Messages

1

Discussion / Re: Liability to pay advance tax in case of non deduction of Tax - Sec 209.

« on: February 16, 2013, 07:09:27 PM »

well as far as actual receipt is concerned, there is not much problem except in cases of running accounts where the payee is not certain as to amount is received without deduction or after deduction. The problem may arises in cases where the amount is credited to the account of payee or debited to the account of buyer. Certainty in such caes will be difficult on the part of the payee as the amount may be remitted to him after a time gap depending upon the credit limit enjoyed by the payer.

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Discussion / Writ against adjudication order

« on: February 13, 2013, 10:22:15 AM »

In the context of service tax, the bombay high court has taken view that writ is maintenable against the order, even if alternative remeady of appeal is available, if such order is passed with biased approach. This is a very well come judgment and we can make use of this judgment even in income tax proceedings in appropriate cases.

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Discussion / Re: Interest free loan by karta and clubbing provisions

« on: November 16, 2012, 10:41:37 AM »

boradly i am in agreement with you. However, section 64 somewhere takes care of a situation where income is transferred to any one without transferring the asset. I doubt that the same may be taxed there as money will continue to belong to individual but income is transferred to HUF. Learned friends on this forum may throw light on this aspect.

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Discussion / two firms to be converted into one

« on: October 03, 2012, 07:34:55 PM »

My query is regarding merger of two firms for future benefit purpose. How should such merger be done to minimise tax liability. The itemised sale of assets attracts huge tax liability. There is no problem as far as stamp duty is concerned. One option is slump sale of entire business. Can anything else be done? please share your valuable views.

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Discussion / income recognition

« on: October 02, 2012, 02:16:51 PM »

Friends,

I have a query. There was an old board circular dated 09-10-1984 prescribing income recognition on NPA in case of banks. The same was referred to by the Supreme Court in case of Uco Bank (237 ITR 889). Whether that circular is in effect today or it has been withdrawn later on? I feel it has been withdrawn as section 43D was enacted later on to take care of this aspect. Can any body provide me the relevant material or subsequent circular withdrawing the said circular dated 09-10-1984? Thanks in advance.

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Discussion / Re: Applicability of section 50C in case of capital contribution in firm

« on: September 01, 2012, 02:25:42 PM »

Thanks for your valuable views. but i still have some issues. Though section 50C does not contain any non obstante clause, it is a special provision while section 45(3) is a general provision. It is a well accepted view that special provision will prevail over the general provision. Section 45(3) applies to every capital asset contributed by the partner to the firm whereas section 50C, being specific, applies only to land and building. In fact, lucknow ITAT has considered this point in case of Carlton Hotel (122 TTJ 515) holding that 50C overrides section 45(3). In that case, the decision was in favour of the assessee on the ground that no sale deed was regisstered and hence section 50C was not applicable which ground no longer remains in view of amendment in section 50C.

As far as receipt of black money is concerned, it may be a case that the partner contribute land (or any other capital asset) to firm at cost and receive black money from other partners who may be outsideres so that on further sale or development thereof all partners may get share of profit in agreed manner on paper. In such a case, there may be involvement of black money though partnership is genuine. so this contention may not be a correct situation in all the cases. Kindly share your valuable views. If any direct decision is there on this issue, kindly share with me. Thanks to all. 

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Discussion / Applicability of section 50C in case of capital contribution in firm

« on: August 31, 2012, 07:26:41 PM »

Will section 50C applies in case of land contributed by a partner to the firm as capital contribution at cost? Can it be argued that section 50C does not apply as (1) what will be full value of consideration has been defined in section 45(3) and (2) ultimately, the transfer is not to any outsider but by partner to firm who are treated as same under the general laws? OR section 50C will override section 45(3) being a special provision?

