Monday, August 4, 2014

Black economy now amounts to 75% of GDP

Driven substantially by the higher education sector, real estate deals and mining income, India’s black economy could now be nearly three-quarters the size of its reported Gross Domestic Product (GDP). These are among the findings of a confidential report commissioned by the government and accessed exclusively by The Hindu.

Since there were no “reliable” estimates of black money generated in India and held within and outside the country, the UPA government commissioned the National Institute of Public Finance and Policy (NIPFP) to estimate the black money in India and held overseas by Indians.

The Special Investigation Team on black money, constituted by the Narendra Modi government on May 27 in compliance with a Supreme Court directive, is studying the report.

Though the report was submitted to the Finance Ministry in December 2013, the UPA’s Finance Minister P. Chidambaram did not place it in Parliament. Nor has his successor Arun Jaitley done so.

The capitation fees collected by private colleges, on management quota seats in professional courses, last year was around Rs 5,953 crore, the report estimates.


Sunday, August 3, 2014

No penalty or prosecution if return was voluntarily filed in good faith prior to detection of concealment

Section 271(1)(c), read with section 276C, of the Income-tax Act, 1961 and section 245 of the Code of Criminal Procedure, 1973 - Penalty - For concealment of income (Effect of filing return) - Assessment year 1988-89 - Whether return filed by assessee was voluntary and it was filed in good faith before detection of any concealment by Assessing Officer, no penalty could be levied - Held, yes - Whether where penalty itself was deleted, very basis of complaint before Sub-Divisional Judicial Magistrate for prosecution of assessee was knocked down and continuation of complaint would be an abuse of process of court - Held, yes [Para 13] [In favour of assessee]

Refer:[2014] 46 281 (Punjab & Haryana)


Raj Bricks Field


Income-tax Officer

Saturday, August 2, 2014

MEF filing date extended

Due to last date of filing of ITRs being 31st July, 2014, the pressure on MEF site started from 1st August, 2014 whereby the members are facing problem in filling the same. Considering the genuine difficulty, the last date of online filing of MEF 2014-15 is hereby extended from 4th August to 10th August, 2014 and the last date of submission of duly signed declaration is extended to 20th August, 2014.

Friday, August 1, 2014


For the convenience of the readers we are providing here under the new tax audit format in excel which is without write protect and can be adjusted as per requirement. Marked in red are the changes/ amendments which has been made in the TAX AUDIT REPORT vide circular no. 33/2014 by CBDT.


Deemed Government companies covered under (C&AG) audit

MCA vide  General Circular No. 33/2014- Dated: 31st July, 2014 has clarified that provisions of Section 139(5) and 139(7) of the Companies Act, 2013 (New Act), which deal with appointment of auditors by Comptroller and Auditor General of India (C&AG) shall be applicable deemed Government companies. Circular is repoduced here under for reference:

General Circular No. 33/2014- Dated: 31st July, 2014

  Subject: Clarification with regard to applicability of provisions of section 139(5) and 139(7) of the Companies Act, 2013

Doubts have been raised about applicability of sections 139(5) and 139(7) of the Companies Act, 2013 (New Act), which deal with appointment of auditors by Comptroller and Auditor General of India (C&AG), to ‘deemed Government Companies’ referred to in section 619B of the Companies Act 1956 (Old Act) i.e. companies where ownership or control lies with two or more Government companies or corporations etc in the manner detailed in section 619B ibid. Stakeholders have pointed out that the New Act does not contain specific provisions about ‘deemed Government companies’ on the lines of section 619E of the Old Act. Clarification has been sought whether, under the new Act, such deemed Government companies would be subject to audit by the C&AG in the same manner as Government Companies.

2. The above issue has been examined and it is clarified that the new Act does not alter the position with regard to audit of such deemed Government companies through C&AG and thus such companies are covered under sub- section (5) and (7) of section 139 of the New Act.

3. Further, it has also been observed that the words “any other company owned or controlled, directly or indirectly by the Central Government and partly by one or more State Governments” appearing in sub-sections (5) and (7) of section 139 of the New Act are to be read with the definition of ‘control’ in section 2(27) of the New Act. Thus documents like articles of association and shareholders agreements etc envisaging control under section 2(27) are to be taken into account while deciding whether an individual company, other than those referred in paragraph 1-2 above, is covered under section 139(5)/ 139(7) of the New Act.

