No more ‘self-declaration’ - Employees now required to give declaration in a new form

Presently, employees who wanted to claim tax deductions are required to file self-declarations of tax savings/deductions to employer  along with the evidences  of such tax savings for every financial  year.  Employer  was  liable  to  deduct tax  at  sources  on  the  estimated income  of employees a  er considering such self-declarations of tax savings.

Now the CBDT has notified new form no. 12BB for such purposes. Employees are now required to submit evidences/particulars of tax savings to employer in Form no. 12BB.

The CBDT has also notified  revised due dates  for filing of quarterly  TDS returns  by persons (other than government). Due dates  for filing TDS return for the quarter ended 30th June, 30th September, 31st December and 31st March has been extended to 31st July, 31st October, 31st January and 31st May respectively  (old dates  were 15th July, 15th October, 15th January and 15th May respectively).

Cl ick h ere to vie w Fo rm n o. 12B B and amen ded Ru l es

Principal of unjust enrichment couldn't be applied to deny refund even if tax amount was written off in P&L account

Merely because amount of tax paid is shown as expenditure, it cannot be concluded that incidence of duty was passed onto buyers; hence, doctrine of unjust enrichment would not apply to deny refunds merely because tax amount was written off in Profit & Loss Account

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Demand stayed by ITAT as huge sum was locked up with dept. in relation to disputed tax liability of earlier years

IT/ILT: Where demand was raised on account of transfer pricing adjustment, disallowance of claim u/s 80-IA and disallowance of long term capital loss, in view of fact Tribunal had already granted stay with reference to similar demand raised for earlier assessment years and that huge sums of assessee stood lock up in disputed tax liability of earlier years, stay was to be granted.

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No exemption under sec. 13A to a political party if it fails to maintain books of account

Facts:

a) The assessee (the then ‘Janata Party’) was a political party registered under the Representation of the People Act, 1951 ('RP Act'). It claimed exemption under Section 13A in respect of voluntary contribution received from members.

b) Assessing Officer (AO) taking a view that assessee did not maintain proper books of account, rejected its claim for exemption.

c) The CIT(A) confirmed the order of the AO. However, on further appeal by assessee, the tribunal reversed the order of the AO.

d) Aggrieved by the order of the tribunal, revenue filed the instant appeal before the High Court.

The High Court held in favour of revenue as under-

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

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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: