Section 271(1)(c), read with section 271AAA, of the Income-tax Act, 1961 - Penalty

IT: Section 271AAA and section 271(1)(c) have different concomitant scopes and are mandated to operate exclusively

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[2015] 55 taxmann.com 284 (Mumbai - Trib.)

IN THE ITAT MUMBAI BENCH 'C'

Assistant Commissioner of Income-tax, Central Circle-13, Mumbai

v.

Prakash Steelage Ltd.*

SANJAY ARORA, ACCOUNTANT MEMBER

AND AMIT SHUKLA, JUDICIAL MEMBER

IT APPEAL NO. 5221 (MUM.) OF 2012

[ASSESSMENT YEAR 2009-10]

JANUARY  28, 2015

Section 271(1)(c), read with section 271AAA, of the Income-tax Act, 1961 - Penalty - For concealment of income (Section 271AAA v. section 271(1)(c)) - Assessment year 2009-10 - Whether section 271AAA and section 271(1)(c) have different concomitant scopes and are mandated to operate exclusively - Held, yes - There was a search and seizure action under section 132 at premises of assessee - Several incriminating materials were found leading to disclosure of undisclosed income vide statement under section 132(4) - Addition was made by Assessing Officer - Thereafter, penalty under section 271AAA had been levied by Assessing Officer as assessee could not specify manner in which such income had been derived - Commissioner (Appeals) deleted penalty on basis of a finding that there was substantial compliance, not warranting any further denial of benefit of Explanation 5A to section 271(1)(c) - Commissioner (Appeals) having examined levy on basis and anvil of a different provision, matter was to be restored back to him for consideration afresh - Held, yes [Paras 4.3 and 4.4] [In favour of revenue/Matter remanded]

Section 10(23AAA) of the Income-tax Act, 1961, read with Rule 16C(5) of the Income-tax Rules

IT : Where commissioner had wrongly interpreted rule 16C and held that employer could not made any payment for corpus of employees welfare fund, order of Commissioner to reject registration under section 10(23AAA) was to be set aside

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[2015] 55 taxmann.com 184 (Gujarat)

HIGH COURT OF GUJARAT

KPT Employees Welfare Trust

v.

Commissioner of Income-tax, Rajkot-I*

K.S. JHAVERI AND K.J. THAKER, JJ.

SPECIAL CIVIL APPLICATION NO. 12659 OF 2014

DECEMBER  22, 2014

Section 10(23AAA) of the Income-tax Act, 1961, read with Rule 16C(5) of the Income-tax Rules, 1962 - Employees' welfare fund, exemption to (Employer's contribution) - Assessee-trust was constituted for benefit of employees of a port trust - It filed application for registration under section 10(23AAA) - Commissioner invoked rule 16C of rules and rejected said application holding that employer could not made any payment for corpus and, therefore, one of conditions laid down in section 10(23AAA) was not fulfilled - Whether since as per CBDT guideline, employer contribution in corpus was acceptable, impugned order passed by Commissioner was to be quashed and set aside - Held, yes [Para 13] [In favour of assessee]

Circulars and Notifications : Notification Nos. 9830 SO 672(E), dated 27-7-1995 and 33/11, dated 3-6-2011

Section 50, read with sections 45 and 49, of the Income-tax Act, 1961 - Capital gains

IT : Godown purchased in 1969, but not used since 1985-86 on which no depreciation was claimed in subsequent years, would not be included in block of assets in view of newly introduced section 50 w.e.f. 1-4-1988; profit arising on sale could not be taxed as short-term capital gain but as long-term capital gains

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[2015] 55 taxmann.com 287 (Gujarat)

HIGH COURT OF GUJARAT

Income-tax Officer

v.

Parikh Transport Co.*

K.S. JHAVERI AND K.J. THAKER, JJ.

TAX APPEAL NO. 245 OF 2001†

NOVEMBER  25, 2014

Section 50, read with sections 45 and 49, of the Income-tax Act, 1961 - Capital gains - Computation in case of depreciable asset (Scope of) - A godown was purchased in 1969, but it was not used for purpose of business since assessment year 1985-86 - No depreciation was claimed in subsequent years - Tribunal held that section 50 which is newly introduced w.e.f. 1-4-1988 would not be applicable in instant case and said asset would not form part of block of assets and profit arising on sale of said asset could not be taxed as short-term capital gain and that said asset was long-term capital asset and, accordingly, long-term capital gain would be computed by applying provisions of sections 45 and 49 - Whether view taken by Tribunal was just and proper - Held, yes [Paras 6 and 9] [In favour of assessee]

Section 158BC, of the Income-tax Act, 1961 - Block assessment in search cases

IT : Where assessee was neither searched nor assets were recovered from him and there was no warrant of authorization in name of assessee, addition as undisclosed income during block assessment was not sustainable

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[2015] 55 taxmann.com 293 (Allahabad)

HIGH COURT OF ALLAHABAD

Commissioner of Income-tax, Allahabad

v.

