NEW BATCH FOR CS FOUNDATION/EXECUTIVE/PROFESSIONAL

Updates:

1. Under GST, apply for registration in 30 days to get input tax credit for period prior to registration. Else get ITC from data of registration.
2. Last date for filing online MEF is extended to 10 Sept, 2016 & submission of hard copy of declaration 20 Sept, 2016.
3. The state of Jammu & Kashmir CBDT further extends the ‘due-date’ for filing Return of Income from 31st August, 2016 to 30th September, 2016.
4. MCA has notified the provisions of section 188 to 194 of the Insolvency and Bankruptcy Code 2016.

GST Impact

 

So far I understood the GST as under:

Updates

Updates:

1. No compensation from Insurance Co. if there is theft without a forcible entry:  [2016]72 taxmann.com 296 (SC of India).
2. VAT Dept issued notification dated 24.08.2016 regarding withdraw of mandatory requirement of DSC in filing DVAT returns.
3. Under GST:
• Composition Supplier can register in multiple states if total sales up to 50 lacs, no Inter state sale. Scheme must for all businesses having PAN.
•  Selling milk, eggs, chickens taxable under GST as dairy/poultry farming not part of agriculture. Vegetables not taxable but their saplings are taxable.
4. Govt notified some of the section of the Bankruptcy. S.O. 2746(E) dated 19th August 2016 issued by MCA.

Heartiest congratulations to all the Shining stars of ICA for clearing CS exams.................

Congrats to all my students who are passed and for other "Always continue the climb. It is possible for you to do whatever you choose, if should not left by you by sorrow, if u are willing to work with power you will ultimate reach to your goal.
Neeraj Chaurasiya,
 Archana Komal, 
Saman, 
Harsha Makan, 
Afreen Fatima,
 Prena Singh,
 Raman Singh,
 Shruti Dewedi
 Shristi Mehrotra, 
Barkha Agarwal, 
Aashi Jain,
 Ritika Saxena, 
Ayesha Zafar,
 Namrata Mishra 
any many more who came out with flying colors

COMPULSORY SWITCHOVER OF ALL PROFESSIONAL PROGRAMME (OLD SYLLABUS)

STUDENTS It is informed that June, 2016 Session was the last examination for Professional Programme (under Old Syllabus). From December, 2016 Session onwards, all students under Professional Programme (Old Syllabus) shall be compulsorily required to switchover to Professional Programme (New Syllabus). As a result, there will NOT be any scope for enrolment for exam for December, 2016 under old syllabus. Therefore, all Professional Programme(Old Syllabus) students are advised to switchover to New syllabus (by logging to account at www.icsi.edu), so that the records are duly updated before the commencement of enrolment process for December, 2016 examination. If the concerned students fail to make switchover to new syllabus, there will be serious disruption in the on-line enrolment process.

https://www.icsi.edu/docs/webmodules/ATTENTION_PROFESSIONAL_PROGRAMME_(OLD_SYLLABUS)_STUDENTS.pdf

UPDATES

CBDT:

The Central Board of Direct Taxes has amended the Income Tax Rules, 1962. These rules may be called the Income Tax (21^stAmendment) Rules, 2016. In the Income Tax Rules, 1962, the rule 37CB (Class or classes of buyers to whom provisions of sub-section (1D) of section 206C shall not apply) after rule 37CA and before rule 37D shall be inserted.

“37CB. (1) the provisions of sub- section (1D) of section 206C in relation to sale of any goods (other than bullion or jewellery) or providing any service shall not apply to the following class or classes of buyers , namely:—

(i)                 Government;

(ii)               Embassies, Consulates, High Commissions, Legation or Commission and trade representation, of a foreign State;

(iii)             Institutions notified under United Nations (Privileges and Immunities) Act, 1947”.

CBDT:

The Central Board of Direct Taxes has issued clarification on the Income Declaration Scheme, 2016. The Income Declaration Scheme, 2016 came into effect on 1^st June, 2016. The Board has issued three sets of FAQs vide Circular Nos. 17, 24, 25 & 27 of 2016. In order to address further queries received from the public relating to the Scheme, the Board has issued clarifications. 