4. Clarification has also been sought about the manner in which the information about incorporation of a company subject to audit by an auditor to be appointed by the C&AG is to be communicated to the C&AG for the purpose of appointment of first auditors under section 139(7) of the New Act. It is hereby clarified that such responsibility rests with both, the Government concerned and the relevant company. To avoid any confusion it is further clarified that it will primarily be the responsibility of the company concerned to intimate to the C&AG about its incorporation along with name, location of registered office, capital structure of such a company immediately on its incorporation. It is also incumbent on such a company to share such intimation to the relevant Government so that such Government may also send a suitable request to the C&AG.

5. This issues with the approval of the competent authority.

F. No.1/33/13-CL-V

Yours faithfully

(KMS Narayanan)
Assistant Director (Policy)

Do Not give Details of Your Bank Account or Credit/Debit Cards on Email/Phone: RBI Warns Public Again on Phishing Mails/Calls

Of late, some new methods of frauds have come to the notice of the Reserve Bank of India.  An e-mail is sent in the name of a senior official of the Reserve Bank of India which gives an impression of it having been sent from the Reserve Bank and at times even displays the official extension. The e-mail states that the Reserve Bank has received a large sum of foreign currency from the World Bank or a well-known international institution or a multi-national company for transfer of such funds to the bank account of the e-mail recipient. The reason for such transfer cited in such e-mails is also quite convincing, such as, ‘compensation for internet and cyber-crimes and for reduction of poverty in Asian regions’. The e-mail requests for submission of personal data of the mail recipient, such as, his bank account number, mobile number and passport details for claiming the amount. The e-mail also claims that such messages are generated by the ‘Foreign Remittance Department – an Online Banking Unit of the Reserve Bank’.
Another way to defraud the susceptible public is to convince the recipient of a phone call to divulge details of the debit card to the caller who claims to be calling from the Reserve Bank. The caller states that the Reserve Bank needs details of the card including the CVV number as printed on the back of the card and also the PIN to make the card more secure. Similarly, through an email, fraudsters lead the mail recipients to a website that looks similar to the official website of the Reserve Bank of India and ask them to fill up a form with details of their bank accounts.
The Reserve Bank of India clarifies and reiterates that it does not send any such mails or make such calls. In fact, no bank or respectable organisation asks for bank account details or details of the debit or credit cards over email or phone.
The Reserve Bank of India has, on several occasions in the past, cautioned the members of public about such frauds and has urged them not to fall prey to fictitious offers/lottery winnings/remittance of cheap funds in foreign currency from abroad by so-called foreign entities/individuals or to Indian residents acting as representatives of such entities/individuals.

The Reserve Bank clarifies/advises that
  • It does not hold any money for any individuals.
  • It does not call or sends sms or e-mails to individuals about lottery prizes, transfer of funds received from abroad or for making bank accounts or credit/debit cards more secure.
  • The only official and genuine website of the Reserve Bank of India is The public should be careful and should not be misled by fake websites with similar addresses beginning with ‘Reserve Bank’, ‘RBI’, etc., along with fake logos.
  • People should not fall prey to offers from someone posing as RBI officials, it could be impersonation.
  • Anyone receiving such fictitious offers should inform the local police or cyber crime authority about such calls/e-mails/sms.

Alpana Killawala
Principal Chief General Manager
Press Release : 2014-2015/228

HC grants sec. 54F relief on construction of new house after demolishing of old one

Section 54F of the Income-tax Act, 1961 - Capital gains - Exemption of, in case of investment in residential house (Construction) - Assessee sold a property and declared certain capital gain - Earlier, he had purchased a built up property which was demolished and new construction on plot was carried out within three years of sale of aforesaid property - Whether assessee was entitled to exemption under section 54F - Held, yes [Paras 8 & 9] [In favour of assessee]

Refer:[2014] 46 416 (Delhi)


Commissioner of Income-tax-V


Ashok Kumar Ralhan

Thursday, July 31, 2014

No amnesty for tax evaders; government vows re-look at GAAR

The Narendra Modi-led government has ruled out a tax amnesty scheme to unearth black money saying it goes against honest taxpayers but sought to send out positive signals to foreign investors promising a relook at the controversial General Anti-Avoidance Rules (GAAR).

"The experience shows when you bring in VDIS (Voluntary Disclosure of Income Scheme), it discriminates against genuine taxpayers. Those of you who pay taxes are goes against honest taxpayers... It may not be a conducive path for recovering more taxes," minister of state for finance Nirmala Sitharaman said while responding to specific issues raised by members in the Rajya Sabha.

