UPDATES FROM TAXGURU 16.12.2009

UPDATES FROM TAX GURU (in this message: 18 new items)

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Replacement of Parts, Machines etc., in a production System – Tax Implications

Posted: 15 Dec 2009 07:24 PM PST

It is quite common for the Revenue to treat such expenditure as capital in nature and administer depreciation allowance, only. An assessee would always put forth his argument that such replacement cost is only to maintain the existing level of...

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Expenditure related to exempt income to be disallowed even if assessee has not earned any tax-free income

Posted: 15 Dec 2009 07:04 PM PST

Special Bench of the Income Tax Appellate Tribunal, New Delhi in the case of Cheminvest Ltd. (ITA Nos.87Del//2008, 4788/Del/2007 and 233/Ahd/ 2006) holds that expenditure relating to exempt income to be disallowed even if assessee has not earned...

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Gains on sale of shares allotted under cashless ESOP plan not taxable as capital gains

Posted: 15 Dec 2009 06:46 PM PST

The Income-Tax Appellate Tribunal, Mumbai in the case of Mr. Bomi S. Billimoria vs. A.C Cir 23(1), Mumbai (ITA No.2120/Mum/1998) held that in case no payment has been made for acquiring shares under Employee Stock Option Plan, the gain on sale of...

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Tax paid by employer on behalf of employee is a non-monetary perquisite subject to single grossing up

Posted: 15 Dec 2009 06:07 PM PST

The Income-tax Appellate Tribunal, Delhi in the case of Triton Holdings Ltd. vs Dy. Director of Income Tax, Deharadun (ITA Nos. 2541 to 2559/Del/2009) held that the tax paid by employer on the behalf of employees should be considered as a...

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Penalty should not be imposed if full disclosure of the facts of the case made by the Assessee

Posted: 15 Dec 2009 05:56 PM PST

The Delhi Bench of the Income - tax Appellate Tribunal (Delhi Tribunal), in the case of Vertex Customer Services (India) Pvt. Ltd. (the taxpayer) held that exclusion of provision of doubtful debts from the operating expenses being a debatable issue...

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Payment made to foreign company for outright purchase of plant and know-how cannot be considered as 'Royalty'

Posted: 15 Dec 2009 05:33 PM PST

Recently, the Himachal Pradesh High Court in the case of CIT v. Maggronic Devices Pvt. Ltd. [2009-TIOL-568-HC-HP-IT] held that payment made by the taxpayer to a Singapore company for outright purchase of plant and product knowhow cannot be...

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Tenant given the power to select own builder in case of redevelopment

Posted: 15 Dec 2009 09:37 AM PST

An amendment in the Development Control Regulation 33 (9) pertaining to cluster redevelopment has given tenants of old, cessed buildings in the island city the right to select their own builder. However, the ultimate power to sanction such schemes...

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Sales Tax Has Precedence Over Bank Mortgage

Posted: 15 Dec 2009 09:27 AM PST

Despite valiant attempt on the part of learned counsel for the appellant to convince us that in view of some observations in Dena Bank Vs. Bhikhabhai Prabhudas Parekh & Co. & Ors., 2000(5) SCC 694, the issue raised in the present appeal...

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Confirmation of particulars for compilation of firms data as on 1st January, 2010 and Information for Firm Constitution Certificate

Posted: 15 Dec 2009 09:15 AM PST

The Institute compiles data of firms as on 1st January every year based on the particulars as provided by the firms duly confirmed/updated/modified. The exercise for compilation of the data of the firms as on 1st January, 2010 is being...

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ICAI president awarded with the honorary membership of the Certified Practising Accountant of Australia

Posted: 15 Dec 2009 09:08 AM PST

CA. Uttam Prakash Agarwal, President, the Institute of Chartered Accountants of India (ICAI), has been awarded with the honorary membership of the Certified Practising Accountant of Australia by Prof. Richard Petty, President, CPA Australia Ltd. CPA...

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e-704 frequently asked questions

Posted: 15 Dec 2009 09:06 AM PST

What is Audit Report in Form 704? Ans : It is a report under section 61 of MVAT ACT, 2002 to be submitted by eligible dealer within 10 months of the end of a particular financial year. Related posts:Frequently Asked Questions and Answers on Goods....

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MAT will be eased for infrastructure companies in new DTC

Posted: 15 Dec 2009 08:35 AM PST

The government is likely to ease the incidence of minimum alternate tax, or MAT, on infrastructure companies. The department of revenue plans to change the proposed direct tax code to exempt these companies from MAT for the first few years since....

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Indian company giving bank guarantee on loan taken by its subsidiary abroad will have to pay tax

Posted: 15 Dec 2009 08:30 AM PST

An Indian company that provides a bank guarantee (BG) against a loan taken by a subsidiary abroad will now have to pay tax here for standing guarantee for its associate, irrespective of whether or not it has received a commission from the latter for...

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Government rewritten corporate governance rules and tighten norms for CAs

Posted: 15 Dec 2009 08:26 AM PST

The mammoth fraud at IT major Satyam, involving over Rs 14,000 crore as per CBI, proved to be the most brazen swindling act, forcing the government to re-write corporate governance rules during 2009 and tighten the norms for chartered accountants....

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GST unlikely to be introduced on April 1, 2010 as Constitutional amendment may take another five months

Posted: 15 Dec 2009 08:22 AM PST

In spite of the optimism shown by Asim Dasgupta, chairman of the empowered committee of state finance ministers, the much-anticipated goods and services tax (GST) is unlikely to be introduced on April 1, 2010. The process of Constitutional amendment....

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Date for Completion of CPE Hours for the Calendar year 2009 extended

Posted: 15 Dec 2009 08:17 AM PST

Announcement regarding extension of date for completion of the mandated CPE hours requirements for the calendar year 2009 in respect of structured learning, for members holding certificate of practice: Related posts:ICAI extended due date for...

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ICWAI decided to increase cost accounting standards significantly within the next one year

Posted: 15 Dec 2009 08:15 AM PST

Issue of Cost Accounting Standards (CAS) is a pioneering initiative by the Institute of Cost and Works Accountants of India. The first CAS (CAS-1) was issued by the institute in the year 2002. The Preface to CostAccounting Standards issued by the...

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Even capital profits have to be added to "book profits" for s. 115JB

Posted: 15 Dec 2009 08:07 AM PST

The assessee earned a capital profit of Rs. 10.38 crores on sale of rights to immovable property. The said profit was directly credited to the capital reserves in the balance sheet instead of being routed through the Profit & loss account. The...

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