No penalty on ‘Aishwarya Rai’ for TDS default if she relied on her CA’s advice

Facts:

a) Assessee (Aishwarya Rai Bachchan) made payment of US $ 77,500 to a non-resident for development of website without deducting TDS under Section 195.

b) The Assessing Officer (AO) observed that payment made for development of website would fall within the meaning of 'fees for technical services' as per Explanation 2 to Section 9(1)(vii). Therefore, payment so made was taxable in India in hands of non-resident and, hence, assessee had made default for not deducting TDS while making such payment. Consequently, the AO imposed penalty under section 271C for not deducting the TDS.

c) Assessee submitted that she had not deducted TDS by relying upon advice of her CA. Therefore, penalty shouldn’t be imposed as there was no mala fide intension on her part.

d) CIT(A) confirmed the order of AO. Aggrieved by the order of CIT(A), assessee filed the instant appeal before the tribunal.

The tribunal held in favour of assessee as under-

Key Transfer Pricing updates for March 2016

Introduction

The Finance Minister, Arun Jaitley announced the Union Budget 2016 on 29 February 2016, amidst high expectations from several stakeholders including taxpayers, investors and consumers. From a Transfer Pricing (TP) perspective, one of the most important development is the introduction of Country-by-Country (CbyC) reporting norms for TP documentation with effect from the Financial Year (FY) beginning 1 April 2016. The Organisation for Economic Co-operation and Development (OECD) and G20¹ countries as part of their Base Erosion and Profit Shifting (BEPS) project under Action Plan 13, introduced the three-tier TP documentation structure, which includes master file, local file and CbyC reporting. India, being an active participant of OECD's BEPS project, has proposed to adopt the above recommendations of the OECD's Action Plan 13 in the TP regulations announced during this budget. Some other amendments in the TP arena have also been proposed.

Recently, the Delhi High Court (High Court) in the case of Denso India Limited², rejected aggregation of an import transaction under the Transactional Net Margin Method (TNMM), since the facts of the case demonstrated that the arrangements made in relation to the transaction, when viewed in their totality, differed from those which would have been adopted by independent enterprises behaving in a commercially rational manner. In a Tribunal ruling in case of Essilor India Pvt Ltd³, the Bangalore Tribunal (the Tribunal) held that in the absence of an arrangement and agreement between the taxpayer and its Associated Enterprise (AE), incurrence of more expenditure on Advertisement, Marketing and Sales Promotion (AMP) compared to comparable companies cannot be inferred as an international transaction between the taxpayer and its AE.

No capital gain tax on amount standing in capital account received by partner on retirement from firm

IT: Amount received by assessee on retirement as partner from firm, on account of credit balance standing in capital account and current account, and not for relinquishing or extinguishing his rights over any assets of firm, would not be chargeable under section 45(4) as capital gains

IT: While computing total taxable income of EOU, depreciation loss of non-eligible units could not be set off against income of eligible units involved in activity of export

IT: Profits derived from export of articles alone are to be considered for claiming deduction under section 10B and not miscellaneous receipts from eligible profits

IT: Section 115J does not empower Assessing Officer to embark upon a fresh enquiry in regard to entries made in books of account of company

       Click here to Know More at http://bit.ly/1Tycaey

CBDT clarifies that officer below the rank of JCIT can’t initiate penalty proceedings u/s 271D or 271E

SECTION 271D, READ WITH SECTION 271E, OF THE INCOME-TAX ACT, 1961 - FAILURE TO COMPLY WITH PROVISIONS OF SECTION 269SS - PENALTY FOR - COMMENCEMENT OF LIMITATION FOR PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271E

CIRCULAR NO.9/DV/2016 [F.NO.279/MISC./M-116/2012-ITJ], DATED 26-4-2016

It has been brought to the notice of the Central Board of Direct Taxes (hereinafter referred to as the Board) that there are conflicting interpretations of various High Courts on the issue whether the limitation for imposition of penalty under sections 271D and 271E of the Income tax Act, 1961 (hereafter referred to as the Act) commences at the level of the Assessing Officer (below the rank of Joint Commissioner of Income Tax.) or at level of the Range authority i.e. the Joint Commissioner of Income Tax./Addl. Commissioner of Income Tax.

Some High Courts have held that the limitation commences at the level of the authority competent to impose the penalty i.e. Range Head while others have held that even though the Assessing Officer is not competent to impose the penalty, the limitation commences at the level of the Assessing Officer where the Assessing Officer has issued show cause notice or referred to the initiation of proceedings in assessment order.

2. On careful examination of the matter, the Board is of the view that for the sake of clarity and uniformity, the conflict needs to be resolved by way of a "DepartmentalView".

Tips collected by hotel from customers and paid to employees couldn’t be taxable as salary: SC

Issue

“Whether tips collected by a hotel from customers and paid to employees could be chargeable as salary in hands of employees?”