Referring to demand of some states such as West Bengal, Bihar, Odisha and Punjab, Union finance ministerArun Jaitley said the government will take a view on the specific demands of the debt-ridden states after receiving the report of the finance commission, which is expected by the year-end.
Jaitley was speaking in the upper house of Parliament while winding up the debate on Finance Bill which was later returned marking the completion of the budgetary process for 2014-15.Jaitley said the government will re-examine GAAR.
"After the budget process is over, we will look into it whether it is that date or some other date and whether some amendments are required or not and only then we will be able to make a final call on that whether it is that date or some other date and whether some amendments are required or not and only then we will be able to make a final call on that," he said.
GAAR, which aims to minimise tax avoidance by routing investments through tax havens, is tocome into effect from April 1, 2015, after being postponed once.
Seeking to allay fears over monsoon condition, Jaitley said: "The situation is more optimistic, monsoons have picked up... There is no drought-like situation." He added there is a back-up plan which would be put into action if the situation demands.
On the issue of taxes foregone, the minister said it is an ambiguous phrase which includes concessions given by the government to boost industrial activity and also those cases where it is difficult to collect dues as there are no assets.
Referring to the tax proposals announced in the budget, Sitharaman said attempts have been made to provide relief to small and medium taxpayers to encourage savings and promote growth despite the limited fiscal space.
She pointed that the previous government had left very little fiscal space for the finance minister to do anything out of the box and as a result there has not been much of a room available. She said Jaitley took the challenge and retained many of the targets set by the UPA government.
On increasing the tax exemption limit under 80C of the Income Tax Act from Rs 1 lakh to Rs 1.5 lakh, she said, "This is definitely going to have an impact on the savings of the country which we need to give a great impetus."


Taxman's missive makeover: Politeness is the new mantra for the Income Tax department

Politeness is the new mantra for the Income Tax department which has asked its officials to be more courteous while approaching taxpayers with queries regarding their financial transactions or returns.

The I-T department had begun the practise of writing such clarification-seeking letters to taxpayers few years back as part of its drive to collect additional revenue lying untapped, especially in cases of suspected non-disclosure or avoidance of tax by an individual or entity.

The decision to sound more polite, courteous and sincere in its communications to taxpayers was recently discussed and agreed upon by the top brass of the department during a two-day conference held in the national capital.

"The practise of writing letter to a taxpayer who has not reported his or her transaction to the I-T authorities is here to stay and we know its importance. It has been decided that letters from the taxman should be more polite and courteous in tone and tenor. In all cases, the department would take it initially that the taxpayer made an inadvertent mistake in not reporting the transaction under question," a senior I-T officer said.

The official letters which are sent by respective Assessing Officers (AOs) of I-T, henceforth, would use some adjectives like 'please', 'warm regards' and 'gentle reminder' even as the taxpayer is addressed by name with proper salutations.

"It is not that our communications with the taxpayer were not polite till now. But, there is always room for improvement and a more simplified and courteous behaviour on the taxman's part bodes well for an organisation that is not only a tax collector but also a facilitator," the officer said.

Hence, apart from the facts of the case like PAN card number, details of investments or purchases made, the letter would sound more as a reminder that the particular instance should be reported to the I-T as incumbent on a responsible citizen of the country.

The new norms would be applicable to letters sent under the non-filers, stop-filers and scrutiny assessment cases including others, the officer said.

It has also been decided to make I-T offices across the country more welcoming and customer friendly in nature by putting up some additional basic facilities like chairs, drinking water dispensers and help-desk kiosks.

These measures were discussed and endorsed during the July 21-22 annual meeting of I-T Directors General (DsG) and Chief Commissioners (CCs) held here.

The department, during last financial year, had sent more than 3 lakh letters to taxpayers in case of non-filer instances.


Income tax department to taxpayers: Save our official email id in inbox

After asking taxpayers to validate their personal email ids and mobile phone numbers for online filing of Income Tax returns, the I-T department has now urged them to include its official email address in the 'safe list' of their inboxes.

The department has suggested taxpayers to validate and include in the 'white/safe list' of their respective inboxes the official handle of the department-- '', so that it does not land in the spam or junk folder of the taxpayer.

