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Sir,

Gifts from husband to wife is exempt u/s 56(2). It includes both cash and kind such as immovable property. Now , When a husband gifts the property to his wife, income tax is not levied in the hands of the receiver for this transaction.
But Section 64, Taxes the income that is derived out of such property as it is without adequate purchase consideration.

Now the question is
1)When a person transfer the property, he also transfers the income from such property, in such cases Can  64 still have any bearing with recent amendment?.
2) Can clubbing provision over rule the benefit of other section?.

sathya

Can unabsorbed depreciation be set off against salary income?.
Section 71(2A) restricts loss under the head business or profession to be set off against salary income.
The question is, Does this loss includes unabsorbed depreciation?
I also like to bring few section that provides a preferential treatment for unabsorbed depreciation
Section 79 - Unabsorbed depreciation to be carried forward whereas the business loss is prohibited to be carried forward
Section 80 - In case of belated return, the limitation to file on due date relates only to business loss and not for unabsorb depreciation.
can the similar benefit also be provided for setting off the unabsorbed depreciation against salary income?

I also append the extract of section 72 and  71(2A) .
The wording in section 72
(1) Where for any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss to the assessee, not being a loss sustained in a speculation business, and such loss cannot be or is not wholly set off against income under any head of income in accordance with the provisions of section 71,
is similar to
The wording in section 71(2A)
(2A) Notwithstanding anything contained in sub-section (1) or sub-section (2), where in respect of any assessment year, the net result of the computation under the head "Profits and gains of business or profession" is a loss and the assessee has income assessable under the head "Salaries", the assessee shall not be entitled to have such loss set off against such income

Both provide for " Under the head Profits and gains of business or profession".
Hence to conclude
If the benefit is given u/s 79 and also for 80, Why cannot the same benefit be extended for this section 71 (2A)
Pls respond with your views. :)
Regards
Sathya
vyakul@gmail.com

[the length of a period becomes irrelevant]

I have been trying to understand the possibility of condonation of delay during the appeal proceedings.
I am sharing the collection of information for this wider audience. :)

The assessee didnot file the petition for appeal within time limit. it got delayed by more than 2 years. Question arose, whether such petition could be admitted after condoning this inordinate delay.

The input is as follows.
IT provsion
1) Time limit for filing appeals . (Provided clearly in the IT Act and limitation is there)
2) Time limit for condoning the delay. (Not provided  and hence not limited)
3) For condonation. Show cause for such delay is important
Two possibilities
1) When a legislation provides for time limit for filing appeals and for condonation. In that case, that particular legislation will prevail and section 5 of the Limitation Act 1963, may not have a jurisdiction.
2) When a legislation dont provide for time limit for condonation of delay. In that case, Sec 5 of the limiation act 1963 is applicable.
In our case, We need to opt for the second one, as the IT Act dont have any limiation for condonation of delay. Means Section 5 of the limiation act is applicable for condoning the delays for the IT Act.

Now
When it come to the question? Delay of about 2 years. Can this be condoned. ?
The following extract from the decided case law
HIGH COURT OF PUNJAB AND HARYANA,Pawan Goel, v.KMG Milk Food Ltd.PERMOD KOHLI, J
is helpful

"The condonation of delay under section 5 of the 1963 Act is permissible without any limit, provided the applicant is able to establish a sufficient cause. It is a settled law that once the Court is convinced or satisfied regarding the existence of a sufficient cause, the length of a period becomes irrelevant. However, this proposition is attracted only if section 5 is applicable. [Para 24]"

From the above it is clear that, The delay of 2 years could be condoned if there is a sufficient cause.

Hope one finds it useful
Regards
Sathya
vyakul@gmail.com

More number of cases were taken up for scrutiny and re assessments were also being made for the companies that claimed depreciation on intangible. I.e. Goodwill. No compete fees.

The vendor decides to sells his business / unit for a consideration that includes the commercial right to carry on the business as an ongoing basis. The agreement also provides scope for the vendor after selling shall not enter into this business for a period of time usually called as "No compete fees". The purchaser pays consideration for these intangible and usually names it as "Goodwill" and accordingly use that as head of accounting.

