ITR filling for a business assessee

I have a client who doesnot make books of accounts.He is a shopkeeper. His iTR is to be filled for the financial year ended 31.02.12 and 31.03.13. I asked him to make Financial Statements. He dosenot want to make these. His income is not more than Rs.180000/-. Now, my query is How should i disclose his income in ITR either under the head ' Income from Business and Profession" or "other source" or under both the heads partilally.His income under both the financial years is not exceeding the Tax slab.

Posted By: sahil bhatia | Posted Date: 2014-02-25

Facebook-WhatsApp deal of 19 Billion USD may invite tax litigation

Facebook Inc. (FB), the world’s largest social network, agreed to purchase mobile-messaging startup WhatsApp Inc. for as much as $19 billion in cash and stock, the biggest Internet acquisition in more than a decade.   The accord includes $12 billion in stock, $4 billion in cash and $3 billion in restricted shares, Facebook said yesterday in a statement. It’s the largest Internet deal since Time Warner’s $124 billion merger with AOL in 2001, according to data compiled by Bloomberg. WhatsApp has more than 450 million members, with 1 million users being added daily.   Facebook Chief Executive Officer Mark Zuckerberg, who bought photo-sharing service Instagram for about $700 million in 2012, has been adding applications such as messaging and news to court smartphone and tablet users. WhatsApp, which would be the company’s biggest acquisition, competes with apps from Twitter (TWTR) Inc., Kik Interactive Inc. and Snapchat Inc., the photo-message startup that rebuffed a $3 billion Facebook bid last year.   They seem to have made a pretty strong statement with this acquisition,” said Debra Aho Williamson, an analyst at EMarketer Inc. “Facebook has come to the realization that it needs a portfolio of apps to reach people with different use cases, different demographics, or different ways of communicating.   Market Value   The deal prices WhatsApp at more than half the $31.5 billion market value of microblogging service Twitter, which has 241 million active users. The shares of Menlo Park, California-based Facebook fell as much as 5.7 percent to $64.18 in extended trading after the acquisition was announced. They rose 1.1 percent to $68.06 at the close in New York.   “Facebook is clearly taking out one of its main competitors,” Paul Sweeney, a Bloomberg Industries analyst, said in an e-mail. “They are buying 450 million loyal users and an extraordinary growth story, but at a staggering cost.

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Posted By: | Posted Date: 2014-02-20

Assessee status for all the sources of income cannot be taken as resident merely for the reason he is resident for one of the sources of his income - ITAT AGRA

 ITAT AGRA  Arvind Singh Chauhan vs. Income-tax Officer February 14, 2014  Assessee's status for all the sources of income cannot be taken as resident merely for the reason he is resident for one of the sources of his income. Therefore salary income accrued outside india cannot be taxed in India.
Para 3, 18 & 19 of the order, inter-alia, read as under-
3) Briefly, the relevant material facts are like this. The assessee, an individual, is in employment of Executive Ship Management Pte. Ltd., Singapore (ESM-S, in short), and works on merchant vessels and tankers plying on international routes. In addition to this salary income, the assessee also derives income from bank interest and receives pension from Indian Army, his former employer. There is also no dispute that the assessee's stay in India, in the relevant previous year, was less than 182 days, and that the residential status of the assessee is ' non-resident'. In the income tax return filed by the assessee, the salary received by the assessee from ESM-S was not offered to tax. The income tax return filed by the assessee was selected for scrutiny assessment, and, in the course of resultant assessment proceedings, the Assessing Officer required the assessee to show cause as to why salary received by the assessee from ESM-S, for services rendered as ship crew, not be brought to tax in India. It was explained by the assessee that as assessee was a non-resident, the scope of his income liable to be taxed in India was restricted to income accruing or arising in India, income deemed to accrue or arise in India, or income received or is deemed to be received in India. Since the salary income in respect of ship crew is accruing and arising outside India, it is outside the ambit of limited scope of Section 5(2). As for salary income being credited to bank account in India, assessee's contention was that salary income deposited in bank account in India, directly from bank account of the company outside India was not taxable in India. Reliance was placed on judicial precedents in the cases of DIT v. Prahlad Vijendra Rao (51 DTR 95) , DIT v. Diglan George Smith [(2011) 40 (I) ITCL 419)] and ITO v. Lohithakshan Nambian (ITA No. 1045/ Bang/ 09; order dated 12.04.2010). None of these submissions, however, impressed the A.O. The Assessing Officer was of the view that the assessee's explanation cannot be accepted because section 6(5) provides that where a person's status is resident for one of the sources of his income, his status for all the sources of income is to be taken as resident, and because assessee's status for pension and interest, by his own admission, is that of ' resident' - an inference based on assessee having shown pension and interest income as his taxable income in the return of income, the status of the assessee for all his sources of income is required to be taken as ' resident'. The Assessing Officer further observed that, "Otherwise also, the assessee is a resident in India for one of the sources of income i.e. pension, because he was a Government employee and is getting pension." The Assessing Officer was also of the view that since appointment letter was issued by foreign employer's agent in India, it is to be deemed that the salary income accrued in India. A reference was made to Hon'ble Supreme Court's judgment in the case of CIT v. Shri Govardhan Ltd. (69 ITR 675) for the proposition that if an assessee acquires a right to receive income, the income is said to have accrued to him even though it may be received later, on it's being ascertained. It was also noted that "by receiving the appointment letter and details of salary to be paid, the assessee gets right to receive t

