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Dear friends,

One assessee failed to claim investment allowance in the return for A.Y. 2016-17 though he was eligible for it. Now what he should do? I could think of following options:

(1) The time limit for revised return is over. However, he can take the remedy of filing revised return alongwith condonation of delay u/s 119 of the Income Tax Act.

(2) He can apply u/s 264 to CIT for revision of intimation u/s 143(1). However, i feel that there will be technical hurdles here as the assessee has failed to claim the investment allowance in the return of income.

What is the better alternative? Is there any other alternative available? The case of the assessee for A.y. 2016-17 has not been selected for scrutiny.

Please share your valuable views.

Friends,

I have certain queries for the learned members on this forum to ponder upon. I have already been given divergent views on this and hence I thought it would be gainful to post these queries on this forum.

(1) Is residential apartment owners association an AOP or a housing society? The tax slab in both the cases will be different. I understand that an AOP can be formed only with an intent of commercial activities whereas apartment owners association is not run with any commercial intent.

(2) Will it make any difference if such apartment owner association is registered or not registered?

(3) It is undisputed that the income earned from members will be exempt on the ground of mutuality principle and income earned from non-member will be taxable as held by Supreme Court in case of Bangalore Race Club. If such apartment owners association has FD interest income of Rs. 2,00,000/- from nationalized banks, will be taxable or basic exemption limit of Rs. 2,50,000/- available to AOP will be available?

(4) is there any direct judgments of court and tribunals available on this? if yes, please provide me relevant citation.

Thank you in advance to all learned members.

In case of exemption under section 47(xiib) in case of conversion of company into LLP, there is a restriction that the resrves shall not be taken away directly or indirectly by partners for a period of 3 years after such conversion.


further, in case of such conversion, the company is treated to have been wound up in which case section 2(22)(c) comes into play which taxes distribution of accumulated profits as dividend and subject to dividend distribution tax.

My question is if in case of conversion, there is a lock in period for reserves, does section 2(22)(c) apply? in other words, should there be restriction on distribution of reserves even after payment of DDT?

Kindly share your views on this.

I have come across a very typical situation. A firm wants to import some material from Italy. Now, the italian seller is not providing the tax residency certificate and hence it is difficult to claim DTAA benefit. However, the transaction is that of purchase of goods on principal to principal basis and therefore i believe that the payment for import will not constitute any income of the non resident u/s 9 of the income Tax Act. Is my understanding correct? should i give 15CB certifcate on this basis without there being tax residency certificate? Kindly share your views. Thanks

An assessee filed a letter before the A.O. to treat the return filed u/s 139(1) as return in response to notice u/s 148 and requested for copy of reasons. The A.O. denies the letter and insist for filng return of income. Is the A.O. correct? Can we have any material/decision in favour of the assessee?

There is CBDT instruction No. 1936 F.No. 404/62/95-ITCC dated 21-03-1996 wherein CBDT instructed that payments of taxes made by the assesse should be first adjusted against the tax due and thereafter against interest u/s 220(2).

Is the instruction still valid? or there is any change in law thereafter?

Can both interest u/s 201(1A) and 220(2) charge on the same amount for the same period in respect of order u/s 201(1)? My understanding is that interest u/s 201(1A) will run upto the order of 201(1) and thereafter interest u/s 220(2) will commence. However, the A.O. is not agreeing to this.

There is a direct provision in respect of intimation u/s 200A by virtue of section 220(2B) w.e.f. 1-7-2012.

is there any reference/circular/judgment in the context of order u/s 201? Please provide the same.

A sales a plot of land to B. In the course of search in case of B, admission of on money payment is given by B on the basis of a chit found from him. B also adheres to the admission and pay tax thereon. Now the department wish to apply this admission to A as natural corollary. Cross examination is demanded but the same may not be granted. 

My question is can a third party statement and material obtained from the possession of a third party be directly applied to the case of an assesse?

Please give your reply/share views with proper judgments. I shall be thankful for the same.

