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S. 14A: Exempt Income Versus Expenses For Exempt Income

CA Jyoti Gupta has considered the question whether disallowance u/s 14A can be made in a case where exempt income is earned from stock-in-trade and strategic investments in the context of the recent judgement of the Supreme Court in Maxopp Investment Ltd vs. CIT 91 154 (SC)

As could be discerned from the heading itself, vide this article we would be discussing the provisions of Sec.14A of the Income-tax Act. The matter for discussion, is the recent decision of Hon’ble Supreme Court in case of Maxopp Investment Ltd vs. CIT [2018] 91 154 (SC).

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S. 271(1)(c) Penalty | Judgement Of Bombay High Court In Shanti Ramanand Sagar Explained

In Shanti Ramanand Sagar vs. CIT (2018) 402 ITR 245, the Bombay High Court has upheld the levy of penalty u/s 271(1)(c) for concealment of income or furnishing inaccurate particulars of income. Advocate Rahul Hakani has explained the judgement in the proper perspective and pointed out that it does not alter the prevalent legal position that no penalty can be levied in case of rejection of a bona fide legal claim

1. After the decision of the Supreme Court in UOI v. Dharmendra Textiles (2008) 306 ITR 277 (SC) , it was seen that the revenue authorities initiated penalty proceedings in an automatic fashion and also argued at different Appellate stages that penalty is to be levied the moment addition is made or confirmed. This erroneous interpretation was set at naught by the Supreme Court in Union of India vs Rajasthan Spinning & Weaving Mill (2009) 180 Taxmann 609(SC) wherein it was held as under:

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Tax Emergency – Tax Bharo Ya Jail Bharo

CA Prarthana Jalan points out that the department’s aggressive action in launching prosecution even for trivial offenses is creating panic amongst taxpayers and leading to a state of “Tax Emergency”. She advises that the department should use the weapon of prosecution sparingly and only against habitual offenders and not as a tool to terrorize taxpayers

I had heard about National Emergency, had read about Financial Emergency and am witnessing “Tax Emergency” in front of my eyes. Indeed our country is in the state of “Tax Emergency”.

As during emergencies, no law is applicable except what the government decides according to its own sweet will similarly in today’s scenario also it seems Income Tax Act, 1961 is not applicable but just one law is applicable i.e “TAX Collection TARGET”

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Finance Bill 2018: Tax Implications Of Conversion Of Stock-In-Trade Into Capital Asset

Advocate Rahul Hakani has analyzed the proposed amendments by the Finance Bill 2018 to sections 2(24), 2(42A), 28 and 49 to tax the notional gains arising on conversion of stock-in-trade into capital asset. He has explained precisely the nuances of the amendments and also identified the controversies that will arise therefrom


1 An assessee may withdraw/convert/treat his stock in trade and hold it as a capital asset if there are changes in facts and circumstances necessitating such conversion.

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Finance Bill 2018: Taxability Of Long Term Capital Gains

Advocate V. P. Gupta has explained the salient amendments proposed in the Finance Bill 2018 relating to the taxability of long-term capital gains. He has pointed out that some provisions are anomalous and may lead to prolonged litigation. He has offered suggestions on how the provisions should be reworded so as to make the law clear and unambiguous

Vide Finance Bill, 2018 the Finance Minister has proposed certain amendments in regard to scheme of taxation of long term capital gains arising on transfer of equity shares and units of mutual funds. Proposed amendments and their implications are being discussed hereunder with reference to present provisions of the Act.

