"18 May 2023" Archive

Proviso to section 36(1)(vii) cannot be applied for disallowing deduction claimed on bad debts relating to non-rural advances

Canara Bank Vs DCIT (ITAT Bangalore)

ITAT Bangalore held that when the proviso to section 36(1)(vii) applies to bad debts written off relating to rural advances, the same cannot be applied for disallowing deduction claimed on account of write off of bad and doubtful debts relating to nonrural/urban advances....

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Legal Compliance Applicable to Private Limited Company

After the formation of a Private Limited Company, there are several legal compliances that need to be followed to ensure the company's compliance with applicable laws and regulations....

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Posted Under: Income Tax |

Doctrine of legitimate expectation invocable where amendment is not made in consonance with public interest

K.B. Tea Product Pvt. Ltd. Vs Commercial Tax Officer (Supreme Court of India)

Supreme Court held that amendment to section 2(17) of West Bengal Sales Tax Act, 1994 by omitting the word ‘blending of tea’ from definition of ‘manufacture’ stopped the benefit of exemption from payment of sales tax. Enactment of such amendment without appropriate justification by the Government brings in play doctrine of legitim...

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Addition for Violation of section 40A(3) sustained because of non-satisfying reply

Rajesh Kumar Vs ITO (ITAT Delhi)

ITAT Delhi held that violation of section 40A(3) sustained as the reply provided by the assessee is hypothetical and non-satisfying....

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Profit & Loss (P&L) Account and cashflow analysis

The Profit & Loss (P&L) account and the Cash Flow statement are two essential financial statements that provide valuable insights into the financial health and performance of a business. They help you understand your business by presenting different perspectives on its profitability and cash flow, enabling you to identify gaps and...

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Posted Under: Income Tax |

Bad debts relating to non-rural branches are allowable u/s 36(1)(vii)

Bank of Baroda Vs ACIT (ITAT Bangalore)

ITAT Bangalore held that bad debts relating to non-rural branches are allowable under section 36(1)(vii) of the Income Tax Act....

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Section 44AD and 44ADA – Presumptive taxation scheme

Let’s delve into Section 44AD and Section 44ADA of the Income Tax Act, their provisions, and their implications for taxpayers, along with relevant examples and a case study Section 44AD of the Income Tax Act: Section 44AD provides a presumptive taxation scheme for eligible businesses. It allows certain eligible taxpayers to calculat...

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Posted Under: Income Tax |

Provisions of section 56(2)(viia) applicable on shares received on account of amalgamation

ACIT Vs Vertex Projects LLP (ITAT Hyderabad)

ITAT Hyderabad held that provisions of section 56(2)(viia) of the Income Tax Act are attracted on shares received by the assessee company on account of amalgamation....

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12 Points to be kept in entering legal contract

1. Clarity and Specificity: For example, if you are entering into a contract to provide website development services, clearly define the scope of work, including details such as the number of webpages, functionality requirements, and design specifications. Avoid vague language like “adequate” or “reasonable” and in...

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Posted Under: Income Tax |

AIS, TIS and form 26AS in income tax

1. Annual Information System (AIS): The Annual Information System (AIS) is a system implemented by the Income Tax Department in India to gather information about a taxpayer’s financial transactions from various sources. The AIS collects data related to income earned, taxes deducted at source (TDS), taxes paid, and other relevant in...

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Posted Under: Income Tax |

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