Posted By: | Posted Date: 2014-02-20

DVAT Amnesty Scheme further extended till 28-02-2014

TO BE PUBLISHED IN PART IV OF THE DELID GAZETTE EXTRAORDINARY GOVERNMENT OF NATIONAL CAPITAL TERRITORY OF DELID FINANCE (REVENUE-I) DEPARTMENT DELID SACHIVALAYA, I. P. ESTATE: NEWDELID-ll0002 No.F.3(26)/Fin(Rev-I)/2013-14/DSVI/238-243  NOTIFICATION Dated 18th Feb 2014   Whereas the Lt. Governor of National Capital Territory of Delhi is of the opinion that it is necessary in the interest of general public so to do.
  Now, therefore, in exercise of the powers conferred by section 107 of the Delhi Value Added Tax Act, 2004 (Delhi Act 3 of 2005) , the Lt. Governor of National Capital Territory of Delhi is pleased to make the following amendment to Delhi Tax Compliance Achievement Scheme, 2013, notified vide Notification No. F.3(16)/Fin(Rev-I)/2013-14/dsvi/786 dated 20-09-2013.
1. Short Title and commencement-
(1) This Scheme may be called the Delhi Tax Compliance Achievement (Second Amendment) Scheme, 2014. (2) It shall come into force with immediate effect.
  2. In the Delhi Compliance Achievement Scheme, 2013, in sub-clause (1) of clause 4, for the ili . ili words and figures "18 day of February, 2014", the words and figures "28 day of February, 2014" shall be substituted.   By order and in the name of the Lt. Governor of the National Capital Territory of Delhi

Posted By: | Posted Date: 2014-02-20

The Finance Minister has clarified that the RICE is not an Agriculture Produce for the purpose of Negative List of Services - Interim Budget 2014

The Finance Minister has clarified that the RICE is not an Agriculture Produce for the purpose of Negative List of Services as per Section 66D(d) of the Finance Act, 1994.

Posted By: Dimple Verma | Posted Date: 2014-02-18

Highlights of Interim Budget 2014 - Presented on 17 Feb 2014

  Finance minister P Chidambaram presented the interim budget for the fiscal year 2014-15 on Monday to cover expenditure until the government's term ends in May. His speech was repeatedly disrupted by protests over the proposed division of Andhra Pradesh to create Telangana state.
• GDP expansion in 2013/14 third and fourth quarters will be at least 5.2% Fiscal Deficit:
• Fiscal deficit seen at 4.6 percent of GDP in 2013/14 • Says need to bring down fiscal deficit to 3% of GDP by 2016/17 Current Account Deficit:
• Current account deficit for 2013/14 projected at $45 billion • Forex reserves to rise by $15 billion by end of 2013/14 Borrowing:
• Gross market borrowing seen at 5.97 trillion rupees in 2014/15 • Net market borrowing at 4.07 trillion rupees • Debt repayment in 2014/15 seen at 1.897 trillion rupees • Ways and Means advances for 2014/15 estimated at 100 billion rupees Privatisation:
• Target from stake sale in state run firms for 2013/14 revised to 258.41 billion rupees • Target for 2014/15 at 569.25 billion rupees Spending:
• Plan expenditure for 2014/15 seen at same level as previous year • Non plan spending estimated at about 12.08 trillion rupees in 2014/15 Subsidies:
• Total spending on food, fertilisers and fuel at 2.5 trillion rupees in 2014/15 • Food subsidy estimated at 1.15 trillion rupees, fertiliser subsidy at 679.71 billion rupees. Petroleum subsidy seen at 634.27 billion rupees versus revised figure of 854.8 billion rupees for 2013/14. Defence:
• Spending raised to 2.24 trillion rupees in 2014/15, up 10% year on year Exports:
• Merchandise exports seen at $326 billion in 2013/14, up 6.3% year on year. • Agriculture exports expected to touch $45 billion in 2013/14, up from $41 billion in 2012/13 
Tax Proposals:
• No major change in tax rates • Factory gate tax to be reduced to 10% from 12% on some capital goods, consumer durables • Cut excise duty on small cars, two wheelers, commercial vehicles to 8% from 12% • Recommends excise duty reductions on larger vehicles • Restructure of factory gate tax rates for manufacturing of mobile handsets Banks Restructuring:
• Govt to provide 112 billion rupees capital infusion in state run banks in 2014/15 • Propose to set up public debt management office to start5 work from 2014/15 Finance minister comments:
Resurgence in exports, global economic revival and moderation in inflation point to better outlook for Indian economy in 2014/15. Our objectives were fiscal consolidation, reviving growth cycle, and enhancing manufacturing, said Chidambaram. Manufacturing needed an immediate boost, he said. I can confidently assert that the fiscal deficit is declining, the current account deficit is constrained, inflation is moderated; exchange rate is stable, he said. India's economy now the 11th largest in the world, he said.

