HC Says: Assessee can file the revised return even after service of intimation u/s 143(1) by department

IN THE HIGH COURT AT CALCUTTA Special Jurisdiction (Income Tax) ITA No. 301 of 2005 TATA METALIKS LTD. Vs. C.I.T III, KOLKATA     BEFORE:  The Hon'ble JUSTICE SOUMITRA PAL  The Hon'ble JUSTICE ARINDAM SINHA  Date : 22nd September, 2014 


Facts of the Case (in Brief)
- Assessee submitted that the return for the relevant assessment year was intimated to have been accepted under Section 143(1) of the Income Tax Act, 1961 on 8th August, 2000. 

- According to him, that was not completion of the assessment in relation to such return filed.

- The assessee sought to file a revised return on 31st March, 2001 which was within the time provided under Section 139(5) of the said Act.

- The Revenue did not accept the above contention of assessee and thereby treating the revised return as invalid return.

Arguments by Assessee - Assesee submitted that intimation issued under Section 143(1) of the said Act cannot be said to be an assessment relying on the decision reported in the case of Assistant Commissioner of Income Tax versus Rajesh Jhaveri Stock Brokers(P) Ltd. : 291 ITR 500(SC), in particular paragraph 13 thereof. He submitted by that judgement it had been held assessment could not be said to have been completed on the issuance of intimation under Section 143(1) of the said Act. He also drew our attention to the judgment in Tarsem Kumar versus Income Tax Officer & Ors. : 256 CTR (P&H 116) rendered following the aforesaid judgment of the Hon’ble Supreme Court.

Arguments by Revenue - Revenue submitted that by the intimation dated 8th August, 2000 the assessee was informed that its original return had been accepted. Refund as raised stood already issued as intimated and thereafter the Assessing Officer did not resort to seeking any further particulars or evidence from the assessee in resorting to the provision of 3 Section 143(2) of the said Act. In those circumstances, the assessment stood completed and accepted by the assessee who then had sought to file a revised return on the last day otherwise possible. According to Revenue, the said revised return was not accepted as it could not be in the facts and circumstances of the case. The Revenue relied on the decisions reported in 2002(3) SCC 496 (Haryana Financial Corporation and Anr Vs. Jagdamba Oil Mills and another) and 2006(1) SCC 275 (State of Orissa & Ors. Versus Md. Illiyas) to submit on the point of applicability of precedents in seeking to distinguish the judgment relied on by Assessee.

Held by High Court -  We find the Hon’ble Supreme Court had considered the effect of Section 143 of the said Act in discussing its sub-sections as it had undergone change from time to time. The Tribunal had relied on the case of CIT Vs. Punjab National Bank (supra) in which also we find the discussion is the same regarding assessment as provided for under Section 143(1) of the said Act, that it could not be said to be assessment was complete on intimation issued.  Section 143(1)(i) of the said Act as it stood in the material time is set out below :
 “143.(1) Where a return has been made under section 139, or in  response to a notice under sub-section (1) of section 142,-  (i)If any tax or interest is found due on the basis of such return, after adjustment of any tax deducted at source, any advance tax  paid, any tax paid on self-assessment and any amount paid otherwise by way of tax or interest, then, without prejudice to the provisions of sub-section (2), an intimation shall be sent

Article ID: 307 | Posted By: TaxReply.com | Date: 2015-01-18

To bring a income from Royalty or FTS within the ambit of section 44DA, Non Resident must have PE in India and such income should be effectively connected with such PE.

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : I : NEW DELHI BEFORE SHRI R.S. SYAL, AM AND SHRI A.T. VARKEY, JM ITA No.234/Del/2013 Assessment Year : 2005-06 CGG Marine SAS (now CGG Veritas Services SA) Vs.
ADIT, International Taxation   Summary of case -
To bring a particular income from Royalty or fees for technical services (FTS) within the ambit of section 44DA, two conditions must be satisfied.

a) First, Non-resident must have a permanent establishment in India and
b) Second, the contract from which royalty or fees for technical services arises should be effectively connected with such permanent establishment.


