Income Tax - Page 5

Section 68 addition Not Justified in case of Issue of Shares in Exchange of Shares

ITO Vs DSR Impex Pvt. Ltd. (ITAT Kolkata)

The issue under consideration is whether the addition u/s 68 is justified in case of issuance of shares in exchange of shares?...

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Income for Sale of Specialized Software Maintenance & Support Services is Not a Royalty

Trimble Solutions Corporation Vs DCIT (International Taxation) (ITAT Mumbai)

The issue under consideration is whether the Income received for sale of specialized software and maintenance and support services is considered as 'Royalty' as per India-Finland Tax Treaty?...

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Gift Received from Brother-in-Law is Exempt under section 56(2)

PCIT Vs Arvind N Nopany (Gujarat High Court)

PCIT Vs Arvind N Nopany (Gujarat High Court) The issue under consideration is whether the gift received from Brother-in-law is exempt u/s 56(2) of I T Act? High Court states that, the tribunal took into consideration the details of the donor, more particularly, the PAN number, capital gain statement, bank statements and the other relevant...

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No Section 194I TDS on Rent if Accommodation Services taken on Casual Basis

Dadiba kali Pundole Vs ACIT (ITAT Mumbai)

The issue under consideration is whether the TDS u/s 194I is applicable on the rent if the accommodation services were taken on a casual basis?...

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No TDS u/s 195 levied on Placement Services since it is Not Covered under Technical Service

D&H Secheron Electrodes Pvt. Ltd. Vs ITO (ITAT Indore)

The issue under consideration is whether the Payment towards placement services is covered under technical service and TDS u/s 195 is applicable on the same?...

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Depreciation cannot be disallowed under section 40(a)(ia)

Wipro Limited Vs. Addl CIT (ITAT Bangalore)

Wipro Limited Vs Addl. CIT (ITAT Bangalore) Claim of depreciation on software- Depreciation claimed by the assessee on the amount of software capitalized was disallowed invoking provisions of section 40(a)(ia) for non-deduction of tax at source. Held, depreciation is a statutory allowance and hence it cannot be considered as expenditure. ...

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Non-utilization of share premium according to section 78(2) of Companies Act could not be taxed under Income Tax Act

ITO Vs New Era Advisors P.Ltd. (ITAT Mumbai)

ITO Vs New Era Advisors P. Ltd. (ITAT Mumbai) Conclusion: Even if amount received in form of huge share premium was not utilized for the purpose of  section 78(2) of the Companies Act, 1956, the same would not have any relevance for the purpose of Income Tax Act, 1961. Further, while the utilization of premium […]...

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Transfer of Land as Capital Contribution & Stamp Duty issues thereon

There are following two issues arise when a partner transfers a land as a capital contribution to the partnership firm Question 1. Whether transfer of Land from Partners to Partnership firm will amount to ‘Transfer’ for the purpose of capital gain and if it is a transfer then what will be the full value of […]...

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Posted Under: Income Tax |

Critical Comparison & Analysis of Presumptive Tax provisions

CRITICAL COMPARISON AND ANALYSIS OF PRESUMPTIVE TAX PROVISIONS UNDER INCOME TAX ACT 1961 – 44AD, 44ADA & 44AE I. APPLICABILITY 1. Section 44AD clearly specifies the ‘Eligible Assessee’ as ‘all resident Individuals, HUFs, or Firms (excluding Limited Liability Partnership Firms)’ engaged in ‘Eligible Business’, which i...

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Posted Under: Income Tax |

Insurance Companies- Section 14A disallowance unjustified

Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi)

Oriental Insurance Co. Ltd. Vs DCIT (ITAT Delhi) The Tribunal has interpreted Section 44 read with the first schedule and concluded that applicability of Section 14A is excluded in relation to computation of income of an insurance company. We have examined the relevant provisions. Section 44 begins with a non-obstante clause and overrides...

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Income Tax Saving Guide

Most of us are not aware about the tax saving scheme people are not aware what all options are available where investment can be done. This article will let you know the options available for an individual where they can invest & also save their taxes. EQUITY LINKED SAVING SCHEME  (E.L.S.S) E.L.S.S are notified Tax […]...

