The Union Cabinet, chaired by the Prime Minister Shri Narendra Modi, in a major decision, has decided to accept the order of the High Court of Bombay in the case of Vodafone India Services Private Limited (VISPL) dated 10.10.2014. This is a major correction of a tax matter which has adversely affected investor sentiment.
Based on the opinion of Chief Commissioner of Income-tax (International Taxation), Chairperson (CBDT) and the Attorney General of India, the Cabinet decided to:
i. accept the order of the High Court of Bombay in WP No. 871 of 2014, dated 10.10.2014; and not to file SLP against it before the Supreme Court of India;
ii. accept of orders of Courts/ IT AT/ DRP in cases of other taxpayers where similar transfer pricing adjustments have been made and the Courts/ IT AT/ DRP have decided/decide in favour of the taxpayer.
The Cabinet decision will bring greater clarity and predictability for taxpayers as well as tax authorities, thereby facilitating tax compliance and reducing litigation on similar issues. This will also set at rest the uncertainty prevailing in the minds of foreign investors and taxpayers in respect of possible transfer pricing adjustments in India on transactions related to issuance of shares, and thereby improve the investment climate in the country.
The Cabinet came to this view as this is a transaction on the capital account and there is no income to be chargeable to tax. So applying any pricing formula is irrelevant.
VISPL is a wholly owned subsidiary of a non-resident company, Vodafone Tele-Services (India) Holdings Limited, Mauritius. On 21.8.2008, VISPL issued shares (at a premium of Rs.8509/-) which resulted in VISPL receiving a total consideration of Rs.246.39 crore from Vodafone Mauritius, on issue of shares and this was shown as "Capital Receipts" in the books of accounts. VISPL reported this transaction as an "International Transaction" and stated that this transaction does not affect its income.
The Transfer Pricing Officer (TPO), vide order dated 28.01.2013, determined the Arm's Length Price of the shares issued by VISPL on the basis of Net Asset Value, at Rs.53,775/- per share and made an upward adjustment of Rs.1,308.91 crore. In addition, the difference Rs.1,308.91 crore between the transaction price and the Arm's Length Price was treated as 'deemed loan' given by VISPL to the holding company; and interest that would have been payable on the loan in an arm's length transaction was computed at Rs.88.35 crore. In total, transfer pricing adjustment of Rs.1,397.26 crore was proposed by the TPO for Assessment Year 2009-10. The matter was agitated by VISPL at the stage of Draft AO itself and therefore the tax payable could not be crystallized. However, the tax rate of 33 percent was applicable for Assessment Year 2009-10.
The DRP, on 11.2.2014, held that the premium determined by the TPO, to the extent not received, is an income arising from issue of shares, and that the AO and the TPO have jurisdiction.
VISPL filed a 2nd Writ Petition in the High Court of Bombay. The High Court, on 10.10.2014, has amongst other things observed:
a) "Section 92(2) of the Act deals with a situation where two or more AEs enter into an arrangement whereby they receive a benefit, service or facility then the allocation, apportionment or contribution towards the cost or expenditure is to be determined in respect of each AE having regard to ALP. It would have no application in the cases like the present one, where there is no occasion to, allocate, apportion or contribute any cost and/ or expenses between the Petitioner and the holding company."
b) The crucial words “shall be chargeable to income tax” which are found in Section 42(2) of the 1922 Act are absent in Chapter X of the Act..... Therefore it is clear that the deemed income which was charged to tax under Section 42(2) of 1922 Act was done away with under this Act."
c) The tax can be charged only on income and in the absence of any income arising, the issue of applying the measure of Arm's Length Pricing to transactional value/ consideration itself does not arise."
d) If its income which is chargeable to tax, under the normal provisions of the Act, then alone Chapter X of the Act could be invoked. Sections 4 and 5 of the Act brings /charges to tax total income of the previous year. This would take us to the meaning of the word income under the Act as defined in Section 2 (24) of the Act. The amount received on issue of shares is admittedly a capital account transaction not separately brought within the definition of Income, except in cases covered by Section 56(2)(viib) of the Act. Thus such capital account cannot be brought to tax as already discussed herein above while considering the challenge to the grounds as mentioned in impugned order."
e) The issue of shares at a premium is on Capital account and gives rise to no income. The submission on behalf of the revenue that the shortfall in the ALP as computed for the purposes of Chapter X of the Act is misplaced. The ALP is meant to determine the real value of the transaction entered into between AEs. It is a re-computation exercise to be carried out only when income arises in case of an International transaction between AEs. It does not warrant re-computation of a consideration received / given on capital account.
The Bombay High Court quashed the reference dated 11.7.2011 by the AO to the TPO, order dated 28.1.2013 of the TPO, draft AO dated 22.3.2013 of the AO and order dated 11.2.2014 of the DRP on the preliminary issue of jurisdiction to tax, setting them aside as being without jurisdiction, null and void.
