Projecr Report on Taxation

I hereby declare that the work which is being presented in project report entitled “TAXATION” is an authentic record of my work carried out under the able guide of Mr. P. K. Jain; DGM-Finance The work has been carried out by me as summer training at premises of HEG Ltd. Mndideep(Near Bhopal) and was undertaken as part of course curriculum PGDBM program of NSB, NEW DELHI. 44 DATEPLACE- ATUL KUMAR RAI 44 CONTENTS. NO. TOPIC PAGE NUMBER 1 2 3 4 VISION AND MISSION PROFILE OF THE ORGANISATION HEG Ltd.

PERFORMANCE HIGHLIGHTS AND DATA ANALYSIS 5 6 7 8 9 10 11 13 12 13 TAXATION INCOME TAX SALE TAX VAT PAN EXCISE DUTY CUSTOM DUTY FINANCE OF HEG CONCLUSION BIBILIOGRAPHY 39 39-64 65-73 74-89 90-91 92-96 97-102 103-105 106-113 114 8 9-20 21-27 28-38 44 VISION HEG LTD. -GRAPHITE DIVISION A vibrant globally acknowledge top league player in Graphite Electrode and allied business with commitment to growth, innovation, quality and customer focus. 44 MISION HEG LTD.

-GRAPHITE DIVISION To become a leading international player in Graphite Electrodes and related business by leveraging our core competence value to our customer, shareholders, employee, and society. 44 PROFILE OF THE GROUP 44 Group Profile The 500 million dollar LNJ Bhilwara Group is a diversified group with interests in Graphite Electrodes, Textiles, In its over four-decade long existence, the LNJ Bhilwara Group has come to be identified with quality and technology. Six of the Group companies have been awarded ISO 9001:2000 certification for their exemplary quality standards.

The fact 44 that export earnings comprise over forty percent of the Group’s turnover underlines its high quality standards. Awarded ISO 9001:2000 & ISO 14001:2004 Certifications. The journey of the LNJ Bhilwara Group began in 1961 when the Group founder, L. N. Jhunjhunwala established a textile mill in Bhilwara, Rajasthan. Today that single textile mill has expanded into several textile mills; the Group has diversified strategically and stands proud as a multi-product and service conglomerate.

Industry pioneers in many cases, we have also established ourselves one of the top 50 Indian business groups. The marriage of traditional values and foresight has combined advancement while retaining our core. Hence, while expanding our original business of yarn, we have moved into manufacturing fabric, technical textiles, automotive fabric, knitted and ready-to-wear garments and now denim. 44 Opportunity is the window to the future and we are looking out of it. We have diversified into areas that few players have ventured into…

Graphite Electrodes, which has been forwardintegrated into sponge iron and steel billets business is one such example. We also have the largest single site graphite electrode manufacturing plant in Asia. Self-reliance is our mantra. The success of our first hydro captive power plant led us to set up India’s first merchant hydro power plant. Today, the group’s power business is flourishing with five projects already under its belt and is well on track towards producing 1500 / 2000 mw by 2012. Our in-house power consultancy firm consolidates our position in this segment

The main group companies are 1. Graphite electrode HEG Limited ? 44 2. ? ? ? ? 3. ? ? ? 4. Textile RSWM Ltd. Maral overseas ltd. BSL Ltd. Bhilwara Spinners POWER Bhilwara energy ltd. Malana Power company ltd. AD Hydro power ltd. Infotech Textile Bhilwara Spinners Limited, is an integral part of the LNJ Bhilwara Group. The Group is a multi-product conglomerate with a global presence and business interests spanning diverse indstries like Textiles, Power Generation, Graphite Electrodes and IT enabled services. 44.

Bhilwara Spinners, based at Bhilwara (Rajasthan), manufacturer of cotton, synthetic blended yarns of various counts and blends. The present capacity of the unit is 18,496 spindles. Based on the requirement of the market, Bhilwara Spinners diversified their product portfolio and now producing various value added product mix like Polyester / Acrylic, mod acrylic flame retardant yarn, Sewing thread, Slub yarn, Viscose Carpet Yarn, Linen Yarn etc. The unit is also manufacturing products suitable for other uses like upholstery, tapestry, and industrial fabrics.

