.



India's overall engineering exports fell by 9.26 percent to USD 4223.29 million in June this year from a revised figure of USD 4654.47 million achieved during June 2012. The decline has exacerbated from -3.15 percent in May 2013.Average growth rate for the first quarter of 2013-14 was -7.53 percent.



Important engineering export segments like iron and steel, products of iron and steel, copper and copper products, motor vehicles and aircrafts, spacecrafts and parts have witnessed sharp decline in exports.



Out of the 33 engineering panels, 19 engineering panels recorded negative growths in the month of June 2013 as opposed to 16 such panels in the month of May 2013.



Faced with a difficult situation in the developed markets of the US and the European Union, the two main destinations for Indian markets, the EEPC is seeking new markets in Africa.



While the overall trade with Africa is much below the potential, India and Africa can help each other tide over the impact of global slowdown, Chadha said.



The continent is recovering from the global crisis of 2009 and it is sustained even though a new global slowdown is constraining Africa's growth, like that of many other regions. With the gradual recovery of North African economies, Africa´s average growth is expected to rebound to 4.8 percent in 2013.



"While keeping an eye on new economic storm clouds in Europe, both India and Africa must keep its focus on reforms that encourage growth and foster bilateral trade and investment between our two regions," EEPC Chairman said.

Source:-www.smetimes.in

CBDT's clarification - Exemption under Sec. 10A, 10AA, 10B and 10BA are available after set off of l

IT : Section 10A, Read with Sections 10AA & 10B of The Income-Tax Act, 1961 - Free Trade Zone - Direct Tax Benefits - Clarification on Issues Relating to Applicability of Chapter IV of The Act and Set off and Carry Forward of Business Losses

CBDT issues instruction to effectively handle the SLPs or appeals to be filed by assessees

IT : Section 261 of The Income-Tax Act, 1961 - Supreme Court - Appeals to - Instruction Regarding Standard Operating Procedure for Appeals/SLPs Filed by The Assessees in The Supreme Court and Related Matters

DRP to pass a speaking order considering all objections raised by assessee

IT/ILT : Where order of Dispute Resolution Panel did not state objections raised by assessee, same should be set aside to its file to pass a speaking order stating all objections and disposing them by giving cogent reasons

Sec. 154 doesn't authorize AO to allow an exemption not claimed in return unless it's an apparent mi

IT: Sec. 154 doesn't authorize AO to allow an exemption not claimed in return, unless it's an apparent mistake

Discount on shares issued under ESOP held as ‘expenditure’ and part of employees’ cost

IT : Object of issuing ESOPs at a price at a discount to market price is not to raise share capital but to earn profit by securing the consistent and concentrated efforts of its dedicated employees during the vesting period. Such discount is construed, both by the employees and company, as nothing but a part of package of remuneration. Discount on ESOPs is neither short capital receipt nor contingent liability. It is an expenditure. Discount on ESOPs deductible on straight line amortization basi

Commissioner (A) can’t take different stands on a same issue but arising in distinct periods

ST : Where Commissioner (Appeals) had upheld orders passed by Adjudicating Authority rejecting refund claim of assessee, while, for subsequent period, refund claim involving same input services was allowed by him, matter was required to be remanded back to Commissioner (Appeals)

Reassessment based on additional reasons recorded after service of reassessment notice not valid

IT: Where Assessing Officer reopened assessment of assessee after recording reasons and served on it a notice under section 148 on 19-1-2010, additional reasons recorded by Assessing Officer subsequent to issuance of notice under section 148 could not be looked into for purposes of determining validity of proceedings initiated under notice dated 19-1-2010

Government to discuss tax concerns of industry groups

Finance minister P. Chidambaram announced on Wednesday the setting up of a mechanism to discuss tax-related, sector-specific concerns raised by industry groups and other associations to improve the dialogue between government and companies.

From the government’s side, Parthasarathi Shome, adviser to the finance minister, will meet industry groups and associations once a week and take note of their concerns. This will only be a forum for the concerns of a particular industry and not individual cases.