Top 6 Salary Negotiation Tactics Best Avoided

GET IT RIGHT: Youve been shortlisted for that coveted job,and youre on cloud nine.But you have one critical stage to cross: working out your pay package.Tread with care this is where it can roll,or break completely.ETs Devina Sengupta & Mahima Puri list the common errors candidates make at this stage,and get a few tips from industry experts on what you could do to sail through 

1 Homework Not Done 

CANDIDATES ARE often clueless about company and salary structures,and walk into traps they have themselves laid.Biotech firm Biocon was once looking at hiring a highly qualified candidate from a rival pharmaceutical firm for a new level,recalls HR head,Ravi Dasgupta.Soon after the candidate was told his salary,he emailed Dasgupta saying he found out the salary on offer was less than what others at the same level were getting.Dasgupta,in turn,told him he could not possibly know anyone else's salary as he would be the first in that grade and level.The candidate apologised,and was subsequently hired.

Expert Take: 

Understand the hierarchy of a company before you get down to salary talks.Grades in two firms may not be same.A Sudhakar,HR head,Dabur Always research the minimum - median - maximum a candidate with your experience,qualifications,achievements and industry exposure can ask for.Kunal Banerji,ED & CEO,Absolute HR International Before joining,check what the company's performance pay was in the previous year,how much increment and bonus they paid.Varda Pendse,Director,Cerebrus 

2 Obsessing over Take Home 


TYPICALLY,YOUNG managers are focused on take-homes 
and companies on total cost.During talks,candidates forget about perks and benefits.And companies focus on getting the right talent at the best possible cost.Candidates need to compare an apple to an apple when it comes to benefits,says K Gopal,ED at Omam Consultants.For instance,if an executive gets a car as an incentive,he can ask a new employer for an updated version,but not an upgrade,which might cost much more.Companies like to defer payment and add long-term incentives into the package to make it seem bigger.

Expert Take: 

Understand all components of the cost to company.Find out what was actually paid out on the variable components in the past two years.Consider the total value proposition and not only the compensation element.Adil Malia,HR head,Essar 

3 Asking For The Moon 

NEGOTIATION IS a subtle art,and you need to get the timing right.Ask for too much,too soon,and you can ruin your case even before you've begun.Dabur has come across candidates who ask for an over 100% rise in salaries,says A Sudhakar,HR head.That's when the HR team has to gently explain that the candidates will be included in a salary bandwidth right for their grade,and cannot jump to the upper limit straightaway.Understand what is expected of you,before you take the plunge or ask for an hike in salary.

Expert Take: 

Let the company make an offer first.E Balaji,CEO,Ma foi Randstad Wait until late in the interview before negotiating a salary.This will give you more leverage since the number of candidates will be smaller and the firm will more than likely be convinced of you.Kunal Banerji,ED and CEO,Absolute HR Intl 

4 Throwing Attitude 

A FORTUNE 500 company was once keen on hiring a candidate from competition for a potentially life-changing opportunity,says Banerji.But the candidate,a senior executive,demanded confirmation of a minimum 60% raise before meeting the employer.Naturally,he was written off.He then came back saying he would accept whatever he was currently being paid,but the prospective employers didn't even want to meet him.This isn't as uncommon as it seems.

Expert Take: 

The candidate should not push too hard in a salary negotiation.Ravi Dasgupta,HR head,Biocon Express appreciation but ask for time to consider the offer.Never be aggressive in your communication.Kunal Banerji,ED & CEO,Absolute HR Intl 

5 Driving Too Hard 


NEGOTIATING TOO hard could break the 
table.At times,when placement consultants get in touch with candidates,young managers do not show signs of flexibility,says Shiv Agarwal,CEO,ABC Consultants.The client is put off."Don't sound like a troublemaker.Instead,carry the process forward in a dignified manner,"he says.

Expert Take: 

Ask for a reasonable hike.A bigger hike will mean more responsibilities and higher targets K Gopal,ED,Omam Consultants Be prepared to stop.But,if you must accept the job,do not set ultimatums.Be clear about your expectations and acceptance points.They have to be modest.... Kunal Banerji,ED & CEO,Absolute HR International 

6 Chasing the Money,Not the Career 

THERE'S NEVER ean end to how much money you can ask for,but remember,greed isn't always good.A career,growth prospects and an opportunity to learn and grow are just as important as salary.It's when everything is in balance,that it clicks for you.

