section 36(1)(vii)

Will CBDT look into the following and allow Government to amend the tax law?

Income Tax - ection 55 (2)(b) of the Income Tax Act, 1961 provides the option to the assesse to consider the fair market value of capital assets as on the 1st day of April , 1981 as the cost of acquisition where the same were acquired before April 1, 1981. This base year has been in use since the last amendment made under the Finance Act, 1992. ...

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GRATUITY- direct cheque issued to LICI, allowed by CIT(A), ITAT, HC and confirmed by SC as contribution to Gratuity Fund

Income Tax - We find lot of complications and procedural delays in setting up and approval of gratuity funds. This can be simplified and any payment made for funding gratuity liability made to insurers like the Life Insurance Corporation of Indian can be allowed....

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Deduction of Interest Expenses – Section 36(1)(iii) – Assessment – Legal Pronouncements

Income Tax - In this discussion, we would take up Section 36(1)(iii) of the Income Tax Act, 1961 and analyse the provision therein from all facets, which will make us understand the deduction in a comprehensive way. In the vortex of legal pronouncements, we will analyse few case laws as well, which throw light on the grey areas that are not captured ...

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Supreme Court rules write off of debt is sufficient for claiming bad debts

Income Tax - In a recent ruling Supreme Court in the case of TRF Ltd. on the issue of whether a taxpayer, while claiming deduction of bad debts in its return of income, is required to establish that the debts have, in fact, become irrecoverable. The SC held that post the amendment to Section 36(1)(vii) (Section) of the Indian Tax Law (ITL), for claimi...

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PF / EPF, CPF, GPF etc. paid after due date but before ROI, cannot be disallowed u/s 43B or 36(1)(va)

ACIT Vs M/s Supersonic Turner Pvt. Ltd. (ITAT Jaipur) - In the case of ACIT Vs. M/s Supersonic Turner Pvt. Ltd., Jaipur Bench of ITAT have held that where ESI/PF received from the employees was deposited late but before the due date of filing return of income u/s 139 (1) the amount cannot be disallowed u/s 43B or 36 (1) (va)....

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Disallowance of Interest at average rate for advance from mixed fund for non business Purposes

CIT Vs M/s Kudu Industries (Punja & Haryana High Court) - In case of CIT vs. M/s Kudu Industries, P&H High Court held that In the absence of anything to indicate that the interest free advance was made only from a particular corresponding advance received by the assessee, the advance made by the assessee would obviously be from the common pool of money. ...

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Bad Advance written off is allowable expense if it was given in the course of business

M/s. Summit Investments Ltd Vs J.C.I.T (ITAT Kolkata) - The brief facts of this issue is that the assessee advanced a sum of Rs. 2 crores on 20.5.1992 to Broker Shri.Pallav Sheth under portfolio management scheme. The said broker is supposed to manage the trading portfolio of shares and securities on behalf of the assessee....

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Employees' contribution to PF is eligible for Deduction U/s. 43B

ITO Vs Indore Steel and Iron Mills Ltd (ITAT Mumbai) - Whether the deposit by the assessee­ of the employee’s contribution to the Employees Provident Fund (EPF) or to the Employees State Insurance Corporation (ESIC), i.e., as an employer, after the respective due dates, i.e., under the respective Acts, where-under both the employee and the employer a...

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Interest cannot be disallowed if huge interest free funds were available without any interest

ACIT Vs Gopal Fabrics (ITAT Ahmedabad) - Where huge funds were available without any interest liability with assessee and there was no evidence to hold that borrowed money was utilized for purpose of advance to sister concerns, no disallowance of interest was warranted. ...

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Recent Posts in "section 36(1)(vii)"

PF / EPF, CPF, GPF etc. paid after due date but before ROI, cannot be disallowed u/s 43B or 36(1)(va)

ACIT Vs M/s Supersonic Turner Pvt. Ltd. (ITAT Jaipur)

In the case of ACIT Vs. M/s Supersonic Turner Pvt. Ltd., Jaipur Bench of ITAT have held that where ESI/PF received from the employees was deposited late but before the due date of filing return of income u/s 139 (1) the amount cannot be disallowed u/s 43B or 36 (1) (va)....