Bank has no lien on security deposited with DRAT by borrower for consideration of his appeal on merits

Bank has no lien in terms of Section 171 of The Indian Contract Act, 1872 on the pre-deposit made by the borrower under Section 18 of the SARFAESI Act as pre-condition for hearing his appeal on merits

Facts:

a) The respondent-borrower filed Securitisation Application before the DRT against the steps taken by the secured creditor, a bank, for enforcing his security. However, DRT rejected the same.

b) The respondent-borrower moved to DRAT u/s 18 of the SARFAESI Act and deposited sum of Rs.50 lakhs before the Appellate Tribunal in terms of the proviso to section 18 of the said Act.

c) Realising that the appeal would not survive thereafter, the respondent sought permission from DRAT to withdraw the same and also for refund of the deposited amount. DRAT granted permission to withdraw deposits subject to the disposal of the appeal.

d) As the appeal itself was being withdrawn, the respondent filed writ before High Court.

e) The High Court set aside the said condition and permitted the respondent to withdraw the amount unconditionally.Aggrieved by the order, the appellant-Bank filed an intra-Court appeal which was dismissed by Division bench

On further appeal, the Supreme Court held as under:

Facebook friends may be treated as connected persons for the purposes of Insider Trading: SEBI

This article gives an analysis of the latest SEBI's order on Insider Trading especially it is a case concerning Promoters of a listed company and persons connected with them who have allegedly engaged in insider trading. SEBI has chosen the social media 'Facebook' to determine and to establish connection between the parties who have committed Insider Trading.

1. Introduction

Securities Exchange Board of India (SEBI) had originally framed SEBI (Prohibition of Insider Trading) Regulations, 1992 in order to deter the practice of insider trading in the securities of listed companies. Afterwards several amendments to the said Regulations and also judicial paradigm through various case laws had also evolved to prohibit insider trading. But major overhaul of the Regulations have not been done. But SEBI on 15^th January, 2015 had notified SEBI (Prohibition of Insider Trading) Regulations, 2015 [Regulations 2015] and has been done in order to strengthen the legal and enforcement framework, toughen the insider trading rules, align Indian regime with International practices and to provide clarity to certain definitions and concepts.

Surveying authority can’t allege excess stock without demanding standard weighment facility from assessee

Facts

a)  Surveying authority conducted survey at premises of assessee and alleged excess stock by weighing stock on basis of cartons. Consequently, the Assessing Officer (AO) made addition on account of excess stock.

b)  Assessee challenged that no addition could made on account of excess stock as weighment was not done by the surveying authority in accordance with the provisions of the Standards and Weights and Measures Act, 1976.

c)  CIT(A) upheld the addition made by the AO by observing that there was no evidence that the assessee provided to the survey team the necessary facility of weighment by a standardized scale.

d)  Aggrieved by the order of the CIT(A), assessee filed the instant appeal before the tribunal.

Mistake by return filing portal, TaxSpanner.com doesn't call for concealment penalty on taxpayer

Where assessee's salary was understated in her return due to mistake of online tax return filing portal (TaxSpanner.com) and she could not verify contents of return due to her pregnancy and immense pressure in office, concealment penalty was not justified

FACTS: 

a)     Assessee was a salaried employee who provided her Form No. 16 to an online tax return filing website (TaxSpanner.com) for filing of her return of income. Due to a mistake committed by website, her income was understated in return of income.

b)    Assessee received ITR-V from website and as she was having pregnancy of five months and due to immense work pressure in the office, she could not devote time to see the content of ITR filed, signed it straightaway and sent it to Income-tax Department.

c)     The Assessing Officer (AO) levied concealment penalty on her for understating the income.

d)    CIT(A) confirmed the order of the AO. Aggrieved by the order of the CIT(A), assessee filed the instant appeal before the tribunal.

Facebook friends may be treated as connected persons for the purposes of Insider Trading: SEBI

Probably, it is for the first time that SEBI has treated ‘Facebook’ as a relevant factor to determine connections between persons or to establish connection. In instant case, SEBI observed that having "mutual friends" on Facebook will form the basis of determination of connection for the purpose of Insider Trading. Insider means any person who is (i) A connected person; or (ii) in possession of or having access to unpublished price sensitive information.

SEBI's order No: WTM/PS/152/IVD/Feb/2016 dated 4th February, 2016 held guilty Chairman and Managing Director (CMD) and Chief Executive O􀁹icer (CEO) of Paired Technologies Ltd (PTL), a micro-cap which runs LatestOne.com, an online mobile accessories store. The PTL had run into financial di􀁹iculties and therea􀁺er it decided to sell its business on a slump sale basis to another entity. The company decided to declare special dividend and also carry out a buyback of shares. Because of this, the shareholders received an amount far higher than the then ruling market price of the shares. Subsequently, the price of the shares also started rising substantially.

It was later on revealed through investigation that the CMD, CEO were part of a cartel of 15 people termed as 'insiders' and were in possession of unpublished price sensitive information (UPSI) on the basis of which they traded in the scrip of PTL. These persons allegedly connected had purchased the shares of PTL at the earlier low ruling price.

How the parties were found connected?

In the aforesaid case, connections with the other parties were found on various grounds. Mr.PS, the Chairman and MD of PTL was a connected person under the Regulations and the