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Discussion / Re: Reopening- s.147

« on: July 16, 2012, 07:25:56 PM »

Pawanji, happy to see you on this forum after a break. Your suggestion is really fine i must say. The reopening on audit objection has been a really problematic area for the assessees as the department always take this course to save themselves. The cost and mental stress is always on the side of the assessee. Through RTI, the entire statistics should be obtained and thereafter, its importance in the overall should be seen and brought to the notice of concerned competent authority/ministry for corrective measures. 

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Discussion / Re: Reassessment and GKN Driveshaft

« on: March 19, 2012, 11:13:54 PM »

Yes sir. that is cent percent correct. This position is clear from the case of P. V. Doshi since 113 ITR. the GKN driveshaft was rendered in the context of writ petition under article 226. However, if the assessee does not want to file writ and want to challange the reassessment in appeal proceedings, there should not be any bar. Howver, i need support of any tribunal decision or high court judgment in the matter. Kindly give me citation, if you find any application decision. Thanks in advance sir.

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Discussion / Reassessment and GKN Driveshaft

« on: March 19, 2012, 07:19:32 PM »

Dear All,

One of the issue which has been recently reaised by department is that after GKN driveshaft judgment, if the assesee does not file objection before the A.O., he can not challange reassessment before CIT(A). This appears to be incorrect. The assessee has right to challange the reassessment u/s 246A. Even otherwise, the issue of jurisdiction can be challanged at any stage. I request you all to kindly give your views in the matter with supporting judgments. It will be really helpful if any direct judgment on the suvject is found. thanks and regards to all.

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Discussion / percentage completion v. project completion v. matching concept

« on: December 23, 2011, 06:11:56 PM »

I want some HC and Tribunal decisions in case of builder wherein it is held that percentage completion method is not mandatory to follow. Project compltion or matcning concept formula can be adopted by a builder. The Supreme Court has dealt with this aspect in case of chit company in case of Bilhari Investment. I want an elaborative decison in case of a builder.

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Discussion / Re: deduction u/s 80IB

« on: December 08, 2011, 04:41:22 PM »

In my view both the items are eligible for deduction. Thee are many decisions in this regard. Recently  P&H High Court in case of Vallabh Yarn (51 DTR 236) held that insurance claim is eligible for deduction. The Liberty India judgment is entirely different. It talk of incentives and source thereof i.e. industrial undertaking vs. government policy. It was held that those incentives were arising from government policy and not directly from industrial undertakaing. The scrap sales is nothing but part of sales. It has no connection with any policy or other source. It is directly arising from the manufacturing process of undertaking. It is always inextrcale linked with manufacturing process and hence can not be seen divorced of industrial undertaking to contend that source is different. Similarly, insurance claim is nothing but the reduction in trading loss. It should not be treated as independent inocme as such but as reduction/saving of expenses. Since the trading loss is debited to P&L account, its saving should always be considerd as reduction of expenses and in that sense eligible for deduction. Both the things are closely connected in undetachable manner to the industrial undertaking and hence eligible for deduction.

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Discussion / Re: Whether interest on TDS is allowable?

« on: October 03, 2011, 04:37:49 PM »

The Bombay HC judgement reported at 196 ITR 406 and Calcutta HC judgment reported at 73 Taxman 555 also says that interest u/s 201(1A) is not deductible.

Pawanji, is there any development in the issue of deduction u/s 80IB(10) on on money receipt we discussed few months back? kindly give you inputs.

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Discussion / penalty u/s 271(1)(c) on improper claim of set off

« on: August 18, 2011, 06:10:47 PM »

There is a decision reported at 12 Taxmann.com 358 on the above subject. Can any one provide full text thereof?

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Discussion / Re: Is there any news on decision of Mumbai High court on B T patil on 80 IA (4)?

« on: August 18, 2011, 01:00:05 PM »

Pune Tribunal in case of Laxmi Enginnering has held that Tribunal larger bench decison of B.T.Patil is not a good law in view of Bomaby HC in case of ABG Heavy Industries (322 ITR 323). Kindly check if it is applicable in your case?