CA Final Results Analysis May 2011 : Passing Trends

Exam	Group I			Group II			Both Group
	Appeared	Passed	Pass %	Appear	Passed	Pass  %	Appear.	Passed	Pass %
May-11	48,548	17,641	36.34	53,766	14,338	26.67	32,419	6,649	20.51
Nov-10	41,302	9,911	24.00	45,955	7,034	15.31	28,430	2,802	9.86
Jun-10	28,889	4,063	14.06	35,187	3,235	9.09	20,666	945	4.57
Nov-09	25,224	5,011	19.87	30,641	3,099	10.11	18,502	1,454	7.86
Jun-09	25,848	8,379	32.42	27,840	4,185	15.03	18,625	2,579	13.85
Nov-08	21,176	5,892	27.82	23,856	5,762	24.15	14,614	2,926	20.27
May-08	17,552	6,444	36.71	18,685	5,290	28.31	10,580	2,645	25.00
Nov-07	16,137	6,353	39.37	16,493	5,005	30.35	8,654	2,446	28.26
May-07	15,083	2,289	15.18	15,874	2,777	17.49	7,467	1,023	13.70
Nov-06	14,587	5,505	37.74	16,947	6,555	38.68	6,830	1,830	26.79
May-06	15,355	5,832	37.98	17,952	5,718	31.85	7,053	1,608	22.80
Nov-05	15,902	5,039	31.68	20,085	5,772	28.74	7,620	1,348	17.69
May-05	18,211	5,748	31.56	20,513	3,520	17.16	8,650	1,243	14.37
Nov-04	16,645	4,089	24.57	20,448	4,484	21.93	7,666	939	12.25
May-04	20,724	7,011	33.83	21,364	3,354	15.70	9,770	1,490	15.25
Nov-03	19,501	4,450	22.82	20,377	4,381	21.50	8,597	1,076	12.52
May-03	20,290	4,469	22.03	18,692	2,203	11.79	7,943	802	10.10

HUF is a Relative for Gift Exemption

HUF is a “relative” for gifts exemption u/s 56(2)(v), (vi) & (vii).

Vineetkumar Raghavji Balodia vs. ITO (Rajkot ITAT)

Remission of Liability u/s 41

Non-encashment of cheques within validity period would not mean that debt had been extinguished and section 41 would apply. (KOL) 

Reopening u/s 147 : Enhanced Scope

In course of income escaping assessment initiated under section 147 for bringing to tax an item of escaped income, Assessing Officer has authority to bring to tax any other income that also escaped assessment in original assessment.

CIT vs. Best Wood Industries & Saw Mill (Kerala HC)(2011)  

Case Study - CA FINAL - MAY 2011 - Indirect Taxes

Friends .....You can download the latest case decision applicable for May 2011 term from the following link

http://www.caclubindia.com/share_files/case-study-ca-final-may-2011-indirect-taxes-37244.asp

In case of any difficulty, please mail me on bikashbogi@yahoo.co.in. Please go through the full facts of the decision before applying in practical situations of your clients.

CASE STUDY - CA FINAL - DIRECT TAXES - MAY 2011

Friends

You can download the latest case decision applicable for May 2011 term from the following link

http://www.caclubindia.com/share_files/case-study-ca-final-may-2011-direct-taxes-34622.asp

In case of any difficulty, please feel free to mail me on bikashbogi@yahoo.co.in

AMENDMENTS - DIRECT TAXES - CA FINAL - MAY 2011

Friends

you can download the amendments of Direct Taxes applicable for CA FINAL May 2011 in the given link

http://caclubindia.com/share_files/amendments-ca-final-direct-taxes-may-2011-36488.asp 

In case of any query or having problem in download, feel free to mail me on bikashbogi@yahoo.co.in

BUDGET 2011 : EXCISE / CUSTOMS

EXCISE / CUSTOMS

EXCISE:

Ø  Merit rate of CENVAT for non-petroleum goods has been increased from 4% to 5%. This would impact items such as medical equipment, drugs and food products.

Ø  Excise duty exemption on 130 items withdrawn and 1% excise imposed subject to non-availment of CENVAT credit.

Ø  Full exemption from duty withdrawn on IT products such as micro processors for computers etc. The products will now be subject to 5% excise duty.

Ø  Duty rates on cement changed from specific rate to ad valorem.

Ø  Full exemption granted to equipment (air-conditioning/conveyer belt) for used for cold storage.

Ø  Excise duty on packaged software to be levied on media value, where not governed by MRP provisions.