Expert Take: 

The candidate must see how his skill sets will improve a few years down the line with the new employer. Varda Pendse,Director at Cerebrus Consultants

Assessee not eligible for deduction u/s 80IB on the amount disallowed by AO due to delayed payment of employee’s contribution of P.F

ITO Vs Millenium Writing Products Pvt Ltd. (ITAT Kolkata)

Deduction u/s. 80IB of the Act is available to an assessee whose gross total incomeincludes any profits and gains derived from eligible business as specified in the section.Here the assessee is claiming deduction on an item of disallowance made by the Assessing Officer on account of employees’ contribution to PF, which was not deposited within the due date. This is neither an item of profit or gain of eligible business nor an item of Profit & Loss Account or manufacturing account rather it is just an employees’ contribution to PF, which assessee has to collect from its employees and to deposit with the PF authorities within the due date prescribed. In case, this is not paid within the due dates the same will be disallowed. Here before us, the issue is not whether it is to be allowed in view of the payment made within the due date or within the due date of filing of return but the issue is whether this amount disallowed, the assessee is eligible for deduction u/s. 80IB of the Act or not. We are of the considered view that this is not an item of manufacturing account or P&L Account and it is neither a profit from eligible business nor a disallowance of expenditure pertaining to the assessee’s eligible business. Hence, the deduction u/s. 80IB(1) of the Act cannot be allowed. Hence this issue of the revenue’s appeal is allowed.

In respect of disallowance of contract payments u/s. 194C of the Act, reason being the TDS deducted is not deposited before the expiry of time prescribed u/s. 200(1) of the Act, thereby, Assessing Officer disallowed by invoking provisions of section 40(a)(ia) of the Act. We find that these contract payments are part of Profit and Loss Account and expenditure is disallowed by Assessing Officer in the absence of non deposit of TDS within the due date. First of all, it is to be mentioned that neither the Assessing Officer nor CIT(A) has discussed why this item is not eligible for deduction u/s. 80IB or why it is eligible. But seeing dates of payments of TDS, it seems that these are paid within due date of filing of return of income, the assessee even otherwise is eligible for deduction and the Assessing Officer cannot invoke the provisions of section 40(a)(ia) of the Act for making disallowance. We are of the view that, let the Assessing Officer consider this issue in the light of the allowance of deduction of this expenditure as the assessee has made payment of this TDS within the due date of filing of return of income and in case, the assessee is not allowed deduction of this expenditure by invoking the provisions of section 40(a)(ia) of the Act, he will go into the eligibility of deduction u/s. 80IB of the Act. Hence, this issue of the revenue’s appeal is set aside to the file of the Assessing Officer.

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH: KOLKATA

I.T.A No. 721/Kol/2010

Assessment-Year: 2006-07

Income-tax Officer, Wd-7(1), Kolkata Vs.  Millenium Writing Products Pvt. Ltd.

ORDER

Per Mahavir Singh, JM

This appeal by revenue is arising out of the order of CIT(A)-VIII, Kolkata in Appeal No.522/CIT(A)-VIII/KOL/08-09 vide dated 22.01.2010. The assessment was framed by ITO, Wd-7(1), Kolkata u/s. 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for Assessment Year 2006-07 vide his order dated 26.12.2008.

2. The only issue in this appeal of the revenue is against the order of CIT(A) in allowing deduction u/s. 80IB of the Act on delayed payment of employee’s contribution of Provident Fund and contract paymentson which payment of TDS was delayed, consequently, Assessing Officer disallowed by invoking provisions of section 4o(a)(ia) of the Act. For this, revenue has raised the following two grounds:

“1. That on the facts and circumstances of the case and in law, the Ld. CIT(Appeals)-VIII, Kolkata, has erred in allowing the deduction u/s. 80IB on disallowance of Rs. 1,58,844/- on delayed payment of employees’ contribution to the Provident Fund and Rs.23,93,016/- u/s. 40(a)(ia) for delayedpayment of TDS.

2. That on the facts and circumstances of the case and in law the Ld. CIT(Appeals)-VIII, Kolkata, erred in appreciating that the above disallowances are penal in nature and the assessee is entitled for deduction of the same in the next assessment years.”

3. Brief facts leading to the above issues are that assessee has claimed deduction of employees’ contribution to P.F amounting to Rs. 1,58,844/- and also the contract payment at Rs.23,93,016/-. The Assessing Officer during the course of assessment proceedings required the assessee to give the details of employees’ contribution to PF paid in the previous year 2005-06 relevant to this assessment year 2006-07. The assessee filed the details and the Assessing Officer noted the same as under:

