update
TG
Jan 12
cgt
Section 54 places thrust on investment & not on completion
Section 54F exemption cannot be denied for mere delay in completion of construction
AT
itatonline
BL
TG
Added complicity.
wprt
Sec 194 IA
ICAI President’s Message – August 2014
ICAI invites suggestions on revised formats of Form Nos. 3CA, 3CB and 3CD
AT
Commonwealth Games Village flats soon to be auctioned
mc
http://www.moneycontrol.com/news-topic/retrospective-tax-amendment/
Bears out self-contradiction galore ???
TG
To be Read in conjunction with Sec 54 , 54 F, 54EC, as amended by Budget 2014 !
BS
Read More
Q
UQ
Taxmann
TG
Write-up @ Taxguru.com
http://taxguru.in/income-tax/finance-2-act-2014-retrospective-amendments.html
For Ready Reference / Reading:
Finance (No. 2) Bill, 2014 - A study
V Swaminathan B.Sc. B.L., FCA
INTRODUCTION
The Finance (No. 2) Bill, 2014 makes for the maiden fiscal enactment of the newly installed government.
The point of intriguing poser, for an insightful scrutiny, is this: - Is the Act absolutely free from 'retro activity', as sought to be made out in officialdom , besides among the legal and other circles?
Prologue
Almost everyone, including active and proactive professional tax advisers- mainly, lawyers and CAs, having something to do or other with the Budget proposals of the newly installed government, have sought and brought to focus the 'highlights'. Even so, it is sad to observe that, in so doing, in one's conviction, some of the deficiencies, hidden or otherwise, it is noted, have not been even touched upon, for reasons not known. One such aspect that appears to have been simplistically glossed over, despite it being of the most concern to the tax payers relates to 'retrospective' changes in the law. So much so, by and large, the impression floated around, unwittingly or otherwise, in learned circles is that if were to go by the effective dates specified, the empowered ministries in general, and the Revenue in particular, have done their best to live up to the repeated assurance to do away with the age old obnoxious weakness of retrospective legislation - which the towering legal luminary/tax expert of our own times (’Nani’) was never tired of referring to and ridiculing remorsefully as, ‘change mania’, ‘obsessive attitude’, the historical fact of successive governments failure to save the tax payer from being made the victim of ‘palpable injustice’, and so on. But, it seems that is not a well-founded impression.
REASONING for saying so :
With reference to the specific amendments made in the 2014 fiscal budget (since enacted) , of section 54 and 54 F of the IT Act, a view has been floated around in certain quarters . That is to the effect that the Finance Minister has now tweaked 'this section' (reference is to section 54) to specify that only “ONE residential house in India” would be eligible for the tax break, and not more than one. (BOLD FONT SUPPLIED)
According to a seemingly well reasoned analysis in a published article*, the recent amendments made are with a view to set at rest the till now on-going controversy, and the mutually contradicting judicial opinion, on the erstwhile (before amendment) provisions, on two facets, not just one; That is, in order to set at rest the raging controversy on, -
(1) the meaning of 'a' ; and
(2) whether residential house, even if situate 'outside india', should qualify for the CGT exemption..
Be that as it were, the amendment, to reiterate, in own individual perspective, seemingly suffers from a malady, - rather a thus far remaining unidentified and being ignored fallacy:
That has something to do with the vexing battle of wits, being tirelessly fought for decades, on the issue of amending any enactment with retrospective effect.
To explain:
(A) Having sold an asset held earlier, in the financial year ended 31-3-2014, tax payer could possibly have, in order to availing of tax exemption as per the THEN law, taken positive steps to accomplish his intention; such as, entering into/concluding a deal with promoter, and / or seller, for purchase or construction of a new asset. According to a strict reading of the unamended section itself , the time limit allowed for his doing so is 2/3 years; which is to be continued thereafter as well. Imaginably, such a time limit could conceivably expire anytime ONLY later; that is, in no case OR not in all cases, before 31-3-2014. On that premise, the point in mind is this: Will not, because of the subject two- fold amendment (s) , in such cases the effect of the proposed amendment(s) would have a retroactive impact in its legal sense of the concept, seemingly unfair by any logic; perhaps, though not intended.
