Govt. to allot PAN and TAN in one day through paperless hassle free process

Govt. has enabled filing of PAN and TAN application via digital signature certificates on the portals of PAN Service provides (i.e., M/s NSDL eGov and M/s UTIITSL). Under the new process PAN and TAN will be allotted to companies within one day after completion of valid on-line application 

Similarly, a new Aadhaar e-Signature based application process for Individual PAN applicants has been made available on the portals of PAN service providers M/s NSDL eGov.

The URL links for the above applications are available in ‘important links’ on the homepage of the departmental website ‘incometaxindia.gov.in’.

Introduction of Aadhaar based e-Signature not only ensures paperless hassle free PAN application process but also seeding of Aadhaar in PAN which will curb the problem of duplicate PAN to a great extent.

No Sec. 69C additions when assessee is covered by presumptive taxation Scheme of Sec. 44AD

Facts:

a) The assessee, being a civil contractor, had declared its profits under section 44AD. The Assessing O􀁹icer made additions under Section 69C for unexplained expenditure.

b) The assessee was of the view that the AO could not disturb the profits declared as per the scheme of presumptive taxation. The CIT(Appeals) dismissed this ground of appeal and upheld the additions made by AO.

c) The aggrieved-assessee filed the instant appeal.

The ITAT held as under:

1) The provisions of the section 44AD are quite unambiguous to the effect that in case of an eligible business based on the gross receipts/total turnover, the income under the head 'profits & gains of business' shall be deemed to be @ 8% or any higher amount. It is undisputed that 'deemed' means presuming the existence of something which actually is not.

FAQs on Income-tax Returns for Assessment Year 2016-17

The deadline for filing Income-tax return for financial year 2015-16 is around the corner. It marks the beginning of worries among taxpayers as various doubts arise in their minds. The CBDT has issued various notifications, circulars and instructions to bring clarity among taxpayers so as to achieve maximum filing of income-tax returns. FAQs may help you to clear all your confusions and file returns timely to avoid last minute hassles.

Few FAQs are listed hereunder:

1. Do I need to furnish details of my assets and liabilities in ITR 1?

2. Whether a firm can file ITR-4S for presumptive income?

3. I am an Individual and resident of India. Do I need to file return if my income is below taxable limit but I am having an account in a foreign bank?

4. I am a resident individual and have income from any source outside India. Whether I can file my income-tax return in paper mode?

Click here to view all FAQs

Prize money paid to service provider for good performance isn't liable to service tax

Facts:

a. Assessee was a registered service provider under the category of ‘site formation and clearance and excavation services’. It was discharging its service tax liability on basis of bills raised and amount paid by the service recipient.

b. One service recipient provided specific quantities of explosives and diesel oils for rendering services. There was agreement that if assessee used quantity of explosives and diesels below agreed quantity, it would be paid bonus/incentive by the service recipient.

c. Revenue contended that explosives and diesel oils which were provided free of cost and amount of bonus paid in shape of incentives would form part of assessable value of services. Assessee did not pay service tax on aforesaid amount and a show cause notice was issued to it.

No denial of Sec. 54F relief if taxpayer is unable to get possession of flat due to builder’s fault

Section 54F relief cannot be denied to assessee when he has invested entire sales consideration in purchase of residential house but he is unable to get possession of flat, which is under construction, due to fault of builder.

The issue before the ITAT was:

Whether Section 54F relief could be denied when assessee was not able to get the title of the flat or unable to get possession of the flat, which was under construction, due to fault of the Builder?

The ITAT held as under :

Commercial expediency of loan to AE not relevant for computing ALP of interest: ITAT Special Bench

The issue before the special bench of ITAT was as under:

Whether ALP adjustment was required to be made in respect of interest free loan granted by the assessee, a non-resident company, to its wholly owned subsidiary in India?

The Special Bench of Kolkata ITAT held as under:

1) The commercial expediency of a loan to subsidiary is wholly irrelevant in ascertaining arm’s length interest on such a loan. There is indeed no bar on anyone advancing an interest free loans to anyone but when such transactions are covered by the international transactions between the associated enterprises, Section 92 of the Act mandates that the income from such transactions is to be computed on the basis of arm’s length price.

