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09.01.2014 - Voice of CA presents - Updates
Thursday, January 9, 2014



  I. Today's Headlines   

1.    Excise : Non applicability of Education Cess and SHE Cess. (Click here for details)

2.    Govt's debt structure supports current ratings: Moody's. (Click here to view details).

3.    Markets remain volatile in a narrow range, banks slide. (Click here to view details).

4.    Investors are pricing in hope rather than reality: Macquarie. (Click here to view details).

5.    Gold loans: Some easing, some stiffening by RBI. (Click here to view details).
 
  

II.  Direct Tax Case laws:

 
1.Narath Mapila LP School vs. UOI, WPC No. 31498/2013, Date of Order: 18.12.2013, (Kerala High Court)

S. 234E: High Court grants interim stay on levy of fee for failure to file TDS statement

S. 234E of the Income-tax Act, 1961 inserted by the Finance Act, 2012 provides for levy of a fee of Rs. 200/- for each day’s delay in filing the statement of Tax Deducted at Source (TDS) or Tax Collected at Source (TCS). The constitutional validity of s. 234E has been challenged in the Kerala High Court. Vide an interim order dated 18.12.2013, the High Court has admitted the Petition and granted a stay of proceedings for a period of two months.

(Please click here to view Judgment)

2. COMMISSIONER OF INCOME TAX  Versus VIRENDARA KUMAR GUPTA,  INCOME TAX APPEAL NO. 563/2013, 22.11.2013, High Court of Delhi.

Whether penalty levied u/s 271AAA on members of AOP is rightly deleted by tribunal in a case where income initially disclosed and declared in the hands of AOP is subsequently disclosed in the individual hands of members forming AOP.

Held Yes

The AOP consisted of Virendara Kumar Gupta, Sarad Jain and Sudhir Jain. Initially, the AOP had declared the entire undisclosed income. AOPs are taxed at maximum marginal rate, whereas individuals are taxed on cascading scale. The Assessing Officer had himself given tax credit to individual members of the tax paid by AOP. AOP consisted of three persons, including the present respondent-assessee. The tribunal has taken the realistic and pragmatic view and accordingly deleted the penalty under Section 271AAA of the Act noticing the factual matrix. „Sugandh Sansar‟ had filed „nil‟ return of income only after the Assessing Officer had decided that Rs.12.5 crores should be equally divided and taxed in the hands of Virendara Kumar Gupta, Sarad Jain and Sudhir Jain. The three respondent-assessees had filed appeal before the Commissioner (Appeals) questioning the said order/position. Meanwhile, the AOP filed an application under Section 264, which was accepted by the Commissioner of Income Tax, Delhi-VII and in terms of the said order, the individual assessees withdrew the appeals. Taxes and applicable interest were paid on the undisclosed income. Details of nature of undisclosed income and manner of earning was recorded in the statement of Virendara Kumar Gupta. It was stated that the income was derived from trading transactions not recorded in the books.
In light of the facts of the present case, we are not inclined to interfere and entertain the present appeals. The same are accordingly dismissed.
 
(Please click here to view the Judgement)

3. CIT (TDS) vs. Rajasthan Urban Infrastructure, D.B. I.T.A. 235/222/238/239 of 2011, Date of Order : 01.07.2013, Rajasthan High Court.

Whether TDS is required on the amount of service tax that was to be paid separately and was not included in the fees for professional services or fees for technical services?

Held No.

In the light of Circulars dated 28.04.2008 and 30.06.2008. The words, “any sum paid”, used in Section 194J of the Act, relate to fees for professional services, or fees fortechnical services. As per the terms of agreement, the amount of service tax was to be paid separately and was not included in the fees for professional services or fees for technical services. The dispute relates to a point as to whether TDS is to be deducted on the amount payable on account of service tax or not? since the amount of service tax was to be paid separately, therefore, the same was not subject to TDS.

(Please click here to view the Judgement)

 Golden Rule:

"Professionals never guess—they make it their business to know their business"

 

  Thanks & Regards

Team

Voice of CA

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