Topics

1

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 / 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.

3

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 Whether that circular is in effect today or it has been withdrawn later on? I feel it has been withdrawn as section 43D was enacted later on to take care of this aspect.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 / 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 / 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 / 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 / Reassessment and reasons

« on: May 31, 2011, 02:03:42 PM »

As we know after GKN Driveshaft (259 ITR 19), furnishing of reasons to the Assessee has become mandatory. What if the A.O. completes the reassesment without giving the reasons to the assessee despite his request ? I find two way decisions in this regard. (1) the reassessment to be anulled. Hyderabad ITAT in case of S. Prasad Raju (96 TTJ 832) and Jharkhand HC in case of Kavee Enterprises Lrd. (301 ITR 156) have taken this view. (2) CIT(A) may remand and ITAT may set aside the cases to the file of the A.O.to do afresh My personal view is that the reassessment should be anulled. The spirit of GKN driveshaft is that validy of reassesment should be decided prior to completion of reassessment. If A.O. completes reassessment first without deciding validity of the same, later on it is not likely that in remand or set aside assessment, he would be able to decide validiy with a nutral mindset. I request learned friends and seniors to kindly share views on this topic.

9

Discussion / addition under section 68/69 and set off

« on: May 03, 2011, 08:07:56 PM »

can the addition made u/s 68/69 be set off against business loss/unabsrobed depreciation? As per my knowledge there is one judgment of Madras High Court in case of Chensing Ventures (291 ITR 258) in which addition u/s 69 was allowed to be set off against business loss. However, some CIT(A)s have taken view that such set off is not permissible as addition u/s 68/69 are headless income as they do not fall under any particular head. This view was derived from the Gujarat High court judgment in case of Fakir Mohammad Haji Hasan (247 ITR 209). This view was furthered on the reasoning that section 71 prescribes headwise set off and hence headless income can not be set off. I request learned friends and senior members to kindly share views on this topic alongwith judgments/decisions, if any. Regards

10

Discussion / tax collection at source

« on: April 22, 2011, 06:21:11 PM »

is TCS applicable on high sea sales between two residents?

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Discussion / reassessment on an issue not allowed in original assessment

« on: February 11, 2011, 06:13:10 PM »

in the original assessment u/s 143(3), deduction u/s 80IB was denied in entirety on the ground of violation of one of the mandatory conditions. CIT(A) allowed the benefit of deduction u/s 80IB finding that there was no breach. The department filed appeal before ITAT. During the pendency of ITAT appeal, department reopened the assessment, on audit objection, on the ground that benefit of deduction u/s 80IB should not be allowed on DEPB. On merit, it seems to be in order due to Supreme Court judgment in case of Liberty India. However, we objected to the reassesment proceedings on the ground that there was no escapement of income as in the original assessment deduction u/s 80IB was denied in entirety. Proviso to section 147 is not applicable as reopening is within 4 years.

(1) Is our stand that there was no escapement of income when no deduction u/s 80IB was allowed in original assesment correct?

(2) Whether doctrine of merger will come into play? can it be said that the assessment order merged into CIT(A)'s order and since CIT(A)'s has allowed the benefit of section 80IB, there is escapement of income to the extent of deduction on DEPB?

(3) Can we say that department could not reopen such a case during pendencey of its appeal before ITAT and can take alternative plea before ITAT for DEPB?

The reassessment was completed disposing objections without discussing them with reasoning. At present, the ITAT has also dismissed department's appeal. Kindly share  your views in the matter.

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Discussion / interest on NPA - position for co-operative bank

« on: January 07, 2011, 06:49:50 PM »

Learned friends

u/s 43D, interest on NPA account is not taxxable even if assessee is following mercantile system of accounting. however, the said section applies mainly to scheduled banks. in case of NBFC, there are judgments which hold that interst on NPA is not taxable in view of theory of real income. latest as per my knowledge is Delhi HC in case of Vashishth Chay Vyapar. My littile confusion is whether the position will be same in case of Co-operative bank? is there any direct judgment in relation to any co-operative bank? Kindly give your valuable views.

13

Discussion / principal amount waived in OTS by bank

« on: January 07, 2011, 06:38:03 PM »

Learned friends

The Bombay HC in case of Mahindra & Mahindra (261 ITR ) held that principal amount waived by bank in respect of term loan for asset purpose is neither taxable u/s 28(iv) nor 41(1). However, in later judgment the Bombay HC in case of Solid Containers (308 ITR ) held that waiver of loan obtaind for trding liability is taxable u/s 28(iv). The HC distinguished earlier judgment of Mahindra & Mahindra and relied on T.V. sundaram Iyengar (222 ITR ). It means waiver in respect of working capital finance from bank which are generally obtained for trading purpose acn be taxed u/s 28(iv). The situation appears to be undesirable. Kindly give your view in the matter.