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Don’t Junk The Collegium System Only Because Of A Few Dubious Judges

Shri. Beni_Madhav

Don’t Junk The Collegium System Only Because Of A Few Dubious Judges

Beni M. Chatterji, Senior Advocate
The author, an eminent Senior Advocate and tax expert, candidly concedes that the non-transparent Collegium system has its defects because while a few persons of sterling character and ability have been left out from consideration, a few persons of dubious character have been appointed Judges. However, he argues that these defects can be rectified and there is no justification for compromising with the independence of the judiciary

Executive and Judiciary are up for collision course or there is any possibility of mutual understanding to solve this monumental constitutional crisis?
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Analysis Of An Important Judgement On International Taxation

Shri. Anant Pai

Analysis Of An Important Judgement On International Taxation

CA Anant N. Pai
A recent verdict of the Authority of Advance Rulings (AAR) has created a controversy over the role of a Protocol in interpreting Tax Treaties, in the context of the “Most Favoured Nation” (MFN) clause. The author has conducted a careful analysis of the judgement, explained its implications and provided valuable guidance on the way forward

1. The AAR decision in the case of Steria (India) Ltd, reported in [2014] 364 ITR 381 (AAR), poses an interesting challenge to tax professionals in evaluating the role of a Protocol in interpreting Tax Treaties.

2. The Applicant in this case, Steria (India) Ltd [‘S’] is an Indian public company stated to be a leading provider of IT driven business services for its clients’ core business processes.

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Recent Important Judgements On Disallowance u/s 14A And Rule 8D

Shri. K. C. Singhal

Recent Important Judgements On Disallowance u/s 14A And Rule 8D

Shri. K. C. Singhal, Advocate, VP, ITAT (Retd)
Section 14A and Rule 8D, which disallow expenditure incurred in respect of tax-free income, have been a major bone of contention between the taxpayers and the income-tax department. There are a number of conflicting judgements on the issue. The author has carefully analyzed all the recent important judgements on the issue, identified their core ratio, and provided valuable guidance on the present state of the law

Disallowance u/s 14A of the Income Tax Act 1961 has always been the subject matter of dispute before the tax authorities, Appellate Tribunal and the courts. Recently, certain decisions have been delivered by the courts which have great impact on the scope of disallowance u/s 14A of the Act.

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Ashamed At Sorry State Of Affairs In India: Mohan Parasaran, Solicitor General*

mohan_parasaran

Ashamed At Sorry State Of Affairs In India: Mohan Parasaran, SG*

Editorial Staff
Solicitor General Mohan Parasaran, who is highly regarded for his legal acumen, court craft and ice-cool temperament, has, on the eve of his resignation from the post, spoken his heart out on the ills plaguing the Country and what can be done to salvage the situation

*Title changed from “Ashamed To Be Indian” as the context appears to have been misunderstood by readers

Survival as top law officer was a “sheer miracle”

Mohan Parasaran did not mince any words in expressing his unhappiness at the way the Government functioned. He said it was a “sheer miracle” that he survived 10 years as the top law officer of the Country. He pointed out that appearing for the Government is like facing a fast bowler in a cricket match without the basic safeguards like pads, gloves, helmet etc. He lamented that the briefs get delivered at the last minute and there are no instructions on what is required to be done. There is a communication gap between the various ministries and the concerned ministry would not even be aware that its’ matter is coming up for hearing on a particular date, he said.
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Analysis Of Two Important Judgements (Jan – March 2014)

Shri. Anant Pai

Analysis Of Two Important Judgements (Jan – March 2014)

CA Anant N. Pai
No practitioner can afford to be unaware of the latest judgements & whether experts view the judgement as being right or wrong. Towards that end, the author has agreed to take time out of his busy schedule to make an analysis of landmark judgements every quarter. In this part, the author has identified two landmark judgements analyzed them with a critical eye and identified their strengths & shortcomings

1. S. 56(2)(vii) does not apply to bonus & rights shares offered on a proportionate basis even if the offer price is less than the FMV of the shares.

Sudhir Menon HUF vs. ACIT – Mumbai ITAT – “A” Bench – ITA no. 4887/Mum/2013 dated 12-3-2014 for Assessment Year 2010-11. (www.itatonline.org).

1.1. The synopsis of the decision is reproduced as under:-

“Section 56(2)(vii)(c) (ii) provides that where an individual or a HUF receives any property for a consideration which is less than the FMV of the property, the difference shall be assessed as income of the recipient. Section 56(2) (vii) does not apply to the issue of bonus shares because there is a mere capitalization of profit by the issuing-company and there is neither any increase nor decrease in the wealth of the shareholder as his percentage holding remains constant. The same argument applies pari material to the issue of additional shares to the extent it is proportional to the existing share-holding because to the extent the value of the property in the additional shares is derived from that of the existing shareholding, on the basis of which the same are allotted, no additional property can be said to have been received by the shareholder. The fall in the value of the existing holding has to be taken into account. As long as there is no disproportionate allotment, i.e., shares are allotted pro-rata to the shareholders, based on their existing holdings, there is no scope for any property being received by them on the said allotment of shares; there being only an apportionment of the value of their existing holding over a larger number of shares. There is, accordingly, no question of Section 56(2) (vii) (c) getting attracted in such a case. A higher than proportionate or a non-uniform allotment though would attract the rigor of the provision to the extent of the disproportionate allotment and by suitably factoring in the decline in the value of the existing holding.”

