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Archive: 25 February 2011

Posts in 25 February 2011

Penalty proceedings – Whenever an addition/disallowance is made, initial burden is upon assessee to prove that it is not his concealed income or he has not furnished inaccurate particulars of such income

February 25, 2011 309 Views 0 comment Print

When an explanation is offered, the onus stands shifted on to the Revenue whereby it has to be shown that the explanation offered by the assessee is false or assessee has not been able to substantiate his explanation and failed to prove that such explanation is bona fide and all the facts relating to the same and material to the computation of his total income have not been disclosed.

Service of maintenance and repair should be under a Maintenance or Repair Contract/Agreement to attract levy of service tax prior to 16-6-2005

February 25, 2011 9604 Views 0 comment Print

Where there was no separate maintenance/repair contract between the parties, the Commissioner had rightly held that in the absence of any maintenance & repair contract, the demand based on rate or value contract work was not sustainable.

TPO can compute ALP after giving assessee opportunity to produce evidence in support of ALP computed by him

February 25, 2011 369 Views 0 comment Print

In case the TPO/AO proposes to make adjustments to the income of the assessee by revising the arm’s length price computed by him, he needs to give a notice to the assessee, conveying the grounds on which the adjustment is proposed to be made, followed by an opportunity to reply to that notice and produce evidence to controvert the grounds, on which the adjustment is proposed.

Assessment of rental income- For purpose of assessment under head “profit and gains of business or profession”, it shall be necessary that property acquired and used is for commercial purpose under business activity

February 25, 2011 585 Views 0 comment Print

Where the investment made by the assessee while constructing the commercial complex seems to be a business investment, the rental income earned from the building as a natural consequence shall be business income.

To avail the benefit of s.57(iii) is that investment must be proper & justified

February 25, 2011 2928 Views 0 comment Print

The condition precedent to avail the benefit of section 57(iii) is that the investment must be proper and justified; proper investment means correct investment with intention to earn profit.

Before invoking provisions of section 153A it would be necessary to comply with provisions of section 132(1) of the Income Tax Act, 1961

February 25, 2011 8692 Views 0 comment Print

Before invoking provisions of section 153A it would be necessary to comply with provisions contained under section 132(1) The purpose of section 132 for issue of warrant of authorization is to unearth, detect and to take possession of the unaccounted/ undisclosed income or property.

Space-selling service- Any services provided by any person to any other person in relation to sale of space would be taxable from 1-5-2006 and not prior to that date

February 25, 2011 7671 Views 0 comment Print

After specific category is introduced as a taxable service in the statute from a specified date, the said activity cannot be a taxable entity or technical entry in any other services prior to that date.

A low rate of gross profit, in absence of any material pointing towards falsehood of accounts books, cannot by itself be a ground to reject account books under section 145(3)

February 25, 2011 9683 Views 2 comments Print

If the rate of gross profit declared by the assessee in a particular period is lower as compared to the gross profit declared by him in the preceding year, that may alert the Assessing Officer and serve as a warning to him, to look into the accounts more carefully and to look for some material which could lead to the conclusion that the accounts maintained by the assessee were not correct.

On invocation of action under section 13 of Securitisation Act by secured creditor, reference before BIFR would abate by virtue of third proviso to section 15(1) of SICA

February 25, 2011 8655 Views 0 comment Print

The third proviso under section 15(1) of the SICA relieves the specified strength of secured creditors from shackle of taking consent of the BIFR and permits them to pursue their remedy under the provisions of Securitisation Act, which have been introduced as a special enactment, to further the cause of financial sector and the financial institutions to which the same is applicable.

Special Auditor, to whom work is assigned, is very much at liberty, to insist upon payment of such fee/remuneration as he may deem adequate for work assigned to him

February 25, 2011 9436 Views 0 comment Print

If the remuneration demanded by the person proposed to be appointed as Special Auditor is not acceptable to the Chief Commissioner or the Commissioner, as the case may be, he may not assign the work to him; but, it would be difficult to accept that the special audit can be assigned to a person without fixing either the remuneration or the norms on which the remuneration is to be calculated after the work is completed and conveying the same to him.

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February 2011