“There is a merit for having an institutional, structured mechanism to hear concerns of industry groups. At present, we get to hear about their concerns only once a year during the pre-budget discussions,” Chidambaram said at a press briefing after meeting the chief commissioners and directors general of customs, central excise and service tax.

Expressing confidence that the government will meet the revenue collection targets for the current fiscal, Chidambaram warned that “non-filers”, those who do not pay taxes, and “stop filers”, those who used to pay taxes but have stopped, will be targeted.

“In service tax, the number of non-filers and stop filers is exceeding Rs.12 lakh. We are going to target them,” he said.

Of the indirect tax target of Rs.5.63 trillion for 2013-14, more than Rs.1.80 trillion has to come from service tax collections.

Given the lukewarm response to the service tax voluntary compliance encouragement scheme in this year’s budget, the finance minister said the tax department would run an awareness campaign to encourage assessees to take advantage of it.

Under the scheme, any service provider who has not paid service tax dues can do so without having to pay interest and penalty. The government will shortly issue a list of frequently asked questions to provide clarity about the scheme, he said.

The finance minister also said that the government is taking steps to address manpower issues with a proposal for cadre restructuring of the Central Board of Excise and Customs (CBEC) to be taken up in the Cabinet soon. The government has to fill almost 700 vacancies above the assistant commissioner level in CBEC.

On a new chairman for the empowered committee of state finance ministers, Chidambaram said that the Union government and state finance ministers will choose a new head at a meeting on 22 July in New Delhi. The post fell vacant after Sushil Kumar Modi stepped down after resigning as the deputy chief minister of Bihar.

