Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 26th September, 2020

PRESS RELEASE

No requirement of scrip wise reporting for day trading and short-term sale or purchase of listed shares

There was a report in certain section of media that stock traders/day traders are required to furnish scrip wise details in the return of income for AY 2020-21. The gain from share trading in case of stock traders or day traders is generally categorised as short-term capital gains or business income. This is because their holding period of shares/units in most of the cases is less than one year which is a prerequisite for the gains to be categorised as long-term capital gains. As there is no requirement in the return of income for scrip wise reporting in case of short-term/business income arising from share transactions, these reports are distorted and misleading.

       The Finance Act, 2018 allowed exemption to the gains made on the listed shares/specified units up to 31.01.2018 by introducing grandfathering mechanism for computation of long-term capital gains for these shares. The scrip wise details in the return of income for AY 2020-21 is required to be filled up only for the reporting of the long-term capital gains for these shares/units which are eligible for the benefit of grandfathering.

       As the grandfathering is to be allowed by comparing different values (such as cost, sale price and market price as on 31.01.2018) for each shares/units, there is a need to capture the scrip wise details for computing capital gains of these shares/units. The scrip wise details are not required in income tax return forms for AY 2020-21 for computation of capital gains/business income from shares/units which are not eligible for grandfathering.

      Without this reporting requirement, there may be situations where taxpayer may not claim or wrongly claim the benefit of grandfathering due to lack of understanding of the provisions. Also, if the above calculation is not made scrip wise and taxpayer is allowed to enter the total figures only, there will be no way for the income tax authorities to check the correctness of the claim and therefore many returns will require to be audited, which may lead to unnecessary grievances/rectifications at a later stage. If scrip wise long-term gain is available, it can be cross verified by the Department electronically with stock exchange, brokerage companies, etc and there will be no need to subject these income tax returns to further audits or scrutiny.

       Thus, the main intent behind requiring scrip wise detail is to facilitate the taxpayer in correctly computing the long-term capital gains on these shares/units. Requirement to provide scrip wise information in the income tax return is not unique to India. Internationally also, the taxpayer is required to provide scrip wise information for reporting capital gains. For example in USA,  a taxpayer having capital gains from transfer of shares is required to fill scrip wise details in Schedule-D of Form 1040 – income tax return form in USA.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT

 

 

Ministry of Finance

Government to study the arbitration case award in Vodafone International Holding BV

Posted On: 25 SEP 2020

The Finance Ministry has said today that it has just been informed that the award in the arbitration case invoked by Vodafone International Holding BV against Government of India has been passed.  The Government will be studying the award and all its aspects carefully in consultation with its counsels. After such consultations, the Government will consider all options and take a decision on further course of action including legal remedies before appropriate fora.

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RM/KMN

(Release ID: 1659099)

 

Ministry of Finance

Income Tax Department carries out searches in Jammu & Kashmir

Dated: 17 SEP 2020

The Income Tax Department carried out a search and seizure operation on a prominent Hotelier, owning a chain of Hotels at  Srinagar, Gulmarg, Sonamarg and Pahalgam with another hotel under construction at Leh.

Various incriminating documents and materials evidencing unexplained investments in immovable properties, construction of hotels and residences aggregating to Rs. 25crore in the last six financial years have been seized during the search, though he has not paid any tax since A.Y. 2014-15. Almost all these investments are in cash and outside the known sources of income.

During the course of the search operation, receipt of unsecured loans to the tune of Rs. 25 crore in the past two years from persons of no-means has been found. All these loans are prima-facie not genuine, as the same have been advanced by persons with doubtful creditworthiness.

The search also revealed that the assessee’s children are studying in USA on whom expenditure of approximately Rs. 25 lakh/annum is being incurred. The expenditure on account of education in USA prima-facie appears to be unexplained/undisclosed. Further, the assessee is also running a B-Ed College as a Trust alongwith his mother. The Trust in not registered and no return is being filed for the Trust though it has substantial taxable income. The assessee has also admitted to having incurred expenditure of Rs. 40 lakh on renovation of his residential house.

During the investigations a bank locker has also been found, which has been put under restraint.

The Department also carried out searches in another case of a prominent jeweller in Srinagar. During the search, it was found that he had not maintained books of accounts of the jewellery business even though the turnover is of the range of Rs. 2 crore to Rs. 10 crore in the earlier years.

The search has revealed that an undeclared bank account was maintained by the assessee with deposits running into crores of rupees, which has not been offered to tax. He also sold immovable property of Rs. 1.90 crore in Srinagar in Financial Year (FY) 2015-16, capital gains tax on which has not been paid.

During the search, documents were found, revealing receipt of sum of Rs. 16 lakh in cash as ‘Pagri’ by the assessee in FY 2019-20 at the time of leasing of one of the shops. This transaction is in violation of provisions of Section 269SS of the Income-tax Act, 1961. This fact of receiving cash of Rs. 16 lakh has been admitted by the assessee as well as the lessee. The payment of Pagri of Rs. 16 lakh is also out of undisclosed income of the lessee.

