UPDATES FROM TAX GURU Restrictions on outbound remittance of royalties and lumpsum fee for transfer of technology to be relaxed Even under Rule 8D of S. 14A, disallowance can be made only if there is actual nexus between tax-free income and expenditure Applicability of indirect taxes on packaged software Exempts goods falling within Chapter 69 and heading numbers 94.01, 94.02 and 94.03 from 1.9.1987 to 28.2.1989 Restrictions on outbound remittance of royalties and lumpsum fee for transfer of technology to be relaxed Under the existing regulatory norms, remittances made by Indian residents to a foreign collaborator are permissible without any prior regulatory approvals to the extent of a lumpsum fee of USD 2 million and royalty payment of 5% on domestic sales... Even under Rule 8D of S. 14A, disallowance can be made only if there is actual nexus between tax-free income and expenditure The assessee earned dividend income on shares which was exempt from tax. The AO took the view that the investment in shares was made out of borrowed funds on which interest expenditure was incurred and consequently made a disallowance u/s 14A. This... Applicability of indirect taxes on packaged software The undersigned is directed to state that 'Packaged Software' is a type of IT software which caters to the needs of a variety of users and is capable of being used for variety of hardwares. IT software is fully exempt from basic customs duty being... Exempts goods falling within Chapter 69 and heading numbers 94.01, 94.02 and 94.03 from 1.9.1987 to 28.2.1989 Whereas the Central Government is satisfied that according to a practice that was generally prevalent regarding levy of duty of excise (including non-levy thereof) under section 3 of the Central Excise Act, 1944 (1 of 1944), the duty of excise on... With Regards,  CA Sandeep Kanoi  Website: http://www.taxguru.in/  Get LEGAL & FINANCIAL UPDATES FROM TAX GURU delivered by emai

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UPDATES FROM TAX GURU Registration u/s 80G(5) of IT Act, 1961 can not be denied on the ground that charitable trust imparting education for fees Carry forward of MAT credit for how many years if there is contradiction between statutory provisions and circular issued Provisions of section 40 cannot be invoked where the income is to be computed under section 42 of the Act Applicability of MAT on amount withdrawn from revaluation reserve and credited to P&L account Applicability of TDS in case of Third Party Administrator (TPA) providing health insurance claim services. RBI Circular on Combating Financing of Terrorism – Unlawful Activities (Prevention) Act, 1967 – Obligation of banks New Online Facility from Central Board of Excise & Customs – Professional Opportunity for Members Scrapping the Apex Court decision on Scrap Leviability of service tax on Tour operator service in connection with Haj & Umrah pilgrimage Registration u/s 80G(5) of IT Act, 1961 can not be denied on the ground that charitable trust imparting education for fees When the assessee-society was granted registration under section 12AA, it is a testimony to the fact that the society is established for charitable purposes as defined in section 2(15); the same will be charitable purposes irrespective of the fact... Carry forward of MAT credit for how many years if there is contradiction between statutory provisions and circular issued There is no ambiguity in the language of sub-section (3) of section 115JAA; the carry forward is available for a total of six (1+5) years; the period of `five assessment years', mentioned in sub-paragraph (2) of the paragraph 45.4 of the CBDT... Provisions of section 40 cannot be invoked where the income is to be computed under section 42 of the Act The fact that even Capital expenditure is allowable as deduction under section 42 itself shows that it overrides the provisions of section 37 of the Act. Thus, the scheme of the Act makes it clear that the provisions of section 42 would prevail over... Applicability of MAT on amount withdrawn from revaluation reserve and credited to P&L account Prior to insertion of the proviso to clause (i) of the Explanation of section 115JB the assessee was entitled to reduce the sum from revaluation reserve while computing book profit under section 115JB; however, after the insertion of the proviso to... Applicability of TDS in case of Third Party Administrator (TPA) providing health insurance claim services. Having regard to the agreement entered into inter se between the hospital and the TPA for payment of money to the hospital, it cannot be said that the TPA, who is the authority or the person to pay the amount to the hospital, is not required to... RBI Circular on Combating Financing of Terrorism – Unlawful Activities (Prevention) Act, 1967 – Obligation of banks In paragraph 5 (b) of the above circular,it has been advised to RRBs that as and when lists of individuals and entities, approved by Security Council Committee established pursuant to various United Nations' Security Council Resolutions (UNSCRs),... New Online Facility from Central Board of Excise & Customs – Professional Opportunity for Members This new service is a new centralised web based software application of CBEC which provides us an online electronic interface with the department. ACES aims to reduce paperwork, visits to the department and transaction costs while increasing... Scrapping the Apex Court decision on Scrap The Central Excise duty is leviable on the process of "manufacture". Any process that brings a new article into existence with different name, character and use is known as manufacturing activity. For levying duty on any article it must satisfy 2... Leviability of service tax on Tour operator service in connection with Haj & Umrah pilgrimage The amount charged to the pilgrims in India undertaking Haj and Umrah pilgrimage, is for services provided by the Government of Saudi Arabia and the tour takes place outside India. As perRule 3 (1) (ii) of the Export of Services Rules, 2005,... With Regards,  CA Sandeep Kanoi  Website: http://www.taxguru.in/  Get LEGAL & FINANCIAL UPDATES FROM TAX GURU delivered by emai