  Facts (in Brief) Assessee filed its return declaring income under the head PGBP at Rs.21,22,18,595/-. The assessee received US $ 4,65,428/- from ONGC on account of mobilization fee in terms of Contracts for hire of vessel for 3D Seismic Data Acquisition. The said amount was included u/s 44BB of the Act for the purposes of computing gross receipts. However, it was mentioned in the return that the assessee reserved its right to revise the computation of gross receipts to the extent of the amounts received on account of mobilization fee attributable to the activity undertaken in India. That is how, it was claimed during the course of the assessment proceedings that the receipt from mobilization or demobilization be taxed only to such extent as could be reasonably attributed to the operations carried out in India. In support of this contention, the assessee relied on a Third Member order passed by the Delhi Bench of the Tribunal in the case of Saipem SPA vs. DCIT (2004) 88 ITD 213 (Del)(TM). 

Ordered by AO
The AO passed order u/s 143(3) of the Act on 05.09.2006 after fully considering and discussing the two Contracts with ONGC. In that order, he accepted that the assessee was engaged in the business of providing equipments and services or facilities in connection with prospecting for extraction or production of mineral oils and as such the revenue received in pursuance of the aforesaid Contracts was taxable u/s 44BB of the Act. He, further held that the entire mobilization fee constituting gross receipts u/s 44BB included by the assesee in its return of income was correct and hence the claim that mobilization fee attributable to mobilization activity undertaken outside India should not be taxed in India, was not acceptable. That is how, the AO completed the original assessment on the basis of gross revenues from ONGC at Rs.212,21,85,946 and computed income at Rs.21,22,18,594 u/s 44BB of the Act @ 10% of such gross receipts. 

Held by ITAT Ordinarily, income by way of royalty or fees for technical services earned by a non-resident pursuant to agreement made after 31.3.2003 is computed u/s 44DA where such non-resident carries on business in India through a permanent establishment situated in India and the contract, etc., in respect of which fees for technical services results is effectively connected with such permanent establishment. On satisfaction of such conditions, the income is computed under the head ‘Profits and gains of business or profession’ in accordance with the provisions of this Act. Thus, in order to bring a particular income from royalty or fees for technical services within the ambit of section 44DA, it is essential that the non-resident must have a permanent establishment in India and the contract from which fees for technical services arises should be effectively connected with such permanent establishment. When these conditions are satisfied, income is computed under the head ‘Profits and gains of business or profession’ as per regular provisions.

Article ID: 304 | Posted By: TaxReply.com | Date: 2015-01-13

Capital gain

Any profit or gain arising from transfer of a Capital Asset is chargeable to tax under the head Capital Gain and is deemed to be the income of the financial year in which the transfer took place. Capital Asset means property of any kind held by the assessee whether or not connected with his business or profession.However, as per section 2(14), Capital Asset does not include the following: (i) Any stock-in-trade, consumable store or raw material held for the purpose of business or profession. (ii) Personal effect (other than jewellery), that is to say, movable property(including wearing apparel and furniture), held for personal use by the assessee or any member of his  family dependent on him. (iii) Agricultural land in India. (iv) notified Gold Bonds and special Bearer Bonds 1991 as issued by Central govt. (v) Gold Deposit Bonds Issued under Gold Deposit scheme, 1999, notified by Central Govt. Year of Taxability:  The basic rule is that the capital gains are deemed to be the income of the previous year in which the transfer giving rise to the gains takes place.Therfore the year of charge is the year in which the sale, exchange, relinquishment etc. takes place. But where the transfer is by way of allowing possession of an immovable property by performance of the contact,it is the year in which such possession is handed over.If the handing over of the possession preceeds the entering of the contarct and the transferee is allowed the possession inpart performance of the proposed contract, the year of taxability of the capital gain is the year, in which the contract is entered into. Long Term Capital Gain/ Short Term Capital Gain: Where capital gain arises by the transfer of a capital asset which is held for more than 36 months, it is treated as Long Term Capital Gain(otherwise is a short term capital Gain). However, in case capital gain arises by transfer of shares of any company, gain shall be long term, where the shares are held by the assessee for more than 12 months before the date of transfer(otherwise short term capital gain.)   Important Point to be noted in case of Long Term Capital Gain:A residential house owned by the firm used for the residence of partners was transferred to the partner on dissolution. Partner sold the same before the completion of 3 years from the date of dissolution. It was held by Madras high Court to be Long Term Capital gain in the case of CIT v. M.K.Chnadrakanth & Others(2002)258ITR 14(Mad.) on the ground that it was used as residential house by the partner even before dissolution and the property of the firm is that of partner. Computation of capital Gain: As per section 48, capital gain are computed by deducting the following from the full value of consideration arising from transfer- (a) The cost of acquisition, (b) The cost of improvement and (c) The amount of expenditure incurred in connection with the transfer. But no deduction will be allowed in respect of payment of securities transanction tax(STT) as introduced w.e.f. 1.10.2004 under chapter VII of Finance Act, 2004. Section 10(38) provides for exemption on long term capital gains arising from transfer of equity shares or units of equity oriented mutual funds w.e.f. 1.10.2004 subject to payment of STT and specified conditions. Section 111A providesrt term capital gains  arising from transfer of equity shares or units of equity oriented mutual funds at a concessional rate of 15% w.e.f. A.Y. 2009-10. Cost Inflation Index: In case of L.T.C. gain, the cost of acquisition/improvement will be substituted with indexed cost as per cost inflation index.Explanation to section 48 defined indexed cost