Acceptance of the Order of the High Court of Bombay in the case of Vodafone India Services Private Limited
Written By Views maker on Saturday, January 31, 2015 | 2:31 AM
Amended Exchange Rates of Foreign Currency Notified
In exercise of the powers conferred by Section 14 of the Customs Act, 1962 (52 of 1962), the Central Board of Excise & Customs(CBEC) hereby makes the following further amendments in the Notification of the Government of India, Ministry of Finance (Department of Revenue) No. 09/2015-CUSTOMS (N.T.) dated the 15th January, 2015 published in the Gazette Of India, Part-II, Section 3, Sub-Section (ii), Extraordinary vide number S.O.167(E) dated, the 15th January, 2015, namely:-
In the SCHEDULE-I of the said Notification, for Serial Nos. 4 & 5 and the entries relating thereto, the following shall be substituted, namely:-
SCHEDULE-I
| S.No. | Foreign Currency | Rate of exchange of one unit of foreign currency equivalent to Indian rupees | ||
| (1) | (2) | (3) | ||
| (a) | (b) | |||
|
|
| (For Imported Goods) | (For Export Goods) | |
| 4. | Danish Kroner | 9.40 | 9.15 | |
| 5. | EURO | 69.95 | 68.20 | |
These rates will be effective from today i.e. 28th January, 2015.
CS Training related documents to be in Soft copy only
Written By Views maker on Sunday, January 25, 2015 | 7:21 AM
Attention students !!
ONLY SOFT COPY OF DOCUMENTS ARE TO BE ACCEPTED BY TRAINING SECTION OF ICSI
Students are required to submit various documents at Training Section of the Institute of Company Secretaries of India ( ICSI ) at various stages of their training ( viz. applications for issuing of sponsorship letter for undergoing various types of training, Quarterly Reports, Project Reports, NOC, Training Completion Certificate etc).
Further, companies and PCS are also sending their application for registration for imparting training to CS students along with all enclosures, copy of annual report etc.
In view of the above, all students are hereby informed that w.e.f. 1st January 2015, only soft copy ( i.e. scanned copy of original documents ) shall be accepted at Training section of the ICSI. It may be sent at training@icsi.edu mentioning necessary details of the case for reference in the text of the e-mail. A ll the soft copies submitted by the students or by the trainer should be duly signed, certified as true copy. The affidavits and other documents in original be supplied by the students/ trainers as deemed necessary by the Training head or the Chief Executiv e/ Secretary of the Institute. All concerned students / stakeholders are advised to take a note of it.
New Amended Stipend structure for CA Students
Final Notification – Amendment in Regulations 28E, 48 (stipend to articled assistants) and 204 of the Chartered Accountants Regulations, 1988. – (23-01-2015)
No. 1-CA(7)/167/2014.- Whereas certain draft regulations further to amend the Chartered Accountants Regulations, 1988, were published as required by sub-section (3) of section 30of the Chartered Accountants Act, 1949 (38 of 1949), in the Gazette of India, Extraordinary,Part III, Section 4, dated the 10th September, 2014, inviting objections and suggestions from persons likely to be affected thereby, before the expiry of forty-five days from the date on which the copies of the Gazette containing the said notification were made available to the public;
And whereas the copies of the said Gazette were made available to the public on the12th September, 2014;
And whereas the objections and suggestions received from the public on the said draft regulations have been considered by the Council of the Institute;
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 30of the said Act, the Council, with the approval of the Central Government, hereby makes the following regulations further to amend the Chartered Accountants Regulations, 1988,namely:-
1. (1) These regulations may be called the Chartered Accountants (First Amendment) Regulations, 2015.
(2) They shall come into force on the date of their final publication in the Official Gazette.
- In the Chartered Accountants Regulations, 1988 (hereinafter referred to as the said regulations),-
(i) in regulation 28E, in sub-regulation (1), in clause (b), for the words “nine months”, the words “eight months” shall be substituted.
(ii) in regulation 48, in sub-regulation (1), for the Table, the following Table shall be substituted, namely:-
Table
| Classification of the normal place of service of the articled assistant | During the first year of training | During the second year of training | During the remaining period of training |
| (1) | (2) | (3) | (4) |
| (i) Cities/towns having a population of twenty lakhs and above. | Rs. 2000/- | Rs. 2500/- | Rs. 3000/- |
| (ii) Cities/towns having a population of four lakhs and above but less than twenty lakhs. | Rs. 1500/- | Rs. 2000/- | Rs. 2500/- |
| (iii) Cities/towns having a population of less than four lakhs. | Rs. 1000/- | Rs. 1500/- | Rs. 2000/- |
(iii) in regulation 204, for the words “and International Trade Laws and World Trade Organisations” the words, “International Trade Laws and World Trade Organisation and International Taxation” shall be substituted.