My client wants to make payment of subscription money to a foreign entity for a periodical (magazine) supplying international prices and statistics of commodity for its business purpose. Whether TDS u/s 195 will apply in such a case? Whether the payment can be termed as royalty for supply of information u/s 9 of the Income Tax Act?

There is DTAA with the country of recipient as per which rate of deduction for Royalty shall not exceed 10%. However, the recipient does not have PAN and hence section 206AA shall apply as per which the rate is 20%. In such a case, what will be the rate of deduction?

What will be the due date for tax audit in a case where domestic transfer pricing is applicable?
I think it is 30th November. The reason is due date for return is now specified date u/s 44AB and therefore due date in this case being 30th November, the specified date for section 44AB will also be 30th November. However, some people are still expressing doubts in this regard. I request the members to give opinion on this. Thank you to all in advance.

Supreme Court in case of Ghanshyam (HUF) - 315 ITR 1 held that interest under section 28 of land acquisition act is accretion to the value of compensation and hencec it is part and parcel of compensation. Thus, taxability of interest u/s 28 will be same as compensation. BOth together will fall under the head capital gains.

However, amendment made in section 145 and section 56 and 57 prescribe that interest on such enhanced compensation will be taxable under the head income from other source in the year of receipt with a deduction of 50% under section 57.

Does it mean that the above Supreme Court judgment in the context of interest under section 28 is no longer valid and now the amendment will be the new mode of calculation?

If yes, what will be the position of interest which accured to aassessee befoe the amendment sdue to judgment of civil court but received after the said date?

We have some confusion and hence we request learned friends and respected seniors on this forum to clarify this issue.

an educational trust is not eligible for exemption u/s 11 in the absence of registration u/s 12AA. Hence, they alternatively want to claim exemption u/s 10(23C)(iiiad) for which the condition is that annual average receipts should be less than 1 crore. My question is how to calculation this limit of Rs. 1 crore - (1) only fees income and other income credited to income and expenditure acccount will be counted ? or (2) the corpus donation received by the trust will also be included for 1 crore limit? Please guide me in the matter with applicable case laws.

Friends,

One trust is not eligible for exemption u/s 11 in a year as it applied for registration u/s 12A belatedly. The said trust had received certain corpus donations in that year. What will be the taxability thereof in the absence of exemption u/s 11? are they receipts liable for tax or capital receipt? kindly advise.

is conversion of firm into LLP is tax free in respect of capital gain or taxable? please advise

Dear Friends,

I have following queries in the matter of conversion of firm into LLP

(1) There is no specific exemption from capital gain. However, firm and LLP both are to be treated as firm for the purpose of income tax assessment. Does it mean that there is no change in entity and hence no capital gain?

(2) New PAN of the LLP to be taken after conversion or the old PAN of the firm will continue to apply to the LLP?

(3) whether two set of accounts i.e. one for the firm and another for the period of LLP to be prepared or only one set of books will suffice.

(4) only one combined return is to be filed or two returns i,e, one for firm and one for LLP to be filed?

Kindly advise and share your valulable views.

Thank you to all in advance.

In the assessment order, addition has been made but some of the details have not been disclosed. We want to take recourse to RTI for such details. Can any one give the relevant decisions of Central information Commission which may be helpful in seeking the information.

I am having two partnership firms wherein all the partners are common and their profit sharing ratio is also same. I want to merge both the firm into one or that i want one firm to take over all the assets and liabilities of another firm so that the another firm may be closed down. My query is whether any tax effect will arise in such a case? If yes, what should be best model for such an arrangement so that tax liability is reduced to minimum. If possible, kindly guide me about stamp duty implications also.

In one of my client's case, there was a search by excise department and a show casue notice has been issued which is pending for adjudication. The adjudication is likely to take little long due to voluminous material and other evidences. on the basis of this show casue notice alone, the income tax department completed regular assessment and reassessments of my cleint for different years and raised demands and also started recovery. The appeals have been filed. My question is such an assessment based solely on other department's mere show casue notice is valid and permissible? is there any other effective way than appeal which is likely to take long time? The department will not grant full stay so is there any other way to keep the demand in abeyance? Kindly give your views with supporting case laws. Thank you in advance.