Can there be any scope for a different thinking /line of reasoning, with 'fair play' in the backdrop?
Looking at from another angle , as well:
(a) The tax exemption pertains to / is of income arising from transfer of asset held in a year anterior to the year ending 31-03-2015;
(b) albeit amendments referred to are of section 54 and 54F, and said to be prospectively from April 1, 2015, those pertain/would, in terms, apply also to income from a transaction effected at an earlier point in time, that is prior to 31-03-2014; that is , not only to income accruing or arising after that date ;
(c) the denial of exemption under the amended section (s) is, in essence, of income accruing or arising in a year also anterior to the one in which exemption is, as per the law, entitled to be allowed; and
(d) thus, consequence of the proposed amendment attaches/dates back to an earlier year- that is, retroactively.
So far as could be seen/is intelligible or decipherable , there appears to be no scope for any different opinion on the foregoing aspects. Should, however, there be , the eminent law experts at large, are welcome to share with, and enlighten the rest, for the benefit of , not merely the taxpaying cmmunity, the Revenue as well.
Aside: One's honest guess is that, the subject amendments, relate to and, more or less , are in line with corresponding proposals, though not exactly, intended to be effected through the DTC , but have come to be advanced, pending its long due enactment, for more than one reason. Not to be over sighted, - even if these were to have waited for, and been brought in only through DTC, if and when enacted, then also it would have become necessary to avoid the treacherous 'retro activity', but through the conventional mechanics of so called , - 'Repeals and Savings'.
*budget 2014 roll over of investment for section 54 and 54f ...
NB: Related Posts et al @ -
http://vswaminathan-swamilook.blogspot.in/2014/07/why-to-tax-worry-or-why-not-to-new.html
http://vswaminathan-swamilook.blogspot.in/2014/07/na-mo-ushered-in-review-of-economy-and.html
Tail Note:
TG
Jan 12
cgt
Section 54 places thrust on investment & not on completion
Section 54F exemption cannot be denied for mere delay in completion of construction
AT
OFFHAND (Tentative Reaction)
The title so also narration of the court's ruling is so
sketchy that it does not clearly bring out what exactly is the essence of the
ruling. However, reading in between lines, one is , for the nonce, left with an
impression that, as already urged elsewhere (in public domain), the ruling is
that the amended provisions are not to be applied to transactions (of sale/
conveyance) giving rise to capital gains , if had been lawfully entered into /
effected at any time prior to the cut-off date of April 1,2014.
Recommend to get a copy of the judgment and give it a close
reading for a proper understanding.
itatonline
BL
Getting the best out of consultants
TG
Added complicity.
wprt
Sec 194 IA
|
|
ICAI President’s Message – August 2014
ICAI invites suggestions on revised formats of Form Nos. 3CA, 3CB and 3CD
AT
Commonwealth Games Village flats soon to be auctioned
mc
http://www.moneycontrol.com/news-topic/retrospective-tax-amendment/
Bears out self-contradiction galore ???
TG
<In
addition to the fact that the term “transfer” has been defined under Section
2(47) of the Act, even if looked at the provisions of Section 54 of the Act
which gives relief to a person who has transferred his one residential house
and is purchasing another residential house either before one year of the
transfer or even two years after the transfer, the intention of the Legislature
is to give him relief in the matter of payment of tax on the long term capital
gain. Ifj person, who gets some excess amount upon transfer of his old
residential premises and thereafter purchases or constructs a new premises
within the time stipulated under Section 54 of the Act, the Legislature does
not want him to be burdened with tax on the long term capital gain and therefore,
relief has been given to him in respect of paying income tax on the long term
capital gain. The intention of the Legislature or the purpose with which the
said provision has been incorporated in the Act, is also very clear that the
assessee should be given some relief. Though it has been very often said that
common sense is a stranger and an incompatible partner to the Income Tax Act
and it is also said that equity and tax are strangers to each other, still this
Court has often observed that purposive interpretation should be given to the
provisions of the Act. In the case of Oxford University Press v. Commissioner
of Income Tax [(2001) 3 SCC 359] this Court has observed that a purposive
interpretation of the provisions of the Act should be given while considering a
claim for exemption from tax. It has also been said that harmonious
construction of the provisions which subserve the object and purpose should
also be made while construing any of the provisions of the Act and more
particularly when one is concerned with exemption from payment of tax.