SECURI TECH INDIA P. LTD. COMPANY Vs. THE CHAIRMAN CENTRAL BOARD OF DIRECT TAXES

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI + WRIT PETITION (CIVIL) NO. 987/2012 Date of decision: 8th July, 2013 SECURI TECH INDIA P. LTD. COMPANY ..... Petitioner Through Dr. M.P. Raju, Advocate. Versus THE CHAIRMAN CENTRAL BOARD OF DIRECT TAXES & ORS. ..... Respondents Through Mr. N.P. Sahni, sr. standing counsel for R-1. Mr. Abhishek Maratha, sr. standing counsel for respondent Nos. 2 to 4. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J. (ORAL): Securi Tech India Pvt. Ltd., petitioner No.1 has filed the present writ petition for refund of Rs.5,42,000/- with interest. It is stated that the respondent Nos.1 to 4 i.e. the income tax authorities are not obeying and complying with the order dated 13th January, 2006 passed by the tribunal and have acted contrary to the mandate and obligation imposed by Section 240 of the Income Tax Act, 1961 (Act, for short). 2. Rajender Prasad Tyagi, respondent No.5 was subjected to search and seizure operations under Section 132 of the Act on 21st January, 1997. An amount of Rs.5,42,000/- was found at the residence, which was allotted to Tuleshwari Tyagi wife of Rajender Prasad Tyagi, at Satya Sadan, Chanakyapuri, New Delhi. Seizure memo W.P. (C) No. 987/2012 Page 1 of 7 (annexure P-1) records the name of the persons searched as R.P. Tyagi and Tuleshwari Tyagi and mentions that Rs.5,32,310/- and Rs.17,000/- in different denominations notes were found at the time of search in one bedroom and store room of the house. Rs.5,25,000/- out of Rs.5,34,310/- was seized. 3. By block assessment order dated 21st January, 1999, substantive addition of Rs.5,42,000/- was made to the income of Rajender Prasad Tyagi as declared. Another order under Section 158 BC was passed in the case of the petitioner No.1 and addition of Rs.5,42,000/- on account of the cash seized was made on protective basis in the hands of the petitioner No.1. As tax demands remained unpaid by Rajender Prasad Tyagi, this amount of Rs.5,25,000/-, which was lying in the PD of the Commissioner, were adjusted towards the demands payable by Rajender Prasad Tyagi. Rajender Prasad Tyagi, however, succeeded in first appeal and addition in his hands was deleted vide order dated 25th January, 2001 by Commissioner of Income-tax (Appeals) and it was held that this amount of Rs.5,25,000/- belonged to the petitioner No.1. Consequent upon the said order, the Assessing Officer passed a fresh assessment order dated 28th March, 2002 and added Rs.5,25,000/- on account of the cash seized on substantive basis to the income of the petitioner No.1. This addition was challenged before the first appellate authority and then before the tribunal. Tribunal by their order dated W.P. (C) No. 987/2012 Page 2 of 7 13th January, 2006 quashed the original assessment order dated 25th January, 1999 made under Section 158 BC of the Act. We only record that the said order has become final. As a result, no addition has been made in the case of the petitioner No.1. 4. Since then, i.e., after 13th January, 2006, petitioner No.1 has been repeatedly asking for refund of the said amount and has written request letters dated 15th March, 2007, 20th September, 2007, 24th March, 2008, 20th August, 2008, 13th January, 2009, 5th February, 2009 and 26th March, 2009, etc. After a lapse of nearly three years, the Assessing Officer for the first time responded and asked the petitioner No.1 vide letter dated 8th April, 2009 to justify the claim of refund by filing documentary evidence. Reply was filed by the petitioner No.1 vide letter dated 2nd May, 2009. The Assessing Officer thereupon wrote letter dated 25th May, 2009/1st June, 2009 asking why the refund was being claimed by the petitioner No.1, as the seized cash could be adjusted against the demand created in the case of Rajender Prasad Tyagi. Thereafter, nothing happened. Petitioner No.1 thereupon approached Ombudsman but proceedings remained pending and no refund was made. 5. The petitioner No.1 has in these circumstances approached this Court by way of the present writ petition. 6. Rajender Prasad Tyagi, respondent No.5 has filed counter W.P. (C) No. 987/2012 Page 3 of 7 affidavit to the present writ petition and has stated that he has no objection in case payment is made to the petitioner No.1. In the counter affidavit he has reproduced the findings recorded by the CIT (Appeals), which read:- "4.3 The cash of Rs.5,25,000/- was not found from the bedroom or from the personal possession of the appellant but from the room wherein records and consumer containing entries of M/s Securi Tech India Pvt. Ltd. were kept by virtue of going a camp office of the said company operating from theses premises. 4.4 Thus, the fact of ownership of cash confirmed by the persons connected to M/s Securi Tech India Pvt. Ltd. So, it cannot be presumed to be belonging to any other person. 4.5 The Department did not have any evidence to reject the statement of the assessee and the owners of the cash so found. Merely, on surmises and conjectures the same could not be assessed or presumed to be the undisclosed income of the appellant. 