Section 43 of the Companies Act, 2013 allows companies to issue equity shares with differential rights as to voting, dividends, or other privileges. So, a company can design an ESOP policy to allocate non-voting equity shares to employees with shorter tenure or lower performance and voting equity shares to high-performing or senior employees. (read more)

According to the judgement of the Bombay High Court in Sarfaraz S. Furniturewalla v. Afshan Sharfali Ashok Kumar, the hardship compensation is not to be considered as revenue receipt and is not liable to be tax, as a result there will be no question of deduction of TDS. from the amount payable by the Developer… (read more)

If the ocean freight payment is to a Non-Resident Shipping Company, no TDS is applicable on export and import of goods. See Section 172 of the Income Tax Act, 1961 and CBDT Circular No. 723 dated 19th September 1995. If the payment is made to a resident shipping company or freight forwarder, TDS is applicable… (read more)

You can file an appeal even after the expiry of the limitation period and request for condonation of the delay. If reasonable cause for the delay is made out, the appeal will be admitted and heard on merits. (read more)

The transaction of receiving Rs. 90 lakhs in cash for the sale of agricultural land violates Section 269SS. It also violates Section 269ST. The assessee is liable for penalty under Section 271D and Section 271DA. It is arguable that only Section 269ST and Section 271DA should be considered as it is a high-value cash transactions.… (read more)

The judgement in PCIT v. Kanak Impex (India) Ltd (Bombay High Court) is wide ranging and hits out at all Bogus purchases where the assessee is unable to prove genuineness of purchases. A distinction, if any, will have to be made on the facts of each case. (read more)

There is no statutory prohibition against an unequal partition though the onus will be high on the assessee to prove that it is done for legitimate and genuine reasons and not for tax planning reasons. Order u/s 171 is mandatory. The judgement of the Supreme Court in M. V. Valliappan explains the concept of partial… (read more)

If you feel the arbitrator has a bias and have lost confidence and he is refusing to resign, you may first approach the Chamber of Commerce (assuming their rules govern the arbitration) or file a petition in the High Court under the Arbitration Act for directions. (read more)

The amount deposited in the CGAS has to be utilized for the purchase or construction of a new residential property within 2 years/ 3 years from the date of transfer of the original asset. The unutilized amount in the CGAS is assessable as Long-Term Capital Gain in the financial year in which the period of… (read more)

The AO's view is wrong in view of the judgements in CIT vs. Reliance Utilities and Power Ltd [2009] 313 ITR 340 (Bom) and others that there is a legal presumption that funds used for non-business purposes have come out of own funds and are not subject to disallowance u/s 36(1)(iii) of the Act. (read more)