44 Products Bhilwara Spinners Limited, The company is manufacturing synthetic blended yarn in raw white and the range includes : * 100% Polyester, Viscose, Acrylic, Polyester/Viscose blended, * Polyester/Acrylic blended * Polyster/Viscose blended * Polyester/Linen blended * Viscose/Linen blended * High Twist / Super High Twist * Slub/ Spun yarn * Blended with Texturised, Special Application yarns for Carpet, 44 Sewing Thread, * Flame and Temperature Resistance yarn like Aramide, Modacrylic, Homo Acrylic, Poly Sulphide yarn (PPA) .

Mayur Suitings, Mayur Suitings the innovative and value for money brand, is a part of RSWM Limited, the flagship company of Rs 2859 crore LNJ Bhilwara Group. For almost 30 years, Mayur has been constantly delivering high quality fabric to the markets in India as well as other countries in the world. Mayur has emerged as a leader in fabric due to its ability to transform itself rapidly to meet the challenges of a highly competitive global economy. Constant modernization and introduction of state-of-the art technology has enabled it to stay ahead in the industry and successfully surpass all expectations.

All this fabric is manufactured at the state of the art manufacturing unit at LNJ Nagar, Mordi, District Banswara in Rajasthan. Innovation and consistent quality are the two pillars that the company has always believed in. And it is on these two pillars that the company has built its hugely popular status in the world. 44 The comprehensive product-mix includes fabric ranges for classic formal wear as well as semi formal wear. This includes unique blends of Polyester Viscose. All this is available in different yarn counts and shades.

What’s more, exciting innovations are accentuated by an array of blends in new finishes, including poly / viscose / silk, poly / wool / silk feather-touch, Poly / wool / Lycra, poly / viscose / linen and poly / viscose cationic dyed soya protein / bamboo and functional fabric. Performance fabric like high wicking, cool comfort, anti-bacterial, antistatic, odor preventive, biodegradable and energy fabric, etc. Mayur produces in excess of 12 Million Meter / Annum. Mayur has been the recipient of the extremely prestigious SRTEPC award for many consecutives years. Quality does not happen by chance at Mayur.

Men and machines work together to achieve the customer’s expectation. Continuous improvement, innovative technology and avant-garde ideas about applying technology are the cornerstones of Mayur’s in industry leadership position. We have the most stringent quality control protocols and we have the latest certifications. ISO 9002 and ISO 9001:2000 Accreditation, TQM Implemented Plant, ERP Management systems to ensure Timely delivery and Internationally acceptable ‘4-Point’ system for Grading are 44 some of the certifications we have. Product quality, innovation and ecofriendliness are a hallmark of all the company’s division.

For testing purposes we have ICI Pilling tester, Random pilling tester, Vertical flammability tester, Automatic light fastness tester, Spectra data color, Color matching cabinet and Crease recovery tester to name a few. The backbone of the company is the robust distribution network that takes the product to the four corners of the country. The company has its products in over 7000 retail outlets all over India. For us, it is not enough to manufacture the finest fabric. The real challenge is to ensure that the finished fabric reach our customers on time, every time.

Ever motivating management practice, excellent leadership, highly skilled workforce and a well focused approach leads us to achieve our goal of being a leader in the Textile industry. We own this strong position not only to our technical competence but also to our clear orientation towards the wishes of our customers. Our technical expertise and unrelenting trust towards continuous quality improvement are the principal strengths of Mayur. 44 POWER GENERATION:Bhilwara Energy Limited will be focusing on diversification of The Group’s portfolio in the power Business, like Power Transmission, Power Distribution, Power Trading and Power Generation from non hydro sources like wind and thermal and to further consolidate its presence in Hydro power generation.

The company endeavors to develop or acquire new green field power projects in states like Himachal Pradesh, Uttranchal, Sikkim, Madhya Pradesh, Chattisgarh & Arunachal Pradesh. BEL holds 51% equity stake in Malana Power Company Limited (Kullu), a joint venture with S N Power, Norway. Thereby, it holds 45. 9% holding of A D Hydro Power Limited (Manali) indirectly, since MPCL holds a 90% stake in ADHPL.

Today, it is one of the largest private players in the power sector of India. Leveraging upon its engineering skills and understanding of the power business, BEL is effectively managing its companies. Among its many achievements BEL can boast of effectively implementing 44 projects taken up by its member companies. BEL would also be independently implementing hydropower projects which are smaller than 100 MW and also some of the larger projects in case the Norwegian partners do not want to undertake them under MPCL, while larger projects above 100 MW would continue to be implemented by MPCL.