Article ID: 303 | Posted By: CA. Jagmohan Singh | Date: 2015-01-11

Commission paid by Assessee on Export Sales to Non Resident Agents is not Fees for Technical Services (FTS), hence not liable to TDS in India.

IN THE INCOME TAX APPELLATE TRIBUNAL , ‘C’ BENCH, CHENNAI
Assessment Year : 2009-10
Assistant Commissioner of Income Tax
Vs.
M/s. Track Shoes (P)Ltd.
Date of Pronouncement : 26th September, 2014
Summary:
Commission paid by Assessee on Export Sales to Non Resident Agents cannot be treated as Fees for technical Services (FTS).  And since Non Residents Agents have no PE in India and no part of their services have been rendered in India therefore in such situation there is no obligation on the assessee to deduct tax at source under section 195 of the Act.
  Facts of Case:
The Assessee paid export sales commission of  Rs.82,30,847/- to four non-resident agents. The same has been disallowed by Assessing Officer. The Assessing Officer was of the view that the amount paid by the assessee to non-resident agents is fee for technical services and since the assessee did not deduct TDS under section 195 of the Act the said expenditure is not allowable under section 40(a)(i) of the Act. He further submits that there were no agreements between the assessee and the non-resident agents in respect of export sales and in the absence of any such agreements it is not known as to whether the assessee has paid sales commission or it is fee paid for technical services.

Arguments by Assessee:
Counsel for the assessee submits that the assessee paid only sales commission based on the orders procured by the non-resident agents and there was no agreement for any technical services to be provided to the assessee by the non resident agents. Counsel submits that since the assessee has paid only export sales commission, the said commission is not taxable in India and therefore provisions of section 195 have no application and in which case disallowance under section 40(a)(i) is not warranted. Counsel further submits that the decision relied on by the Commissioner of Income Tax (Appeals) in the case of Faizan Shoes Ltd. (supra) has been affirmed by the Hon’ble Madas High Court in Tax Case Appeal no.789 of 2013 dated 22.7.2014, copy of which is placed on record.  
Held by ITAT:
Heard both sides. Perused orders of lower authorities and the decisions relied on. The Assessing Officer while completing the assessment disallowed commission payments made to foreign agents on the ground that assessee has not deducted TDS. The Assessing Officer was of the view that sales commission paid by the assessee shall be deemed to accrue or arise in India, if such income is accrued or arisen from any business connection in India, The Assessing Officer was of the opinion that in the instant case payments were made for assessee’s business purposes which is carried on in India and therefore such commission paid to non-residents abroad is deemed to have been arisen in India. The Assessing Officer is not disputing that the commission paid by the assessee is not for export sales. Further he has not brought on record to suggest that non-residents provided technical services to the assessee. The Commissioner of Income Tax (Appeals) in respect of sales commission paid to Calzados Jose and M.G. Diffusion International deleted the disallowance relying on the decision of this Tribunal in the case of ITO Vs. Faizan Shoes Pvt. Ltd. (supra) where the facts were identical as foreign agents have no permanent establishments in India, no part of their services have been rendered in India and in such situation there is no obligation on the assessee to deduct tax at source under section 195 of the Act. The decision relied on by the Commissioner of Income Tax (Appeals) has been affirmed by the Hon’ble Madras High Court in the case of CIT Vs. Faizan Shoes Pvt. Ltd. in Tax Case Appeal No.789 of

