CAs Dr. Raj K. Agarwal and Somil Agarwal have studied the provisions of The Banning of Unregulated Deposit Scheme Act 2019 and pointed out that there is widespread confusion as to whether the taking of all deposits and loans is banned. The authors have dealt with the issue and provided a clear-cut explanation with reference to the statutory provisions

Ordinance issued by the Central Government as on 21.02.2019 titled as ‘The Banning of Unregulated Deposit Scheme Ordinance, 2019’ (No. 7 of 2019)has been substituted by passing the Act by parliament. It provides a comprehensive mechanism to ban the unregulated deposit scheme and to protect the interest of depositors and for matters connected therewith or incidental thereto.

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Advocates Neelam Jadhav & Sashank Dundu of KSA Legal Chambers have prepared a wiki guide on the law under section 14A and Rule 8D relating to disallowance of expenditure incurred for earning tax-free income. The authors have identified in a systematic manner the various controversies which have arisen and also provided ciatations of all important judgements. The authors have assured that the Wiki Guide will be updated on a regular basis so that taxpayers and professionals have access to the updated law at all times. A pdf version of the Guide is also available for download

Introduction

S.14A was introduced to overcome the judgement of Supreme Court in Rajasthan State Warehousing Corporation v. CIT (2000) 242 ITR 450 (SC) wherein it was held that in case of an indivisible business, some income wherefrom is taxable while some exempt, entire expenditure would be permissible deduction and the principle of apportionment would apply only for an indivisible business. Finance Act, 2001 w.e.f. 01-04-1962 introduced the provision. Constitutional validity of the provision is upheld by the Bombay High Court in Goderj& Boyce Mfg Co Ltd v. CIT (2010) 328 ITR 81 (Bom) (HC) observing that Ruled 8D is applicable w.e.f. AY. 2008-09 and subsequent year and same is affirmed in Godrej & Boyce Manufacturing Co. Ltd v. DCIT (2017) 394 ITR 449(SC). Provision of S.14A read with Rule 8D has led to increase in litigation tremendously in the last one decade. To guide the professionals, we have made an attempt to prepare an issue wise list of case laws which may be useful for tax practitioners in their day to day practice.

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The research team of AIFTP Journal Committee and KSA Legal Chambers have prepared a comprehensive digest of all important judgements delivered in the period from January to December 2018. The judgements are sorted section-wise and topic-wise and are accompanied with a crisp summary which provides the precise ratio of each judgement. The Digest will prove invaluable to busy tax professionals and taxpayers

S. 2(1A) : Agricultural income-Mushroom is not a ‘vegetable’, ‘plant’, ‘fruit’ or ‘animal’ but is a ‘fungus’. Anything which is produced by performing basic operations on the soil is an “agricultural product” and the income therefrom is “agricultural income”. The nature of the product and the fact that it is not a ‘plant’, ‘flower’, ‘vegetable’ or ‘fruit’ is irrelevant. The only relevant aspect is whether the production is by performing some basic operations on the soil. Accordingly the income from production and sale of Mushrooms can be termed as ‘agricultural’ income.[S. 10(1)]
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Sr. Advocate Firoze Andhyarujina has conducted a comprehensive analysis of the various provisions in the Income-tax Act relating to eradication of Black Money. He has focused on the menance of bogus share capital/ premium and bogus capital gains through penny stocks. He has also explained the impact of GAAR on these transactions. All the important judgements on the subject have been referenced

INDEX

1. Year of credit for section 68.

2. Recent Judgment of Supreme Court in CIT v. NRA Iron and Steel Pvt Ltd ( 2019) 412 ITR 161 (SC) – Share capital / share premium.

