A reference is invited to the paragraph 4.2.3 – Notes (iv) of the Master Circular on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF) dated July 2, 2012, wherein it is mentioned that ‘the net credit balance, if any, in the inter-office account with Head Office/overseas branches will not be reckoned as capital funds. However, any debit balance in the Head Office account will have to be set-off against capital.’
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 transferred to profit and loss account.
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 Service Tax (ST). Of the many changes, a major change has been with respect to extension of the Reverse Charge (RC) mechanism to many other services. Notification No.15/2012-Service Tax, dated 17th March, 2012 notifies the following taxable services and the extent of service tax payable thereon by the person liable to pay ST.
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. […]
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 of the structure are few of the attractions of the Partnership. Unlimited liability of partners, absence of incorporation status and perpetual succession are three significant drawbacks of the Partnership Structure.
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 fair market value for the services and facilities.
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 an industrial undertaking.
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 course of recovery of their dues. It is hard to see a Bank now going to Civil Court or facing a Civil Proceeding in-respect of recovery of their dues.
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 of SARFAESI Act, 2002. If any borrower or any person is aggrieved with the action initiated by the Bank under the provisions of SARFAESI Act, 2002, then, he can approach the Debt Recovery Tribunal (DRT) under section 17 of the Act by paying the prescribed fee.
The capital expenditure incurred by the assessee on purchase of motor cars could not be considered as expenditure incurred by the assessee on in-house research & development and, therefore, the same was not eligible for weighted deduction under section 35(2AB). Similarly, capitalized interest on purchase of car was also not eligible for this benefit for same reasons because it was equal or similar to cost of car. Hence, this ground was to be rejected.