"What a taxpayer needs to do is to include this email id in the safe list of his or her email recipients. Once an online tax filer validates his or her email id and mobile phone on the department's online portal, the system sends an auto-generated PIN to complete the secure process and hence this email should not land into the spam folder which can be easily missed by the individual," a senior I-T officer said.

The department has issued the advisory after it found instances of this validation email landing into the spam or junk folder of taxpayer's inboxes thereby leading to trouble in e-filing.
The online tax filing season is on and as of now the last date is July 31.

Once the email is received from this official handle, the taxpayers can use the PIN to go further with the online filing procedures of their Income Tax Return (ITR).

The Central Board of Direct Taxes, the apex authority of the I-T, has recently notified new rules for online filing of ITRs saying taxpayers filing their returns this year (assessment year 2014-15) will have to mandatorily share their personal email ids and mobile numbers with the department.

The aim behind this latest move was to update and stay in touch with the taxpayer each and every time their is a tax related issue.

The CBDT also recently notified taxpayers that the I-T department does not send any communication from private email addresses such as gmail, yahoo etc to them.

"Taxpayers are cautioned that they should not respond to such phishing mails and avoid downloading any attachment, which may contain virus or malicious software," the CBDT had said.

Read more at:

ICAI invites suggestions on the revised formats of Form Nos. 3CA, 3CB and 3CD - (31-07-2014)

The Central Board of Direct Taxes has through, Income-tax (7th Amendment) Rules, 2014, notified new Forms of tax audit reports namely Form No. 3CA, 3CB and 3CD.The said notification can be downloaded from the link below:

With regard to the same, ICAI invites suggestions on the said new tax audit report formats, from the members. Members are requested to submit their suggestions latest by 6th August, 2014.

Click here to submit your suggestions

Wednesday, July 30, 2014

No addition for unexplained investment on basis of unsigned MOU recovered during survey for purchase of land

Section 69, read with section 271(1)(c), of the Income-tax Act, 1961 - Unexplained investments (Immovable properties) Assessment year 2006-07 - An unsigned memorandum of understanding between assessee and a seller of land as well as an unsigned receipt issued by seller was recovered - Said MOU as well as receipt in question were found to be unsigned documents and transaction had not materialized - Whether since both Commissioner (Appeals) and Tribunal found that facts did not establish revenue's contention that unexplained investment in cash had been made by assessee, no question of law arose from order of Tribunal deleting addition on that account - Held, yes [Para 6] [In favour of assessee]

Refer:[2014] 46 372 (Delhi)


Commissioner of Income-tax


Gian Gupta

No ST on sale of flat even if advance was received by builder prior to completion of construction

Section 65(30a) of the Finance Act, 1994 - Taxable services - Construction of Complex Services - Stay Order - Period from 1-4-2006 to 30-9-2007 - Assessee was engaged in developing and constructing residential complex having more than twelve residential units on its own land with own resources for selling same to prospective buyers - Department argued that since advances were being received from buyers and construction progressed with receipt of payments from prospective clients, it could not be said that assessee used its own resources for construction and hence, amounted to construction services to prospective buyers - HELD : When construction of residential complex is for sale of flats and same are ultimately sold to customer under agreement, it cannot be held that there was any service being provided by builders to their customer even if a part amount of cost of flats is being received in advance - Such advance amount is against sale consideration of flat and building and not for obtaining any service, so as to make it leviable to Service-tax - Further, as per Circular dated 29-1-2009, service tax does not arise on builders selling flats - Hence, pre-deposit was waived [Paras 3 & 4] [In favour of assessee]

Circulars and Notifications : Circular No. 108/2/2009-S.T., dated 29-1-2009

Refer:[2014] 46 254 (New Delhi - CESTAT)


Indo Global Estates


Commissioner of Central Excise, Chandigarh

Tuesday, July 29, 2014

CBDT has withdrawn old utility of form No. 3CD, expected to release new utility soon

The existing Form No. 3CA, Form No. 3CB and Form No. 3CD have been substituted vide notification no. 33/2014 dated 25.07.2014 with immediate effect. Taxpayers and CAs are advised to await the release of the new schema and utility to submit in the newly notified aforementioned Forms. Taxpayers and CAs are advised that any upload using the old Forms will not be valid even for previous AYs in view of the notification of CBDT. The new schema and updated utility for e-Filing of the same will be deployed shortly. CBDT has withdrawn old utility of form No. 3CD. CBDT is expected to release new utility soon.