3. Brought forward loss eligible for setoff u/s.68.

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CA Shweta Ajmera has explained the concept of “blockchain” in a manner in which lay persons can understand it. She has pointed out that “blockchain” is already being widely used in several countries. She opines that the concept could prove to be a compliance revolution for transactional taxes such as transfer pricing, VAT, withholding tax, stamp duties, insurance premium taxes etc and it is only a question of time before India adopts it

1. Introduction:

1.1 The underlying technology of cryptocurrencies- as the Internet of value. For nearly four decades we have internet of information. It vastly improved the flow of data within and among firms and people, but it has not transformed how we do business. That’s because the Internet was designed to move information-not value from person to person. When we email someone a document or photograph or audio file, we’re really sending a copy of our original. This information is abundant, unreliable and perishable. Anyone else can copy, change and send it to somebody else. In many cases, it’s legal and advantageous to share these copies.

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CA Ashish Chadha has pointed out that the increased use of cloud-based services has led to cross-border tax implications for the suppliers and the customers. He has analyzed various types of cloud services such as ‘accounting serves’, ‘database’, ‘storage’, ‘support services’ and examined whether the income therefrom can be assessed as “royalty’, ‘fees for technical services’ or ‘business profits’ under the DTAAs and international tax law

Cloud computing, also referred to as ‘the cloud’, is the delivery of on-demand computing resources over the Internet. The cloud has brought out an elementary change in the way information technology (‘IT’) services are developed, maintained, deployed, updated and paid for. Cloud-based services are fattening in both the business sector and among users. Companies that seek greater IT efficiency and reduction of their capital costs are moving towards the cloud. The users opt for cloud-based applications to store their digital content that they wish to share and access on multiple devices.

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CA Sunil Maloo has analysed the Interplay between the Income Tax Act, 1961 and The Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015. He has explained the recent controversy, summary of the legal provisions and also offered valuable advice based on his practical experience of working on Direct tax litigation and Settlement Commission cases

1. Taxation of Undisclosed Foreign Income and Assets (including financial interest in any entity) has been very close to the heart of the Indian Law Makers throughout past one decade. To tackle with this issue, following actions have been taken by the parliament–

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Dr. Sunil Moti Lala, Advocate, has conducted a detailed study of the provisions of the Income-tax Act relating to ‘Base Erosion and Profit Shifting’ (‘BEPS’), General Anti Avoidance Rule (‘GAAR’) and other critical issues affecting the global arena. Based on this study, he has offered 25 suggestions which can be incorporated in the impending Finance Bill

Background w.r.t. BEPS and GAAR

BEPS – Global Initiative

International tax rules have not always kept up with the development in the world economy and globalisation has increased the need for countries to cooperate with each other to protect their sovereignty on tax matters.In 2013, the shifting of profits by Multi-National Enterprises (MNEs) had gained unprecedented political significance and rightly so.

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Dr. Sunil Moti Lala, Advocate, has prepared a Digest of 4000 Important judgments on Transfer pricing (1150 cases), International Tax (200 cases) and Domestic Tax (2650 cases) pronounced in the period January 2018 to December 2018. The author has meticulously and systematically classified the judgments into various categories to enable ease of reference. A PDF copy of the Digest is available for download. He has also given the appeal numbers in all cases so as to enable the judgements to be retrieved from the website of the respective Court or Tribunal. The digest will prove invaluable to all practitioners of taxation law

The Digest comprises of all the important judgements dealing with transfer pricing, international taxes and domestic taxation laws. A brief head note is given for each case. The Digests for the earlier periods are available here

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In Mangathai Ammal vs. Rajeswari, the Supreme Court has explained the law on statutory presumption and burden of proof in the context of the 1988 Act as well as the 2016 amendment. It has also considered whether the said amendment can be treated as retrospective and applicable to earlier transactions. Advocates Ashwani Taneja & Renu Taneja have highlighted the salient points of the judgement and explained its practical relevance

Case Analysis of recent judgment of the Supreme Court in the case of Mangathai Ammal (Died) through LRs &Ors. vs Rajeswari & Ors. (Civil Appeal Number 4805 of 2019)

The above said judgment passed by the Supreme Court, as recent as on 9th May 2019, is of great significance for many reasons.

Firstly, it has upturned and reversed the findings of both the lower authorities i.e. the Trial Court as well as the High Court.

Secondly, in this process it has given fine principles of jurisprudence dealing with the Benami Law.

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