UPDATES FROM TAX GURU 01.01.2010

UPDATES FROM TAX GURU (in this message: 9 new items)

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Income-tax dispute resolution panel may hit tax collection by Rs 10,000-crore

Posted: 31 Dec 2009 07:08 PM PST

The government's tax collections could take a Rs 10,000-crore hit this year due to the setting up of the income-tax dispute resolution panel (DRP) for settling transfer pricing disputes. Such a dispute arises when there is a disagreement between the...

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Service Tax Planning – Limits of Management Consultancy Services

Posted: 31 Dec 2009 06:26 PM PST

Meaning:- Section 65(105)(r) of Finance Act, 1994 defines taxable service as any service provided or to be provided to any person by a management or business consultant1 in connection with the management of any organization or business, in any...

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MVAT circular on activity code to be mentioned in audit report form 704

Posted: 31 Dec 2009 07:44 AM PST

Activity Codes are numerical codes that are used to define the activities of an economic unit. These codes are developed by National Industrial Classification (NIC) 2008. It is a standardized system of classification of economic activities essential...

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Burden to prove the genuineness of the gift is on the Assessee

Posted: 31 Dec 2009 06:56 AM PST

The failure of the persons to appear before the AO for examination in assessment proceedings or remand proceedings tilts the scales in favour of the revenue for giving a finding that the gifts were not genuine.

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Finance companies too governed by provisions of section 269SS and 269T of the Income Tax Act, 1961

Posted: 31 Dec 2009 06:54 AM PST

Necessity of establishing goodwill and reputation, that too in a finance company, is of utmost necessity; at same time, it cannot give a permanent license to the company to continue to violate the provisions of section 269SS/269T.

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Providing of fixtures & fittings to licencee of a premises would not make income from sub-letting of property as business income

Posted: 31 Dec 2009 06:48 AM PST

We have heard learned counsel for the assessee. Learned counsel for the assessee drew our attention to various clauses in leave and license agreement and submitted that the premises were given purely on license basis with fixtures and fittings. It...

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Blending of tea for export by an industrial unit in SEZ area is a manufacturing activity which qualifies for exemption u/s 10A/10AA

Posted: 31 Dec 2009 06:47 AM PST

The short question that arises for consideration is whether blending and packing of tea for export in the industrial unit in the Special Economic Zone amount to manufacture or production of an article qualifying for exemption under Section 10A of...

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Tribunal's power u/s 254(2) is not to review its earlier order but only to amend it with a view to rectify any mistake apparent from the record

Posted: 31 Dec 2009 06:46 AM PST

. From the various judgments of the Supreme Court above referred to and other High Courts, it is clear that the Tribunal's power under Section 254(2) is not to review its earlier order but only to amend it with a view to rectify any mistake apparent...

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Establishment of identity of creditor, creditworthiness of creditor and genuineness of transaction

Posted: 31 Dec 2009 06:41 AM PST

It would depend upon facts of each case whether all the three ingredients to discharge the onus to prove cash credit have been proved by the assessee or not; if an NRI, engaged in business of real estate development with substantial means, decided...

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With Regards, 
CA Sandeep Kanoi 
Website: http://www.taxguru.in/ 
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UPDATES FROM TAX GURU 31.12.2009 (HAPPY NEW YEAR)

UPDATES FROM TAX GURU (in this message: 13 new items) 

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Additional depreciation on new asset not subject to setting up or operational connectivity with main business

Posted: 30 Dec 2009 07:37 PM PST

This article summarizes recent ruling of the Madras High Court (HC) in the case of CIT v M/s Hi Tech Arai Limited (Taxpayer) [Tax Case (Appeal) Nos. 670 and 671 of 2009] on the issue of allowability of additional depreciation on newly set-up...

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Interest on funds borrowed for acquiring controlling interest not allowable expenditure under the Income Tax Act

Posted: 30 Dec 2009 07:28 PM PST

The Taxpayer incurred interest expenditure on the funds borrowed for investing in shares of a company, with a view to acquire controlling interest. The ITAT held that the interest expenditure incurred is not allowable under Section 57(iii)(Section)...

