Wednesday, February 16, 2011

ITR (Trib) : Valume 7 Part 8 dt 21.02.2011

Volume 7 Part 8 ISSUE DATED 21-02-2011

->> Assessee disclosing full details o->> income pertaining to claim for deduction o->> expenses on payments to workers, penalty u/s. 271(1)(c) to be deleted : Asst. CIT v. Megji Mathradas (Mumbai) p. 749 ->> License fee paid to parent company under technical assistance agreement allowable as business expenditure : Dy. CIT v. Nestle India Ltd. (Delhi) p. 758 ->> Mere non receipt o->> interest by creditor does not make assessee not liable to TDS u/s.194A : ITO v. Executive Officer cum Secretary Marketing Committee (Delhi) p. 769 ->> Where assessee not deemed owner, income from subletting assessable as income from other sources : Tushar Pravinchandra Shah v. Dy. CIT (Ahmedabad) p. 776 ->> Where no objection before AO regarding service o->> notice o->> reassessment, reassessment valid : ITO v. M. V. Balaji (Chennai) p. 795 ->> Where no expenditure incurred by educational institution towards achieving main object, denial o->> renewal o->> approval justified u/s. 80G : Pearls Educational Institute v. CIT (Delhi) p. 804 ->> Industrial undertaking : 90 per cent. o->> income from wind energy not to be reduced u/s. 80HHC, Expln. (baa) : Elgitread (India) Ltd. v. Asst. CIT (Chennai) p. 813
->> Plan to cure tax assessment limits o->> income-tax officials In a significant organisational revamp, the Central Board o->> Direct Taxes has raised the monetary limit o->> tax assessments handled by Income-tax Officers. The move is designed to lighten the load on senior officers so that they can concentrate more on investigations, international taxation issues and transfer pricing. It also aims to ease the hardships o->> taxpayers in small towns and mofussil areas who have to travel to cities to attend to their tax matters. Under the revised monetary limits, revenue cadre officials in metros will handle non-corporate taxpayers with an annual income above Rs. 20 lakh and corporates with an income above Rs. 30 lakh. In case o->> non-metros, they will deal only with non-corporate taxpayers with an annual income above Rs. 15 lakh and corporates with income over Rs. 20 lakh. This is a big respite for taxpayers in small towns who until now had to travel to big centres where a Commissioner or an Assistant Commissioner usually has his office. The Central Board o->> Direct Taxes has also finalised a strategic plan that includes creation o->> dedicated directorates for criminal investigation and risk management. Resources freed up as part o->> this restructuring will be diverted to these specialised units. This will help in mounting an effective surveillance on fund flows into the country that have the potential to impact national security. The country's direct tax revenues have grown from Rs. 13,000 crore in 1991-92 to Rs. 3.87 lakh crore in 2009-10. The number o->> taxpayers has also grown nearly five times over the period to more than Rs. 3.2 crore. [Source : dated February 5, 2011] ->> Tax cap ruling against evaders in line with litigation policy The Income-tax Department is mulling over development o->> an increase in limits above which it files appeals against tax evaders in the Tribunal or courts. "The Department is planning to change the tax limits for appeals. Now, for filing an appeal in the Income-tax Appellate Tribunal (ITAT), the tax effect should be Rs. 3 lakh, for High Courts it has been increased to Rs. 10 lakh and for the Supreme Court it is Rs. 25 lakh", the official said. With the move, the Income-tax Department expects to reduce up to 13 per cent. cases at ITAT level and 25-30 per cent. cases at the High Court and the Supreme Court level each, the source added. "Even i->> the case is strong enough to be taken to the Tribunal, the Department will not do so. This will cut down the wastage o->> resources in unnecessary litigation and reduce the burden o->> overburdened courts while at the same time assessee would also benefit from this policy", the official added. According to the National Litigation Policy, the Government should work towards reducing litigation in courts so that valuable court time would be spent in resolving other pending cases. This will help in achieving the goal in the National Legal Mission to reduce average pendency time from 15 years to 3 years. The initiative by the Income-tax Department comes in the backdrop o->> criticism by the Finance Minister that the Income-tax Department has emerged as the largest litigant in the country. Last year, the Comptroller and Auditor General o->> India (CAG) had stated in its report that the disputed tax amount "can wipe of->> the revenue deficit o->> the Government in 2008-09". The total amount o->> direct tax stuck at the Commissioner (Appeals) level is Rs. 2.2 lakh crore for 2008-09, the CAG had pointed out. Apart from that, Rs. 12,757.59 crore is stuck at Income-tax Appellate Tribunal, Supreme Court and High Court levels, the Finance Minister had told the Parliament last year. The move is to cut down wastage o->> resources in unnecessary litigation and reduce the burden o->> overburdened courts. [Source : dated January 31, 2011] ->> ASSOCHAM offers a neat way to enhance deduction on health insurance premiums The Associated Chambers o->> Commerce and Industry o->> India (ASSOCHAM) in its pre-budget memorandum recommended that the deduction (under section 80D) in respect o->> medical insurance premium o->> an individual or his family should be raised to Rs. 25,000 from Rs. 15,000. The rationale given by ASSOCHAM is "In the context o->> the sharply increasing medical expenses, medical insurance premiums are escalating every year. Also, there is need to increase the penetration ratio o->> insurance by providing encouragement through tax reliefs for opting for medical insurance." [Source : www.economictimes. com dated February 8, 2011]

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