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UPDATES FROM TAX GURU (in this message: 10 new items) MAT applicable on capital gains included in book even if same is not liable to be taxed If assessee deposited advance received as per agreement as required us 54EC, he cannot be treated as a defaulter for the same Allowability of exemption to partly charitable and partly religious trust When a part of the surrender can be accepted on proper explanation the rest can also be allowed to be explained Two Income tax officer caught red handed on CCTV trying to break fellow officer's safe to steal files ICAI to issue fresh notice to PriceWaterhouse, Delhi after Delhi High Court objection Government discussing suggestions of stakeholders to modify direct tax code: FM FAQs for ICAI Members to become Members of ICAEW S. 80-IA (4) deduction is not available to contractors: ITAT Mumbai Larger Bench Indexed cost of gifted assets has to be determined with reference to previous owner MAT applicable on capital gains included in book even if same is not liable to be taxed Posted: 05 Nov 2009 07:38 PM PST The long term capital gain included in the net profit prepared under the Companies Act is not deductible from the net profit for the purpose of computing book profit u/s115JB; merely because the long term capital gain is not liable to be taxed under... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] If assessee deposited advance received as per agreement as required us 54EC, he cannot be treated as a defaulter for the same Posted: 05 Nov 2009 07:33 PM PST Allowability of exemption under section 54EC of IT Act, 1961 When there is no bar to take possession by an agreement and transfer can be treated to have taken place on the basis of an agreement and advance payments deposited in specified bonds as... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Allowability of exemption to partly charitable and partly religious trust Posted: 05 Nov 2009 07:26 PM PST A religious purpose can be a charitable purpose and vice versa in India; therefore, exemption cannot be denied to a trust which is partly charitable and partly religious. Related posts:Allowability of exemption under section 11(1)(a) of IT Act... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] When a part of the surrender can be accepted on proper explanation the rest can also be allowed to be explained Posted: 05 Nov 2009 07:20 PM PST When a part of the surrender can be accepted on proper explanation the rest can also be allowed to be explained. The assessee's claim that balance was from cash withdrawals from cash book has to be tested on the facts appearing in the case. For that... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Two Income tax officer caught red handed on CCTV trying to break fellow officer's safe to steal files Posted: 05 Nov 2009 07:06 PM PST Mumbai: A late-night adventure by two senior income-tax (IT) officers, who sneaked into the room of one of their colleagues and broke open a cupboard to gather information on a leading city builder, went awry recently, leaving the investigation wing... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] ICAI to issue fresh notice to PriceWaterhouse, Delhi after Delhi High Court objection Posted: 05 Nov 2009 06:53 PM PST Accounting regulator ICAI on Wednesday said it will issue fresh notices to PriceWaterhouse, Delhi, in relation to the Satyam scam after the Delhi High Court objected to its action against the firm without any evidence that it was related to PW,... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Government discussing suggestions of stakeholders to modify direct tax code: FM Posted: 05 Nov 2009 06:33 PM PST Government would make all efforts to meet the aspirations and expectations of the taxpayers and the corporate sector before finalisation of the Direct Tax Code. The next steps in this direction would be taken only after a comprehensive review... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] FAQs for ICAI Members to become Members of ICAEW Posted: 05 Nov 2009 05:46 PM PST The MoU provides for Recognition and Examination arrangements for the members of the two largest Institutes. This agreement would facilitate mobility of members across the borders and further strengthen the ties between India and Great Britain. The... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] S. 80-IA (4) deduction is not available to contractors: ITAT Mumbai Larger Bench Posted: 05 Nov 2009 04:52 PM PST he assessee, a civil contractor, claimed deduction u/s 80-IA (4) in respect of the profits from infrastructure projects executed by it. The lower authorities rejected the claim on the ground that the assessee was a mere contractor and not a... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] Indexed cost of gifted assets has to be determined with reference to previous owner Posted: 05 Nov 2009 04:40 PM PST The assessee transferred a capital asset which was received by her by way of gift on 1.2.2003. The previous owner had acquired the capital asset on 29.1.1993. In computing capital gains, the assessee claimed that the indexed cost of acquisition had... [[ This is a content summary only. Visit my website for full links, other content, and more! ]] With Regards,  CA Sandeep Kanoi  Website: http://www.taxguru.in/  Get LEGAL & FINANCIAL UPDATES FROM TAX GURU delivered by emai

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