Read More

Disallowance of Interest at average rate for advance from mixed fund for non business Purposes

CIT Vs M/s Kudu Industries (Punja & Haryana High Court)

In case of CIT vs. M/s Kudu Industries, P&H High Court held that In the absence of anything to indicate that the interest free advance was made only from a particular corresponding advance received by the assessee, the advance made by the assessee would obviously be from the common pool of money. ...

Read More

Bad Advance written off is allowable expense if it was given in the course of business

M/s. Summit Investments Ltd Vs J.C.I.T (ITAT Kolkata)

The brief facts of this issue is that the assessee advanced a sum of Rs. 2 crores on 20.5.1992 to Broker Shri.Pallav Sheth under portfolio management scheme. The said broker is supposed to manage the trading portfolio of shares and securities on behalf of the assessee....

Read More

Employees' contribution to PF is eligible for Deduction U/s. 43B

ITO Vs Indore Steel and Iron Mills Ltd (ITAT Mumbai)

Whether the deposit by the assessee­ of the employee’s contribution to the Employees Provident Fund (EPF) or to the Employees State Insurance Corporation (ESIC), i.e., as an employer, after the respective due dates, i.e., under the respective Acts, where-under both the employee and the employer are obliged to contribute a sum, reckoned...

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Interest cannot be disallowed if huge interest free funds were available without any interest

ACIT Vs Gopal Fabrics (ITAT Ahmedabad)

Where huge funds were available without any interest liability with assessee and there was no evidence to hold that borrowed money was utilized for purpose of advance to sister concerns, no disallowance of interest was warranted. ...

Read More

Will CBDT look into the following and allow Government to amend the tax law?

ection 55 (2)(b) of the Income Tax Act, 1961 provides the option to the assesse to consider the fair market value of capital assets as on the 1st day of April , 1981 as the cost of acquisition where the same were acquired before April 1, 1981. This base year has been in use since the last amendment made under the Finance Act, 1992. ...

Read More
Posted Under: Income Tax |

Disallowance on account of bad debt & advances written off not justifed

M/s Pepsico India Holdings Private Limited Vs DCIT (ITAT Delhi)

Amount of advance given to M/s Dhillon Kool Drinks and Beverages Limited was advanced in the course of business. It is undisputed that the advances became irrecoverable. In such situation, as per the ratio emanating from the decision of the Hon'ble Jurisdictional High Court in the case...

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GRATUITY- direct cheque issued to LICI, allowed by CIT(A), ITAT, HC and confirmed by SC as contribution to Gratuity Fund

We find lot of complications and procedural delays in setting up and approval of gratuity funds. This can be simplified and any payment made for funding gratuity liability made to insurers like the Life Insurance Corporation of Indian can be allowed....

Read More
Posted Under: Income Tax |

Deduction of Interest Expenses – Section 36(1)(iii) – Assessment – Legal Pronouncements

In this discussion, we would take up Section 36(1)(iii) of the Income Tax Act, 1961 and analyse the provision therein from all facets, which will make us understand the deduction in a comprehensive way. In the vortex of legal pronouncements, we will analyse few case laws as well, which throw light on the grey areas that are not captured ...

Read More
Posted Under: Income Tax |

If assessee advanced to sister concerns or others without interest for no business purpose, interest to that extent to be disallowed

Sree Rayalaseema Green Energy Vs Deputy Commissioner of Income-tax, Circle-3(2), Hyderabad (ITAT Hyderabad)

Once it is borne out from the record that the assessee had borrowed certain funds on which liability to pay tax is being incurred and on the other hand, certain amounts had been advanced to sister concerns or others without carrying any interest and without any business purpose, the interest to the extent the advance had been made without...

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