Yoga a form of ‘Medical Relief’: ITAT Delhi allows Tax Exemption to Patanjali Yogpeeth [Read Order]

 

In a big relied to Baba Ramdev’s Patanjali Yogpeeth, the Delhi bench of Income Tax Appellate Tribunal (ITAT) has allowed exemption status under section 11 and 12 of the Income Tax Act. 

While the answering questions Whether the Yoga a form of ‘Medical Relief’ and Whether the Propagation of Yoga constitutes imparting of education, the Tribunal bench noted that, The definition of term ‘medical’ clearly provides that the ‘art of healing any disease’ constitutes medical relief and the same need not be restricted to conventional methods of treatment. Yoga, thus, as a system of medicine, has been successful in curing various dreadful diseases and providing relief to the sufferings of people. Thus, it undoubtedly qualifies as a form of ‘medical relief’ as provided in section 2(15) of the Income Tax Act.

Purchase of Jewellery above Rs. 2 lakhs in Cash will attract 1% TCS from April 1st

According to recently introduced Finance Bill, 2017, Cash purchases of jewellery exceeds 2 lakhs will attract 1 per cent Tax Collection at Source (TCS) from April 1st. Currently the limit of cash purchase is Rs. 5 lakh. 

The bill likely to be passed in the second part of Budget Session. Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1 per cent TCS on cash purchase of above Rs. 2 lakh. 

In the Finance Bill 2017, Clause (ii) of sub-section (1D) of the said section provides for tax collection at source at the rate of one per cent. of sale consideration on cash sale of jewellery exceeding five lakh rupees. It is proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided under section 269ST. 

Cash Deposit Verification Guidelines

Cash Deposit Verification Guidelines given by CBDT to Assessing Officers[Instruction No. 3/2017 dated 21-02-2017]:

1. In case of an individual (other than minors) not having any business income, no further verification is required to be made if total cash deposit is up to Rs. 2.5 lakh.

2.  In case of taxpayers above 70 years of age, the limit is Rs. 5.0 lakh per person.

3. In non business cases,  where the person under verification has filed return of Income, a reasonable quantum can be considered as explained while quantifying the undisclosed amount, if any

4. In case of persons engaged in business or requirement to maintain books of accounts, no additional information is required to be submitted by the person under verification if total cash out of earlier income or savings (sum of responses for all cash transactions) is not more than the closing cash balance as on 31st March 2016 in the return for AY 2016-17

5. However, if the AO has reason to believe that the closing cash balance as on 31st March 2016 has been increased by revising the return or backdating transactions in the books of account, further verification may be carried out.

6. For cash received from identifiable persons without PAN, The AO needs to verify if the cash receipts are not in line with the normal practices of concerned business as mentioned in the earlier returns of Income after considering the remarks provided by the taxpayer, nature of business and earlier history before seeking additional information.

No Disallowance with respect to Exempt Income can be made if the Securities are held as Stock-in-Trade: Calcutta HC [Read Order]

In CIT v. M/s. G K K Capital Markets (P) Limited, the division bench of the Calcutta High Court held that no disallowance under section 14A  r/w Rule 8D can be made with respect to exempt income if the securities are held as stock-in-trade. The decision was based on the CBDT Circular No. 5/2014 dated 11.02.2014. 

The bench was hearing an appeal preferred by the Revenue challenging the order of the ITAT wherein the Tribunal allowed relief to the assessee on ground that the assessee does not have any investment and all the shares are held as stock in trade.

Purchase of Jewellery above Rs. 2 lakhs in Cash will attract 1% TCS from April 1st, 2017

According to recently introduced Finance Bill, 2017, Cash purchases of jewellery exceeds 2 lakhs will attract 1 per cent Tax Collection at Source (TCS) from April 1st. Currently the limit of cash purchase is Rs. 5 lakh. 

The bill likely to be passed in the second part of Budget Session. Once the Finance Bill 2017 is passed, jewellery will be treated on par with general goods which attract 1 per cent TCS on cash purchase of above Rs. 2 lakh. 

In the Finance Bill 2017, Clause (ii) of sub-section (1D) of the said section provides for tax collection at source at the rate of one per cent. of sale consideration on cash sale of jewellery exceeding five lakh rupees. It is proposed to omit the said clause in view of restriction on cash transactions as proposed to be provided under section 269ST. 