Bhilwara Infotech “We, at BIL, strive to ensure Customer Satisfaction by providing quality software and services, on time, every time. We are committed to comply with the requirements of our Quality Management System and to continually improve its effectiveness through Management Reviews of the Quality Objectives. ” 44 HEG Limited ? HEG Ltd, a premier company of the LNJ Bhilwara group, is today India’s leading graphite electrode manufacturer. It has one of the largest integrated graphite electrode plants in South-East Asia, processing sophisticated UHP (Ultra High Power) Electrodes.? than The company exports over 80% of its production to more 25 countries of the world. ?

The position the company enjoys today in India and abroad is largely due to its commitment to constant upgradation of its product quality to match international standards and to meet new challenges to win and excel in all situations. In the 1990’s, we set our “Vision” to be : “ A vibrant globally acknowledged top league player in Graphite Electrodes and allied businesses with commitment to growth, innovation, quality and customer focus”. ?

In Graphite, our focus is on UHP grade electrodes, and we 44 have expanded our product range and established the same on some of the toughest furnaces of our customers. Today, we have years of experience supplying quality UHP grade electrodes all over the world. ? The encouragement from our customers has led us to increase production capacity and become a significant global producer of quality UHP grade electrodes for EAF application. Our ability to source the best raw materials from sources worldwide and the skills of our human resources has been the key to our growth. ? we With a recent Rs 4.

5 billion ( US$ 120 million) investment, have now expanded our manufacturing capacity. As a responsible graphite electrode manufacturer, we continue to invest in technology, development of new products and in our human resources. 44 Set up in 1977, HEG is a diversified company with interests in Graphite Electrodes and Power. From a modest investment made in 1977, the company reported a turnover of Rs. 6500 million (US$140 million) in fiscal 2007. A Flagship of the LNJ Bhilwara Group, HEG is Asia’s leading graphite electrodes manufacturer and exporter. ? It is an ISO 9001 & ISO 14000 Certified Company, by M/s.

Bureau Veritas. ? Largest integrated graphite electrodes plant in South East Asia & Middle East and second largest in the World. ? Technology originally sourced from ‘SERS’ – a subsidiary of Pechiney, France. The Collaboration ended in the early 1990s. ? Won the country’s top export award (CAPEXCIL) for 17 consecutive years. ? Also won the National Top Export Award from the Government of India and the Rajiv Gandhi National Quality Commendation Award. 44 QualityPolicy We, in HEG, are committed to being a customer-oriented organisation where Quality is the inspiration and innovation is the way of life.

We believe that world is our market and therefore competitive quality of our products, response and service is the essence of our being. We recognise that the involvement of the employees is basic to quality and for continuing growth and improvements. We would involve our suppliers in the continuing programme for Quality Improvement. We believe that quality can only be obtained in a safe, clean and orderly environment and therefore, we are committed to these basics in our day to day activity. SafetyPolicy We in heg, are committed to being a safe and eco – friendly 44 organization.we believe that protection of our personnel and the environment is one of our prime responsibilities.

We, therefore, commit ourselves to: Introduce sound safety, health and environment management practices. Conduct our business responsibly through adoption of safer, healthier, cleaner and energy- efficient technologies. Comply with all applicable legislations and regulations related to safety health and environment. Continually improve our safety, health and environmental performance operation. Investigate the accidents to identify root causes and by developing effective controls of our introduce corrective and preventive measures. Generate a high degree of awareness amongst all the interested parties, 44 Care for Ecology HEG, an ISO 14001:1996 company, is fully aware of the ecological impact of its processes and actions can have and has put in place effective mechanisms to minimise any negative fallout.

Also, the Company has carried out comprehensive afforestation programme in and around its facilitiesd .The Company’s facility at Mandideep has been regarded one of the cleanest graphite electrode plant 44 in the world when seen in the light of the material used and the products manufactured there.