2) The assessee is not really correct in contending that when the assessee has not reported any income from a particular international transaction, the ALP adjustment cannot compute the same. The computation of income on the basis of arm’s length price does not require that the assessee must report some income first, and only then it can be adjusted for the ALP. Section 92(1) is not an adjustment mechanism; it is a computation mechanism. The arm’s length price principle requires that an arm’s length price is assigned to the transactions between the associated enterprise, and if the income in computed, if any, on the basis of the

arm’s length price so assigned.

Now Cos. must obtain written consent from Cost Auditor prior to his appointment

MCA has amended the Companies (cost records and audit) Rules, 2014. The major changes brought in the rule are as under:

1) Written Consent by Cost auditor: Now it’s mandatory for the companies to take prior written approval/Consent from proposed cost auditor before his appointment.

2) Declaration/Certificate: Cost auditor appointed as per the Companies Act, 2013 has to submit a declaration that:

a) He is eligible for appointment and is not disqualified form appointment under the act, rules and regulations

b) He satisfies the criteria provided in the section 141 of the companies act, 2013

c) The proposed appointment is within the limits laid down by authority

Effective rate of tax isn’t reduced to 31% under Income Declaration Scheme; CBDT clarifies

The Income Declaration Scheme, 2016 provides an opportunity to persons who have not paid full taxes in the past to come forward and declare their undisclosed income and assets.

CBDT has received queries from various stakeholders whether the payment under the Scheme can be made out of undisclosed income without including the same in the income declared, thereby bringing down the effective rate of tax, surcharge and penalty payable under the Scheme to around 31%.

Now the CBDT has clarified that the intent of the clarification issued vide Question No.5 of Circular No.25 of 2016 was limited to conduct of enquiry by the Department. It in no way intends to modify or alter the rate of tax, surcharge and penalty payable under the Scheme which have been clearly specified in the Scheme itself. Sections 184 & 185 of the Finance Act, 2016 unambiguously provide for payment of tax, surcharge and penalty at the rate of 45 per cent of undisclosed income.

Compliance barriers on the road to GST- An Analysis of Model GST Law

1. Introduction

"Will you walk into my parlour?" said the Spider to the Fly, '

Tis the prettiest little parlour that ever you did spy;

The way into my parlour is up a winding stair,

And I've a many curious things to show when you are there."

Oh no, no," said the little Fly," to ask me is in vain,

For who goes up your winding stair can ne'er come down again."

(an extract of the poem 'The spider & the fly', by Mary Botham Howitt)

With the advent of Goods and Services Tax (GST) in India, the above extract appears to be a fitting & interesting one. While there have been several discussions of how the GST regime would be beneficial to the Indian Economy, the aspect of compliances was never on the agenda. Recently released Model GST Law, throws light on this aspect. While the assessees should revamp their IT systems to be compliant with the new regime, it is also of utmost importance to understand how complying with the statutory timelines could have an impact on their cash flows and credit mechanism. Is tax becoming one of the key factors to drive a business or are we still in an era where business drives the tax. This article attempts to examine whether the compliance aspects under the model GST law are flight's of winding stairs to the spider's parlour or otherwise.

SEBI facilitates transition for listed entities covered under IND-AS

Background

MCA vide notification no. G.S.R. 111(E) dated 16th February, 2015 had issued the Companies (Indian Accounting Standards) Rules, 2015 ('IND-AS Rules'). According to IND-AS Rules, the Companies and their auditors shall comply with the IND-AS Rules in preparation of their financial statements and auditor's reports respectively. IND-AS Rules are aligned with the International Financial Reporting Standards (IFRS) and are mandatorily applicable on certain class of companies from April 1, 2016.

List A

(a)		companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of rupees five hundred crore or more;
(b)		companies other than those above and having net worth of rupees five hundred crore or more;
(c)		holding, subsidiary, joint venture or associate companies of companies covered by sub-clause (a) and (b) above;

List B

(a)		companies whose equity or debt securities are listed or are in the process of being listed on any stock exchange in India or outside India and having net worth of less than rupees five hundred crore;
(b)		companies other than those covered under List A and (a) above, that is, unlisted companies having net worth of rupees two hundred and fifty crore or more but less than rupees five hundred crore.
(c)		holding, subsidiary, joint venture or associate companies of companies covered by sub-clause (a) and (b) above under List B: