Re: UPDATES FROM TAX GURU (in this message: 18 new items)

On Mon, Dec 7, 2009 at 9:36 AM, LEGAL & FINANCIAL UPDATES FROM TAX GURU <info@taxguru.in> wrote:

UPDATES FROM TAX GURU (in this message: 18 new items)

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• Cost of granting stock options to employees is not deductible expenditure in the hands of employer
• BPO may be taxed in DTC as no provision in DTC to extend tax exemption benefit
• ED claimed to have proof of violation of FDI guidelines by Emaar MGF
• STT is applicable on Mutual fund trading and profit is taxable too
• No provision in DTC requiring filing of return of loss in time to carry forward losses
• Taxation of Hindu Undivided Family (HUF) and Family Arrangement
• Misuse of STPI Scheme for duty free import- CESTAT decision
• Scope of the expression Customized Software, standard software and exemption from Indirect taxes
• CESTAT decision – Service Tax on Management Consultant's Services (MCS)
• Short-term capital loss from a transaction can be set-off against short-term capital gain from any transaction at the option of the taxpayer
• Profits arising on transfer of rural agricultural land are not liable to MAT
• Disallowance u/s 14A is to be made even when exempt income is not earned or received during the year
• Procurement of orders by South African company for Indian company on commission basis is not taxable in India
• Profit element on sale of DEPB, i.e., the amount in excess of sale proceeds over the face value is covered u/s 28(iiid)
• Penalty levied with reference to revised return is bad in law when the revised return has been treated as non-est
• Even under new s. 36 (1) (vii) assessee to prove that the debt written of was indeed a bad debt
• Brokers need to keep documentary evidence of financial details provided by clients :SEBI
• Consumer court awarded compensation of Rs 15 lakh to widow for medical negligence of doctors

Cost of granting stock options to employees is not deductible expenditure in the hands of employer Posted: 06 Dec 2009 07:26 PM PST The ITAT dismissed the appeal of the Revenue and the assessee by holding that the discount on stock options was notional in nature and was not deductible either in the year of grant or in the year when the option is exercised by the employees. In... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

BPO may be taxed in DTC as no provision in DTC to extend tax exemption benefit Posted: 06 Dec 2009 07:18 PM PST Business Processing Outsourcing (BPO) centers in India would be subjected to taxation under the new proposed Direct Tax Code (DTC) but some clarifications, especially on double taxation, were still needed, an expert said. The (tax) exception given... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

ED claimed to have proof of violation of FDI guidelines by Emaar MGF Posted: 06 Dec 2009 07:11 PM PST The Enforcement Directorate(ED) on Friday claimed to have found evidence of "large-scale" violations of Foreign Direct Investment(FDI) guidelines by real-estate major Emaar MGF in purchase of land. During its searches carried out at 13 premises of... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

STT is applicable on Mutual fund trading and profit is taxable too Posted: 06 Dec 2009 07:07 PM PST Buying and selling mutual funds units on the recently opened trading facility on stock exchanges will not be tax-free. While equity schemes would attract securities transaction tax, debt and liquid funds would face capital gains tax. Capital gains... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

No provision in DTC requiring filing of return of loss in time to carry forward losses Posted: 06 Dec 2009 07:00 PM PST The Direct Taxes Code Bill, 2009 breaks away from its predecessor in many significant ways when it comes to treatment of losses. While losses from the head capital gains remain a taboo and will have to be set off only against positive income under... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Taxation of Hindu Undivided Family (HUF) and Family Arrangement Posted: 06 Dec 2009 06:53 PM PST The Hindu Undivided Family (HUF) is a special feature of Hindu society. Hindu Undivided Family is defined as consisting of a common ancestor and all his lineal male descendants together with their wives and unmarried daughters. Therefore a Hindu... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Misuse of STPI Scheme for duty free import- CESTAT decision Posted: 06 Dec 2009 06:28 AM PST M/s. Converge Labs Software Technologies Pvt. Ltd. ('Converge') is a 100% export oriented unit ('EOU') operating under the Software Technology Parks of India ('STPI') Scheme and is engaged in the development and export of software. Notification No.... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Scope of the expression Customized Software, standard software and exemption from Indirect taxes Posted: 06 Dec 2009 05:41 AM PST Based on the aforementioned observation, the CESTAT held that the software imported by Appellant was only modified packaged software and not „Customized Software? and would not be eligible to the exemption under the subject notification, which... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