4.6 In respect of other amount of Rs.17,000/- Sh. Yashvir Tyagi, brother-in-law of the assessee, categorically confirmed in his statement that this amount was left by him with his sister and was a part of professional fee and expenses received by him for representing a murder case at Gurgaon. The fees was received at the residence of his sister and thereafter he proceeded to Gurgaon from where he returned to his home at Meerut without picking it up from the residence of his sister. He could not come to Delhi, thereafter, and the said cash was seized at the time of search. 4.7 Smt. T.D. Tyagi and Sh. R.P. Tyagi at the time of search in their statements recorded on 21.01.1997 categorically stated that this amount of Rs.17,000/- was left by Sh. Yashbir Tyagi, Advocate and brother of Smt. T.D. Tyagi. This was also confirmed by Sh. Yashbir Tyagi in his affidavit and statement filed before the A.O. In fact, the affidavit and other confirming evidence from his client, who paid the W.P. (C) No. 987/2012 Page 4 of 7 fees to him, were also submitted before the A.O. Shri. Yashvir Tyagi has been assessed under Section 158 BC at the same time and the said receipt has already been considered as income in his hands. 4.8 Factually, the AO has not given any reason to reject the contention of the appellant and that of Shri Yashvir Tyagi. But he merely brushed aside the facts and submissions by stating the same to be an afterthought. 4.9 In respect of cash of Rs.5,25,000/- found from the flat, I am of the opinion that the appellant cannot be deemed to be the owner of the said cash as he has been able to discharge his onus." 7. It is clear from the above quote that the CIT (Appeals) has held that the money belonged to petitioner No.1 and the amount seized Rs.5,25,000/- did not belong to any other person. The balance amount of Rs.17,000/- it was held belonged to one Yashvir Tyagi and has been assessed as his income under Section 158 BC. This order of the CIT (Appeals), as noted above, has been accepted by the Revenue and it has not been challenged or questioned. 8. We fail to understand that once the department has accepted the said order and treated Rs.5,25,000/- as income and money of petitioner No.1 and this was/is also the stand of respondent No.5, why the said respondents have not refunded or repaid the said amount. We also fail to understand why the Assessing Officer took three years to respond to the letter written by the petitioner No.1 and their ambivalence and distrait thereafter. Addition of Rs.5,25,000/- on substantive basis in W.P. (C) No. 987/2012 Page 5 of 7 the case of the petitioner No. 1 was deleted by the tribunal by their order dated 13th January, 2006. Rs.5,25,000/- should have been refunded immediately thereafter. The department could not have adjusted the amount against the demand payable by Rajender Prasad Tyagi in view of the findings recorded by the CIT (Appeals) in the order dated 25.1.2001 that the amount belonged to petitioner No.1. It was not the money of respondent No. 5. We have recorded that there is no dispute between the petitioner No.1 and respondent No.5 that the amount belongs to petitioner No.1 and respondent No.5 does not claim any right or interest on the said amount. 9. In view of the findings recorded above and the statement made by respondent No.5, we are not inclined to entertain and examine the submission made by respondent Nos.1 to 4 that payment or refund under Section 132(3) can only be made to Rajender Prasad Tyagi and not to petitioner No.1. We would not like to examine the contour of Section 132 as the facts of the present case do not require the said examination. The said respondents accept that the refund of Rs.5,25,000/- is due. The amount belongs to the petitioner No. 1. Respondent No. 5 states and accepts that the amount/refund should be paid to the petitioner No. 1. As already noted above, the case of the respondent No.5 throughout has been that the money does not belong to him and the said finding has been accepted by the first appellate W.P. (C) No. 987/2012 Page 6 of 7 authority under the Act, i.e., the Income Tax Act, 1961 and the order has become final. Prima facie it appears that Section 132(3) is meant to deal with the cases where there is difference or dispute between two or more persons as to whom the money belongs. In the present case, no such issue or question arises. In these circumstances, Section 132(3) need not be interpreted as the question is of merely academic interest. 10. Amount of Rs.5,25,000/- along with interest is lying deposited in this Court. It will be appropriate and proper if the said amount along with interest is released to the petitioner No.1 by the Registry of this Court. The petition is accordingly allowed to the extent indicated and the respondent Income-tax authorities, i.e., respondent Nos. 1 to 4 will pay costs of Rs.20,000/- to the petitioner No.1. The said costs will be paid within two months by sending a cheque. Mr. Abhishekh Maratha, who appears for respondent No.6, the Assessing Officer of Rajender Prasad Tyagi states that as per their records no amount is due and payable by Rajender Prasad Tyagi. In case any recovery has to be made from Rajender Prasad Tyagi, the same will be affected in accordance with law. SANJIV KHANNA, J. SANJEEV SACHDEVA, J. JULY 08, 2013/NA/VKR W.P. (C) No. 987/2012 Page 7 of 7