Key takeaways from new Form No. 3CD

The CBDT has notified Income-tax (7th amendment) Rules, 2014 which substitutes the existing Form No. 3CD with a new form. The new Form 3CD prescribes certain new reporting clauses and substitutes some existing clauses with new ones. The new form requires tax auditor to furnish more and detailed information in the new form for tax audit report.
Unlike old form 3CD which required auditor to report only those inadmissible payments which were debited to Profit and loss account, the new Form 3CD requires reporting of all disallowable payments even if they are not debited to profit and loss account.
With the substitution of Form No. 3CD, reporting in the new form would be a time taking job for the Chartered Accountants. Here is the list of additional reporting requirements as prescribed in the new Form No. 3CD:
(1) Registration number in case of indirect tax liability:
 Assessees liable to pay indirect taxes (like excise duty, service tax, sales tax, customs duty, etc.) shall furnish their registration number or any other identification number allotted to them[clause 4 of Part A].
(2) Relevant clauses of section 44AB:
 The relevant clauses of section 44AB shall be reported under which audit has been conducted[clause 8 of Part A].
(3) Location at which books of account are kept:
 New Form seeks details of the address at which books of account of assessee have been kept[clause 11(b) of Part B].
(4) Nature of documents examined by the auditor:
 The auditor is required to specify the nature of documents examined by him in the course of tax audit[clause 11(c) of Part B].
(5) Change in method of accounting/stock valuation:
 A tabular format is specified for reporting of financial impact of changes in method of accounting and method of stock valuation[clause 13 and clause 14 of Part B].
(6) Transfer of land/building for less than stamp duty value:
 Details of land or building transferred by assessee for less than stamp duty value (under section 43CA or under section 50C) shall be reported in new Form 3CD [clause 17 of Part B].
(7) Deduction allowable under Sections 32AC/35AD/35CCC/35D:
 Deductions allowable under sections 32AC, 35AD, 35CCC and 35DDD are also required to be reported in revised Form No. 3CD[clause 19 of Part B].
(8) Disallowances:
 Old Form3CD required reporting of inadmissible payments only when they were debited to Profit and loss account. However, the new Form 3CD requires reporting of following disallowable payments, even if they are not debited to profit and loss account[clause 21 of Part B]:
(i) Disallowance for TDS default under Section 40(a)
(ii) Disallowance for cash payments under section 40A(3)
(iii) Disallowance for provision for gratuity under section 40A(7)
(iv) Disallowance under Section 40A(9)
(v) Particulars of any liability of a contingent nature
(vi) Amount of deduction inadmissible under section 14A
(vii) Interest inadmissible under the proviso to section 36(1)(iii)
(9) Deemed income under Section 32AC:
 Section 32AC of the Act provides for investment allowance of 15% for investment in plant and machinery. New form provides for reporting of deemed income which results from sale or transfer of new asset, (if asset was acquired and installed by the assessee for the purpose of claiming deductions under Section 32AC) within a period of five years from the date of its installation[clause 24 of Part B].
(10) Receipt of unlisted shares:
 A new clause is inserted in the Form 3CD which requires reporting of all unlisted shares which were received by assessee either for inadequate consideration or without consideration in view of section 56(2)(viia)[clause 28 of Part B].
(11) Issue of shares above fair market value:
 A new clause is inserted in the Form 3CD which requires reporting of all transactions of issue of shares where consideration received by assessee exceeds its fair market value in view of section 56(2)(viib)[clause 29 of Part B].
(12) Speculation losses:
 New Form No. 3CD provides for reporting of losses from speculation business as referred to in Section 73[clause 32(c) of Part B].
(13) Losses from business specified under section 35AD:
 Assessee shall furnish details of losses incurred as referred to in Section 73A in respect of specified businesses mentioned in Section 35AD[clause 32(d) of Part B].
(14) Reporting of deductions claimed under Sections 10A and 10AA:
 If any deduction has been claimed by assessee under Sections 10A and 10AA then it shall be reported in new Form No. 3CD[clause 33 of Part B].
(15) Compliance with TCS provisions:
 Old Form 3CD required reporting on compliance with TDS provisions only. However, New Form No. 3CD requires reporting on compliance with TCS provisions as well[clause 34(a) of Part B].
(16) Filing of TDS/TCS statements:
 The tax auditor shall report on the compliance by the assessee with the provision of furnishing of TDS or TCS statement within prescribed time[clause 34(b) of Part B].
(17) Assessee-in-default:
 If assessee is deemed as an assessee-in-default and he is liable to pay interest under Section 201(1A) or 206C(7), the tax auditor shall furnish the TAN of assessee, interest payable and interest actually paid[clause 34(c) of Part B].
(18) Dividend Distribution Tax:
 Revised Form No. 3CD requires reporting of following reductions as referred to in clause (i) and clause (ii) of Section 115-O(1A)[clause 36 of Part B]:
i) Dividend received by domestic company from its subsidiary, and
ii) The amount of dividend paid to any person for or on behalf of the New Pension System Trust referred to in Section 10(44).
(19) Audits:
(i) Cost audit: Old Form No. 3CD required reporting only when statutory cost audit was carried out under Section 233A of the Companies Act, 1956. However, the revised Form No. 3CD specifies reporting requirement even when cost audit has been carried out voluntarily. The requirement of attachment of copy of cost audit report along with Form has been substituted with reporting of qualifications in cost audit report[clause 37 of Part B].
(ii) Cost Audit under Central Excise Act: The requirement of attachment of copy of cost audit report along with Form has been substituted with reporting of qualifications in cost audit report [clause 38 of Part B].
(iii) Special Audit under Service Tax: If any service-tax audit is carried out in relation to valuation of taxable services, the tax auditor shall report any qualifications made in relation to valuation of taxable services[clause 39 of Part B].
(20) Ratios:
 Unlike old form which required reporting of certain ratios pertaining to current year only, the new Form requires reporting of ratios of preceding financial year as well. Further, total turnover is to be reported for the previous year as well as for preceding financial year[clause 40 of Part B].
(21) Demand raised or refund issued:
 The new Form seeks details of demand raised or refund issued under any tax laws (other than Income Tax Act, 1961 and Wealth Tax Act, 1957) along with details of relevant proceedings[clause 41 of Part B].
Refer:[2014] 47 342  (Article)