Considering the aforestated observations and the principles with regard to the
interpretation of Statute pertaining to the tax laws, one can very well
interpret the provisions of Section 54 read with Section 2(47) of the Act, i.e.
definition of “transfer”, which would enable the appellants to get the benefit
under Section 54 of the Act. - See more at:
http://taxguru.in/income-tax-case-laws/entering-agreement-sell-amounts-purchase-54-creates-rights-favour-buyer-sc.
The
intention of the Legislature or the purpose with which the said
provision has been incorporated in the Act, is also very clear that the
assessee should be given some relief. Though it has been very often said
that common sense is a stranger and an incompatible partner to the
Income Tax Act and it is also said that equity and tax are strangers to
each other, still this Court has often observed that purposive
interpretation should be given to the provisions of the Act. In the case
of Oxford University Press v. Commissioner of Income Tax [(2001) 3 SCC
359] this Court has observed that a purposive interpretation of the
provisions of the Act should be given while considering a claim for
exemption from tax. It has also been said that harmonious construction
of the provisions which subserve the object and purpose should also be
made while construing any of the provisions of the Act and more
particularly when one is concerned with exemption from payment of tax.
Considering the aforestated observations and the principles with regard
to the interpretation of Statute pertaining to the tax laws, one can
very well interpret the provisions of Section 54 read with Section 2(47)
of the Act, i.e. definition of “transfer”, which would enable the
appellants to get the benefit under Section 54 of the Act. - See more
at:
http://taxguru.in/income-tax-case-laws/entering-agreement-sell-amounts-purchase-54-creates-rights-favour-buyer-sc.html#sthash.hu0nQ3dK.dpuf
The
intention of the Legislature or the purpose with which the said
provision has been incorporated in the Act, is also very clear that the
assessee should be given some relief. Though it has been very often said
that common sense is a stranger and an incompatible partner to the
Income Tax Act and it is also said that equity and tax are strangers to
each other, still this Court has often observed that purposive
interpretation should be given to the provisions of the Act. In the case
of Oxford University Press v. Commissioner of Income Tax [(2001) 3 SCC
359] this Court has observed that a purposive interpretation of the
provisions of the Act should be given while considering a claim for
exemption from tax. It has also been said that harmonious construction
of the provisions which subserve the object and purpose should also be
made while construing any of the provisions of the Act and more
particularly when one is concerned with exemption from payment of tax.
Considering the aforestated observations and the principles with regard
to the interpretation of Statute pertaining to the tax laws, one can
very well interpret the provisions of Section 54 read with Section 2(47)
of the Act, i.e. definition of “transfer”, which would enable the
appellants to get the benefit under Section 54 of the Act. - See more
at:
http://taxguru.in/income-tax-case-laws/entering-agreement-sell-amounts-purchase-54-creates-rights-favour-buyer-sc.html#sthash.hu0nQ3dK.dpuf
To be Read in conjunction with Sec 54 , 54 F, 54EC, as amended by Budget 2014 !
BS
Read More
Ours is not a high-tax government: Jaitley
The National Democratic Alliance (NDA) government under Prime Minister Narendra Modi doesn't believe in high taxes since it prevents investments that ...Q
"Our's is not a high-tax
government," the finance minister said. "A high tax government cannot
promote business activity, since it will make domestic products
non-competitive. High taxes also drive consumers away. Consumers buy
products, they don't buy taxes."
He also assured the house that his government would also not resort to
indiscriminate levy of taxes with retrospective effect, that creates
additional liabilities on businesses and sends wrong signals to
investors.
Theoretically, the ideas though not surfaced for the first time, are resonating with ideal thinking; but, should the buck stop there is the moot point for devoted consideration, Reflecting for a while, the previous government was vociferously talking about simplifying the tax laws and the taxpayer friendly tax regime. But, as is common knowledge, that stopped short of translating the same into action; much less, took any truly positive and concerted effective steps worth a mention, for moving towards accomplishing the spoken-of, widely and wildly trumpeted, ideals.