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SB rules income from derivative trading in shares prior to financial year 2005-06 is speculation income

Posted: 30 Dec 2009 07:19 PM PST

This Tax Alert summarizes a recent ruling of the Special Bench (SB) of Kolkata Income Tax Appellate Tribunal (ITAT) in the case of Shree Capital Services Ltd. (Taxpayer) vs. ACIT (ITA No. 1294 (Kol) of 2008) in which the SB held that, prior to...

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Duty Drawback and sale of DEPB license not eligible for tax holiday: Supreme Court

Posted: 30 Dec 2009 07:11 PM PST

This article summarizes a recent ruling of the Supreme Court (SC) [2009-TIOL 100-SC-IT] in the case M/s Liberty India (Taxpayer), in which the SC held that the receipts, by way of Duty Drawback and sale of Duty Entitlement Pass Book (DEPB) licence...

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Larger Bench rules tax holiday not available to a contractor/executor under the Income Tax Act

Posted: 30 Dec 2009 06:56 PM PST

Taxpayers in the infrastructure sector are often engaged in the execution of construction activities, which form a minor portion of a contract for the development of an infrastructure facility. This ruling provides guidance on whether a contactor...

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Govt decided to shelve introduction of unique transaction number (UTN)

Posted: 30 Dec 2009 06:30 PM PST

The government has decided to shelve the introduction of the unique transaction number, which tax payers need to quote along with permanent account number when tax is deducted/collected at source.The scheme was to have come into force from the new...

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Budget 2010 may have anti-avoidance provisions to check evasion of tax

Posted: 30 Dec 2009 06:18 PM PST

The forthcoming Union budget may have an anti-avoidance provision, which can effectively check convoluted transactions devised exclusively for the purpose of evading paying taxes in India. The finance ministry, said revenue department officials, is...

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Habitual absence from work without taking leave amounts to misconduct

Posted: 30 Dec 2009 06:08 PM PST

Now, habitual absence from work without taking leave amounts to misconduct on the part of an employee. According to the ruling by the Mumbai High Court, a person in the habit of being absent without prior sanction, is somebody who is not devoted to...

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RBI circular on Advance Remittance for Import of Rough Diamonds

Posted: 30 Dec 2009 06:05 PM PST

banks have been permitted to make advance remittance without any limit and without bank guarantee or standby letter of Credit, by an importer (other than Public Sector Company or Department / Undertaking of the Government of India /State...

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mendment to the Maharashtra Value Added Tax Rules, 2005

Posted: 30 Dec 2009 05:32 PM PST

The sub-rule (1) provides the different forms of returns to be filed by various categories of dealers. Earlier, the dealers. used to submit these forms of return-cum-chalan physically either to the Bank alongwith payment of tax, interest etc., if...

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Indian Company Law – Objects Clause?

Posted: 30 Dec 2009 08:16 AM PST

We all know about the requirements of forming a Company in India. Incorporation of a Company, as a secretarial practice, may not be a complicated exercise. It is not difficult to get the Director Identification Numbers (DIN) for the proposed...

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Appeal to simplify and speedup the procedure for approval u/s. 22 of the Bombay Public Trust Act, 1950, where any change occurs in any of the entries recorded in the Register of Trusts

Posted: 30 Dec 2009 07:56 AM PST

For the benefit of all the Public Charitable and Religious Trusts, Trustee & all such Trusts should jointly make a petition before Law Minister, Law and Judiciary Department Sachivalaya, Maharashtra to amend this and other similar provisions in...

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Appeal to simplify and speedup the procedure for approval u/s. 36A(3) of the Bombay Public Trust Act, 1950 in respect of raising loan or deposit

Posted: 30 Dec 2009 07:31 AM PST

Thus, for the benefit of all the Public Charitable and Religious Trusts, Trustee & all such Trusts should jointly make a petition before Law Minister, Law and Judiciary Department Sachivalaya, Maharashtra to amend this and other similar...

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With Regards, 
CA Sandeep Kanoi 
Website: http://www.taxguru.in/ 
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UPDATES FROM TAXGURU