Article ID: 302 | Posted By: TaxReply.com | Date: 2015-01-05

Though the second proviso to sec. 40(a)(ia) was inserted w.e.f 1.4.2013, but the same is is declaratory and curative in nature and has retrospective effect from 1.4.2005

IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘D’, NEW DELHI ITA No. 3893/Del/2010 : Asstt. Year : 2007-08
ITA No. 5696/Del/2011 : Asstt. Year : 2008-09
Date of Pronouncement : 25.07.2014
Income-tax Officer
Vs. Dr. Jaideep Kumar Sharma, Prop. Dr. Jaideep’s Diagnostic Summary of Case-
Though the second proviso to sec. 40(a)(ia) was inserted w.e.f 1.4.2013, but the same is declaratory and curative in nature and has retrospective effect from 1.4.2005. Therefore if payee has filed his return of income and paid taxes within the stipulated time, then no disallowance u/s 40(a)(ia) in respect of the above said payments is to be done.


Facts of Case
An addition of Rs. 64,55,563/-  & Rs.88,689/- has been made under section 40(a)(ia) of the I. T. Act, 1961 as the assessee failed to deduct TDS on the same u/s 194J and 194C respectively for AY 2007-08. (Similar additions were made on identical set of facts for assessment year 2008-09 also by A.O.).

Submission:
It was submitted that the matter can be examined afresh by the Assessing Officer in light of second proviso to sec. 40(a)(ia) of the Act, which, according to him, is retrospective in operation, in view of judicial precedents on the subject.
Held By Tribunal
7. We have heard rival submissions and perused the material on record. The second proviso to sec. 40(a)(ia) inserted by Finance Act, 2012 reads as under:-
“Provided further that where an assessee fails to deduct the whole or anypart of the tax in accordance with the provisions of Chapter XVII-B on any such sum, but is not deemed to be an assessee in default under the firstproviso to sub-section (1) of section 201, then, for the purpose of this subclause, it shall be deemed that the assessee has deducted and paid the tax on such sum on the date of furnishing of return of income by the resident payee referred to in the said proviso.”  7.1 Even though above stated proviso was inserted w.e.f 1.4.2013, the Agra Bench of the Tribunal in the case of Rajiv Kumar Aggarwal in ITA No. 337/Agra/2013 order dated 29.5.2013, following the Jurisdictional High Court in the case of CIT Vs Rajinder Kumar reported in 362 ITR 241 and held that the second proviso is declaratory and curative in nature and has retrospective effect from 1.4.2005. The relevant findings of the Agra Bench of the Tribunal cited (supra) reads as follows:-

[ Para 6 - However, the stand so taken by the special bench was disapproved by [Hon’ble Delhi High Court in the case of CIT Vs Rajinder Kumar (362 ITR 241). While doing so, Their Lordships observed that, "The object of introduction of Section 40(a)(ia) is to ensure that TDS provisions are scrupulously implemented without default in order to augment recoveries………Failure to deduct TDS or deposit TDS results in loss of revenue and may deprive the Government of the tax due and payable" (Emphasis by underlining supplied by us)". Having noted the underlying objectives, Their Lordships also put in a word of caution by observing that, "the provision should be interpreted in a fair, just and equitable manner".
Para 9 - On a conceptual note, primary justification for such a disallowance is that such a denial of deduction is to compensate for the loss of revenue by corresponding income not being taken into account in computation of taxable income in the hands of the recipients of the payments. Such a policy motivated deduction restrictions should, therefore, not come into play when an assessee is able to establish that there is no actual loss 0f revenue. This disallowance does deincentivize not