The search also revealed that sale of a flat in Delhi was made by the wife of the assessee in F.Y. 2019-20 of Rs. 33 lakh. During the search, it was seen that no capital gains has been paid on the above sale. Further, out of the sale consideration of Rs.33 lakh, Rs.13 lakh has been received in cash in violation of provisions of Section 269SS of the Income-tax Act, 1961. The source of investment of buyer also seems prima-facie undisclosed, which is being investigated.

The search also revealed that the daughter of the assessee was studying abroad and the expenditure on account of the same prima-facie appears unexplained/undisclosed.

Further investigations are in progress.

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RM/KMN

(Release ID: 1655515)

 

Press Information Bureau

Government of India

Ministry Of Law

Dated: 17 SEP 2020

Tax tribunal makes innovative and aggressive use of IT techniques to dispense faster justice in the field of Direct Taxes despite corona.

The Income Tax Appellate Tribunal, a statutory quasi-judicial institution created under the Income Tax Act, 1961 and the second appellate authority dealing with disputes in the field of Direct Taxes and widely acclaimed as the ‘Mother Tribunal’, has been modelling itself on its motto of ‘Nishpaksh Sulabh Satvar Nyay’, meaning Impartial, Easy and Speedy Justice, by maintaining good disposal even during the COVID-19 Pandemic period.  The innovative and aggressive use of techniques of Information Technology to dispense justice in the field of Direct Taxes in such times when physical hearing of cases was not found feasible on concerns of safety, etc. has been seamlessly adopted by the ITAT.

            Justice P.P. Bhatt, President of ITAT directed the start of judicial proceedings immediately upon lifting of lockdown, albeit through the mode of Video Conferencing instead of physical hearings.  This has yielded good dividends inasmuch it has enabled the Benches to function, whereby cases have been heard and disposed of by hearing both parties from remote locations.  During the period starting from partial lifting of lockdown in April, 2020 and up to 31st August, 2020, as many as 5,392 cases were disposed of as against filing of 3,078 cases during such period.

            The 63 Benches of the ITAT are spread over 28 regular stations and 2 Circuit Benches at Varanasi and Dehradun.  Administratively, the Benches are divided in 10 Zones, each headed by a Vice President.  All the Zones functioned during this period strictly in compliance with the guidelines and instructions issued by the Central and/or State Governments.

            ITAT wishes to thank its stakeholders, viz., taxpayers, lawyers, Chartered Accountants and the Offices of the Income Tax Department in cooperating with the Benches and providing useful assistance in the administration of justice in the field of Direct Taxes during the current period of COVID-19 Pandemic.

 

Government of India

Department of Revenue

Ministry of Finance

Central Board of Direct Taxes

New Delhi, 2nd September, 2020

PRESS RELEASE

Income Tax Department carries out searches in Srinagar and Kupwara

The Income Tax Department has carried out simultaneous search and seizure operations on 2nd September, 2020 in the case of three prominent businessmen in Srinagar and Kupwara. These operations have, prima facie, led to the detection of huge amount of undisclosed income, seizure of unaccounted assets and incriminating evidence and involvement in benami transactions by these three groups. 

The search action revealed that the key person of one of the groups, although engaged in Cross-LOC trade until the suspension of trade by the Government in April 2019, has not filed his Income Tax Returns. He was also found to be having two active PANs. His proprietory concern has made exports of over Rs. 25 crore in the last few years. However, no income tax has been paid at all. Incriminating documents related to the LoC trade have been seized from the Custodian of cross-LOC trade, indicating large-scale tax evasion. There are also evidences of unexplained expenditure on the education of his daughter in Pakistan.

In another case, the key person and his brother were engaged in Cross-LOC trade until the suspension of trade by the Government. He had made total exports of  Rs 3 crore in the last two years, while he had filed his Income Tax Return for only one year and that too, showing meager receipts. The Income Tax Return filed also does not match with the credits in multiple bank accounts which run into crores of rupees. Further, evidences showing illegal trade in violation of suspension of cross LoC trade have been seized. The passport of the assessee reveals that he had travelled to Pakistan for 20-25 days every calendar year since 2017 and the source of expenditure on this account is prima-facie unexplained.

In yet another case, it was seen that the group was engaged in Cross- LOC trade of vegetables and fruits. In this case, unaccounted cash of Rs. 15 lakh has been seized. The group is having multiple concerns. However, transactions of these concerns have not been reflected in their Income Tax Returns. In the case of a person of this group, who is a non-filer, documents pertaining to the unaccounted business transactions of about Rs.10 crore have been seized. In another case of a firm, one of the partners in the firm has admitted that his name was only being used, though he was not involved in any activity of the firm. The matter is being examined from the angle of Benami transactions. A locker has also been found which is yet to be searched and has been placed under restraint.

Further investigations are going on.

(Surabhi Ahluwalia)

Commissioner of Income Tax

(Media & Technical Policy)

Official Spokesperson, CBDT