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    Ministry vide The Companies (Meetings of Board and its Powers) Second Amendment Rules, 2014 Dated:14.08.2014, has amended the limits as to transactions as contained in the initial rules, in relation the 1st provisio to Section 188 (1) of the Companies Act, 2013. The revised rules in comparison with the Original rules are herewith reproduced.

    Rule 5A of the Service Tax Rules, 1994 provides for audit under service tax. This provision empowers Commissioner to appoint officer for carrying out audit under Service Tax. As everyone are aware, the recent buzz is that appointment of Departmental Officer for audit under this rule is invalid as it is ultra vires Section 72A which contemplates only special audit by a Chartered Accountant or Cost Accountant. Let’s have a look at this rule before proceeding to discuss on this issue. 

    “5A. Access to a registered premises: 

    • An officer authorised by the Commissioner in this behalf shall have access to any premises registered under these rules for the purpose of carrying out any scrutiny, verification and checks as may be necessary to safeguard the interest of revenue. 
    • Every assessee shall, on demand, make available to the officer authorised under sub-rule (1) or the audit party deputed by the Commissioner or the Comptroller and Auditor General of India, within a reasonable time not exceeding fifteen working days from the day when such demand is made, or such further period as may be allowed by such officer or the audit party, as the case may be,- 
    • the records as mentioned in sub-rule (2) of rule 5; 
    • trial balance or its equivalent; and 
    • the income-tax audit report, if any, under section 44AB of the Income-tax Act, 1961 ( 43 of 1961), for the scrutiny of the officer or audit party, as the case may be.” 

    On perusal of this rule, the following interpretations emanate—

    • Sub-rule(1) empowers Commissioner to authorize an officer for accessing any registered premises to carry out any scrutiny, verification, checks as may be necessary to safeguard the interest of revenue. 

    We all are aware that the services provided to a unit located in SEZ or a developer of SEZ are exempted from service tax by way of Notification No 12/2013-ST dated 01.07.2013 subject to certain conditions, limitations and safeguards as specified in the said notification. 

    The notification provides for ab intio exemption from service tax for such specified services received by SEZ unit or developer which are exclusively used for authorised operations of the SEZ. Further, the service tax pertaining to such services which are not used exclusively for authorised operations of the SEZ shall be allowed by way of refund subject to certain conditions as mentioned below. 

    The said notification vide Para III (a) states that the services which are common to the authorised operations of the SEZ and the operation in the DTA Unit shall be distributed among the SEZ Unit and the DTA Unit in the manner as prescribed in Rule 7 of Cenvat Credit Rules, 2004. That is to say the SEZ unit or developer can only claim refund of the service tax which is in proportion to the turnover of the SEZ Unit and credit of service tax in proportion to the turnover of DTA Unit shall not be allowed. 

    Alternative Minimum Tax (Sec 115JC to 115JF): Finance Act 2011 has introduced payment of Alternative Minimum Tax (AMT) on Limited Liability Partnership. Finance Act, 2012 has extended the scope of AMT by making applicable it to all persons except companies. It is applicable if any person is claiming deduction U/S 10AA, 80IA to 80RRB except 80P and is payable on ‘Adjusted Total Income’ of the previous year. 

    It is applicable where the regular income tax payable for a previous year by a person (other than companies) is less than alternative minimum tax@ 18.5% payable for such previous year, the adjusted total income shall deemed to be the total income of the such person and be liable to pay tax @ 18.5% on ‘Adjusted Total Income’ and increased by surcharge, if any, and education cess. In this regard, in this article, we wish to distinguish the concepts of AMT and MAT as under: 

    Is it right in law in applying the section 50C and section 50 (depreciable assets) while computing capital gains on sale of depreciable assets? 

    Assessee is a partnership firm. It has sold the office building used earlier for business purpose during the previous year. The asset was sold for a consideration of Rs. 49, 43,525/-. The written down value of the said building after claiming depreciation for past years is Rs. 49,43,525/- and hence assessee declared the capital gains as NILL. 

    During the course of assessment proceedings the assessing office noticed that the value of the property as per the stamp duty valuation was Rs. 76, 49,000/-. According to him the full value consideration for transfer of the building is the value adopted for stamp value as per section 50C and after deducting the written down, value the balance amount is taxable as capital gains from transfer of building. 

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