Mumbai bench of Income-tax Appellate Tribunal (the Tribunal) in the case of DCIT v. Bombay Diamonds Co. Ltd. (ITA no. 7488/Mum/07) held that if the books of accounts of the taxpayer which are not prepared in accordance with part II and part III of schedule VI to the Companies Act, 1956, the Assessing Officer (AO) can make adjustment in the book profits under section 11 5JB of the Income-tax Act, 1961 (the Act) even if the books of accounts are audited or certified by the auditors and accepted by the shareholders.
Supreme Court in the case of TRF Limited held that post amendment (with effect from 1 April 1989) to claim deduction for the bad debts under section 36( 1)(iii) of the Income-tax Act, 1961 (the Act) it is not necessary for the taxpayer to establish that the debt has actually become irrecoverable. It is sufficient if the bad debt is written off as irrecoverable in the books of accounts of the taxpayer.
Mumbai Income-tax Appellate Tribunal (the Tribunal) in the case of DDIT v. Star Cruises (India) Travels Services Pvt. Ltd [2010-TIOL-04-ITAT-MUM] has held that merely booking of different cruise tour packages for M/s. Star Cruises Management Ltd. (M/s. SMCL) foreign company by the taxpayer cannot per se be decisive for holding that M/s. SMCL is having ‘business connection’ in India within the meaning of section 9(1)(i) of the Income-tax Act, 1961 (the Act). Accordingly, it cannot be said that income has been accrued to M/s. SMCL in India in respect of the booking of tour packages of Cruise made by taxpayer in India.
The pricing in regard to issue and transfer of shares to non-residents were governed by the CCI guidelines. Theses have been replaced with the discounted cash flow method which is based on the future earnings. However, RBI has made a distinction in pricing with respect to issue of shares on preferential basis as compared to normal issue as the same would be covered by the RBI guidelines to be prescribed.
Price of shares issued to persons resident outside India under this Schedule, shall not be less than – (a) the price worked out in accordance with the SEBI guidelines, as applicable, where the shares of the company is listed on any recognised stock exchange in India;(b) the fair valuation of shares done by a SEBI registered Category – I Merchant Banker or a Chartered Accountant as per the discounted free cash flow method, where the shares of the company is not listed on any recognised stock exchange in India ; and
The finance ministry will soon unveil a new format for income-tax returns that will hopefully make tax filing easier for the salaried and pensioners. Theoretically, redesigning a returns form should not be as complex as, say, rewriting archaic income-tax laws. Taxmen have, however, been grappling with the new format for over six months as the challenge is to make it really simple.
Top multinational accounting firms (MAFs) — PriceWaterhouseCoopers, KPMG, Ernst & Young and Deloitte Touche Tohmatsu —have flouted norms to provide services in India, a report by an Institute of Chartered Accountants of India (ICAI) committee has said.
The government plans to introduce a separate legislation to speed up insolvency proceedings and help distressed firms wind up operations quickly. The new law will shorten the legal processes involving insolvency operations of small and medium entities. The government is keen to make bankruptcy proceedings a time-bound procedure.
Reduces time for disclosing results; solvency position to be disclosed every 6 months. The Securities and the Exchange Board of India (Sebi) has reduced the period within which companies can announce their annual financial numbers. The regulator has also made it mandatory for all listed entities to disclose their asset-liability and solvency positions every six months.
With a view to improve transparency and corporate governance, market regulator SEBI made it mandatory for all listed companies to disclose their financial results within 45 days of the end of every quarter. Companies would also be required to disclose their audited financial statements within 60 days of every financial year end, the Securities and Exchange Board of India (Sebi) said while amending the equity listing agreement.