CUSTOMS:

v  Self-assessment in the Customs Act, 1962 both for imported goods and exported goods.

v  Definition of ‘Completely Knocked Down’ added for concessional customs duty under project imports.

v  CVD on packaged software to be levied on media value, where not governed by MRP provisions.

v  BCD @2.5% levied on import of aircraft by non scheduled operators.

v  Exemption from BCD, SAD and CVD @5% on specified parts of hybrid vehicles.

v  All clearances (manufactured or traded) from SEZ to DTA exempt from SAD provided VAT/CST is not exempt.

v  Exemption from full customs duty on parts, component and accessories for manufacture of PC connectivity cables/ battery chargers/hands free headphones of mobile handsets.

v  Time limit for filing of refund claim/ issuance of show cause notice extended from 6 months to 1 year.

CENVAT CREDIT:

ü  Definition of inputs and input services has been amended to exclude inputs/ input services used for construction of building/civil structure, laying of foundation, etc.

ü  Definition of inputs to include goods cleared for free warranty.

ü  Definition of input services amended to exclude trading activity.

ü  Inputs and inputs services primarily used for personal use or consumption of

employees excluded.

ü  Input services such as outdoor catering, health insurance, life insurance, etc. Has been specifically excluded.

ü  Credit required be reversing when inputs or capital goods have been partially or fully writing off in the books of accounts.

ü  Definition of inputs and input services has been amended to exclude inputs/ input services used for construction of building/civil structure, laying of foundation, etc.

ü  Rule 6 (5) of the Credit rules has been omitted. Now the manufacturer or service provider is eligible to claim proportionate credit on all services attributable to taxable activity in terms of Rule 6(3A).

ü  The amount payable on exempted services (when credit on common inputs/input services has been claimed) has been reduced from 6% to 5%.

ü  The restriction on credit under Rule 6 is not applicable in case the taxable services are provided without payment of service tax to SEZ unit/zone/ developer.

BUDGET 2011 : SERVICE TAX

SERVICE TAX

Ø  Rate of Service Tax retained at 10% to create foundation for GST.

Ø  Service Tax Refund / Exemption to SEZ Units rationalized & clarified.

Ø  2 New services introduced

»        Services by air-conditioned restaurants having license to serve liquor; and

»        Short-term accommodation in hotels / inns / clubs / guest houses etc

Ø  Scope of following existing services expanded:

»        Authorized Service Station service: To cover all persons and all motor vehicles other than those meant for goods carriage or three wheeler auto rickshaw

»        Life Insurance Services: Services provided by Life Insurance Companies in the area of investment also brought within the ambit of Service Tax.

»        Commercial Training or Coaching Services: Scope expanded to include all coaching and training that is not recognized by law.

»        Club or Association Services: Services provided to non-members covered

»        Business Support Services: Scope expanded to include operational and administrative assistance of any kind.

»        Legal Consultancy Services: Services provided to individuals covered and representation services provided by any person to business entities covered under Service Tax net.

»        Health Services: Scope of health services expanded in respect of clinical establishment having central air-conditioning facility in any part of the establishment and more than 25 beds for in-patient treatment.

Ø  Point of Service Tax Rules, 2011 introduced to determine the point of time when the services shall be deemed to be provided to determine rate of Service Tax.

Ø  Individual and sole proprietors provided relief from Service Tax audit by Department subject to having turnover less than INR 60 lakhs.

Ø  Penal provisions rationalized to encourage voluntary compliance.

BUDGET 2011 : DIRECT TAXES

DIRECT TAXES

TAX RATES – INDIVIDUALS

Ø  Basic exemption limit raised to INR 180,000.

Ø  Women - Basic exemption limit raised to INR 190,000. (No change.)

Ø  Senior Citizen - Basic exemption limit raised to INR 250,000. Qualifying age reduced from 65 to 60 yrs

Ø  Very Senior Citizen (> 80 yrs) - Basic exemption limit raised to INR 500,000.

CORPORATE

Ø  Surcharge – For domestic companies reduced from 7.5% to 5%. For non-domestic cos, reduced from 2.5% to 2%. Basic tax is the same.

SALARY

Ø  Salaried tax payers exempted from filing return of income, subject to fulfilment of certain conditions

Ø  Contribution made under section 80CCE (New Pension Scheme) to be excluded from the limit of INR 1 Lac. Further deduction of such amount applicable to the employer. (restricted to 10% of the employee’s salary)

INVESTMENT LINKED DEDUCTION UNDER SECTION 35AD

Ø  Removal of term “new” from existing definition of specified businesses (only hotel and hospital) claiming 100% deduction under section 35AD. Thus losses under section 73A for such businesses to be freely allowed to be set off. Applicable from AY 2011-2012

Ø  2 additional businesses – “affordable housing projects”, “production of fertilizers” eligible for investment linked deduction (100%) under section 35AD. Applicable from AY 2012-2013.

