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Can some one give a answer to this problem, if possible

Hi Team,

My company received Loan amounts from the subsidiary companies and directors in the previous year 11-12 and we considered it as loan until 11-12. But there after the management of the decide to convert the loan amount in the equity in the Financila year 12-13.

The FMV in the financial year 11-12 is low compared to 12-13.

Can we convert it as equity in 12-13 or we have to repay it and get it once again as fresh money.

Please quote what are consequences and possible ways to do safe way without attracting any penalty provisions or doubtfull in the minds of Assessing officer.

Please revert back at the earliest as it is urgent.

Thank You

With regards

C Vinay Surana 

 ITAT New Del h i in  ca s e o f  Pr aveen Gupta vs ACIT  [13 7 TTJ 3 07] was  seized of the issue and held that the allotment date  of  flat by builder is the date from which indexation  is to be computed for the cost of  acquisition . In other words, it held that the date of
allotment is the date from which the period of  holding is to be counted.

One More cases

ITAT Mumbai in Nita A. Patel vs ITO 132 TTJ 468 (2009)

Definiton of Purchase date as per various court decisions is the day you book your flat provided you pay all your outstanding dues. Here are some decisions which has been favoured the assesse.

Jitendra Mohan vs Income tax officer New delhi (2007)
Jagadish Chander Malhotra vs Income tax officer
CIT vs Vimalchand Mutha (1991)
CIT vs Vedprakash&Sons(HUF)

is there any one to reply to this query.....

There are two companies---Company A and Company B----both has common directors and almost deal with same line of business.

A few months back Company A had an exparte assessement from PF department and amound was paid off to avoid harrasement.After few months the company shifts all the employees from A to B and Pays salary from B alone and startred deducting the PF from B employees(Not even one paisa salary goes from A)

Now the Problem is Only A is registered with PF department and B is not registered,there are some technical issues which are standing as a constraints which is not allowing us to register.

My question is can we pay the PF amount which is deducted by Company B and remitted to PF department using Company A PF Code.

How to justify this act in the income tax department convincing them that PF is deducted only from Company B and it is remitted on behalf of B by A since B does not a  have code due to technical issues and cumbersome procedures.

Can any one guide me on this or any case law on this type of cases where commercial expediency prevails.Please help me out my dear friends and senior professionals.

http://220.227.161.86/26888cajournal_june2012-19.pdf

I hope this may be helpfull for your reading and understanding

Please put up case here

it will be helpfull for us also

Tax will be deducted u/s 195 only since as u mentioned 194J is governed for resident only.

If he does not have any other income other than mentioned by you and tax for the same is deducted by the Indian deductor then there is no requirement for the non resident to file income tax returns.

Fees for Technical and professional work



SP Sridhara

you are required to read sec 90 and 91 for relief to claimed.

For RBI every bank which is opened across the country it should be registered.When a bank has to be opened there are certains norms which are prescribed by RBI which may be common for all banks(Minimum Requirements) that it should be fulfilled.If such norms are only fulfilled it attains a status of so called name "BANK".Even sec 6 and 7 of banking regulation act probhits the using of the word "bank" other than those person who are not registered.Such in case just because it is not found or updated by the RBI in its schedule is mere for arguement sake we can speak otherwise this arguement is not valid on the grounds that it is not found in the schedule of RBI.Once a bank is registered it should be updated in the scedule.

Interestingly, I have seen an argument written by somebody in this forum with regard to 40a(ia) disallowance and TDS demand. I found that the same is logical and reasonable. Once the deductee had filed return of income duly reflecting the receipts from the deductor, then not only the demand u/s 201(1) but also the demand u/s 201(1A) cannot be enforced in the hands of deductor. To overcome that an amendment has been brought into statute 201(1A) by way of a proviso in the Finance Act, 2012. When the section says that interest is to be charged till the date of payment of the relevant tax either by the deductor or by the deductee, the newly inserted proviso says interest is payable till the date of finling return of income by the deductee. It appears that the law makers didnot make note of this while proposing the amendment. Think from this angle also.


Can you give the link of this article so that i can read it to have some more clarity on these late payments

[7. We have heard both the sides. In the assessment order the Assessing Officer disallowed interest of Rs.11,676/- on the ground that interest on TDS is not allowable expense. The reasoning giving by Assessing Officer is that when TDS is not allowable, how interest on same is allowable. However, in the impugned order Ld. CIT(A) accepted the contention of assessee that when assessee received interest on ITA 2511/Ahd/2010 A.Y. 2008-09]

7. We have heard both the sides. In the assessment order the Assessing Officer disallowed interest of Rs.11,676/- on the ground that interest on TDS is not allowable expense. The reasoning giving by Assessing Officer is that when TDS is not allowable, how interest on same is allowable. However, in the impugned order Ld. CIT(A) accepted the contention of assessee that when assessee received interest on ITA 2511/Ahd/2010 A.Y. 2008-09

Satyavenshi Sir and Ca Manoj gupta if you note this point at the reason given by the officer,it is If TDS is not allowable then interest is not allowable.