As per IT, The term intangible asset is a one that is ii) know-how, patents, copyrights, trade marks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets acquired on or after the 1st day of April, 1998,

Apparently the term "goodwill or no compete fee "dont appear in the said list but means only that.

The AO is of the opinion that goodwill / no compete fee is not an intangible asset  and depreciation could not be provided.

Is this view is acceptable? Is there any decided case on this issue? Can you pls help us out

sathya
vyakul@gmail.com

The assessee has his property that got competed by Feb 2006. There remains interest on borrowed capital of Rs. 2.6 lacs. The property was not self occupied nor was it let out. It could not be let out in that short time for the FY 2005-2006.
Section 24 stipulates the condition that the property be completed / constructed.  In such a case, Can he claim the entire interest accrued on such property in full (without this limit of 150000).

Is there any decided case law on this subject?

Sathya
vyakul@gmail.com

[The specified date is amended during this 2008.]

Finance Act 2008 has amended  the provision  40(i)(ia) of the I T Act.
This amendment relates to expenses being disallowed for not remitting the TDS on or before the specified date.

The specified date is amended during this 2008.
The  amended section provides for the following
1) TDS for March month shall be remitted on or before the due date of filing the return of income.
2) This is amended for the AY commencing from 2005-2006.

Prior to the amendment The provision provided the specified due date as
For all expenses booked on 31st March the time limit is 31st May,
For all expenes booked for march other than 31st is 7th April.

The following question arose because of the retrospective amendment.

This is more relevant for the FY 2004-2005. For this FY 2004-2005, There are more possibilities wherein the assessee would not have remitted the TDS before 31st May 2005 but before due date of filing the return of income.  The question is more relevant for all the Assessments that got completed for this AY 2005-2006. The statutory date for completing the assessment is  31-12-2007

1) Self assessment cases: The assessee by themselves would have disallowed such expenses based on the earlier provision. As per amended provision the assessee neednot disallow such expenses. In such a cases, Should the Assessee file a revised return?
2) Scrutiny assessment: If the assessee didnot disallow such expenses,The assessing officers would have disallowed.This is not a mistake and may not invoke provision 154. In such cases what is the remedy?. Should the assessee file a revised return?

In both cases Can the revised return be filed after the due date of assessment i.e. 31-12-2007?

I am reproducing the extract of the provision for immediate reference.

any interest, commission or brokerage, rent, royalty, fees for profes­sional services or fees for technical services payable to a resident, or amounts payable to a contractor or sub-contractor, being resident, for carrying out any work (including supply of labour for carrying out any work), on which tax is deductible at source under Chapter XVII-B and such tax has not been deducted or, after deduction, has not been paid,—

    * (A) in a case where the tax was deductible and was so deducted during the last month of the previous year, on or before the due date specified in sub-section (1) of section 139; or
    * (B) in any other case, on or before the last day of the previous year:

Provided that where in respect of any such sum, tax has been deducted in any subsequent year, or has been deducted—

    * (A) during the last month of the previous year but paid after the said due date; or
    * (B) during any other month of the previous year but paid after the end of the paid previous year,

such sum shall be allowed as a deduction in computing the income of the previous year in which such tax has been paid.




Hope to get some light.
Sathya
vyakul@gmail.com

NBFC treats interest income on sticky loans (non performing assets) based on cash basis while they follow mercantile system for performing assets. It is based on prudential norms and as per the guideline of the Parent legislation "RBI".

During the course of assessment, It is usual for the Assessing officers to consider the income on sticky loans based on mercantile and charge income tax on it. They mostly rely on the supreme court judgement. They also take shelter under section 145.

There are circular from CBDT particularly 698 allow the benefit of this treatment only to banks and formal financial institution and ignored the NBFC. Though the circular draw reference to the RBI, but grossly ignored the fact that NBFC are also guided by the same regulation.

Infact it provides a inequality. It may be unconstitutional. Only experts can comment :)

So i want to know is there a case law that provides for considering the interest income on cash basis instead of accrual concept
sathya
vyakul@gmail.com

I understand that the unabsorbed depreciation could be carry forward in definite. It is not barred under section 79 (Section 79 bars only business losses). I was told  there is a SC case in this "Subhulaxmi mills" vs"CIT". Can someone provide the detailed judgement?
Thanks
sathya