COMMISSIONER OF INCOME TAX Vs. SAMSUNG INDIA ELECTRONICS LTD.

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 9th July, 2013 + ITA 132/2010 COMMISSIONER OF INCOME TAX ..... Appellant Through Ms. Suruchi Aggarwal, sr. standing counsel. versus SAMSUNG INDIA ELECTRONICS LTD. ..... Respondent Through Mr.Satyen Sethi and Mr. Arta Tarana Panda, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J. (ORAL) This appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) by the Revenue, which relates to the assessment year 1998-99 raises two issues. The first issue pertains to deletion of disallowance on account of brand-building and dealers loyalty expenditure. The said issue is covered against the Revenue by decision dated 3rd September, 2012 in ITA 98/2010, Commissioner of Income Tax Vs. Samsung India Electronics Ltd. We note that ITA 98/2010 also relates to the assessment year 1998-99. ITA 132/2010 Page 1 of 4 2. The second issue relates to training expenses of Rs.29,30,950/-. The said expenses were incurred by the respondent-assessee on training given to technical and some non-technical persons. The Assessing Officer has held that that the expenditure had resulted in enduring benefit to the assessee and amortized the expenditure over a period of six years. 1/6th of the said expenditure was allowed for the year 1998-99. Assessee filed first appeal but the CIT (Appeals), instead of agreeing with the assessee, disallowed the entire expenditure holding that it relates to ,,pre setup period and was capital expenditure. The CIT (Appeals) observed that some of the employees, mainly engineers and technicians, were sent to various plants in Indonesia, Bangkok and Seoul but the said training was given before commencement of the business of manufacturing which started from 17th June, 1997. The technicians were trained abroad during the period February-March 1997. 3. The contention of the assessee, which has been accepted by the tribunal, is though manufacturing of colour TV sets commenced with effect from 17th June, 1997, but the business was setup earlier. The date of commencement of manufacturing was not relevant. The Tribunal has held that the expenditure was essentially for the purpose of carrying on the existing business, for which the commercial operations had started in 1996- ITA 132/2010 Page 2 of 4 1997, and the new manufacturing unit was an extension of existing business. We have already noticed that the Assessing Officer did not treat the expenditure in question as capital in nature but amortized it over a period of six years. The first appellate authority took notice of the fact that actual manufacturing activity commenced from 17th June, 1997, but did not go into the question as to the date on which business activities commenced i.e. business was setup and whether the manufacturing activity was in continuation of the earlier business. The first appellate authority has, however, recorded that the respondent-assessee had commenced its business during the previous year in 1995-96 and training was given in March, 1997. 4. Pertinent observations have been made in Commissioner of Income Tax v. Cement and Chemical Industries Ltd. [1973] 91 ITR 170 by a division bench of Gujarat High Court (authored by Justice Bhagwati P.N. J as his Lordship then was) that "business" connotes a continuous course of activities and all the activities need not start simultaneously in order that the business may commence. The business would commence with the activity which is first in point of time and which much necessarily precede all other activities. Thus, in that case when the cement company quarried the leased area of land and extracted limestone from it, it was considered as much an ITA 132/2010 Page 3 of 4 activity in the course of carrying on the business as the subsequent activities of manufacture of cement and sale of manufactured cement. This activity came first in point and laid foundation for others and, hence, was held to be deductible in computing the trading profits of the assessee for the relevant assessment years. 5. In view of the findings recorded by the tribunal, we do not think that any substantial question of law arises for consideration and the appeal is dismissed. SANJIV KHANNA, J SANJEEV SACHDEVA, J JULY 09, 2013 NA ITA 132/2010 Page 4 of 4

COMMISSIONER OF INCOME TAX Vs. SAMSUNG INDIA ELECTRONICS LTD.