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How To Use The RTI Act For Maximum Benefit In Income-Tax Matters

CA Narayan  Varma

How To Use The RTI Act For Maximum Benefit In Income-Tax Matters

CA Narayan Varma
The Right to Information Act, 2005 is a potent tool for tax payers to find solutions to their everyday problems. Unfortunately, most taxpayers & tax professionals have not understood the scope and potential of the Act. The author, an eminent and veteran Chartered Accountant, has explained the law in the simplest possible manner and given several practical examples so that all taxpayers can derive full benefit from the RTI law

This article deals with Income-tax Issues, though some parts of it will be applicable to Indirect tax issues also.

RTI & Professionals

Citizens in general and professionals alike in the financial fields are more often than not stuck in a major traffic jam of bureaucrats, red tapism, ‘babudom’, corrupt officials, unconcerned staff, rude misbehaviour, etc. There is almost no way to wade through this. There are a lot of tiny issues that are present in the government departments which are so deeply imbibed into their system that they are almost synonymous with the department in itself. The common man too has this fixed negative notion towards these departments but has never tried to change it since he thinks that his individual effort would go entirely futile and that a mass movement is required to extract this absorbed venom from the veins of our democracy. October 2005 was the lucky time when the Government came up with the anti-venom, the Right to Information Act. Read more ›

S. 132: A Practical Guide To The Law And Procedure Of Search And Seizure

Dr. K. Shivaram

S. 132: A Practical Guide To The Law And Procedure Of Search And Seizure

Dr. K. Shivaram, Advocate
The power of search & seizure is a potent tool for the department to unearth unaccounted income. However, to mitigate the possibility of its misuse by over-zealous officials, the law has incorporated several safeguards. The author, an eminent advocate with rich experience in the subject, has explained the entire law in a succinct manner. His check list will ensure that the department and the taxpayers are always on the right side of the law

1. Introduction.

1.1. One may recollect that in the year 1991, when the Chamber of Income-tax Consultants had organised the second All India Tax Conference, one of the session was regarding tax payers’ education programme. It was the first time in the history of taxation that the Chamber of Income tax Consultants had produced a “skit on Search and seizure”. The skit (play) was informative about how a search was conducted, the common mistakes committed by assessees and the like. In the year 1991, the Chamber of Tax Consultants also had a unique programme held at Baidas Hall, where the high income-tax payers of Mumbai were honoured. In this programme also, the play was enacted and was appreciated by all including the Chairman of the CBDT, the Commissioners of Income-tax of Mumbai and the officials of the search team. It is worth considering, subject to permission and precautions, if this play can be posted in the website of the Chamber of Tax Consultants or could be re-enacted during seminars like this.

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Analysis Of Four Important Judgements (July – Sept 2013)

Shri. Anant Pai

Analysis Of Four Important Judgements (July – Sept 2013)

CA Anant N. Pai
No practitioner can afford to be unaware of the latest judgements & whether experts view the judgement as being right or wrong. Towards that end, the author has agreed to take time out of his busy schedule to make an analysis of landmark judgements every quarter. In this part, the author has identified four landmark judgements analyzed them with a critical eye and identified their strengths & shortcomings

(1) Business Income :- [Section 28 (1)] – Security deposit collected in sales invoice towards possible levy of sales tax on packing charges is not trading receipt.
Dalmia Cement {Bharat} ltd. vs. CIT [2013] 36 taxmann.com 358 (Delhi)
In the case before the Delhi High Court, the assessee had collected refundable security deposits from its trade customers towards possible levy of sales tax on packing charges. At the time of collection, levy of sales tax on packing charges was a pending dispute before Courts. The security deposit was collected by the assessee  in the invoice with a specific citation therein that the amount collected would be paid to Government, if the  issue of levy of sales tax was upheld in Supreme Court and otherwise returned to the payer, if the levy was not sustained.

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Transfer Pricing: The Law And Practice Of Advance Pricing Agreements (APA)

Anurag Soan + Shreya Ganju

Transfer Pricing: The Law & Practice Of Advance Pricing Agreements

Anurag Soan & Shreya Ganju, Symbiosis Law School, Pune
The Advance Pricing Agreement Scheme (APA), which was notified on 30.08.2013, presents a steep learning curve for the taxpayers and the revenue though it has been in operation in other countries for several years. The authors have, after deep study of the Indian law and that prevailing in other Countries, identified all the complexities in the Scheme and suggested measures to resolve them

Introduction

Taxation is a concept which is based on the sovereignty of nations, whereby each nation taxes income derived from businesses within its sovereign control. Universally, the world recognises each nation’s right to tax the economic activity within its jurisdiction.1 International issues are addressed, to some extent, through a number of bilateral treaties, many based on an international model2 or convention, mutual understandings, and practice. Taxation of international transactions by individual nations often results in confusion, disagreement, double or multiple taxation of same income,3 and, also taxable income which is not taxed by any of the nations. Concurrently, the fragmentation of taxation of international transactions into a number of national systems provides a significant opportunity to business entities for tax avoidance, evasion, or mistake.4

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S. 43CA: Tax Implications On Builders And Real Estate Developers

Dr.  Raj K. Agarwal & Dr.  Rakesh Gupta

S. 43CA: Tax Implications On Builders And Real Estate Developers

Dr. (CA) Raj K. Agarwal & Dr. Rakesh Gupta, Advocate
S. 43CA, which provides that the profits on transfer of immovable property held as stock-in-trade shall be computed on the basis of the stamp duty valuation, has several nuances and complications, particularly for real estate developers following the percentage completion method. The authors have, after detailed study, identified all the nuances and complications and provided clear-cut answers

Finance Act, 2013 has inserted a new section 43CA under the Income Tax Act, 1961 which is applicable from Financial Year 2013-14, introducing the provisions for taxability of transfer of immovable property (land or building or both) held in the nature of stock in trade, on the same lines which are applicable for immovable property held in the nature of “capital asset” under section 50C of the Act.

Read more ›

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