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Topics - bhaveshformals

Discussion / Writ petition against Rule 8D
April 20, 2009, 10:15:19 AM
Does anyone have any knowledge if there has been any writ petition against Rule 8D in any High Court?
Also please tell if any hearing is already over or at when is the hearing expected.

Keep Smiling

Discussion / Section 44AF
January 19, 2009, 04:21:25 PM
The assessee is engaged in retail trade.
He has prepared Financials. The P and L A/C is showing Profit of Rs. 2,40,000 i.e. 12% of Turnover.
Can he still take the benefit of Section 44 AF and offer only 5 % of the amount for taxation or will he have to offer 12% as shown in the P and L A/C

Bhavesh Savla
Keep Smiling.

If section 14A (2) is read carefully, then can we advance the arguments that Rule 8D is to be applied only if the A.O. is dissatisified as regards the claim of the assessee? Thus Rule 8D is not to be applied mechanically. It is a last option.
It is only after A.O. rejects the claim of the assessee.
Also while rejecting, should the A.O give reasons for his order?   
Has anyone else here taken a simliar position.

Bhavesh Savla
Keep Smiling.
Discussion / Functioning of Tribunal
December 03, 2008, 02:38:40 PM
Was the tribunal functioning on 27 and 28 Nov.
I could not attend a hearing on 27 nov because of the terrorists attack.
What is the status of cases on 27 and 28 nov?

Bhavesh savla
Keep Smiing.

Discussion / Wealth tax
August 07, 2008, 04:59:04 PM
Dear all

Under the wealth tax the valuation of depreciable assets is given below

(i)    in the case of an asset on which depreciation is admissible, its written-down value;

My query is that the written down value should be as per the Income tax act or as per the books of accounts?

Bhavesh Savla
Keep smiling.
Discussion / MAT under 115JB
July 04, 2008, 07:12:22 PM
Under 115 JB a company is allowed to deduct the minimum of brought forward business losses or depreciation.

Suppose a company never had owned fixed assets and therefore has never claimed depreciation in its books as an expense.

Under such facts if we apply 115JB strictly, then the company will never be able to take the benefit of brought forward business losses.

Can one argue that the provision relating to unabsorbed depreciation won't apply to such a case and therefore the company can claim unabsorbed business loss for calculation of book profits for section 115JB

--Bhavesh Savla

Keep Smiling.
Discussion / 35D amendment by 2008 Budget
June 20, 2008, 10:10:33 AM
Dear all

Section 35D has been amended by the Budget 2008 to include non-industrial undertakings also.Thus they can get the benefit from AY 2009-10.

My question is that should the expenditure be necessarily incurred in the FY 2008-09 to get this benefit. Suppose an assessee incurrs an expenditure in FY 2007-08. Is it possible to take a view that it will not get the 20% allowance in the AY 2008-09 but it can start getting the allowance of  20% from AY 2009-10. The Section 35D nowhere says that the expenditure should be in the prevoius year relating to the year of first allowance.

Your views would be highly appreciated.

Bhavesh Savla
Keep smiling.

Dear All

Is there any decided laws on SEBI registration fees paid to SEBI by Merchant Banker.

IS it allowable as Revenue Expenditure or to be capitalised as a dead loss??

Bhavesh Savla
Keep Smiling.
Discussion / Professional Tax
July 25, 2007, 10:20:07 AM
Dear all

The Delhi HC in CIT vs NHK Japan Broadcasting Corpn. 291 ITR 331 has
said that that Citizens Tax paid by the employer out of the salary of
the employee is a diverison of tax.

On reading the case it seems that the Citizens Tax is very similar to
the Professional Tax paid by us. So can we also claim that it is a
diversion of income and hence no tax is to be paid on it.

bhavesh savla
Discussion / Ishikawajima
June 29, 2007, 10:57:29 AM
My Views on Ishikawajma Harima

The Sc has basically not disputed the finding of facts of the AAR. It merely mentions the fact that the Contract is a turnkey one and a composite one but the consideration is not.

Clause 1 of Article 7 of the DTAA:
·   The profits of an enterprise of a Contacting State shall be taxable only in that Contracting State unless the enterprise carries on business in the other contracting State through a permanent establishment situated therein.
·   If the enterprise carries on business as aforesaid, the profits of the enterprise may be taxed in that other Contracting State but only so much of them as is directly or indirectly attributable to that permanent establishment."

Going by the plain words I agree that the Offshore Supply is to be judged under Article 7 because the applicant had a PE in India. However what needs to be examined is that whether the profits are attributable to the PE.

The SC says that the PE was never involved in the transaction because it took place overseas. However that is not the way to look at it. The SC has never considered if the PE was involved in getting the order placed with Ishikawajma. If yes then definitely the profits can be attributable to the PE and the Income may be taxable in India.

Distinction between PE and ' Business Connection'

The SC says that the PE can't be equated to a Business Connection since the former is for the purposes of the DTAA and latter is for the purpose of the Income Tax Act. If one looks at the issue plainly without any complications then the PE in itself is a Business Connection. And yes I am in complete agreement with you that the term 'Business Connection' includes a PE but not vice-versa i.e. there could be a Business Connection without a PE. However if you look at the definition of PE in the DTAA then it virtually includes everything in Business Connection.

Now to determine the taxability under the Act it has to be again proved that the Income was attributable to the Business Connection.

Having established that the PE is a Business Connection now whether the profits can be attributable to the PE i.e. Business Connection is a question of Fact and the SC should have reverted back to the AAR.
Discussion / Indexation
June 26, 2007, 04:36:29 PM
Hi all

Suppose a transfer of a Capital Asset takes place by way of will from
Mr.X to Mr.Y in FY 2002-03. X had purchase it originally in FY 1995-
96. Mr.Y sells it in FY 2005-06. Can Mr.Y get the benefit of
indexation from FY 1995-96 or it will be from FY 2002-03.

Two Contradicting judgments

Pushpa Sofat 81 ITD 1 Chandigarh ITAT Assessee Favouring
Kishore Kanugo 290 ITR 298 Mumbai ITAT Revenue Favouring

Explantion to Section 48 says that it will be from the first year held
by the Assessee. Literally it means from FY 2002-03. However the
legislature has provided that the holding perid should include that of
the previous owner also.

The Mumbai ITAT judgment defeats the very purpose of the Indexation
i.e. to counter the effects of Indexation.

Law should be interpretated in such a way that it makes a clause
meaningful and not meaningless.