Issue #119



Time is Precious

India uniquely positioned to benefit from cloud in 2017

As enterprise cloud is expected to become the most secure place for IT processing with nearly 60 per cent IT organisations to move their systems management to the cloud in 2017, India will be among top beneficiaries from cloud computing. Increased government spending on digital technologies, coupled with heightened demand from the private sector, continues to be a great boost for the industry.Data security & control issues will be the reasons for which cloud will be preferred over data centeres.

Donald Trump immigration ban: Tech companies to challenge the in court now

Tech companies, brought together by GitHub are reportedly planning to meet in order to discuss filing an Amicus brief to support a lawsuit against the President’s order of a ban on immigration from 7 Muslim major countries. The tech world appears to be the biggest loser visavis the ban and the giants are trying to find the best way to counter the decision. This includes strong stances and statements from major tech leaders and also financial support for organisations which back immigrants. Trump’s order of banning immigrants from seven Muslimmajority countries has caused a chaos among people who are trying to enter the US, and as a response, the technology giants have come out to protest.

  • Indian IT company’s stock falls 9% over US visa concerns.
  • Remonetization to end cash crunch by April’17: Economic Survey.
  • IT Dept sent 87 notices under new Benami Transaction Act.
  • GST PAN card must for excise,service tax payers to migrate to new income tax regime.
  • Tax refunds to exporters under GST in seven days.
  • ICAI launches it’s first Cost & Management Accounts lab.
  • RBI permits Paytm to launch it’s Payments Bank.
  • Real Estate sector pins hope on Union Budget.
  • Reserve Bank prohibits investment in ‘noncooperative’ countries.


International Section

Deutsche Bank fined $630 million for money laundering in Russia.

German lender Deutsche Bank has been fined nearly $630 million over alleged money laundering in Russia worth $10 billion. Deutsche Bank will also be required to hire an outside monitor to review its internal compliance measures. The fine comes after the bank recently finalised a $7.2 billion settlement over its role in 2008 finacial crisis.

US tax reforms could transform global oil market: Goldman Sachs

The push by Republicans in the US House of Representatives for a shift to borderadjusted corporate tax (BTA) could push US crude prices higher than the global benchmark Brent, triggering largescale domestic production, according to analysts at Goldman Sachs.


Budget 2017
Tax proposals, Railways & Political Funding, here are the key takeaways

Here are the key takeaways from FM Arun Jaitley’s speech:
• International Monetary Fund estimates that the world GDP will grow by 3.1% in 2016 and 3.4% in 2017. The advanced economies are expected to increase their growth from 1.6%1.9% and emerging economies from 4.1%4.5%.
• The focus of the budget are in these areas: Farmers, rural population, youth, poor and underprivileged, infrastructure, financial sector, digital economy, public service, fiscal management and tax administration.

Tax proposals:
• We are largely a tax noncompliance society when too many people evade taxes burden falls on those who are honest.
• We are committed to making our taxation rate reasonable more fair & expand the tax base of the country.
• TaxtoGDP ratio very low in India.
• Tax rate if income of Rs 2.5 to 5 lakh will be reduced to 5%.
• 50 percent saving in income tax on earning upto Rs 5 lakh.

• Total FY18 disinvestment target seen at Rs 72,500 Crore Vs Rs 56,500 Crore (YoY).
• Total Tax revenue seen at Rs 12.27 Lakh Crore.
• Gross Market borrowing seen at Rs 6.05 Lakh Crore.
• Revenue receipts seen at Rs 15.16 Lakh Crore.
• To levy surcharge of 10 percent on income between Rs 50 Lakh to Rs 1 Crore.
• Out of 3.7 crore who filed tax returns in 201516, only 24 lakh persons showed income above Rs 10 lakh.
• New law for defaulters, proposed.
• Net Tax Revenue Growth At 17% For Last 2 Years.
• Post demonetisation deposits between Rs 280 lakhs made in 1.09 crore accounts.
• Thrust of Tax proposals will be to stimulate growth.
• Propose to make changes in capital gains tax for housing.
• Holding period for land & building will be reduced to 2 years from 3 years.

Other announcements:
• Fiscal Deficit target for 201718 is 3.2%.
• Total resources being transferred to the states & union territories with the legislature is Rs 4.11 lakh crore.
• Defence expenditure excluding pension at Rs 2.74 lakh crore.
• Total expenditure of budget 201718 has been placed at Rs 21.47 lakh crore.
• Aadhar enabled payment system to be launched soon; Banks have targeted to introduce additional 10 lakh PointofSale terminals by Mar’17.
• Demonetization seeks to create a new normal where in the GDP would be bigger, cleaner and real.