Article ID: 301 | Posted By: TaxReply.com | Date: 2015-01-04

Payment made to Non Resident exclusively for the purpose of earning income from a source outside India are covered by exclusion clause u/s 9(1)(vii)(b) of the Act. Hence not liable to TDS in India

IN THE INCOME TAX APPELLATE TRIBUNAL, CHENNAI
I.T.A.No.846/Mds/2013 Assessment year : 2003-04 The Dy. Commissioner of Income-tax, Chennai Vs.
M/s Hofincons Infotech and Industrial Services Pvt. Ltd
Date of Pronouncement : 18-08-2014
Summary
- Payments made to Non Resident exclusively for the purpose of earning income from a source outside India are covered by exclusion clause u/s 9(1)(vii)(b) of the Act. Hence not liable to TDS in India.
- Once the assessee had made all the payments, finalized accounts well before insertion of the retrospective explanation by Finance Act 2010, it is not supposed to take the clock back and deduct TDS.
  Facts of the Case - Para 2 & 3 of Order:
2. The assessee is a ‘company’. It provides operation, maintenance, consultancy and training services. The assessee had filed its return on 1.12.2003 admitting loss of ` 32,84,971/-. The same was ‘summarily’ processed. Thereafter, the Assessing Officer completed a ‘regular’ assessment on 22.8.2006 reducing the loss declared to ` 22,74,779/-.

3. After framing of ‘regular’ assessment, the Assessing Officer formed reasons to believe that the assessee’s income liable to be taxed had escaped assessment. He issued section 148 notice dated 31.3.2008. The assessee reiterated the income already returned. In re-assessment, the Assessing Officer found the assessee to have paida sum of ` 2,02,21,560/- as service charges in foreign currency. This comprised of a sum of ` 1,57,79,352/- towards per-diem allowances paid to resident employees outside India and payment in relation to support services rendered of  44,22,208/-. We are only concerned about the latter limb. The assessee had not deducted TDS u/s 195 of the Act.
Arguments by Assessee - Para 3 of Order:
3. It pleaded that these payments pertained to services rendered/performed in Qatar qua its Nigerian projects. There was no service stated to be rendered in India. It referred to section 9(1) explanation to clause (i) to contend that if business of which all operations are not carried out in India, its entire income or a part thereof accrues or arises in India only as is reasonably attributable to the operations carried out in India. Per assessee, it had not carried out any operation in India in relation to the support services availed in question which would create any obligation to deduct TDS. The Assessing Officer did not agree. In re-assessment order dated 31.12.2009, he invoked section 40(a)(i) and disallowed this sum of  44,22,208/-.
Held by CIT (A) -  Para 4 of Order:
The CIT(A) finds that these payments are in the nature of service charges exclusively paid towards execution of projects in Qatar and covered by exclusion clause u/s 9(1)(vii)(b) of the Act. He has followed case law of the 'tribunal' in Ajapa Integrated Project Management Consultant Pvt. Ltd I.T.A.No.2169/Mds/2010 holding this ‘exclusion’ applicable if the payment is made to a non-resident for the purpose of earning income from a source outside India. The CIT(A) concludes that these payments pertain to the assessee/consultancy firm’s overseas Nigerian contracts. So, the fees paid to such consultants abroad have been held to be for services utilized in the business carried outside India not liable for any TDS deduction. The CIT(A) has deleted the impugned disallowance.


Appeal by Revenue against order of CIT(A) - Para 7 & 8 of Order:
A) The Revenue’s plea is that its appeal is pending

Article ID: 300 | Posted By: TaxReply.com | Date: 2015-01-02

HC: Same income cannot be taxed in the hands of two people - one on substantive basis and other on protective basis

IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN Commissioner of Income Tax, Jaipur Vs. Shri Sobhrajmal   Facts of the case: Para 3 of order
3. The brief facts, which can be noticed on perusal of the order passed u/s 256(1) and the order passed by the ITAT while deciding the matter, are that a search and seizure operation was carried out in the case of partnership firm M/s Ghindmal Kauromal on 05/09/1985 and the respondentassessee happened to be the partner of firm M/s Ghindmal Kauromal and was also subjected to search, the other partners were also subjected to search. During the course of search, certain books of accounts, documents and other incriminating HCdocuments/material were found and seized. During the course of assessment proceedings, the Assessing Officer (for short, 'AO') scrutinized the said documents and had made additions on account of some of the documents and it was claimed that these documents pertained to the assessee. The AO also made additions on account of some papers/documents in the case of firm M/s Ghindmal Kauromal on substantive basis but since the assessee being a partner and the documents having been found in the possession and custody and at the residence of the assessee, therefore, on protective basis, the addition was also made in the hands of the assessee as well.
Arguments by Assessee: Para 8 of order
8. Ld. counsel for the respondent-assessee, on the other hand, contended that when these very additions have been made in other cases and even the AO in the assessment order himself held that the additions are being made on protective basis, then when additions have already been made in other hands, the addition cannot be made in the case of the assessee again. He further contended that the order of ITAT is based essentially on finding of fact and does not lead to any question of law.
Held by High Court: Para 10 and 13 of order
10. Under the Income Tax Act though there is no such word as substantive addition/assessment or protective addition/ assessment, however, the courts have held that in case where it appears to the income tax authorities that certain income has been received during the relevant year or for that matter documents/loose papers have been found and it is not clear to whom it pertains or it is not clear who has received that income and prima-facie it appears that the income or/and documents/loose papers pertains to either A or B or by both together and thus it will be open to the relevant income tax authority to determine the said question by taking appropriate proceedings both against A and B.
  13. When we peruse the facts in the present reference application, then it is an admitted fact and the revenue also does not deny that protective addition was made in the case of assessee whereas substantive addition was either made in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and in the case of Nanak Ram (Dropadi Devi) and when the above additions have finally been sustained, as observed by the ITAT in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and Nanak Ram (Dropadi Devi), then it is a finding of fact and no question of law can be said to arise with the facts found by the ITAT. When ultimately, the addition of these very documents had been sustained in some other case relating to the search or other partners or in the case of M/s Ghindmal Kauromal or/and in the case of Roop Chand or/and Nanak Ram (Dropadi Devi), then the ITAT had rightly deleted the addition as the same cannot be or could not have been made in two hands. The revenue should not have been aggrieved as the additions on the basis of loose papers/documents has ultimately been made/sustained in other cases of the g

Article ID: 299 | Posted By: TaxReply.com | Date: 2014-12-29

HC- If TDS becomes incapable of being adjusted or counted towards tax payable, it acquires the character of income

HONBLE SRI JUSTICE L. NARASIMHA REDDY AND HONBLE SRI JUSTICE CHALLA KODANDA RAM
(High Court of Andhra Pradesh)     
06-08-2014
Sri Y. Rathiesh (Appellant)
vs.
The Commissioner of Income Tax  I, Visakhapatnam (Respondent) 

These two appeals filed under Section 260A of the Income Tax Act, 1961 (for short the Act) arise out of common order dated 09-11-2001 passed by the Visakhapatnam Bench of the Income Tax Appellate Tribunal (for short the Tribunal) in I.T.A No. 2254 and 2257 of 1996 and batch.  The assessee is the appellant.