Anil Kumar Chadha*

TARUN AGARWALA AND DR. SATISH CHANDRA, JJ.

IT APPEAL NO. 86 OF 2011

WRIT TAX NO. 572 OF 2012†

FEBRUARY  18, 2015

Section 158BC, of the Income-tax Act, 1961 - Block assessment in search cases - Procedure for (Search and seizure, condition precedent) - Block period 1-4-1988 to 3-5-1998 - Police recovered certain sum of money from three persons - Said persons stated that money belonged to assessee - Matter was referred to Income-tax department - Department issued a notice under section 158BC to assessee and made addition as undisclosed income - However assessee was neither searched nor assets were requisitioned from him under section 132A - Further, there was no warrant of authorization in name of assessee - Whether section 158BC was not applicable in assessee's case - Held, yes - Whether addition of undisclosed income was not justified - Held, yes [Para 17] [In favour of assessee]

Mumbai and Ahmedabad get push as global finance centres with new norms on permanent establishment

New norms on permanent establishment (PE) announced in the Budget will be applicable to all funds — regardless of whether they have raised funds in India or plan to deploy capital in the country — potentially boosting prospects of cities such as Mumbai and Ahmedabad with ambitions to emerge as global finance centres. But, there are irritants, notably the super-rich tax introduced in the Budget, which stipulates higher tax rate for those earning above Rs 1 crore as well as, what some analysts say, are ambiguities in the language of the new norms. In his Budget speech, Finance Rules on Permanent Establishment Give Fin Hub Plans a Fillip Minister Arun Jaitley had said the current taxation norms discouraged fund managers from locating to India. The Budget sought to change this in line with the government's keenness to attract high value financial services to India by clarifying that the physical presence of fund manager would not result in the creation of a PE.

"..A mere presence of a fund manager in India would not constitute permanent establishment of the offshore funds resulting in adverse tax consequences," said Jaitley. Many analysts say this is a step in the right direction though fund managers are not exactly queueing up to relocate to India. The initial impact could be on India-centric funds that have raised capital globally. "You would see superannuation funds, mainly from North America, taking advantage of this, as they have been bullish on India for some time," said Dinesh Kanabar, tax expert and CEO of tax advisory firm Dhruva.

Mumbai and Ahmedabad get push as global finance centres with new norms on permanent establishment"But the ambiguity around tax regulations had stopped them from appointing a manager in India. Apart from this, other funds would adopt a wait-and-watch approach for some time," he said. A major fund is all set to post a fund manager in Mumbai in 30-45 days, people close to the development said.

Fifteen crore Aadhar cards linked with bank accounts

The National Payments Corporation of India on Friday announced linking of 15 crore Aadhar cards with various bank accounts in India.

"NPCI, the umbrella organization for all retail payments system in India, reached a major milestone of successfully linking 15 crore bank accounts with Aadhar number," NPCI Managing Director and CEO A.P. Hota said here.

The current focus is on linking the bank accounts of 17 crore DBTL beneficiaries of Aadhar numbers by June 30 this year, he added.

"It is expected that soon all beneficiaries of all types of government subsidiaries and benefit transfers will be brought under the linkage programme. Such a framework of electronic benefit transfer would not only be unique, but will be one of the largest in the world," Hota said.

He said the extent of leakage prevented due to this unique system would be visible on completion of running the scheme for about a year.

Hindalco, Jindal Power bag mines on 3rd day of auctions

Hindalco Industries and Jindal Power have bagged one mine each on the third day of the second phase of the coal block auctions.

Hindalco Industries has bagged Dumri mine in Jharkhand for an estimated Rs 9,809 crore, while Jindal Power won Tara block in Chhattisgarh for Rs 2,103 crore.

Bidding for Nerad Malegaon in Maharashtra is still on. "Hindalco highest bidder at Rs 2,127 (per tonne) for Dumri and Jindal Power at Rs 126 (a tonne) for Tara coal block," tweeted coal secretary Anil Swarup.

"Auction for Tara block, which is for power sector, began at 11am with rupee one bid. For Dumri, the auction began at Rs 2,125 per tonne while for Nerad Malegaon it started at Rs 413 per tonne," an official told PTI.

There were eight players vying to grab Dumri block in Hazaribag district of Jharkhand with extractable reserves of 46.13 MT.

The companies in the race to grab this block were - Balco, Easternrange Coal Mining Private Ltd, Hindalco Industries Ltd, Lakeview Dealtrade Private Ltd, Rungta Mines Ltd, Natural Resources Private Ltd, Sesa Sterlite Ltd and Usha Martin Ltd.

The mine was previously allotted to Nilachal Iron & Power Ltd and has preliminary forest clearance and awaits forestry clearance for mining lease.