The end result, the exchequer is left with an astoundingly worrisome and pressingly huge junk of unrecovered, admitted to be unrecoverable, demands in arrears. Added to it is the increasingly mounting disputes and court litigating, resulting in impaired efficiency both in the quality of administration and adjudication.
Are the directly responsible law ministry and the finance ministry at all listening; more so, thinking of concrete steps for overhaul and improvement of the system in place.
No retrospective tax on debt mutual funds |
Redemptions till July 10 exempted from higher capital gains tax; LS passes Finance Bill
<><> Yes(ss); as said, it is undoubtedly disappointing. The hon’ble FM, as aided by his coterie, has seemingly met the grievance against the subject amendment only 'half-way' and half-kind-heartedly. No knowing whether the still aggrieved section of the investors would , as is not unexpected, decide to dispute and go into litigation challenging the vires of the balance of (residual) 'retroactivity'. In this context, as viewed against and aired in certain taxpayers' circle, there are some other amendments e.g. of sections 54, 54F , 54 EC, etc., crying for a fair reconsideration and equally fair and righteous remedial action. Those, however, do not seem to have been even taken a serious note of. Unless and until the Revenue comes to realize the fallacy and suitably well-thought-out remedies, a fresh spate of similar disputes and long drawn litigation, as is foreseen, might be inevitable. That means, from the viewpoint of taxpayers, they are left with a 'trishanku'- like situation, as hitherto for decades. in short, they are pushed back to the old 'order' (or 'disorder'), with no end to the misery of a fresh spate of life-long litigation. Only have to depend on invisible Providence to what really is in store in the foreseeable future, not beyond. What all the more disappointing is the real life situation all around. That is, despite all attempts to sincerely share own ideas which might turn out to be for the common good, as a great visionary said to the effect, it is the populace, literate or illiterate, being replete with 'unthinking people' , that frightfully hinders scope for any realization/recognition of a 'spade' on eying a 'spade'. Cross Refer > http://praja.in/en/blog/m... icl Retrospective Tax Legislation and 'Small Repairs'Higher tax may not apply to debt funds redeemed before .. |
Taxmann
| Changes made in Finance (Bill) No. 2, 2014 as passed by the Lok Sabha | ||||
|
||||
TG
Write-up @ Taxguru.com
http://taxguru.in/income-tax/finance-2-act-2014-retrospective-amendments.html
For Ready Reference / Reading:
Finance (No. 2) Bill, 2014 - A study
V Swaminathan B.Sc. B.L., FCA
INTRODUCTION
The Finance (No. 2) Bill, 2014 makes for the maiden fiscal enactment of the newly installed government.
The point of intriguing poser, for an insightful scrutiny, is this: - Is the Act absolutely free from 'retro activity', as sought to be made out in officialdom , besides among the legal and other circles?
Prologue
Almost everyone, including active and proactive professional tax advisers- mainly, lawyers and CAs, having something to do or other with the Budget proposals of the newly installed government, have sought and brought to focus the 'highlights'. Even so, it is sad to observe that, in so doing, in one's conviction, some of the deficiencies, hidden or otherwise, it is noted, have not been even touched upon, for reasons not known. One such aspect that appears to have been simplistically glossed over, despite it being of the most concern to the tax payers relates to 'retrospective' changes in the law. So much so, by and large, the impression floated around, unwittingly or otherwise, in learned circles is that if were to go by the effective dates specified, the empowered ministries in general, and the Revenue in particular, have done their best to live up to the repeated assurance to do away with the age old obnoxious weakness of retrospective legislation - which the towering legal luminary/tax expert of our own times (’Nani’) was never tired of referring to and ridiculing remorsefully as, ‘change mania’, ‘obsessive attitude’, the historical fact of successive governments failure to save the tax payer from being made the victim of ‘palpable injustice’, and so on. But, it seems that is not a well-founded impression.