Monday, July 28, 2014

Important changes in new 3CD Format

CBDT has revised format of Tax Audit Report to be submitted in Form 3CD vide its Notification No. 33/2014, Dated: July 25, 2014. The revised report has added some new clauses to increase disclosure requirement and as well  as amended few existing clauses to further increase/improve disclosure requirements. Revised Tax Audit Report has mainly added additional reporting requirement on TDS payment and defaults. Now 3CD has made more informative w.r.t TDS deduction with complete details of Filing of returns and deduction including reporting of Lower or no deductions with figures Some of the changes in new Format of 3CDare as follows :-

4. Whether the assessee is liable to pay indirect tax like excise duty, service tax, sales tax, customs duty,etc. if yes, please furnish the registration number or any other identification number allotted for the same.

8. Indicate the relevant clause of section 44AB under which the audit has been conducted.

17. Where any land or building or both is transferred during the previous year for a consideration less than value adopted or assessed or assessable by any authority of a State Government referred to in section 43CA or 50C, details to furnish.

21(b). Details required to be inserted whether tds paid after due date specified in section 200.

28. Whether during the previous year the assessee has received any property, being share of a company not being a company in which the public are substantially interested, without consideration or for inadequate consideration as referred to in section 56(2)(viia), if yes, please furnish the details of the same.

29. Whether during the previous year the assessee received any consideration for issue of shares which exceeds the fair market value of the shares as referred to in section 56(2)(viib), if yes, please furnish the details of the same.

32(c ). Whether the assessee has incurred any speculation loss referred to in section 73 during the previous year, If yes, please furnish the details of the same.

32(d). whether the assessee has incurred any loss referred to in section 73A in respect of any specified business during the previous year, if yes, please furnish details of the same.

32(e). In case of a company, please state that whether the company is deemed to be carrying on a speculation business as referred in explanation to section 73, if yes, please furnish the details of speculation loss if any incurred during the previous year.

34 Details of TDS deducted to be filled in full and also interest as per section 201(1a) and 206C(7). Also details of TDS returns to be given if filed late

39. Whether any audit was conducted under section 72A of the Finance Act,1994 in relation to valuation of taxable services, Finance Act,1994 in relation to valuation of taxable services, if yes, give the details, if any, of disqualification or disagreement on any matter/item/value/quantity as may be reported/identified by the auditor.

41. Please furnish the details of demand raised or refund issued during the previous year under any tax laws other than Income Tax Act, 1961 and Wealth tax Act, 1957 alongwith details of relevant proceedings.

