Thursday, June 3, 2010

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS ISSUE DATED 7-6-2010 Volume 3 : Part 6

ITR'S TRIBUNAL TAX REPORTS (ITR (Trib)) HIGHLIGHTS ISSUE DATED 7-6-2010

Volume 3 : Part 6

 

 

REPORTS



>> Where seized document not containing signature of assessee, date, nature of transaction, deletion of addition justified : Asst. CIT v. Dr. Kamla Prasad Singh (Patna) p. 533

 

>> Assessee entitled to special deduction u/s. 80-IB(10) in respect of units whose built-up area below 1500 sq.ft. : SJR Builders v. Asst. CIT (Bangalore) p. 569

 

>> Where business not commenced and no actual user of windmill, disallowance justified u/s. 32 : Asst. CIT v. Mohit K. Mehta (Bangalore) p. 580

 

>> A.O directed to rework the interest expenses attributable to earning of interest income from member co-operative societies by allocation of interest expenses on basis of proportion of eligible interest income in relation to total receipts of business in P & L a/c for computation of net income eligible for deduction : ITO v. Punjab Co-operative Milk Producers Federation Ltd. (Chandigarh) p. 586

 

>> Where no proof as regards temporary lull in business and resumption of possession of property by assessee, no mistake apparent from record u/s. 254(2) : T and R Welding Products (India) Ltd. v. Asst. CIT (Chennai) p. 593

 

>> Entire membership fee received on selling timeshares in tourist resorts by assessee not assessable as income chargeable to tax in initial year on account of contractual obligation to provide services in future : Asst. CIT /Dy. CIT v. Mahindra Holdidays and Resorts (India) Ltd. (Chennai) [SB] p. 600

NEWS-BRIEFS



>> Tax relief on New Pension Scheme to make it best savings deal

The New Pension Scheme (NPS), a defined contribution superannuation scheme for Government employees, was thrown open to the private sector in May last year. The scheme offers subscribers the flexibility to decide their investment portfolio as well as choose between fund managers.

 

With weighted returns of over 12 per cent. annually, NPS is expected to be the ideal long-term saving instrument for workers in the unorganised sector. Its low fund management fees of 0.009% make it attractive.

 

The Pension Fund Regulatory and Development Authority (PFRDA) has written to the Finance Ministry seeking level playing field for NPS with other long-term savings schemes that will get tax benefits under the proposed Direct Taxes Code.

 

NPS is currently under the Exempt-Exempt-Tax system, which means investment will be taxed when it is withdrawn. Provident fund and many of the small savings schemes are under the Exempt-Exempt-Exempt (EEE) regime, and are not taxed at any point.

 

The pension regulator has, in its letter to the Central Board of Direct Taxes (CBDT), said tax benefits will make the scheme more attractive and will help increase its share. Many private sector companies and public sector banks are also exploring the option as it would rid them of the headache of administering and managing the funds.

 

The PFRDA has further requested for an additional window under section 80C of the Income-tax Act for contributions by subscribers' employers. Investments in specified schemes up to Rs. 1 lakh are exempt under section 80C of the Income-tax Act. The budget for this year has given an additional exemption of Rs. 20,000 for investments in infrastructure schemes.

 

The scheme, however, has managed only 6,500 private subscribers, partly because it does not enjoy some tax benefits given to private provident fund and private superannuation funds. [Source : www.economictimes.com dated May 27, 2010]

 

>> Government to address concern on revised DTC draft

 

The Government has said that it has identified nine areas of concern in the Direct Taxes Code (DTC) draft, and they would be taken into consideration while it is being redrafted.

 

"The Government intends to introduce the DTC (Bill) in the forthcoming monsoon session of the Parliament," he said in his address to the Central Direct Tax Advisory Committee, an official release stated.

 

The Minister said that he has identified nine core areas, over which various stakeholders had expressed concern. All these concerns will be taken into consideration while the code is being redrafted, he added.

 

The Minister said that the second draft of the code would be put in the public domain soon. As per the proposals, the highest tax liability of 30 per cent. was to fall on people with an annual income of above Rs. 25 lakh, against the current level of over Rs. 8 lakh. It had proposed similiar widening for other tax slabs too. But the draft also proposed that long-term savings be taxed at the time of withdrawal, and the minimum alternate tax (MAT) be calculated against the gross assets of the companies concerned. These proposals evoked sharp reactions from the industry as well as the public.

 

The Finance Minister also said that the Government has written to 65 countries, asking them to make exchange of information more effective and remove the secrecy clause.

 

The issue had taken centrestage when it was alleged that several thousand crores of rupees had been stashed away in Swiss banks by various Indian political parties during the last general elections.

 

Among other matters, the Finance Minister said that two more Centralised Processing Centers (CPC) would be set up this year. "The first one at Bengaluru has enabled faster processing of tax returns and better records management", he said. The Minister further stated that the Refund Banker Scheme would be extended to more cities this year. The scheme enables speedier refunds to the bank accounts of taxpayers. [Source : www.economictimes.com dated May 19, 2010]

 

 



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