The proposed amendment is consequential to the insertion of a new section 269ST in the Income-tax Act. 

However, there is no special provision for TCS on its purchase, jewellery is now being clubbed in general ‘goods’ on which 1 per cent TCS is triggered if a single transaction exceeds Rs. 2 lakh in cash. 

No Show Cause Notice to be given under ‘Operation Clean Money’ during Verification: CBDT directs Taxman

In an eight page directions issued today, the Central Board of Direct Taxes (CBDT) asked the Income Tax Officers to ensure No Show Cause notice to taxpayers under Operation Clean Money during verification process. 

The CBDT also directed that, It should be ensured that the communications made online with the persons under the verification should be in very polite language without containing any element of threat or warning. 

The CBDT had launched Operation Clean Money on 31st January, 2017  to identify post-demonetisation deposits of large amounts. Initial phase of the operation involves e-verification of large cash deposits made during 9th November to 30th December 2016. Under this operation, email and SMS were sent to over 18 lakh taxpayers to submit their response on the e-filing portal. 

Finance Minister Mr Arun Jaitley : Abolish Section 271J for imposing Penalty of Rs 10,000/- on Chartered Accountants - Sign the Petition!

Abolish Section 271J for imposing Penalty of Rs 10,000/- on Chartered Accountants

The proposed Section 271J prescribing imposition of penalty of Rs. 10000/-, on Chartered Accountants or a merchant banker or a registered valuer on allegation of furnishing incorrect information or incorrect report or certificate should be strongly protested. It would give powers to Assessing Officers to threaten CAs even for no fault on their part.

House given to Spouse for Inadequate Consideration could be attached to recover Tax dues of Assessee: Kerala HC [Read Judgment]

In T.S Sujatha v. TRO & Anr, the Kerala High Court ruled that where the assessee transferred a property to his spouse for inadequate consideration during block period for which search was carried out against him, in case of failure of assessee to pay tax demand determined in block assessment proceedings, department could proceed against aforesaid property of spouse under Explanation to section 222(1) of the Income Tax Act.

Coming to the facts of the case, assessee’s husband transferred a property in her name for inadequate consideration during block period for which search was carried out against him.

Loss due to Fraud Committed by the Employees need not be proved by Producing Evidence of Legal Actions: ITAT Jaipur [Read Order]

 The Income Tax Appellate Tribunal (ITAT), Jaipur bench, in M/s Pawan specialities Pvt Ltd v. ACIT, held that the loss due to fraud committed by the employees need not be proved by producing evidence of legal actions and the Assessing Officer cannot insist the assessee to submit details for proving the claim of expenditure under the Income Tax Act. 

The assessee-company filed income tax return by claiming expenditure in respect of the loss due to fraud committed by its employees. The AO, while completing assessment, asked the assessee to produce the copy of FIR proving the legal actions taken by the Company against such employees in order to substantiate their claim. The assessee failed to submit the same and therefore, the officer disallowed the claim for want of evidence. 

The assessee contended that it is an admitted position that theft/ fraud had indeed taken place in the assessee company and the AO had nowhere doubted the fact of fraud but he disallowed the claim of the assessee for the reason that the assessee could not establish the fact of fraud like non- production of copy of FIR and not taking any legal action against the employee who was involved in this activity of fraud.It was further contended that non-action against those employees cannot bring the genuineness of the loss in question and more particularly when the fact of loss on account of fraud is an admitted position and thus the genuineness thereof automatically gets established.

It is the duty of the Tax Officials to follow-up the cases by Consulting their Advocates: Bombay HC asks the Officials to Stop ‘Blame-Game’

In the Commissioner of Service Tax, Pune v. M/s Vansum Industries, the Bombay High Court made some serious criticism over the lapses and attitude of the Tax officials in following up the cases. 

The Court opined that the Officials are playing blame-game by blaming the advocates for not updating the case status with them and for not rendering necessary legal advises. 

A Practicing CA cannot carry on Business through Companies, Trusts and Firms: Delhi HC [Read Order]

In a recent ruling, the Delhi High Court confirmed the removal of a practicing Chartered Accountant from the register of Members held that carrying on business through Companies, trusts and Firms by a practicing Chartered Accountant would amount to professional misconduct.