$~ * IN THE HIGH COURT OF DELHI AT NEW DELHI Date of decision: 9th July, 2013 + ITA 132/2010 COMMISSIONER OF INCOME TAX ..... Appellant Through Ms. Suruchi Aggarwal, sr. standing counsel. versus SAMSUNG INDIA ELECTRONICS LTD. ..... Respondent Through Mr.Satyen Sethi and Mr. Arta Tarana Panda, Advocates. CORAM: HON'BLE MR. JUSTICE SANJIV KHANNA HON'BLE MR. JUSTICE SANJEEV SACHDEVA SANJIV KHANNA, J. (ORAL) This appeal under Section 260A of the Income Tax Act, 1961 (Act, for short) by the Revenue, which relates to the assessment year 1998-99 raises two issues. The first issue pertains to deletion of disallowance on account of brand-building and dealers loyalty expenditure. The said issue is covered against the Revenue by decision dated 3rd September, 2012 in ITA 98/2010, Commissioner of Income Tax Vs. Samsung India Electronics Ltd. We note that ITA 98/2010 also relates to the assessment year 1998-99. ITA 132/2010 Page 1 of 4 2. The second issue relates to training expenses of Rs.29,30,950/-. The said expenses were incurred by the respondent-assessee on training given to technical and some non-technical persons. The Assessing Officer has held that that the expenditure had resulted in enduring benefit to the assessee and amortized the expenditure over a period of six years. 1/6th of the said expenditure was allowed for the year 1998-99. Assessee filed first appeal but the CIT (Appeals), instead of agreeing with the assessee, disallowed the entire expenditure holding that it relates to ,,pre setup period and was capital expenditure. The CIT (Appeals) observed that some of the employees, mainly engineers and technicians, were sent to various plants in Indonesia, Bangkok and Seoul but the said training was given before commencement of the business of manufacturing which started from 17th June, 1997. The technicians were trained abroad during the period February-March 1997. 3. The contention of the assessee, which has been accepted by the tribunal, is though manufacturing of colour TV sets commenced with effect from 17th June, 1997, but the business was setup earlier. The date of commencement of manufacturing was not relevant. The Tribunal has held that the expenditure was essentially for the purpose of carrying on the existing business, for which the commercial operations had started in 1996- ITA 132/2010 Page 2 of 4 1997, and the new manufacturing unit was an extension of existing business. We have already noticed that the Assessing Officer did not treat the expenditure in question as capital in nature but amortized it over a period of six years. The first appellate authority took notice of the fact that actual manufacturing activity commenced from 17th June, 1997, but did not go into the question as to the date on which business activities commenced i.e. business was setup and whether the manufacturing activity was in continuation of the earlier business. The first appellate authority has, however, recorded that the respondent-assessee had commenced its business during the previous year in 1995-96 and training was given in March, 1997. 4. Pertinent observations have been made in Commissioner of Income Tax v. Cement and Chemical Industries Ltd. [1973] 91 ITR 170 by a division bench of Gujarat High Court (authored by Justice Bhagwati P.N. J as his Lordship then was) that "business" connotes a continuous course of activities and all the activities need not start simultaneously in order that the business may commence. The business would commence with the activity which is first in point of time and which much necessarily precede all other activities. Thus, in that case when the cement company quarried the leased area of land and extracted limestone from it, it was considered as much an ITA 132/2010 Page 3 of 4 activity in the course of carrying on the business as the subsequent activities of manufacture of cement and sale of manufactured cement. This activity came first in point and laid foundation for others and, hence, was held to be deductible in computing the trading profits of the assessee for the relevant assessment years. 5. In view of the findings recorded by the tribunal, we do not think that any substantial question of law arises for consideration and the appeal is dismissed. SANJIV KHANNA, J SANJEEV SACHDEVA, J JULY 09, 2013 NA ITA 132/2010 Page 4 of 4

Trust registration couldn’t be denied because of non-commencement of charitable activities

IT : Only because trust has not commenced activities, Commissioner would have no authority to ipso facto reject application for registration under section 12AA

Transportation and installation of goods after transfer of title thereof is liable to ST

ST : If transfer of title of goods takes place at place of seller, then, subsequent charges for transporting goods, installation and other expenditure do not form part of sale price and can be charged to service tax

Direct taxes code bill to be introduced in monsoon session: Chidambaram

The government will introduce the official amendments to the Direct Taxes Code (DTC) bill, seeking to overhaul the over 50-year old income tax law, towards the end of the Monsoon session of Parliament.

The session will be held from August 5 to 30.