MINIMUM ALTERNATE TAX (‘MAT’) AND DIVIDEND DISTRIBUTION TAX (‘DDT’)

Ø  MAT rate proposed to be increased to 18.5% on book profits.

Ø  Proposed to introduce sunset clause in the existing MAT exemption in the case of SEZ Developers and units in SEZ. MAT to be applicable to such units w.e.f AY 2012-13.

Ø  MAT made applicable to Limited Liability Partnerships. Set off of MAT tax  available against tax payable under normal provisions subject to certain conditions.

Ø  Proposal to discontinue exemption from DDT in the case of SEZ Developers and units in SEZ w.e.f 01.06.2011.

SUNSET CLAUSES FOR SECTION 80-IA/IB PROVISIONS (PROFIT LINKED) / SECTION 10

Ø  Terminal period for claiming deduction under section 80-IA, for any entity engaged in “generation and distribution of power, transmission or distribution of network lines”, extended to 31 March 2012.

Ø  In case of commercial production of mineral oil – 7 years profit linked deduction to continue except for contracts awarded under a government of India scheme.

Ø  Section 10B – No extension has been granted for the existing STPI units.

TRANSFER PRICING

Ø  Standard deduction of variation of 5% on arm’s length price outdated. New variation to be notified. Applicable from AY 2012-13 onwards.

Ø  TPO to determine the arm’s length price of additional international transactions other than those referred by the AO.

Ø  Additional powers of survey conferred on the TPO. Applicable from 01.06.2011

Ø  Filing of Accountant’s Report in Form No. 3CEB extended to 30 November. (w.e.f 01.04.2011) Applicable to A.Y . 2011-12

SETTLEMENT COMMISSION

Ø  Entities on whom search is initiated can file an application before the settlement commission if additional tax payable on disclosed income exceeds INR 50 Lacs.

Ø  Entities related (to be defined) to a tax payer on whom the search is initiated would be allowed to file an application before the settlement commission if additional tax payable on disclosed income exceeds INR 10 Lacs. Such entities should also be subject to search proceedings.

FOREIGN TAXATION:

Ø  Anti avoidance measures: New Section 94A introduced w.e.f 01.06.2011 to deal with transactions undertaken with persons located in any country or jurisdiction which does not effectively exchange information with India.

Ø  Currently dividend received from foreign subsidiary company is taxed at maximum marginal rate. This rate is amended now to be taxed at 15 percent (plus surcharge as applicable). Applicable w.e.f AY 2012-2013.

Ø  New measures introduced to facilitate prompt collection of information on requests received from tax authorities outside India.

Ø  The proposal for providing document identification number for any correspondence made by the tax officer to be implemented w.e.f 01.07.2011 is done away with.

Ø  Liaison offices to file annual information report within 60 days of end of financial year. Applicable from 01.06.2011

General

Ø  Existing monetary limit of INR 10 Lacs enhanced to INR 25 Lacs for entities to be treated as not involved in charitable activity under section 2(15).

Ø  Section 10 amended to include tax exemption to an income earned by an entity engaged in any activity for the benefit of general public excluding commercial activity.

Ø  Income earned by an infrastructure debt fund will be fully exempt.

Ø  Section 35(2AA) amended to increase the weighted average deduction from 175% to 200% towards any sum paid for approved scientific research programme

Ø  Mutual Funds to be liable to pay additional income tax on distributed income

Ø  25 percent for an individual and 30 percent for others. (money market fund or liquid fund)

Ø  12.5 percent for an individual and 30 percent for others. (debt fund)

Ø  Equity oriented funds continue to enjoy the tax exemption

Service Tax : Renting of immovable Property

Burden of service tax levied on service or facility of leasing of premises should be borne by lessee (user).
If the overall objective of the levy - as explained by the Supreme Court, were to be taken into consideration, it is the service which is taxed, and the levy is an indirect one, which necessarily means that the user has to bear it; the rationale why this logic has to be accepted is that the ultimate consumer has contact with the user; it is from them that the levy would eventually be realized, by including the amount of tax in the cost of the service (or goods).

Pyarelal Bhavan Association vs. Satya Developers Delhi High Court.

Speculative Transactions : Trading in Shares

Transaction of the purchase and sale of shares cannot be regarded to be speculative transaction u/s 43(5) in case same is settled through actual delivery through demat account of investor.

Jahanganj Cold Storage  ITAT, AGRA BENCH (THIRD MEMBER)