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Finance Bill 2018 – Deemed Dividend and Distribution Tax

Advocate Rahul Sarda has analyzed the amendments proposed by the Finance Bill 2018 to sections 2(22), 115-O and 115-R of the Income-tax Act, 1961 with regard to the taxation of dividends and the levy of dividend distribution tax. He has explained how these amendments will widen the tax base on the pretext of ‘ease of collecting taxes’

I. Introduction

1) Since the Union Budget for the fiscal year 2012-13 presented on 16th March 2012, and all budgets thereafter, we have seen the direct tax proposals being assiduously organised into various heads. While some of these heads represent the disposition of Government’s policies such as Ease of doing business, Make in India and Swachchh Bharat, some other heads denote the transient and ad hoc nature of yearly budgetary exercise such as Rationalisation measures and Tax incentives and reliefs. But there is one head – Widening of tax base – which has figured in some form or the other in direct tax proposals for most budgets during the years 2012 till 2018.

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Finance Bill 2018 – International Tax Amendments

Advocate Sunil Moti Lala and CA Tushar Hathiramani have analyzed the amendments proposed in the Finance Bill 2018 relating to “business connection“. They have explained the precise scope of the proposed amendments and also highlighted the controversies that are likely to arise therefrom. The relevant judgements on the issue have also been cited

Vide the Finance Bill, 2018, India has yet again introduced anti-Base Erosion and Profit Shifting measures in its domestic law in line with the Action Plans formulated by the Organisation of Economic Cooperation and Development (‘OECD’). The international tax amendments brought out vide this Finance Bill seek to expand the scope of the term ‘business connection’ contained in Section 9 of the Income-tax Act, 1961 (‘the Act’) by way of

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Deemed Service Of Notice U/s 143(2) On Assessee – Judgment In Case Of Dharam Narain (SC) Needs Reconsideration

In ITO vs. Dharam Narain, the Supreme Court has held that if the assessee is not available to take service of the s. 143(2) notice, service on the authorized representative is sufficient to draw inference of deemed service of notice on the assessee. It was also held that the fact that the authorized representative is disowned by the assessee is irrelevant. CA Dev Kumar Kothari has carefully analyzed the judgement. He argues that the judgement is wrong and requires reconsideration. He has made good his assertion by giving detailed reasons

In a Writ Petition in case of Dharam Narain Versus Income Tax Officer, Etawah – 2012 (12) TMI 1148 – ALLAHABAD HIGH COURT, the High Court has held that there was no service of notice upon assesse, therefore initiation of assessment proceeding was invalid. However, this has been reversed in CIT V Dharam Narian reported as 2018 (2) TMI 1474 – SUPREME COURT OF INDIA.

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Deadly Deadlines

CA Yash V. Rajpurohit has compiled a list of all important due dates in March 2018, and the statutory obligations which require to be complied with within the said deadline. The checklist will help taxpayers and professionals ensure that they do not miss out on any obligation which may attract penal consequences

“Kaal Kare So Aaj Kar,
Aaj Kare So Ub,
Pal Mein Pralaya Hoyegi,
Bahuri Karoge Kub”

Sant Kabir

Sant Kabir in the 15th Century has clearly portrayed the importance of time management; while inscribing the above doha. The above verse clearly explains the human tendency of laziness and procrastination even at that point of time. Sant has also explained that if we keep on postponing our work, it may cause stress related problems to us. Sant has advised that we should complete our work well within the given timeframe. Completing our work before the target date will not only help us to reduce the stress but it will also help in improving the quality of work.

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Digest Of 2000 Important Judgments On Transfer Pricing, International Tax And Domestic Tax (Jan To Dec 2017)


Advocate Sunil Moti Lala, assisted by CA Tushar Hathiramani, has prepared a compilation of 2000 important judgments on transfer pricing (1,200 cases), International Tax (109 cases) and Domestic Tax (691 cases) reported in the period from January to December 2017. The author has meticulously and systematically classified the judgments into various categories to enable ease of reference. The appeal numbers in most cases have been provided so as to enable the judgements to be retrieved from the website of the respective Court or Tribunal. A PDF copy of the digest is available for download. The digest will prove invaluable to all practitioners of taxation law.

The Digest comprises of all the important judgements dealing with transfer pricing, international taxes and domestic taxation laws. A brief head note is given for each case. The Digests for the earlier periods are available here

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