The DTC bill was introduced in the Lok Sabha in 2010 and Standing Committee on Finance has given a report after its scrutiny.

Finance Minister P Chidambaram on Tuesday said: "The report (of the panel) has come. I completed the exercise in the Ministry of Finance. The official amendments are now being drafted. They will be ready and I will introduce the official amendments in the Parliament towards the end of the Monsoon session and then it is for Parliament to pass it."

The minister said the DTC has gone through entire legislative process except passage in Parliament. "I think we have done our homework and Parliament will pass it".

The DTC aims to rationalise tax rates to bring more people and companies under the tax net.

Among other things, the Standing Committee had suggested raising the income tax exemption limit to Rs 3 lakh as against Rs 2 lakh proposed in the DTC Bill, 2010.

On the proposed Goods and Services Tax (GST), Chidambaram said "one or two state governments" are opposing it.

The Empowered Committee of State Finance Ministers, he said, is working hard on the GST and by-and-large all of them are very supportive.

"The Constitution amendment bill is being drafted. It is being placed before the Council of Ministers (on July 22). Then the GST bill is to be drafted. It will be placed before them," Chidambaram said, adding the two would be placed in Parliament after they are ready.

The GST bill, introduced in Parliament in 2010, is being vetted by the Standing Committee on Finance. After the committee submits its report, the states and the Centre would together to finalise the draft and bring it back to Parliament.

The proposed GST will bring in a common tax regime for goods and services by subsuming most indirect taxes, and is expected to help increase revenue mop ups.

The GST roll out has missed several deadlines on account of differences over contentious issue of Central Sales Tax, compensation and design of the GST structure between the states and the Centre.

Saket Agarwal vs. ITO (ITAT Delhi)

No s. 271(1)(c) penalty even if explanation unproved if it is not disproved by AO The assessee had a cash credit of Rs. 7.33 lakhs in his books. He also claimed agricultural income of Rs. 1 lakh. He offered an explanation on both issues which was not accepted by the AO. He accordingly surrendered both amounts to tax to buy peace. The AO imposed penalty u/s 271(1)(c) which was confirmed by the CIT(A). Before the Tribunal, the assessee claimed that the additions were made on “voluntary surrender” and to avoid further litigation and to buy mental peace and that the same could not be considered as furnishing of inaccurate particulars of income or concealment of income. HELD by the Tribunal allowing the appeal: If the assessee gives an explanation which is unproved but not disproved i.e. it is not accepted but circumstances do not lead to the reasonable and positive inference that the assessee’s case is false, then the penalty is not imposable. In the present case, the assessee’s explanation remained unproved but it cannot be said as disproved. Further, s. 68 is an enabling provision for making an addition where the assessee fails to give an explanation regarding the cash credit but such addition does not automatically justify imposition of penalty u/s 271(1)(c) r/w Explanation 1 thereto. In order to justify levy of penalty, there must be some material or circumstances leading to a reasonable conclusion that the amount does represent the assessee’s income and the circumstances must show that there was a conscious concealment or act of furnishing of inaccurate particulars. From a bare reading of s. 271, it is clear that the provisions of Explanation 1 to s. 271 do not make the assessment order conclusive evidence that the amount assessed was, in fact, the income of the assessee and that the assessee did not satisfactorily explain the cash credits by producing evidence and documents. Accordingly, penalty u/s 271(1)(c) is not leviable (Upendra V. Mithani (Bom) (included in file) and National Textile 249 ITR 125 (Guj) followed)

INCOME TAX APPELLATE TRIBUNAL : CHENNAI BENCHES : CHENNAI CONSTITUTION FOR THE WEEK FROM 15-07-2013 TO 18-07-2013

[unable to retrieve full-text content]INCOME TAX APPELLATE TRIBUNAL : CHENNAI BENCHES : CHENNAI CONSTITUTION FOR THE WEEK FROM 15-07-2013 TO 18-07-2013 {ad} Formore information...