For the Month	Amount	Due Date	Date of payment
April, 2005	Rs.11065/-	15.05.05	27.05.05
July, 2005	Rs.13936/-	15.08.05	30.12.05
August, 2005	Rs.15874/-	15.09.05	03.11.05
Sept., 2005	Rs.15012/-	15.10.05	06.12.05
Oct., 2005	Rs.15976/-	15.11.05	06.12.05
Nov., 2005	Rs.14760/-	12.12.05	30.12.05
Dec., 2005	Rs.18717/-	12.01.06	02.02.06
Jan., 2006	Rs.19451/-	15.02.06	17.02.06
Feb., 2006	Rs.16695/-	15.03.06	12.04.06
March, 2006	Rs.17358/-	15.04.06	02.05.06
	Rs.158844/-

The Assessing Officer noted that the payments in respect of employees’ contribution to PF are belated payment and accordingly in view of the provisions of section 2(24)(x) r.w.s. 36(va) of the Act, disallowed and added back to the returned income of the assessee amounting to Rs. 1,58,844/-. Similarly, in respect to the contract payment, the assessee filed details of TDS deducted as under:

Date of TDS	Amount paid	Amount of TDS	Due dateof payment	Actual        date     of payment
31.01.2006 28.2.2006	15,43,919/- 8,49,097/-	34,586/- 19.021/-	7.2.2006 7.3.2006	10.7.2006 10.7.2006
	23,93,016/-

The Assessing Officer noted that TDS payments in terms of section 200(1) of the Act from contractpayments were deducted u/s. 194C of the Act but payment made belatedly to the Government Account. Accordingly, Assessing Officer by invoking provisions of section 40(a)(ia) of the Act, disallowed the contract payments and added back to the returned income of the assessee. Aggrieved, assessee preferred appeal before CIT(A). The assessee before CIT(A), claimed that addition on these items are eligible for deduction u/s. 80IB of the Act as these are manufacturing profits. Before CIT(A), the assessee has not claimed that these payments are within the due dates or deduction on account of employees’ contribution to PF or contract payments are allowable rather it was claimed that once the business profit is increased deduction u/s. 80IB of the Act should be allowed. For this, the assessee has raised the following two grounds before CIT(A):

“1. That the learned ITO has wrongly calculated and allowed deductions u/s. 80IB, which is wrong and biased. The appellant is eligible to get 30% of deduction u/s. 80IB of the Income Tax Act, 1961 on Manufacturing Income.

The Learned ITO has disallowed certain expenses and made certain additions, which resulted in increase of Manufacturing Income and hence the deductions u/s. 80IB should be recalculated accordingly.

2. For that other ground or grounds may be urged at the time of hearing.”

4. The CIT(A) allowed the claim of the assessee by giving following findings in his appellate order:

“In this ground, the appellant is disputing the Assessing Officer (A. O) ’s action in not allowing it enhanced deduction under Sec. 80IB of the Income Tax Act, when, as a result of addition made in the assessment order its gross total income has increased. Perusal of the wording of the Sec. 80IB of the Income Tax Act reveals that the deduction is to be worked out at a percentage of profits and gains derived by the appellant in business which is eligible for deduction under Sec. 80IB of theIncome Tax Act. The addition made in the assessment order has effectively enhanced such profits and gains. In my opinion, therefore, the appellant is eligible for the statutory deduction on this enhanced figures of profits and gains as computed by the A. O. The A. O. is accordingly directed to do so. This ground of appeal is allowed.”

Aggrieved, revenue is in appeal before us.

5. We have heard rival contentions and gone through facts and circumstances of the case. Ld. DR argued that the assessee before CIT(A) has not challenged the following two additions:

“i)      Rs.1,58,844/- u/s. 2(24)(x) read with section 36(va) as employees contribution to PF was not deposited within due date.

ii)             Rs.23,93,016/- u/s. 40(a)(ia) as tax was not deducted at source.”

Ld. DR stated that the disallowance with respect to employees’ contribution to PF is not part of Profits of eligible business; rather it is a deduction to be allowed after contribution made by the employee to the PF account and this payment, if actually made within the due date, is allowable as deduction. According to him, it is neither a business profit nor an expenditure relating to Profit & Loss Account item, which is disallowed and consequently which enhances business profits. In respect to contract payments disallowed by invoking the provisions of section 40(a)(ia) of the Act, he also made similar argument.

