DIRECT TAX: PROFESSIONAL UPDATES FOR THE 2nd WEEK OF AUGUST 2014, BY RAJPUT JAIN & ASSOCIATES TEAM

• As reported by some of the newspapers and PTI government may provide a major relief to the tax-payers, by increasing the Income Tax slab limit for exemption from Rs.2 lakh to Rs.5 lakh.
• The official e-mail of Income Tax Department has been migrated to an upgraded version requiring better security. For this, a new password is being reset for the official e-mail at http://mail.incometaxindia. Gov.in. You are requested to send your password request from an existing email to webcr@incometaxindia.gov.in mentioning your official e-mail id @incometaxindia.gov.in, name, designation and city. New password will be sent within 24 hours. Help line numbers- 0120-2770483, 9711572258, 9891860580
• Due to delayed share allotment share application money from related party couldn’t be held as a loan transaction [Parle Biscuits (P.) Ltd. vs. Deputy Commissioner of Income Tax (I.T.A. No. 9010 (MUM.) of 2010) Date of Order: 11.04.2014, ITAT – Mumbai].
• SC: Dismisses Revenue's SLP; “Precaution” can't be equated to “concealment” u/s 271(1) (c), held HC (Durr India Pvt. Ltd.)
• Capital Gain on depreciable assets held for more than 3 years is to be taxed at rate applicable to LTCG Smita Conductors Ltd vs. DCIT (ITAT Mumbai)
• Family arrangement cannot be regarded as being without consideration ACIT vs. BilakhiaHoldings P. Ltd (ITAT Ahmedabad) 
• Vide Notification No. 32/2014 dated 23-06-2014; CBDT has made mandatory filing of Wealth Tax Return only by electronic means for certain persons including company and an assessee being individual or HUF who is liable to audit u/s 44AB. 
•  One can reset  the password using the “Forgot Password” link in the Income Tax website by following three options:

-     Answer Secret Question

-     Upload Digital Signature Certificate

-     Enter E-filed Acknowledgement Number and Bank Account Number

If you are unable to retrieve your password, send an email request from registered email-id, to validate@incometaxindia.gov.in with following details:

                                i.            PAN

                              ii.            Name of the assessee as appearing on the PAN card

                            iii.            Date of Birth/Date of incorporation

                            iv.            Name of father as appearing on the PAN card (in case of individual)

                              v.            Registered PAN Address

• HC: Rejects delay condonation holding Revenue's explanation as "after thought" to "cover lapses" Harinagar Sugar Mills Ltd. [TS-453-HC-2014(BOM) 
• HC : Absent employee's 'non-resident' status in specific AY, Indian employer not representative-assessee u/s 163 Comverse Networks Systems India Pvt. Ltd. [TS-462-HC-2014(DEL)] 
•  ITAT : Loan to single entity ineligible for 'substantial business part’ exception u/s 2(22)(e) KishoriLal Agarwal 
•  ITAT : Allows smart cards preparation expenditure by TPA as revenue absent enduring benefit MD India Healthcare Services (TPA) Pvt. Ltd. [TS-448-ITAT-2014(PUN)] 
•  Query: How to claim benefit of tax deducted in advance on income which is taxable in subsequent years?

Answer: Certain provisions of TDS (including TCS) require deduction of tax at source at the time of payment or at the time of credit, whichever occurs earlier. Advance payments are also subjected to TDS. Old ITR form did not have any mechanism to carry forward the excess TDS, thus, taxpayers were required to show the entire TDS as a deduction and claim refund of excess TDS. To overcome the issues, the Schedule TDS/TCS in the ITR forms introduced two new columns:

(a) Unclaimed TDS/TCS brought forward

  (i) Financial Year in which deducted/collected

 (ii) Amount brought forward

(b) TDS/TCS being claimed this year from amount brought forward or from TDS/TCS of current financial year.

Thus, the portion of TDS credit pertaining to income taxable in the subsequent year can be carried forward to subsequent year and can be claimed in the year in which income is offered to tax.

• Profit from sale of agricultural land would not be included for purpose of computing book profit under section 115JB. [2014] 
• HC: Allows Sec 10(23C) exemption; Educational institute's "annual receipt" threshold excludes land sale consideration Madrasa E-Bakhiyath- Us-Salihath Arabic College [TS-503-HC-2014(MAD) 
•  SC: Dismisses assessee's SLP; HC held habitual dealer's share trading as business Manoj Kumar Samdaria [TS-502-SC-2014] 
•  Income Tax Department started sending e-mail/SMS to assessees for requesting to update contact details. 
•  Central Board of Direct Taxes (CBDT) extended the due date for obtaining and furnishing of the report of audit under section 44AB of the Act for Assessment Year 2014-15 in case of assessees who are not required to furnish report under section 92E of the Act from 30th day of September, 2014 to 30th November, 2014 vide F.No.133/24/2014-TP dated 20/08/2014. (Order Under Section 119 of the Income-tax Act, 1961) 
• Further, CBDT had also affirmed our representation regarding the tax audit reports filed prior to 25th July, 2014, which we had mailed on 12.08.2014 and further clarified that the tax audit report under section 44AB of the Act filed during the period from 1st April, 2014 to 24th July, 2014 in the pre-revised Forms shall be treated as valid tax audit report furnished under section 44AB of the Act.
  
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