To download copy of Finance Bill 2014 click here


Posted By: | Posted Date: 2014-02-17

Finance minister P Chidambaram is all set to present his interim budget today - 17-02-2014

Finance minister P Chidambaram is all set to present his interim budget  today (17-02-2014, Monday).  The finance minister could also announce a cut in customs duty on gold by two percentage points to 8%, signalling a staggered unwinding of the curbs on bullion imports imposed to contain a free-falling rupee and a widening current account deficit (CAD). The finance minister is widely expected to articulate the need for unwavering focus on fiscal discipline even in a poll-bound year, given the delicate state of public finances. The UPA government's last budget comes at a time when the economy is struggling to claw out of a crippling slowdown. India's gross domestic product (GDP)— the total value of goods and services produced in the country— is set to record sub-5% growth for two consecutive years. Finance ministers usually avoid making any big changes in income tax rates and slabs or announcing major programmes during an interim budget, leaving it to the Lok Sabha to ratify changes in tax laws. Along with the interim budget, which will likely list out details of the UPA regime's social and economic achievements, the finance minister will also present a vote on account to enable carrying out regular expenses till a new government assumes office after the general elections.
Earlier this month, Chidambaram indicated that he may tweak excise duties and service tax rates in the interim budget, but may stay away from key reform legislation due to lack of political consensus. Chidambaram's speech is also likely to contain a roadmap for the future, including two critical tax reform initiatives — the Direct Taxes Code and the Goods and Services Tax (GST). Both the DTC, which seeks to overhaul India's archaic income tax laws, and the GST, which will stitch together a common national market by replacing a web of state levies with a single sales tax, could not be passed during this Lok Sabha's tenure due of lack of consensus. P Chidambaram is also likely to unveil the progress on the medium-term roadmap to reduce India's fiscal deficit to 3% of the GDP by 2016-17. The plan draws from the recommendations that a committee headed by former finance secretary Vijay Kelkar had laid out in a recent report.


Posted By: TaxReply | Posted Date: 2014-02-16

HIGH SPENDERS beware - the tax man is watching

If you have deposited more than Rs. 10 lakh in your savings bank account or have bought shares worth more than one lakh rupees, beware. The taxman is watching you.
The income tax department is scanning the records of 4.07 million people who have made cash deposits upto Rs. 10 lakh in their bank accounts in the current financial year for potential instances of tax evasion.
"With technical solutions at the department's disposal, there is a lot of information that is readily available to the authorities. We just want to send across the message that nothing is clandestine and the department would get to know every transaction especially high value ones," said a senior I-T department official.
The official added that the I-T department had sent notices for non-filing of taxes to around 1.2 million people and firms and more such notices are in the offing.
In fact, the IT department is also armed with the data of around 4 million people who had purchased mutual fund units of Rs. 2 lakh or more, bonds or debentures of Rs. 5 lakh or more, shares issued by companies of Rs. 1 lakh or more and bonds issued by RBI of Rs. 5 lakh and above.
The taxman also has data about 1.55 million people who purchased or sold immovable property worth Rs.30 lakh or more, 2.06 million people who made payments of Rs. 2 lakh or more in a year against their credit card bills, and people who received interest income of Rs. 50,000 and above from banks.

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Posted By: TaxReply | Posted Date: 2014-02-16

Applications under DVAT Amnesty Scheme shall also be received on 17-02-2014 and 18-02-2014

GOVERNMENT OF NATIONAL CAPITALTERRITORYOF DELHI DEPARTMENT OF TRADE & TAXES VYAPAR BHAWAN: NEW DELHI (ADMINISTRATION BRANCH)   F.IV/Operation cell/2005-06/566-72 Dated:14.02.14 CIRCULAR   Para 2 of the circular, inter-alia, read as under-
  The applications under Amnesty Scheme shall also be received on 17-02-2014 (Monday) and 18.02.2014 (Tuesday) from 10.00 AM to 6.00 PM at the front office, 1st Floor and at the receipt counter in room no. 301, 3rd floor, VYAPAR BHAWAN (DEPTT. OF TRADE & TAXES) JP Estate New Delhi-110002.  

Posted By: TaxReply | Posted Date: 2014-02-16