A maximum of nine companies — Adani Power Ltd, Adani Power Rajasthan Ltd, Adani Power Maharashtra Ltd, Athena Chhattisgarh Power Ltd, Jindal Power Ltd, JSW Energy Ltd, KSK Mahanadi Power Company Ltd, LANCO Amarkantak Power Ltd and RattanIndia Nasik Power Ltd — were vying for Tara block in Surguja district of Chhattisgarh.

Walmart India appoints Ashwin Mittal as chief financial officer

Walmart India on Saturday announced two executive appointments with Ashwin Mittal as the new Chief Financial Officer and Javier Rojo as head of Real Estate and Business Development.

Mittal will replace Jill Anderson, currently the CFO of Walmart India, who will soon repatriate back to Walmart in US, the company said in a statement.

Commenting on the development Walmart India President & CEO Krish Iyer said the appointments reflected the company's 'commitment to India'.
"Ashwin comes with in-depth knowledge, wide experience and commitment that will help us strengthen our processes even more in the years to come," Iyer added.
Javier will lead the Real Estate and Business Development and will be responsible for Design & Construction, Real Estate and Store Planning.
"Javier's depth of knowledge and global experience in real estate development will indeed make a positive difference and deliver results as we remain steadfast on our growth and expansion plans in India," the CEO said.

Opinion: Black Money Measure a Welcome Move in Budget

Finance Minister Arun Jaitley's Union Budget 2015-16 has set out the tone for a long term growth strategy, consistent with the ambition of Prime Minister Narendra Modi. While the tax savings in this Budget for the salaried -class did not meet the sky rocketing expectations, the policy initiatives reinforced the emphasis on long term growth. The efforts in it are clearly towards aligning laws and administration to put India at par with developed countries, and hence ' Aam aadmi' will have to resist the desire to gain immediate benefits in anticipation of a better and secure future. However, the success of the proposals will be decided based on how the Modi government delivers in the years to come.

Measures to curb black money

A comprehensive new law on black money will be enacted to specifically deal with black money stashed away abroad. Concealment of income or assets and evasion of tax in relation to foreign assets will be a non-compoundable offense, punishable with penalty of 300 per cent and rigorous imprisonment up to ten years with no recourse to settlement commission. Rigorous imprisonment of up to seven years for non-filing of return or filing of return with inadequate disclosure of foreign assets is a welcome move for bringing black money back to India.

Wealth tax abolished

Finance ministry to incentivise credit, debit card usage

You may have to use your to pay a bill of over Rs 5,000 while eating out at a four or five star hotel. This is one of the measures that the finance ministry is considering as it tries to discourage cash transactions.
“We are looking at incentivising banks, sharing part of the cost of point of sale machine, etc,” said finance secretary Rajiv Mehrishi on Monday, adding that the ministry will set up a committee to suggest measures to incentivise credit or debit card transactions.
The move follows finance minister Arun Jaitley’s announcement in the Budget 2015-16 that transactions in cash would be discouraged to curb flow of black money.
The finance ministry will also decide in two months on quantum of funds that could be raised by the companies in railways and road sector through tax-free infrastructure bonds. “Tax-free infra bonds are meant for road and rail sector. The limit will be decided by March or April,” said the finance secretary.

eGovWatch: Indian Railways launches passenger complaint portal, Mobile App

After three days of the budget, Railways on Monday launched a mobile phone App and also an online portal with a view to providing customers with “an effective forum to lodge complaints”.
People can also use these forums to send suggestions for  improving railway services.
“There should not be any complaints ideally, but if about 3 crore passengers will travel in more than 10,000 trains daily, some complaints might come up.
“So, there should be an effective forum to lodge complaints,” Railway Minister Suresh Prabhu said after launching the portal and the App.
“Valuable suggestions on the newly-launched portal can be incorporated… if found suitable,” he said.
Passengers can lodge their complaints and suggestions on the webpage www.indianrailways.gov.in. One can also download the mobile App from the URL www.coms.indianrailways.gov.in. for registering complaints and sending suggestions.

Govt changes rule to make RBI more accountable; Governor will have to explain failure if inflation targets are not met

If Reserve Bank of India Governor Raghuram Rajan fails to rein in inflation, he will now have to write a letter to the government — just as his counterpart in Bank of England does — explaining why he failed. Chances are it could even be put in the public domain, as is done in other countries, for anyone to figure out whom to blame for rising prices.

The rules of the game have been changed to make the central bank more accountable and usher in 'inflation targeting' through a new agreement on 'monetary policy framework' signed by the government and central bank.

The agreement was signed on February 20, a week before Finance Minister Arun Jaitley said in his Budget speech that the RBI Act would be amended to pave the way for a monetary policy committee (as is the practice worldwide). The agreement released on Monday, however, makes no mention of the proposed panel.

It is understood that there are differences between RBI and the government over the composition of the committee, which may be set up only after the Act is amended."There is disconnect between the framework agreement and the Budget announcement of a monetary policy committee. Clause 7 (of the agreement), which says that any dispute over interpretation or implementation of this agreement will be resolved through a meeting between the (RBI) governor and the government, is redundant," former RBI governor