6. On the other hand, Ld. Counsel for the assessee argued that the assessee is a company registered under the Companies Act, 1956 and manufactures ball pens and its components. The assessee is eligible for deduction u/s. 80IB of the Act on its income from manufacture of ball pens and its components and the Assessing Officer not computed deduction u/s. 80IB of the Act, since profits of business has gone up on account of disallowance of employees’ contribution to PF not deposited within the due dates and contract payments disallowed by invoking the provisions of section 40(a)(ia) of the Act. She stated that CIT(A) has rightly allowed the claim of the assessee by directing the Assessing Officer to compute deduction u/s. 80IB of the Act on enhanced total income, which is resulting into addition made in the assessment to its gross total income. According to Ld. Counsel, by making addition the Assessing Officer has effectively enhanced business profits and deduction should have been computed on enhanced figures and CIT(A) has rightly directed the Assessing Officer accordingly.

7. We find that the undisputed facts are that the assessee has not challenged the additions in respect to employees’ contribution to PF not deposited within the due dates nor contract payments on which tax deducted but deposited beyond due dates prescribed u/s. 200(1) of the Act.

a) As we will take up the issue of employees’ contribution to PF, whether addition on this account results into increase in business profits or not. The fact is that employee’s contribution to PF is not part of Profit & Loss Account and it is neither a profit of manufacture nor an expenditure disallowed by Assessing Officer on account of items of Profit & Loss Account. This is merely a deduction to be allowed to the assessee in case employees’ contribution to PF is deposited within the due dates in terms of section 43B read with section 36(va) of the Act. The provisions of section 80IB of the Act allows deduction in terms of sub-section (1) that whether the gross total income of the assessee includes any profits and gains derived from any business referred to in sub-sections 3 to 11, 11A and 11B, i.e. the eligible business, the deduction of such profits and gains will be allowed equal to such percentage and for such number of assessment years as specified in this section. Relevant provisions of section 80IB(1) of the Act is reproduced hereunder:

“(1) Where the gross total income of an assessee includes any profits and gains derived from any business referred to in sub-sections (3) to ⁴¹[(11),(11A) and

(1 1B)] (such business being hereinafter referred to as the eligible business), there shall, in accordance with and subject to the provisions of this section, be allowed, in computing the total income of the assessee, a deduction from such profits and gains of an amount equal to such percentage and for such number of assessment years as specified in this section.”

We find from the above section that deduction u/s. 80IB of the Act is available to an assessee whose gross total income includes any profits and gains derived from eligible business as specified in the section. Here the assessee is claiming deduction on an item of disallowance made by the Assessing Officer on account of employees’ contribution to PF, which was not deposited within the due date. This is neither an item of profit or gain of eligible business nor an item of Profit & Loss Account or manufacturing account rather it is just an employees’ contribution to PF, which assessee has to collect from its employees and to deposit with the PF authorities within the due date prescribed. In case, this is not paid within the due dates the same will be disallowed. Here before us, the issue is not whether it is to be allowed in view of the payment made within the due date or within the due date of filing of return but the issue is whether this amount disallowed, the assessee is eligible for deduction u/s. 80IB of the Act or not. We are of the considered view that this is not an item of manufacturing account or P&L Account and it is neither a profit from eligible business nor a disallowance of expenditure pertaining to the assessee’s eligible business. Hence, the deduction u/s. 80IB(1) of the Act cannot be allowed. Hence this issue of the revenue’s appeal is allowed.

b) In respect of disallowance of contract payments u/s. 194C of the Act, reason being the TDS deducted is not deposited before the expiry of time prescribed u/s. 200(1) of the Act, thereby, Assessing Officer disallowed by invoking provisions of section 40(a)(ia) of the Act. We find that these contract payments are part of Profit and Loss Account and expenditure is disallowed by Assessing Officer in the absence of non deposit of TDS within the due date. First of all, it is to be mentioned that neither the Assessing Officer nor CIT(A) has discussed why this item is not eligible for deduction u/s. 80IB or why it is eligible. But seeing dates of payments of TDS, it seems that these are paid within due date of filing of return of income, the assessee even otherwise is eligible for deduction and the Assessing Officer cannot invoke the provisions of section 40(a)(ia) of the Act for making disallowance. We are of the view that, let the Assessing Officer consider this issue in the light of the allowance of deduction of this expenditure as the assessee has made payment of this TDS within the due date of filing of return of income and in case, the assessee is not allowed deduction of this expenditure by invoking the provisions of section 40(a)(ia) of the Act, he will go into the eligibility of deduction u/s. 80IB of the Act. Hence, this issue of the revenue’s appeal is set aside to the file of the Assessing Officer.

8.       In the result, revenue’s appeal is allowed partly for statistical purposes

9.       Order is pronounced in the open court on 21.4.2011