Content right to :eJurix


Commissioner Of Income Tax Delhi Iv Vs. Dlf Universal Ltd. (HCDelhi)(21 Dec, 2016)

Held: The change in the accounting method in 199293 ipso facto could not have resulted in loss of revenue as is urged by the tax authorities in the present case. The distortions, which the revenue urges relate to the treatment of development charges as well as the treatment of expenditures such as brokerage, commission and interest payments. The assessee's explanation here is that the 30% of the sums realized by it were under compulsion of law to be treated as development expenses and kept in a separate escrow account under the control of the HUDA. The revenue has not disputed this position. In that sense, the assessee was justified by statute to appropriate the sums towards development expenses. Having regard to the assessee's uniform pattern of revenue recognition that only upon execution of the conveyance/sale deed, would the amounts lying with it be treated as profit and brought to tax, the possibility that in law certain flat or plot buyers could be handed over possession earlier per se would not result in distortion of the kind stated by the revenue. Appeals dismissed


Laxmi Automatic Loom Works Ltd. Vs. Deputy Commissioner Of Income Tax (Recovery) And Anr. (HCDelhi )(5 Dec, 2016)

Held: Though the modified scheme was issued in 2009, the consideration and grant of relief took place on 29.12.2012 by the income tax authorities when they actually took note of the projections. It is a matter of record that the company achieved net worth and had in fact moved out of the rehabilitation phase in 2011. That was the rationale for this Court's decision on 15.02.2016 that those actual figures should be taken note of. It is here that the company's functioning became material. The income tax authorities now feel that whilst the decision of carry forward was justified, the figures now based upon the functioning after rehabilitation reveal a different story, i.e. that the company has funds and that there was less than half the projected profits for a certain period having regard to the modified scheme. A direction is issued to the respondents not to charge interest or penalty on the capital gains tax amounts in the circumstances of the case for the duration that the matter remained pending in these proceedings and all prior proceedings. Writ petition allowed.

Maharao Bhim Singh

Maharao Bhim Singh of Kota Thr. Maharao Brij Raj Singh, Kota Vs. Commissioner of Incometax, RajasthanII, Jaipur. (SC )(5 Dec, 2016)

Held: In Section 10(19A) of the I.T. Act, the Legislature has used the expression "palace" for considering the grant of exemption to the Ruler whereas on the same subject, the Legislature has used different expression namely "any one building" in Section 5 (iii) of the Wealth Tax Act. It is a settled rule of interpretation that if two Statutes dealing with the same subject use different language then it is not permissible to apply the language of one Statute to other while interpreting such Statutes. Similarly, once the assesses is able to fulfill the conditions specified in section for claiming exemption under the Act then provisions dealing with grant of exemption should be construed liberally because the exemptions are for the benefit of the assesses.Principle of res judicata does not apply to incometax proceedings and each assessment year is an independent year in itself, yet, in the absence of any valid and convincing reason.There should be a finality attached to the issue once it stands decided by the higher Courts on merits. Appeal allowed.


Pay As You Go

Pay as You Go Model (Only pay for what you want!!!)

Coke in India was not going where it planned to when it introduced its flagship product for the first time in the early nineties. Reason? Pricing. Some deft calculations later, an unexpectedly simple solution emerged: reduce quantity and reduce prices! Result? Sales shot thru the roof! They have never looked back ever since.
The above is not an isolated incidence. India is replete with such instances. Another example which ought to be mentioned here is that of shampoo sachets. Started by a relatively unknown SSI unit in Tamil Nadu, it is now a textbook case in prestigious Management Institutes worldwide.
At first glance, these examples may seem outofplace in the world of industry and technology. Read between the lines, they bring out an essential fact of life which affects industry as much as any individual. Funds…called money in general parlance! The richest to the poorest, all crave for it and are perennially short of it.

And this is where the above stories make sense. They are about asking you to spend only as much as is needed….and affordably!
Welcome to the world of cloud computing where you get the technology equivalent of a shampoo sachet at similar prices! The best product at the least prices! Pay for exactly what and when you want!
Technology products, be it a car or a computer differs from the likes of shampoos and pickles. They need constant backup, servicing and upgrades which shampoos, pickles and their like do not need. How does one guarantee that?
Being a shared user experience, cloud computing by its very nature has services such as upgrades, security, multiutility and similar needs built into the product. You pay for exactly what you use and do not bother about extraneous factors which are taken care of by the service provider.
Since it is about multiusers, size is what comes in and along comes the latest technology and lowest prices. Replicating this at one’s end would be an expensive, timeconsuming task. In any case, if this is not your breadandbutter activity, why bother? Do what you can do best….for the rest, there are specialists like MindChipps of Pune!
Greek Philosopher Plato once said Each man is capable of doing one thing well. If he attempts several, he will fail to achieve distinction in any. This, essentially sums up all that cloud computing stands for! Nothing more needs to be said.Btw, Check latest offering Ask a Query which leverage Pay as you Go model, for all your needs related TaxLegal information with Citation!


We are reaching out !!!

Budget 2017

Teacher: Whoever answers my next question, can go home.
One boy throws his bag out the window.
Teacher: Who just threw that?
Boy: Me and I’m going home now.

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