CESTAT decision – Service Tax on Management Consultant's Services (MCS) Posted: 06 Dec 2009 04:14 AM PST M/s. Nirulas Corner House Pvt. Ltd. („the Appellants?) were engaged in the food and confectionary business. They had entered into an agreement with M/s. Sagar to permit them to run restaurants in the name of "Nirulas" as per the specified plans with... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Short-term capital loss from a transaction can be set-off against short-term capital gain from any transaction at the option of the taxpayer Posted: 06 Dec 2009 04:06 AM PST S. 70, 115AD; A/y 2005-06; in favor of taxpayer:- Taxpayer, a FII, earned short-term capital gains on sale of shares which it bifurcated as pre and post 30 September 2004 (pre and post STT), chargeable to tax at 30% and 10%, respectively under... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Profits arising on transfer of rural agricultural land are not liable to MAT Posted: 06 Dec 2009 04:01 AM PST Ss. 2(1A), 115JB; A/y 2005-06; in favor of taxpayer: Profits arising on transfer of rural agricultural land amounts to agricultural income under section 2(1A). Such income cannot be included in the total income under section 10(1). Section 115JB... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Disallowance u/s 14A is to be made even when exempt income is not earned or received during the year Posted: 06 Dec 2009 03:42 AM PST Special Bench of the Income Tax Appellate Tribunal, New Delhi holds that expenditure relating to exempt income to be disallowed even if assessee has not earned any tax-free income. Related posts:S. 14A disallowance to be made even if no tax-free... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Procurement of orders by South African company for Indian company on commission basis is not taxable in India Posted: 06 Dec 2009 03:19 AM PST S. 9, Treaty with South Africa; in favor of taxpayer: - Z, a South African company, offered to promote and market the products of the taxpayer, an Indian company, on commission basis. Z will procure and negotiate orders and forward these to the... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Profit element on sale of DEPB, i.e., the amount in excess of sale proceeds over the face value is covered u/s 28(iiid) Posted: 06 Dec 2009 03:13 AM PST S. 80HHC; in favor of taxpayer: Post the amendment by Taxation Law Amendment Act, 2005 (effective from 1 April 1998), controversy had arisen as to whether in case of an exporter having export turnover of more than INR100 million (where generally... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Penalty levied with reference to revised return is bad in law when the revised return has been treated as non-est Posted: 06 Dec 2009 03:07 AM PST S. 271(1)(c); in favor of taxpayer : The taxpayer was a trust organized in the US and was a resident of the US. As regards India, it was registered with SEBI as a sub- account of M/s Fidelity Management Resources Co. It filed a return of income... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Even under new s. 36 (1) (vii) assessee to prove that the debt written of was indeed a bad debt Posted: 06 Dec 2009 01:32 AM PST The assessee wrote off an amount as a "bad debt" in its accounts and claimed a deduction u/s 36 (1) (vii). The AO asked the assessee to furnish information as to the names and addresses of the debtors, copies of ledger accounts and efforts made to... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Brokers need to keep documentary evidence of financial details provided by clients :SEBI Posted: 06 Dec 2009 12:47 AM PST In a move to bring greater transparency and discipline among market participants, the Securities and Exchange Board of India (Sebi) on Thursday put out mandatory requirements related to dealings between investors and stock brokers (including trading... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

Consumer court awarded compensation of Rs 15 lakh to widow for medical negligence of doctors Posted: 06 Dec 2009 12:36 AM PST The State Consumer Disputes Redressal Commission has awarded a Thane widow a hefty compensation of Rs 15 lakh—one of the highest given in the state in the recent past—after penalising three doctors for medical negligence that led to her husband's... [[ This is a content summary only. Visit my website www.taxguru.in for full article ]]

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