Performance Highlights and data analysis 44 Graphiteseg ent revenue breakup fpr m 20 8 0 HIGH POWER ELECTRODE 32% ULTRA HIGH POWER ELECTRODE 68% 44 44 44 P RODUC IONOFS E LT ROUGHE T TE H AFROUT E M I L L I O N T O N N E S 500 450 400 358 350 300 250 200 150 100 50 0 2001 2003 2005 2006 2007 2008 2010E 296 319 402 365 450 424 44 44 44 44 44 44 44 Taxation 44 • Tax system in India is divided in to two types, Direct Tax and Indirect Tax. • Direct Taxes that comprising of income tax, wealth tax, etc. are those whose burden falls directly on the taxpayer. •

The indirect taxes are levied on goods and services and its ultimate falls indirectly on the consumers. The indirected taxes are comprising of sales tax, service tax, VAT, excise duty, custom duty, etc. INCOME TAX Income Tax is all income other than agricultural income levied and collected by the central government and shared with the states. According to Income Tax Act 1961, every person, who is an assessee and whose total income exceeds the maximum exemption limit, shall be chargeable to the income tax at the rate or rates prescribed in the finance act.

Such income tax shall be paid on the total income of the previous year in the relevant assessment year. 44 The total income of an individual is determined on the basis of his residential status in India. Income Tax Timeline in India (History)- 1860 1860 Introduced for the first time for a period of five years to cover the 1857 mutiny expenses. It was abolished in 1873. 1877 1877 The tax system was revived as a result of the Great Famine of 1876. 1886 1886 Introduced as Act II of 1886. It laid down the basic scheme of income tax that continues till the present day. 1918

1918 Introduced as Act VII of 1918. It had features like aggregation of income from various sources for the determination of the rate, classification of income under six heads and application of the Act to all income that accrued or arose or was received in India from whatever 44 source in British India. 1922 1922 On the recommendations of the All-India Income Tax Committee, the father of the present act was introduced. The central government was vested with the power to administer the tax. 1961 1961 The Act came into force from 1 April 1962, it extended to the whole of India.

1997 1997 Establishment of the Tax Reform Committee under the chairmanship of Dr. Raja J. Chelliah. It was followed by restructuring the income tax with parameters like lower taxes, fewer slabs, higher execptions, etc. 2003 The Kelkar Task Force, which was followed by outsourcing of PAN/TAN, exemption of dividend income, compensated by levy of the dividend distributed tax to be paid by the company. Income Tax Rates Across the World 44 Country Personal Income Tax Rate Australia 0% – 48. 5% Canada 16% – 29% Estonia 24% – 24% Denmark 44% – 63% Hong Kong 0% – 33% India 0% – 33% Israel.

10% – 49% Malaysia 0% – 29% Mexico 3% – 32% Russia 13% – 13% Singapore 0% – 22% UK 0% – 40% 44 US 10% -35% INCOME TAX RATES/ SLABS For individuals, HUF, Association of Persons (AOP) and Body of individuals (BOI): For the Assessment Year 2009-10 44 Rate Taxable income slab (Rs. ) (%) Up Up to to 1,90,000 (for 1,60,000 women) NIL Up to 2,40,000 (for resident individual of 65 years or above) 1,60,001 – 3,00,000 3,00,001 – 5,00,000 5,00,001 upwards 10 20 30* *A surcharge of 10 per cent of the total tax liability is applicable where the total income exceeds Rs 1,000,000. Note : •

Education cess is applicable @ 3 per cent on income tax, inclusive of surcharge if there is any. 44 • A marginal relief may be provided to ensure that the additional IT payable, including surcharge, on excess of income over Rs 1,000,000 is limited to an amount by which the income is more than this mentioned amount. • Agricultural income is exempt from income-tax. ResidenceRules An individual is treated as resident in a year if present in India I. II. for 182 days during the year or for 60 days during the year and 365 days during the preceding four years. Individuals fulfilling neither of these conditions are nonresidents.

(The rules are slightly more liberal for Indian citizens residing abroad or leaving India for employment abroad. ) A resident who was not present in India for 730 days during the preceding seven years or who was nonresident in nine out of ten preceding yeas I treated as not ordinarily resident. In effect, a newcomer to India remains not ordinarily resident. 44 For tax purposes, an individual may be resident, nonresident or not ordinarily resident. Non-Residents and Non-Resident Indians Residents are on worldwide income. Nonresidents are taxed only on income that is received in India or arises or is deemed to arise in India.

A person not ordinarily resident is taxed like a nonresident but is also liable to tax on income accruing abroad if it is from a business controlled in or a profession set up in India. Capital gains on transfer of assets acquired in foreign exchange is not taxable in certain cases. Non-resident Indians are not required to file a tax return if their income consists of only interest and dividends, provided taxes due on such income are deducted at source. It is possible for non-resident Indians to avail of these special provisions even after becoming residents by following certain procedures laid down by the Income Tax act.

