"08 July 2012" Archive

Taxability of waiver of loan taken for acquiring capital asset

Bombay Gas Co. Ltd. Vs Additional Commissioner of Income-tax, 1(1), Mumbai (ITAT Mumbai)

It is settled law that if the loan is taken for acquiring the capital asset, waiver thereof would not amount to any income exigible to tax. On the other hand, if this loan was for trading purpose and was treated as such from the very beginning in the books of account, the waiver thereof may result in the income more so when it was transfe...

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Operational Issues Arising Under Reverse Charge Mechanism Scheme of Service Tax

Service tax is supposed to be paid by the service provider (SP). However, in some of the cases like import of services, payment to transporter for transport of goods by road, etc., the liability to pay tax has been cast on the service recipient (SR). Budget 2012 has made large number of changes in the scheme of taxation with respect to Se...

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Posted Under: Income Tax | ,

Clarification on Point of Taxation for Works Contract Services & open issues

Query:- What is the option open to the Assessee following Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 which is rescinded vide Notification No. 35/2012-ST dated 20-6-2012, w.e.f 1-7-2012. Answer:- Change in the manner of payment of tax from composition scheme under erstwhile the Works Contra...

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Posted Under: Income Tax |

Reverse Charge Mechanism under New Service Tax Regime

CA Rajender Handa S. No. Service Provider Service Recipient Proportion of Tax by Ser. Provider Proportion of Tax by Ser. Receiver 1. Insurance Agent Person Carrying on Insurance Business Nil 100% 2. GTA in respect of Transport of Goods by road Consignor or Consignee (Person liable to pay freight):-v Factory Regd. Under Factories Act, 1948...

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Posted Under: Income Tax |

LLP – Synopsis, Swot Analysis, Formation Process etc.

Partnership: Partnership (regulated by Partnership Act, 1932) is one of the preferred business vehicles by entrepreneurs in India. In-fact, India is one of a country which recognizes partnership as a taxable entity (assessee) under the Income Tax Act, 1961. Less stringent regulations, low compliance cost, ease, speed and flexibility o...

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Posted Under: Income Tax |

Reasonability of interest paid to persons covered under section 40A(2)(b)

DCIT Vs Sports Station (India) (P.) Ltd. (ITAT Delhi)

DCIT v. Sports Station (India) (P.) Ltd. As is apparent from the impugned order, the Assessing Officer did not bring any material on record for holding that the payment of interest at the rate of 15 per cent per annum to unsecured creditors was excessive and how interest at the rate of 12 per cent per annum was reasonable or represented f...

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S. 80-IB deduction can’t be denied for Common statutory registration, accounts or power connection

FIL Industries Ltd. Vs Additional Commissioner of Income-tax (ITAT Amritsar)

After reading statutory provisions as contained in section 80IB(1), 80IB(2) & 80IB(4) of the Act, we find that provisions do not provide in any way separate registration or maintenance of separate records for claiming deduction u/s 80IB of the Act. The requirement under section 80IB(1), 80IB(2) and 80IB(4) is that profit must derive from ...

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Why High Courts are now burdened with DRT/SARFAESI matters?

After the constitution of Debt Recovery Tribunals (DRT) and Debt Recovery Appellate Tribunals (DRAT) under The Recovery of Debts due to Banks and Financial Institutions Act, 1993 and after conferring the authority to entertain appeals from the aggrieved persons under section 17 of SARFAESI Act, 2002, Banks have gained an upper-hand in the...

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Posted Under: Income Tax |

Reporting Guidelines for Foreign Investments in India

1. Reporting of FDI for fresh issuance of shares: (i) Reporting of inflow:(a) The actual inflows on account of such issuance of shares shall be reported by the AD branch in the R-returns in the normal course.(b) An Indian company receiving investment from outside India for issuing shares / convertible debentures / preference shares under ...

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Posted Under: Income Tax |

Approaching DRAT in SARFAESI matters appears to be very costly?

Under the provisions of ‘Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (‘SARFAESI Act’ in short), the Bank can invoke the process of recovery of money on its own without any adjudicatory process. The Banks can proceed with the enforcement of ‘security’ under the provisions o...

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Posted Under: Income Tax |

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