So If TDS is allowed can we take it as Interest also allowed ??
To be frank this case was not argued properly nor it was appealed in the Courts may be due to amount being small in disallowance and with regard to the cost of expenses with courts and Lawyers.

[6. The only other ground of appeal is as under:- "(2) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition made of Rs.11,676/- on account of interest paid on late payment of TDS as the interest on TDS is not allowable deduction as per Income Tax Law."7. We have heard both the sides. In the assessment order the Assessing Officer disallowed interest of Rs.11,676/- on the ground that interest on TDS is not allowable expense. The reasoning giving by Assessing Officer is that when TDS is not allowable, how interest on same is allowable. However, in the impugned order Ld. CIT(A) accepted the contention of assessee that when assessee received interest on ITA 2511/Ahd/2010 A.Y. 2008-09DCIT Cir-5 A'bd v. M/s. Raajratna Metal Inds. Ltd. Page 3tax refund the same is taxable in same manner the interest on late payment of TDS is allowable expense. It is pertinent to note that it is not the case of assessee that benefit of netting of interest paid to the Department and received from the Department be allowed. It appears that assessee deducted TDS and deposited the same late with the Income-tax Department. As a result of this, it paid interest of Rs.11,676/-. The Hon'ble Supreme Court income Bharat Commerce & Industries v. CIT (1998) 230 ITR 733 (SC) held that interest for late payment of direct taxes is not deductible. Therefore disallowance of interest of Rs.11,676/- is restored. This ground of appeal is allowed.8. In the result for the statistical purposes the appeal of Revenue is treated as partly allowed.]

Thought Bharat Commerce Industries case law never talks about late payment TDS,but Royal Packaging, Nani Daman vs Department Of Income Tax,Income Tax Appellate Tribunal - Ahmedabad produced a verdict that late payment of interest on TDS is not allowed under tha act. Im reproducing the case law.Please guide me if you have any more justifications sir


6. The only other ground of appeal is as under:- "(2) On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in deleting the addition made of Rs.11,676/- on account of interest paid on late payment of TDS as the interest on TDS is not allowable deduction as per Income Tax Law."

7. We have heard both the sides. In the assessment order the Assessing Officer disallowed interest of Rs.11,676/- on the ground that interest on TDS is not allowable expense. The reasoning giving by Assessing Officer is that when TDS is not allowable, how interest on same is allowable. However, in the impugned order Ld. CIT(A) accepted the contention of assessee that when assessee received interest on ITA 2511/Ahd/2010 A.Y. 2008-09

DCIT Cir-5 A'bd v. M/s. Raajratna Metal Inds. Ltd. Page 3

tax refund the same is taxable in same manner the interest on late payment of TDS is allowable expense. It is pertinent to note that it is not the case of assessee that benefit of netting of interest paid to the Department and received from the Department be allowed. It appears that assessee deducted TDS and deposited the same late with the Income-tax Department. As a result of this, it paid interest of Rs.11,676/-. The Hon'ble Supreme Court income Bharat Commerce & Industries v. CIT (1998) 230 ITR 733 (SC) held that interest for late payment of direct taxes is not deductible. Therefore disallowance of interest of Rs.11,676/- is restored. This ground of appeal is allowed.

8. In the result for the statistical purposes the appeal of Revenue is treated as partly allowed.

Whats your take on this case law Satyavenshi Sir

Thank you Satyavenshi Sir

From your last para discussion i found that interest cannot be passed to deductees as i will be allowed to claim the same.My unanswered questions are

SHOULD I REVISE MY TDS RETURNS SO AS TO INCLUDE THE INTEREST PORTION ALSO.

From your discussion im getting an opinion that since interest itself is not passed to deductees then why i should revise my returns when there will be no use in revising it.


@Manoj Gupta
My question is talking about Interest on TDS and not on Interest on Income Tax.

I have paid TDS lately and Interest on TDS has been paid by me.I have following questions

1.Since i have paid interest on Late deposit of TDS,should i be required to revise my TDS returns now including this interest amount.(I have paid interest separately).If i have to revise the returns then should i pass the interest amount to deductee also??

2.If there is revision of returns and interest is passed on to clients,will they be able to claim the interest portion along with the TDS why im asking this since interest of TDS is disallowed under income tax,it will be disallowed for me also,then how can my clients will be taken into account and how the same will be allowable to them

3.Can i just keep quiet without revising the returns and passing on to clients,since in any way it is going to be disallowed for me,let it be in my accounts and get disallowed.

Please guide me on this with detailed procedure of law and jsutify the same with the case law.