44 Taxability of individuals is summarised in the table below Status Indian Income Foreign Income Resident resident and ordinarily Taxable Taxable Resident but not ordinary Taxable resident Not Taxable Non-Resident Taxable Not Taxable INCOME TAX – TAXABLE HEADS OF INCOME Remuneration for work done in India is taxable irrespective of the place of receipt. Remuneration includes: • Tax upon salaries and wages Tax upon pension • 44 • Tax upon bonus, fees & commissions Tax upon Gratuity Tax upon Annuity Tax upon profits in lieu of or in addition to salary Tax upon advance salary and perquisites.

• • • • Others: • Tax upon Allowances Tax upon Deferred compensation Tax equalisation • • Besides remuneration for work, individuals may be taxed on the following income: Tax upon Income from house property 44 The annual value of property, consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him, the profits of which are chargeable to income tax, shall be chargeable to income tax under the head “Income from House Property”.

Tax upon Income from business or professions:- For charging the income under the head “Profits and Gains of business,” the following conditions should be satisfied: • There should be a business or profession The business or profession should be carried on by the • assessee. • The business or profession should have been carried on by the at any time during the previous year. assessee Tax upon Income from capital gains:- 44 Capital asset means property of any kind held by an assessee whether or not connected with his business or profession.

Tax upon Income from other sources:- Income of every kind, which is not chargeable to income tax under the heads • salary income from house property, profits and gains of business and profession, capital gains can be taxed under the head “income from other • • • sources”. However such income should also not fall under income not forming part of total income under the IT Act. Tax upon Clubbing of Income:- The total income of an individual also includes certain income of other persons.

These are:- 44 a. Income of spouse from, remuneration derived from the concern in which the individual is substantially interested unless the remuneration is by virtue of the application of technical or professional skill possessed by him or her; assets transferred by the individual to the spouse or to o any other person for the benefit of the spouse unless the transfer is for adequate consideration or in consideration of an agreement to live apart. b. income of son’s wife from assets transferred by the individual to her or to any other person for her benefit unless the transfer is for adequate consideration.

c. income of his minor child – other than the minor child suffering from disability specified in section 80-U, referred to in para 5. 3. 9 except when such income arises to the child on account of any manual work done by him or on account of any activity which involves application of any skill, talent or specialised knowledge and experience. 44 The individual in whose income the income of other spouse as mentioned in (a) (i) above is to be included will be the husband or wife whose total income – before including such remuneration income – is greater.

Similarly the income of minor child is to be included in the income of the parent having greater income. If the marriage of the parents does not subsist, it will be parent who maintains the child. Tax Rates In India, Individual income tax is a progressive tax with three slabs. From April 1, 2008 new tax slabs apply, which are as follows: No income tax is applicable on all income up to Rs. 1,50,000 per year. (Rs. 1,80,000 for women and Rs. 2,25,000 for senior citizens) • • From 1,50,001 to 3,00,000 : 10% of amount greater than Rs. 1,50,000 (Lower limit changes appropriately for women and senior citizens)

44 • From 3,00,001 to 5,00,000 : 20% of amount greater than Rs. 3,00,000 + 15,000 (slightly less for women and further less for senior citizens) • Above 5,00,000 : 30% of amount greater than Rs. 5,00,000 + 55,000 (slightly less for women and further less for senior citizens) SURCHARGE A 10% surcharge (tax on tax) is applicable if the taxable income (taking into consideration all the deductions) is above Rs. 10 lakh (Rs. 1 million). The limit of 10 lacs was increased to Rs. 1 crore (Rs. 10 million) with effect from 1 June 2007 for corporate assesses. EDUCATION CESS.

All taxes in India are subject to an education cess, which is 2% of the total tax payable. With effect from assessment year 2008-09, 44 Secondary and Higher Secondary Education Cess of 1% is applicable on the subtotal of taxable income. TAX RATE FOR NON-INDIVIDUALS There are special rates prescribed for Firms, Corporates, Local Authorities & Co-operative Societies. [5] REFUND STATUS FOR SALARIED TAX PAYERS The Income Tax Department has put on its website the list of income tax refunds of all salary tax payers which could not be sent to the concerned persons for want of correct address. (link to check refund).

