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18.01.2014 - Voice of CA presents - Updates
Saturday, January 18, 2014

  I. Today's Headlines   

1. CBDT Instruction 1/2014 dt. 15.01.2014 reg Citizens Charter for TDS applications . (Click here to view details)
2. No TDS on Service tax if shown Separately. CBDT accepts Rajasthan Court order . (Click here to view details)
3. Notification No. 03/2014 containing rates of exchange applicable from January 17, 2014. (Click here to view details)
4. RBI to conduct Rs 10k-cr OMO on Wednesday. (Click here to view details)
5. NSEL, brokers & investors to return to settlement table. (Click here to view details)


II.  Direct Tax Case laws:

 
1. CIT vs. DHTC Logistics Ltd, ITA 314/2013, Date of Order : 26.07.2013 (Delhi High Court)

S. 272B  - Penalty is Rs. 10000 per deductor and not per wrong PAN penalty, the same is not applicable on deductor if information is not furnished by deductee.

In case, the PAN Numbers are not furnished by the deductees, the assessee cannot be penalized u/s 272B. S. 139A also imposes the obligation on the deductees to furnish PAN Number to the deductor. Secondly, the stand taken by the revenue is contrary to the stand taken by the CBDT. The AO had imposed penalty of Rs.10,000/- in each case where PAN Number was not provided by the deductee. However, the CBDT has in letter dated 5.8.2008 vide No.275/24/2007-IT(B) clarified that penalty of Rs.10,000 u/s 272B is linked to the person, i.e., the deductor who is responsible to deduct TDS, and not to the number of defaults regarding the PAN quoted in the TDS return. Therefore, regardless of the number of defaults in each return, maximum penalty of Rs.10,000/- can be imposed on the deductor.

(Please click here to view the Judgment)

2. Bank of Bahrain & Kuwait VERSUS Deputy Director of Income Tax (International Taxation),I.T.A. No.7781/Mum/2010, DATE OF ORDER: 30.09.2013, ITAT-Mumbai.

NRI desk expenses and direct staff cost incurred by head office outside India and same were reimbursed by Indian branch, direct and exclusive NRI Desk expenses incurred by Head Office were allowed in full as same were not hit by section 44C

An identical issue has been considered and decided by this Tribunal in assessee's own case for the assessment year 2002-03, Addl. DIT v. Bank of Bahrain & Kuwait. Respectfully following the order of this Tribunal, the direct and exclusive NRI Desk expenses incurred by head office were allowed in full as same were not hit by section 44C. However, the allocated expenses towards staff cost incurred by OBD and various other Head Office support centres to NRI Desk are to be considered as per provisions of section 44C only subject to verification and correctness of expenses as per the directions of the Tribunal for the assessment year 2002-03. Similarly, the other common Head Office expenses are also to be considered as per the provisions of section 44C only. Therefore, the Assessing Officer has to work out the amount of deduction under section 44C afresh as per law in respect of the common expenses covered under section 44C. Accordingly, the orders of authorities below are modified. 

(Please click here to view the Judgment)

 Golden Rule:

"Inspiration exists, but it must find you working."

 

  Thanks & Regards

Team

Voice of CA

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