Facts of the case: Para 2 & 3 of order
The appellant was functioning as a Managing Director of M/s. A.P. Tanneries Limited (for short, the 1st company).  He gave loan of certain amounts to the said company as well as to another company by name M/s. Associated Tanners (for short, the 2nd company).  The latter was paying interest on the amount advanced by him regularly, whereas the former was just showing the accumulated interest, in its account books without making actual payment.  It was also his case that even while showing the interest payable to him in the account books, the 1st company deducted tax at source (TDS) on the amount of interest payable and issued certificates, in relation thereto.
In the returns filed by him, the appellant was adopting a hybrid procedure.  While in respect of his transaction with the 1st company, he adopted cash system, as regards the transaction with the 2nd company, he adopted the mercantile system.  The result was that he did not pay the tax on the interest payable to him by the 1st company, even while he enjoyed the entire benefit of TDS made in that behalf.  There is no dispute about the interest paid by the 2nd company, since the appellant has shown the same as income and paid tax thereon.
The assessing officer took objection to this and passed an order of assessment treating the interest payable by the 1st company on transfer basis, as income and levied tax.  The same result ensued for various financial years.  Aggrieved by that, the appellant filed appeals before the Commissioner of Income Tax, Visakhapatnam.  The appeals were dismissed.  Thereupon, the appellant filed further appeals before the Tribunal.  Through order dated 09-11-2001, the Tribunal dismissed the appeals.
Argument by Assessee: Para 5 of order
Learned counsel for the appellant submits that it is open for an assessee to adopt partly the cash system and partly, the mercantile system and even while holding the same as permissible, the authorities under the Act have adopted the principles underlying the mercantile system for the entire returns.  It is pleaded that when the 1st company did not pay the interest at all, the appellant ought not to have been levied tax on such amount.  She has also urged that once TDS is deducted even while withholding the payment of the corresponding amount, the appellant was entitled to claim the benefit thereof.   Sri S.R. Ashok, learned Senior Counsel for the Income Tax Department submits that though it is permissible for an assessee to adopt dual method for the same returns, the appellant cannot claim the benefit of TDS in its entirety and at the same time, refuse to pay tax on the corresponding interest.  Learned Senior Counsel submits that the appellant acquired a right to receive interest from the 1st company once it was shown in the account books of that organization; and that is sufficient to levy tax upon the appellant, particularly when he is taking full advantage of the amount recovered as TDS.    The assessee has option to file returns by adopting the cash system or mercantile system.  In a given

Article ID: 298 | Posted By: TaxReply.com | Date: 2014-12-28

Finance Minister Shri Arun Jaitley asks the IRS officer Trainees to be Firm and Fair in Their Dealing with the Tax Assesses

Finance Minister Shri Arun Jaitley Asks the Indian Revenue Service (IRS-Customs & Central Excise) Officer Trainees to be Both Firm and Fair in Their Dealing with the Tax Assesses; 

Asks Them to Maintain High Level of Ethics, Morality and Credibility in Public Life 


The Union Finance Minister Shri Arun Jaitley asked the Indian Revenue Service (IRS-Customs &Central Excise) officer trainees to be both firm and fair in their dealing with the tax assesses. He said that they have to maintain a fine balance between what taxes are to be charged and what not to be charged. The Finance Minister said that those officers who are the face of Government before the public have to be acceptable. The Finance Minister Shri Jaitley was speaking after inaugurating the Professional Training Programme of 66th Batch of Officer Trainees of Indian Revenue Service (IRS) (Customs &Central Excise) here today. The Finance Minister Shri Jaitley further asked the officer trainees to abreast themselves during the 18-month long training programme with the new regime of indirect taxes especially after implementation of Goods & Service Tax (GST). He asked the trainees to maintain high level of ethics, morality and credibility in public life. 

Speaking on the occasion, the Minister of State for Finance Shri Jayant Sinha asked the IRS officer trainees to work hard with integrity and have a mind set of serving the people with integrity. They must keep in mind that they are public servant and try to provide best possible costumer service to make the life easier for people at large. He asked them to use latest tools of technology in efficient discharge of their duties. He called for the need of raising the tax to Gross Domestic Product (GDP) ratio in the country which is quite low at 15.5% while in case of developed countries, it is above 30%. He asked the officer trainees to remove the bottlenecks at the structure level in order to improve the overall system in the Government rather than doing fire fighting and fixing the problems all the time. 

Earlier, the Chairman Central Board of Excise and Customs (CBEC) Shri Kaushal Srivastava administrative the oath to newly recruited IRS trainees. He said that the Government has approved the setting-up of the new campus of National Academy of Customs, Central Excise and Narcotics (NACEN) in Andhra Pradesh. 

Among others present on the occasion include Shri Shakti Kanta Das, Revenue Secretary, Members of CBEC, Shri G. Sreekumar Menon, DG, NACEN and the senior officers of Department of Revenue. 

Article ID: 297 | Posted By: TaxReply.com | Date: 2014-12-28