CORPORATE INCOME TAX For companies, income is taxed at a flat rate of 30% for Indian companies, with a 10% surcharge applied on the tax paid by companies with gross turnover over Rs. 1 crore (10 million). Foreign companies pay 40%. [7]. An education cess of 3% (on both the tax and the surcharge) are payable, yielding effective tax rates of 33. 99% for domestic companies and 41. 2% for foreign companies. 44 From 2005-06, electronic filing of company returns is mandatory. FRINGE BENEFIT TAX Fringe Benefit Tax is a tax payable by companies against benefits that are seen by employees but cannot be attributed to them individually.

This tax is paid as 33. 99% of the benefit, which is only a percentage of the actual amount paid. TAX PENALTIES “If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person(b) has failed to comply with a notice under sub-section (1) of section 142 or sub-section (2) of section 143 or fails to comply with a direction issued under sub-section (2A) of section 142, or (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty,-

44 (ii) in the cases referred to in clause (b), in addition to any tax payable by him, a sum of ten thousand rupees for each such failure; (iii) in the cases referred to in clause (c), in addition to any tax payable by him, a sum which shall not be less than, but which shall not exceed three times, the amount of tax sought to be evaded by reason of the concealment of particulars of his income or the furnishing of inaccurate particulars of such income” Avoidation of double taxation.

Since a ‘resident’ is liable to pay tax in India on his ‘total world income’, it is possible that he may have to pay tax on his foreign income in that country also, where it is earned. Such situation leads to double taxation of the same income -in India and again in the country where it is earned. To avoid such a situation, the Government of India has entered into agreements for avoidance of double taxation with different countries, a discussion about which is made in Chapter XII. Filing of Return – compulsory.

As per AY 2008-09 Non-auditable accounts are furnished by those businesses, which have annual turnover of up to Rs 40 lakh per 44 annum and those professionals having income up to Rs 10 lakh per annum. From July 26 onwards taxpayers including salaried class would also be allowed for the first time to file tax returns in 1,000 designated post offices in the country. Earlier the one-by-six scheme that prescribed the return was to be filed compulsorily, if any of the following six items were present and whether the person had taxable income or not.

One-by-six scheme-If a person is enjoying any of the following item, he/she has to file his/her return. • Occupation of a House Ownership of a motor car Expenditure on foreign travel Holder of credit card Electricity payments in excess of Rs 50,000/annum • • • • 44 • Member of a club – where the entrance fee is more than Rs 25,000/-. Penalty Under the existing law, penalty for delay in filing of return of income is calculated as a percentage of the shortfall of tax. Where tax has already been deducted at source, or advance tax has been duly paid, no penalty is leviable.

It is proposed to amend the law to provide for the penalty of Rs. 1000 even in such cases. This provision is targeted towards the salary earners who always had the impression that their liability was over the moment the tax was deducted by the employer. Types of Assessments Basically assessment is an estimation for an amount assessed while paying Income Tax. It is a compulsory contribution that is required for the support of a government. It is generally of the following 44 types. Self assessment The assessee is required to make a self assessment and pay the tax on the basis of the returns furnished.

Any tax paid by the assessee under self assessment is deemed to have been paid towards regular assessment. Regular assessment On the basis of thereturn of income chargeable to tax furnished by the assessee an intimation shall be sent to the assessee informing him about the tax or interest payable or refundable to him. Best judgement assessment In a best judgement assessment the assessing officer should really base the assessment on his best judgement i. e. he must not act 44 dishonestly or vindictively or capriciously.

There are two types of judgement assessment : 1. Compulsory best judgement assessment made by the assessing officer in cases of non-co-operation on the part of the assessee or when the assessee is in default as regards supplying informations. 2. Discretionary best judgement assessment is doen even in cases where the assessing officer is not satisfied about the correctness or the completeness of the accounts of the assessee or where no method of accounting has been regularly and consistently employed by the assessee Income escaping assessment or re-assessment.

If the assessing officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year assess or reassess such income and also nay other income chargeable to tax which has escaped assessment and which comes to his notice in course of the proceedings or any other allowance, as the case may be. Precautionary assessment 44 Where it is not clear as to who has received the income, the assessing officer can commence proceedings against the persons to determine the question as to who is responsible to pay the tax. Section 80C.

Section 80L used to allow deduction of interest earned on, say, a National Savings Certificate or a bank deposit up to a limit of Rs 12,000. But now all these are gone . In their place has come Section 80C — “u/s 80CCC, & u/s 80CCD”, as the Finance Bill puts it. Thus, the new Section 80C of the Income Tax Act proposed in Union Budget gives you a bigger tax break than what the current regime of