Sec. 54 relief allowed as two houses were acquired instead of one big house to avoid disharmony among children

Facts:

The assessee sold his house and invested the capital gains from sale of house in purchasing two independent residential houses for his two sons. 

The issue for consideration of High Court was:

Whether exemption under sec. 54 would be available in respect of two separate residential houses acquired out of capital gains?

The High Court held in favour of assessee as under:

1)  It was open to the assessee to purchase a big residential house out of the sales consideration so as to accommodate his two sons and avail of exemption under section 54. Instead, he chose to purchase two small residential houses to avoid any litigation or disharmony;

2)  The context in which the expression "a residential house" is used in section 54 makes it clear that it was not the intention of the Legislature to convey the meaning that it referred to a single residential house;

3)  The singular 'a residential house' also permits use of plural by virtue of section 13(2) of the General Clauses Act. Therefore, the acquisition of two residential houses by the assessee out of the capital gains would fall within the phrase 'residential house' and, accordingly, the assessee would be entitled to the benefit undersec. 54(1);

4)  However, while interpreting this word, the authorities have to keep in mind the facts of the particular case. When we hold 'a' could not be read as singular, it also could not be read as multiples and so as to avoid paying taxes. – CIT v. Khoobchand M. Makhija[2014] 43 taxmann.com 143 (Karnataka)

HAPPY HOLI

No TDS from salary paid to NR working on a foreign ship for less than 90 days as it is exempt under sec. 10(6)(viii)

Payments made to foreigner-crew member of ship who had worked for a period of less than 90 days in India, were not income of employees in India liable to TDS.

Due date of payment of last installment of advance tax extended till March 18, 2014

DATE OF PAYMENT OF THE MARCH INSTALMENT OF ADVANCE TAX EXTENDED FROM 15TH MARCH 2014 TO 18TH MARCH 2014

The final instalment of Advance tax for Financial Year 2013-14 is required to be paid on or before 15th March, 2014 by the tax payers who are liable to pay advance tax. These taxpayers can make payments in the designated branches of the authorized banks, electronically or physically, as per law. The banks are open for half day on 15th March, 2014, being a Saturday. Accordingly, to facilitate payment of this instalment of Advance tax for the Financial Year 2013-14, the Central Board of Direct taxes (CBDT) has issued an order to extend the time limit to make such payments of Advance Tax, from 15th March, 2014 to 18th March, 2014. Taxpayers, therefore, can now pay their advance tax instalment by 18th March, 2014 without entailing any consequential interest for deferment.

Presumptive taxation under Sections 44AD, 44AE and 44AF

Sections 44AD, 44AE and 44 AF cover special provisions of computing profits on a presumptive basis. All the schemes are optional at the discretion of the assessee. Conditions and manner of computation common to all three sections are given at the end after specific provisions applying to each section.

ADVANCE TAX DUE DATE ADVANCE TAX CHALLAN INTEREST ON LATE DEPOSIT

Who is responsible to pay Advance Income Tax

The provisions of advance tax are applicable on all types of persons irrespective of the residential status of the person.

Senior citizen exempted from advance tax
W.e.f.  Financial year i.e 2012-13(assessment year) ,Resident Senior citizens (age 60 years on or before end of previous year) are exempted to deposit Advance Income Tax ,if they do not have income from business and profession.

OECD – New single global standard on automatic exchange of information

Offshore tax evasion remains a serious problem for countries and jurisdictions worldwide, with vast amounts of funds deposited abroad and sheltered from taxation when taxpayers fail to comply with obligations in their home countries. 

Responding to a mandate from G20 leaders to reinforce action against tax avoidance and evasion and inject greater trust and fairness into theinternational tax system, the OECD has unveiled today a new single global standard for the automatic exchange of information between tax authorities worldwide.

New Rules of Corporate Social Responsibility

Introduction: Corporate Social Responsibility (CSR) is attracting the attention of every Company andstakeholders. CSR activities are not new but it has been recently the mostly discussed or debated topic for the reason that companies Act has made it mandatory for certain companies to spend 2% of average net profits of 3 preceding financial years. Many companies consider CSR activities as philanthropic act towards society and do not want the Government to exert pressure on them to spend compulsorily 2% of average net profits of preceding 3 financial years. Finally Section 135 of Companies Act, 2013 (CA, 2013) and new CSR rules have been notified by the Ministry of Corporate affairs for implementation. This Article analyses the provisions of Section 135 and new rules framed under the CA 2013.

IMP - No sec. 41(1) addition even if debt remained due for certain years unless there was cessation of liability

IT: Where assessee in return of income for assessment year 2007-08 had shown certain amount by way of his debts and Assessing Officer applying provisions of section 41(1) added back said amount in income of assessee as deemed income, since there was nothing on record to suggest that there was remission or cessation of liability that too during assessment year 2007-08, above amount could not be added back in income of assessee

IT:Reply given by Income Tax Dep. in regard to difficulties in the system on 18 points

Sl. No.	Point discussed	Reply / comments of the Deptt.
1.	Credit for TDS when income is offered in the subsequent year following cash method of accounting.  This problem is not only arising in the case of professionals but also in the case of bank/post office interest on fixed depoists	W.e.f. 01.04.2014, DG (Systems) will introduce a system according to which an assessee will be required to mention TDS Certificate number and he may claim credit either fully or partly for a certificate or may not claim credit in that year. System will carry forward credit of TDS not claimed and same can be claimed in the subsequent year when the income is offered to tax.