[File No. 1-CA(7)/167 /2014]
Sd/-
V. Sagar
Acting Secretary
Original Link- http://220.227.161.86/36524council25906-sas.pdf
- See more at: http://taxguru.in/chartered-accountant/icai-doubles-stipend-payable-students.html#sthash.CfkPeBBg.dpufFinal Notification – Amendment in Regulations 28E, 48 (stipend to articled assistants) and 204 of the Chartered Accountants Regulations, 1988. – (23-01-2015)
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
NOTIFICATION
New Delhi,the 23rd January, 2015
No. 1-CA(7)/167/2014.- Whereas certain draft regulations further to amend the Chartered Accountants Regulations, 1988, were published as required by sub-section (3) of section 30of the Chartered Accountants Act, 1949 (38 of 1949), in the Gazette of India, Extraordinary,Part III, Section 4, dated the 10th September, 2014, inviting objections and suggestions from persons likely to be affected thereby, before the expiry of forty-five days from the date on which the copies of the Gazette containing the said notification were made available to the public;
And whereas the copies of the said Gazette were made available to the public on the12th September, 2014;
And whereas the objections and suggestions received from the public on the said draft regulations have been considered by the Council of the Institute;
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 30of the said Act, the Council, with the approval of the Central Government, hereby makes the following regulations further to amend the Chartered Accountants Regulations, 1988,namely:-
1. (1) These regulations may be called the Chartered Accountants (First Amendment) Regulations, 2015.
(2) They shall come into force on the date of their final publication in the Official Gazette.
- In the Chartered Accountants Regulations, 1988 (hereinafter referred to as the said regulations),-
(i) in regulation 28E, in sub-regulation (1), in clause (b), for the words “nine months”, the words “eight months” shall be substituted.
(ii) in regulation 48, in sub-regulation (1), for the Table, the following Table shall be substituted, namely:-
Table
| Classification of the normal place of service of the articled assistant | During the first year of training | During the second year of training | During the remaining period of training |
| (1) | (2) | (3) | (4) |
| (i) Cities/towns having a population of twenty lakhs and above. | Rs. 2000/- | Rs. 2500/- | Rs. 3000/- |
| (ii) Cities/towns having a population of four lakhs and above but less than twenty lakhs. | Rs. 1500/- | Rs. 2000/- | Rs. 2500/- |
| (iii) Cities/towns having a population of less than four lakhs. | Rs. 1000/- | Rs. 1500/- | Rs. 2000/- |
(iii) in regulation 204, for the words “and International Trade Laws and World Trade Organisations” the words, “International Trade Laws and World Trade Organisation and International Taxation” shall be substituted.
[File No. 1-CA(7)/167 /2014]
Sd/-
V. Sagar
Acting Secretary
- See more at: http://taxguru.in/chartered-accountant/icai-doubles-stipend-payable-students.html#sthash.CfkPeBBg.dpuf
Table
| Classification of the normal place of service of the articled assistant | During the first year of training | During the second year of training | During the remaining period of training |
| (1) | (2) | (3) | (4) |
| (i) Cities/towns having a population of twenty lakhs and above. | Rs. 2000/- | Rs. 2500/- | Rs. 3000/- |
| (ii) Cities/towns having a population of four lakhs and above but less than twenty lakhs. | Rs. 1500/- | Rs. 2000/- | Rs. 2500/- |
| (iii) Cities/towns having a population of less than four lakhs. | Rs. 1000/- | Rs. 1500/- | Rs. 2000/- |
(iii) in regulation 204, for the words “and International Trade Laws and World Trade Organisations” the words, “International Trade Laws and World Trade Organisation and International Taxation” shall be substituted.
[File No. 1-CA(7)/167 /2014]
Sd/-
V. Sagar
Acting Secretary
- See more at: http://taxguru.in/chartered-accountant/icai-doubles-stipend-payable-students.html#sthash.CfkPeBBg.dpuf
Final Notification – Amendment in Regulations 28E, 48 (stipend to articled assistants) and 204 of the Chartered Accountants Regulations, 1988. – (23-01-2015)
No. 1-CA(7)/167/2014.- Whereas certain draft regulations further to amend the Chartered Accountants Regulations, 1988, were published as required by sub-section (3) of section 30of the Chartered Accountants Act, 1949 (38 of 1949), in the Gazette of India, Extraordinary,Part III, Section 4, dated the 10th September, 2014, inviting objections and suggestions from persons likely to be affected thereby, before the expiry of forty-five days from the date on which the copies of the Gazette containing the said notification were made available to the public;
And whereas the copies of the said Gazette were made available to the public on the12th September, 2014;
And whereas the objections and suggestions received from the public on the said draft regulations have been considered by the Council of the Institute;
Now, therefore, in exercise of the powers conferred by sub-section (1) of section 30of the said Act, the Council, with the approval of the Central Government, hereby makes the following regulations further to amend the Chartered Accountants Regulations, 1988,namely:-
1. (1) These regulations may be called the Chartered Accountants (First Amendment) Regulations, 2015.
