It would be imperative to peruse through the Order of revision issued under section 263 of the Income-tax Act, 1961. If the Order has directed the Ld. Assessing Officer to make a de novo assessment, then the directions of the Additional commissioner of Income-tax would be valid in law. If there are instructions pertaining to… (read more)

It would be pertinent to understand that the nomenclature i.e., “Development Agreement” cannot be the reason for deciding disallowance. As section 54F of the Income-tax Act, 1961, is a beneficial provision granting an exemption, the same would be construed strictly and onus is on the tax-payer to establish its entitlement to exemption. But once the… (read more)

The issue of credit for payment of advance tax paid earlier is subject of matter of writ pending before High Court . One has to read the recorded reasons for reassessment . If the recorded reason is for failure to pay the tax as per declaration or based on the IDS declaration . The assessee… (read more)

Partnership is considered as same entity as individual partners, i.e. it is not separate legal entity. Reference can be made to the judgment of Hon’ble Supreme Court in case of CIT v. Hind Construction (1972 ) 83 ITR 211 (SC) ( dated 16.09.1971), in which it is held that the transfer of assets to firm… (read more)

It is pertinent to note that section 44AB of the Income-tax Act, 1961 is qua the assessee and not qua the business. Therefore, the assessee would have to prepare and file a tax audit report, if applicable, without segregating the businesses. Further, an Audit report is not a criterion for carry forward of losses. However,… (read more)

The Hon’ble Supreme Court in the case of Miss Dhun Dadabhoy Kapadia v. CIT [1967] 63 ITR 651 (SC) held that, any diminution in the price of the existing shares, as a result of right issue cannot be set-off against the amount received on renouncing the right to receive shares, while computing Capital Gains. Therefore,… (read more)

Once search warrant is issued in the name of Mrs X and her son Y. The revenue must have prepared the panchanama and also statement in the course of search proceedings . The validity of search proceedings can be challenged by writ and not in appeal proceedings . However if no incriminating material was found… (read more)

The issuance of right shares by a closely held company does not result in a taxable transaction. The Hon’ble Income-tax Appellate Tribunal in the case of Sudhir Menon HUF v. ACIT [2014] 45 taxmann.com 176 (Mumbai), DCIT v. Smt. Mamta Bhandari [2019] 108 taxmann.com 207 (Delhi - Trib.) have held that section 56(2)(vii) would not… (read more)

The conversion of a Partnership Firm into a Company does result in dissolution of the Firm. However, as there is no Capital Asset or Stock in trade or both being transferred by the Firm to the Partners, section 9B of the Income-tax Act, 1961 would not be attracted. The shares issued to the partners should… (read more)

As we understand, the assessee had offered income under section 44AD of the Income-tax Act, 1961 (Act). There is no dispute that the assessee falls under the provision of section 44AD of the Act. The Ld. Assessing Officer has also accepted that the assessee’s case falls under the purview of section 44AD of the Act… (read more)