REASONING for saying so :
With reference to the specific amendments made in the 2014 fiscal budget (since enacted) , of section 54 and 54 F of the IT Act, a view has been floated around in certain quarters . That is to the effect that the Finance Minister has now tweaked 'this section' (reference is to section 54) to specify that only “ONE residential house in India” would be eligible for the tax break, and not more than one. (BOLD FONT SUPPLIED)
According to a seemingly well reasoned analysis in a published article*, the recent amendments made are with a view to set at rest the till now on-going controversy, and the mutually contradicting judicial opinion, on the erstwhile (before amendment) provisions, on two facets, not just one; That is, in order to set at rest the raging controversy on, -
(1) the meaning of 'a' ; and
(2) whether residential house, even if situate 'outside india', should qualify for the CGT exemption..
Be that as it were, the amendment, to reiterate, in own individual perspective, seemingly suffers from a malady, - rather a thus far remaining unidentified and being ignored fallacy:
That has something to do with the vexing battle of wits, being tirelessly fought for decades, on the issue of amending any enactment with retrospective effect.
To explain:
(A) Having sold an asset held earlier, in the financial year ended 31-3-2014, tax payer could possibly have, in order to availing of tax exemption as per the THEN law, taken positive steps to accomplish his intention; such as, entering into/concluding a deal with promoter, and / or seller, for purchase or construction of a new asset. According to a strict reading of the unamended section itself , the time limit allowed for his doing so is 2/3 years; which is to be continued thereafter as well. Imaginably, such a time limit could conceivably expire anytime ONLY later; that is, in no case OR not in all cases, before 31-3-2014. On that premise, the point in mind is this: Will not, because of the subject two- fold amendment (s) , in such cases the effect of the proposed amendment(s) would have a retroactive impact in its legal sense of the concept, seemingly unfair by any logic; perhaps, though not intended.
Can there be any scope for a different thinking /line of reasoning, with 'fair play' in the backdrop?
Looking at from another angle , as well:
(a) The tax exemption pertains to / is of income arising from transfer of asset held in a year anterior to the year ending 31-03-2015;
(b) albeit amendments referred to are of section 54 and 54F, and said to be prospectively from April 1, 2015, those pertain/would, in terms, apply also to income from a transaction effected at an earlier point in time, that is prior to 31-03-2014; that is , not only to income accruing or arising after that date ;
(c) the denial of exemption under the amended section (s) is, in essence, of income accruing or arising in a year also anterior to the one in which exemption is, as per the law, entitled to be allowed; and
(d) thus, consequence of the proposed amendment attaches/dates back to an earlier year- that is, retroactively.
So far as could be seen/is intelligible or decipherable , there appears to be no scope for any different opinion on the foregoing aspects. Should, however, there be , the eminent law experts at large, are welcome to share with, and enlighten the rest, for the benefit of , not merely the taxpaying cmmunity, the Revenue as well.
Aside: One's honest guess is that, the subject amendments, relate to and, more or less , are in line with corresponding proposals, though not exactly, intended to be effected through the DTC , but have come to be advanced, pending its long due enactment, for more than one reason. Not to be over sighted, - even if these were to have waited for, and been brought in only through DTC, if and when enacted, then also it would have become necessary to avoid the treacherous 'retro activity', but through the conventional mechanics of so called , - 'Repeals and Savings'.
*budget 2014 roll over of investment for section 54 and 54f ...
NB: Related Posts et al @ -
http://vswaminathan-swamilook.blogspot.in/2014/07/why-to-tax-worry-or-why-not-to-new.html
http://vswaminathan-swamilook.blogspot.in/2014/07/na-mo-ushered-in-review-of-economy-and.html
Tail Note:
www.thehindubusinessline.com/features/...be.../article1156259.ece
Feb 4,
2011 - T. N. Pandey ... This section provides for exemption
in respect of long-term capital gains ... The condition attached to the benefit
u/s 54(1) is that the assessee, ... XThese are links to The Hindu Business
Line suggested by ...
This
view favours taxpayer, inferably expecting him to follow.
www.thehindubusinessline.in/bline/2008/07/.../2008070550020900.htm
Jul 5,
2008 - Conceptually, there is no ground to give Section 54 benefit to a
person who acquires a house property or ... T. N. Pandey ... Section
54 provides for exemption in respect of LTCG arising from the
transfer of a residential house.
This view is adverse to taxpayer; it is anybody’s guess
whether it may have been turned into a
favourable opinion, had the judicial view been available at that point in time and taken a note of for guidance ?!
No comments:
Post a Comment