Forfeiture of deposit by hotel due to cancellation of reservation isn’t chargeable to service tax

ST/ECJ : In case of hotel industry, where hotelier retains deposit in event of cancellation of reservation by client, neither payment of deposit, nor retention of that deposit is liable to service tax

Changes you must know while filing tax returns this year

The tax filing process for financial year 2012-13 differs from previous years in more ways than one, more so for businesses.

Central Board of Direct Taxes (CBDT) has brought in many changes that need to be kept in mind while e-filing tax returns. Some of these are listed below:

Tax Audit Report and Transfer Pricing Report to be e-filed

Businesses having revenue of 1 Crore (Rs. 25 Lacs for professionals) need to get their account books of audited by a practising chartered accountant (CA) under the laws of the Income Tax Act. Also, the details of such Tax Audit Report (Form 3CD) were required to be disclosed in the returns of such businesses along with the details of CA signing such report.

From financial year 2012-13, Income Tax Department has made it mandatory to e-file tax audit reports prior to filing of income tax returns. E-filing of Transfer Pricing Reports under section 92E (Form CEB) has also become mandatory for businesses with respect to entering into international transactions.

Immediate impact of this change would be escalated compliance cost for businesses since this would be an additional requirement. We feel that this change would be good for accounting practice eco-system at large in our country and would create more value to the practice for obvious reasons.

Disclosure of Assets and Liabilities in ITR Form

This is another major change one needs to know while filing tax returns for financial year 2012-2013, the objective of which seems to gather as much information as possible. Law says that every individual and Hindu Undivided Family (HUF) having total income Rs 25 lakhs is required to disclose complete details of assets and liabilities in Schedule AL in the ITR form to be e-filed.

MAT Report (Form 29B) to be E-Filed

A report under section 115JB ( Form 29B) of the Income-tax Act, 1961 is required to be obtained from a practicing chartered accountant for computing book profits of the company in accordance of the law. The Income Tax Department has made it mandatory from financial year 2012-13 (AY 2013-14) to e-file such Form 29B within the stipulated time.

New Method of issuance of Form 16 (Salary Certificate)

The Income Tax Department has introduced new a method to issue Form 16/ Salary Certificate to the employees. This system mandates that Part A of Form 16, which contains total income and tax deduction details for a particular financial year needs to be generated using the TRACES portal and Part B ( personal details of the employee) needs to be prepared by the employers. This method is a step in the right direction, since now there would be lesser chances of discrepancies in the Form 16 vis-Ã -vis Form 16AS (Tax Deduction) details on the portal of IT Department. However, since this is the first year of its implementation, there ought to be some operational issues.

Mind you there is a penalty of Rs. 100 per day prescribed on the company for delayed issuance of Form 16 to the employees. Many companies would have delayed the issuance of Form 16, mainly due to this new system, thus the government may look to be lesser stringent on the penalty front.

Other changes in Online Income Tax Returns for FY 2012-13 (AY 2013-14)

• The IT Department has brought in stringent rules for ITR applicability for various assessees, specifying forms for set of income and also assessees. Now, ITR (Sahaj) can not be filed in case of losses from Other Sources exceeding Rs 5000 (winning from horse race, lottery etc), or if there is a double taxation avoidance agreement exemption, also applicability of ITR 4 and ITR4S.

• E-filing has become mandatory for assessees having income more than Rs 500,000 in FY 2012-13. It is a step in the right direction, which will bring transparency in the system.

• A new section 80TTA has been introduced, wherein interest upto Rs 10,000 is exempt from taxes, if earned from a savings bank account, or co-operative bank/post office.

• There is no need for senior citizens to pay advance taxes if they don't have business income.

HC dismissed writ challenging reassessment as assessee had an alternate remedy of appeal

IT: Where assessee filed a writ petition challenging initiation of reassessment proceedings based on change in method of accounting adopted by Assessing Officer, in view of fact that assessee had sufficient alternative remedy of filing appeal before appellate authorities, writ petition was to be dismissed being non-maintainable