Format of Tax Audit Report Revised

CBDT vide Notification No. 33/2014 dated 25-07-2014 has revised Form 3CA, 3CB and 3CD(Format of Tax Audit Report) .The Notification is produced here under for ready reference of the viewers and it will be applicable from the date of its publication in official gazette.


Notification No. 33/2014, Dated: July 25, 2014

S.O. 1902 (E).. In exercise of the powers conferred by section 295 read with section 44AB of the Income Tax Act, 1961 (43 of 1961), the Central Board of Direct Taxes hereby makes the following rules further to amend the Income Tax Rules, 1962, namely:-

1. (1) These rules may be called the Income Tax (7th Amendment) Rules, 2014. (2) They shall come into force on the date of their publication in the Official Gazette.

2. In the Income Tax Rules, 1962, in Appendix-II, for Form No. 3CA, Form No. 3CB and Form No. 3CD, the following forms shall be substituted, namely:-

Revised Form No. 3CA (Word)

Revised FORM NO. 3CB (Word)

Revised Form No. 3CD (Word)


(J Saravanan)
Under Secretary (TPL)

Note: The principal rules were published in the Gazette of India vide number S.O. 969(E), dated the 26th March, 1962 and last amended by number S.O. 1418, dated the 30/05/2014.

Sunday, July 27, 2014

Interest on loan taken against FDRs held allowable as it was incurred exclusively to keep intact income from FDRs

In order to protect interest earnings from fixed deposits and to meet her financial needs, when an assessee raises a loan against the fixed deposits, so as to keep the source of earning intact, the expenditure so incurred in wholly and exclusively to earn fixed deposit interest income has to be allowed as deduction

Once the assessee claims that the actual market value of the land or building is less than stamp duty valuation adopted by the authorities, it is incumbent upon the Assessing Officer to refer the valuation of said land of building to the Departmental Valuation Officer

Refer:[2014] 47 88 (Agra - Trib.)


Raj Kumari Agarwal


Deputy Commissioner of Income-tax, Circle -2, Agra

Saturday, July 26, 2014

Agricultural land to be deemed as capital asset after its conversion into a non-agricultural land

Section 2(14) of the Income-tax Act, 1961 - Capital gain - Capital asset (Agricultural land) - Assessment year 2007-08 - Whether where assessee entered into a development agreement-cum-G.P.A with a company for development of its agricultural land into a housing project and said land was converted from agricultural purposes to non-agricultural purposes by taking approval of competent authority during year, said land no more remained agricultural land in terms of section 2(14)(iii) - Held, yes [Para 44] [In favour of revenue]

Section 2(47), read with section 45, of the Income-tax Act, 1961 and section 53A of the Transfer of Property Act, 1882 - Capital gains - Transfer (Land deals) - Assessment year 2007-08 - Whether when transferee, by its conduct and by its deeds, demonstrates that it is unwilling to perform its obligations under agreement during year, date of agreement ceases to be relevant and it is only actual performance of transferee's obligations that can give rise to situation envisaged in section 53A - Held, yes - Assessee entered into a development agreement with a builder for development of its agricultural land into housing project - Assessing Officer brought said transaction to tax under section 45 holding that land was capital asset - It was found that construction of building had not started as building approval was granted at end of relevant year - No consideration had been passed on between builder and assessee and, thus, required cost of acquisition by builder was not incurred - Further, builder had not taken any steps in performance of agreement and, thus, had not performed its obligation under agreement - Whether on these facts, said agreement could not be said to be a contract as referred to in section 53A and, accordingly, provisions of section 2(47)(v) could not be invoked and no capital gains could be charged during relevant year - Held, yes [Paras 58 & 59] [In favour of assessee]

Refer:[2014] 46 313 (Hyderabad - Trib.)


Fibars Infratech (P.) Ltd.


Income-tax Officer, Ward -1(2), Hyderabad

Friday, July 25, 2014

Trust can avail of depreciation on asset even if sum incurred on its acquisition is claimed as application of income

Section 32, read with section 12A of the Income-tax Act, 1961 - Depreciation - Allowance/rate of (Charitable Trust) - Whether a trust registered under section 12A, can claim depreciation on assets of which cost has already been allowed as application of income - Held, yes [Para 11] [In favour of assessee]

Refer:[2014] 46 241 (Madhya Pradesh)


Commissioner of Income-tax


Devi Sakuntala Tharal Charitable Foundation