• Welcome to itatonline.org Forum.


ITAT issues guidelines for stay of demand.

Main Menu

Show posts

This section allows you to view all posts made by this member. Note that you can only see posts made in areas you currently have access to.

Show posts Menu

Topics - ddshah

Any decisions on the issue as to whether the registration of a trust can be cancelled because the trust has not carried out any activity so as to enable the CIT to verify whether the activities of teh trust are as per the objects of the trust?
Discussion / Conversion of Firm into LLP
July 03, 2011, 10:44:21 PM
The conversion of Company to LLP is exempt under certain conditions. The LLP is also regarded as Firm for the purposes of IT Act. Is the conversion of firm to LLP exempt?

One possible view could be yes. This is because, the term 'convert'has been defined under the 2nd Schedule of LLP Act as transfer ofproperties, assets, interest, rights, privileges, liabilities, obligations andundertakings of the firm to the Limited Liability Partnership.  This definition largely signifies the transformation of a firm into different entity which is not the case with LLP for the purpose of IT Act.

Further, the firm and LLP both are enjoying the status of firm under IT Act. There is no specific provision for exemption from firm to company whereas the conversion of company to LLP is exempt. The provisions of conversion of firm to LLP under the LLP Act has no implication as although under LLP Act, the conversion results in change in entity, but under IT Act, it does not result in change in status. The conversion of firm to LLP merely results in the change in the rights vis a vis the partners while the nature of entity under IT Act remains same. Hence, it can be said that there is no transfer of the capital asset.

Looking it differently, the transfer as per LLP Act amounts to transfer of entire undertaking lock stock barrel. Hence, it is a case of slump sale which does not result in any profit. Hence, even on the said count, it not result in taxable income.

What are the view of the members?
There is recent SB decision in Scientific saying that the loss from non-eligible unit cannot be set off against profit from eligible unit while computing 10A. There are decisions that even loss from eligible unit cannot be set off against profit from eligible unit whlie computing 80I deduction.

Is anyone aware of decision on 10A/10B where loss from eligible unit cannot be set off against profit from eligible unit before calcuting 10A deduction which means that the 10A deduciton to be calculated independantly of each unit?
Discussion / deduction of interest expense - s. 14A
August 30, 2007, 12:35:52 AM
There are certain High Court decisions on the issue that in case if the interest is not allowed as deduciton, the same could be added to the cost of acquisition. This could have been useful in cases where the interest paid on borrowings used for investment in shares is disallowed due to s. 14A.

However, there are 2 decisions on the issue, i.e. Macintosh Finance Estates Ltd v. ACIT [12 SOT 324] (Mum) and Mohanlal M.Shah v.Dy,CIT [105 ITD 669] (Mum). Both these decisions hold that the interest so disallowed cannot be added to the cost of acquisition.

1.  Is there any decision in favour subsequent to these decisions.
2.  What would be the position in law for s. 14A for AY 1998-99 where the dividend is taxable upto 1.6.1997. Can it be said that the income is not such ' which does not form part of the total income' (as income for part of the year forms part of the total income). In such case, can we claim that s. 14A is not applicable?
Discussion / re: 143(2) in Block proceedings
August 24, 2007, 01:05:35 AM
Is notice u/s. 143(2) required to be issued in Block proceedings.

Is there any decision in favour after considering the negative decision of Special Bench in Naval Kishore and recent Gauhati High Court decision saying that the notice is mandatory.
Discussion / re: Bad Debts Deduction
August 24, 2007, 01:03:34 AM
As regards the deduction of bad debts, is it allowable by merely writting off the same in books or whether the assessee has to prove that the debts have become bad.

Is Oman international accepted after the Madras High Court decision. Any decision considering and following Oman International after considering the favourable decision of Delhi High Court in morgan Stanley and adverse decision of Madras  Court?