(2) They shall come into force on the date of their final publication in the Official Gazette.
- In the Chartered Accountants Regulations, 1988 (hereinafter referred to as the said regulations),-
(i) in regulation 28E, in sub-regulation (1), in clause (b), for the words “nine months”, the words “eight months” shall be substituted.
(ii) in regulation 48, in sub-regulation (1), for the Table, the following Table shall be substituted, namely:-
Table
| Classification of the normal place of service of the articled assistant | During the first year of training | During the second year of training | During the remaining period of training |
| (1) | (2) | (3) | (4) |
| (i) Cities/towns having a population of twenty lakhs and above. | Rs. 2000/- | Rs. 2500/- | Rs. 3000/- |
| (ii) Cities/towns having a population of four lakhs and above but less than twenty lakhs. | Rs. 1500/- | Rs. 2000/- | Rs. 2500/- |
| (iii) Cities/towns having a population of less than four lakhs. | Rs. 1000/- | Rs. 1500/- | Rs. 2000/- |
(iii) in regulation 204, for the words “and International Trade Laws and World Trade Organisations” the words, “International Trade Laws and World Trade Organisation and International Taxation” shall be substituted.
[File No. 1-CA(7)/167 /2014]
Sd/-
V. Sagar
Acting Secretary
Original Link- http://220.227.161.86/36524council25906-sas.pdf
- See more at: http://taxguru.in/chartered-accountant/icai-doubles-stipend-payable-students.html#sthash.CfkPeBBg.dpufInspirational Video On CA Course
Written By Views maker on Thursday, May 8, 2014 | 12:35 AM
Execution of irrevocable power of attorney of a property in favour of land developers deemed as ‘transfer’
Written By Views maker on Wednesday, September 11, 2013 | 9:35 AM
Execution of irrevocable power of attorney of a property in favour of land developers deemed as ‘transfer’ Where an irrevocable power of attorney was executed and registered by a housing society, leading to overall control of property in hands of developer, it constituted transfer under section 2(47) In the instant case the assessee was a member of a housing society, which transferred certain land to developers under a Joint Development Agreement (‘JDA’), whereby each member was entitled to monetary consideration and a furnished flat. An irrevocable Special Power of Attorney (‘ISPOA’) was executed in favour of the developers which was deemed as a transfer under section 2(47) by the revenue. But assessee contended that handing over of possession of property was conditional in order to enable the builder to obtain necessary permission from the Governmental agencies, and there was no transfer as per section 2(47). The Tribunal held in favour of revenue as under: 1) Clauses of the ISPOA and JDA clearly showed that the developers were authorized to enter upon the property not only for the purpose of development but for other purposes also; 2) Developers were authorized to amalgamate the project with any other project in the adjacent area or adjoining area as per the special Power of Attorney. The position contemplated by clause (v) of section 2(47) need not be exclusive possession. What is required is that the transferee by virtue of possession should be able to exercise control for intended purposes; 3) In the instant case, the assessee had not given only a license as claimed by the ld. Counsel of assessee, but also the powers of selling, amalgamating, etc, mentioned in the JDA and ISPOA. Section 2(47)(vi) clearly shows that any transaction which has the effect of transferring or enabling enjoyment of any immovable property would be covered by the definition of transfer; 4) Where developers were vigorously pursuing issue of permission/sanction for executing agreement, requirement under section 53A of Transfer of Property Act, regarding willingness of transferee to perform contract, was also fulfilled; 5) Though it is a settled principle of law that notional income can’t be taxed yet in case of capital gain, rigour of tax in case of capital gain would come into play on the transfer of capital asset and total consideration arising on such transfer has to be taxed; 6) Therefore, capital gains tax had to be paid on the total consideration arising on transfer which would include the consideration which had been received as well as the consideration which had arisen and become due and might be received later on - SMT. BINDER KHOKHER V. ACIT (2013) 36 taxmann.com 503 (Chandigarh - Trib.)
CPT exemption
Written By Views maker on Monday, August 6, 2012 | 7:50 AM
It’s official that now graduate and post graduate can directly enter the CA course. The commerce graduate should have a minimum of 50% marks for exemption and others should have 60% marks in their gradation or post graduation. Similarly CS or ICWA inter pass students are also exempted from CPT.
Other conditions:
1. Should have completed at least 9 months of practical training before appearing for Intermediate exams
2. Should have complete the Information technology or computer training before appearing for the Inter Exams