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Depreciation on intangible assets transferred by Firm allowable to Company

Padmini Products Pvt. Ltd. Vs DCIT (Karnataka High Court)

Section 32(1) of the Act provides for depreciation in respect of trademarks owned wholly or partly by the assessee. In the instant case, the assessee succeeded to the business of the partnership firm, which had trademarks registered in its name. Therefore, the assessee under Section 32(1) of the Act was entitled for depreciation....

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Be Careful…while making transactions in cash!!

Krishna, Today is 13th October last day for the promotion of Elections. In the chaos of election, crores of rupees were ceased. During this period Election Commission has laid many restrictions on cash transaction. But what are the provisions of cash transactions under Income Tax Act?...

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Tax planning and managing the House Property

The direct tax proposals of budget 2014 have been tax friendly. It is also worth noting that budget proposals have received the assent of President and now it is law of land under Indian Income Tax Act. It provides for tax advantage in the form of increased basic exemption limit for individuals by Rs.50K....

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388 transfers and postings in Additional/Joint CIT grade

Office Order No. 199 of 2020 (16/10/2020)

Office Order No. 199 of 2020 The following transfers and postings in the grade of Additional/Joint Commissioners of Income Tax are ordered with immediate effect and until further orders:...

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111 Transfers/postings in Ad.CIT/JCIT Grade

Office Order No. 198 of 2020 (16/10/2020)

F.No. A-22012/2/2020-Ad-VI Government of India Ministry of Finance Department of Revenue (Central Board of Direct Taxes) North Block, New Delhi -110 001 Dated: 16.10.2020 Office Order No. 198 of 2020 The following transfers/postings in the grade of Additional Commissioner of Income Tax (Ad.CIT)/Joint Commissioner of Income Tax (JCIT) in t...

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AO cannot challenge or change method of valuation opted by assessee as per his whims & fancies

Nabh Multitrade Pvt. Ltd. Vs ITO (ITAT Jaipur)

Nabh Multitrade Pvt. Ltd. Vs ITO (ITAT Jaipur) There is no dispute that during previous year relevant to assessment year under consideration the assessee issued 37,500 equity shares of Rs. 10/- each for a price of Rs. 200/- each which includes the share premium of Rs. 190/- per share. To substantiate the value of equity […]...

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Government concerns are not comparable as they do not have profit motive

Intercontinental Hotels Group (India) Pvt. Ltd. Vs DCIT (ITAT Delhi)

Intercontinental Hotels Group (India) Pvt. Ltd. Vs DCIT (ITAT Delhi) Hon’ble High Court in Philip Morris had directed that M/s. Apitco Ltd. was not good comparable of concerns providing business support services, on the ground that in case of Government enterprises, profit motive is not relevant consideration and the Government company ...

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Maharashtra Govt allows women to travel in local trains during fixed time slot

Notification No. DMU 2020/CR 92/DM I (16/10/2020)

Vide a order dated 16.10.2020 Maharashtra govt has allowed women to travel in local trains from 11am to 3pm and then from 7pm till the last service for the day from 17.10.2020. QR codes wilt not be required for ladles travelling during the said time period. Only a Valid Ticket will be required. Government of […]...

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CBDT issues guidelines for intrusive or coercive tax recovery

F.No. 275/29/2020-IT(B) (16/10/2020)

Any coercive or intrusive action for recovery of tax demands should be taken only after exhausting alternative means of recovery as mentioned in Para 2((i) of Board's letter F.No. 275/29/2020-(IT(B) dated 21st September, 2020....

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Business Loss? – Audit u/s 44AD or 44ADA Applicable or Not?

The recent CBDT circular on extension of due date for assessees required to get their accounts audited u/s 44AB has brought to light many things. Once such thing is the implication for assessees having having turnover less than Rs. 1 crore and having Net loss from business....

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Main features of Kisan Vikas Patra (KVP ) Scheme, 2019

Kisan Vikas Patra is one of the most famous investment schemes in India. The main reason is the feature of this investment in which the money invested will get doubled at the end of the maturity period. In December, 2019 fully new Kisan Vikas Patra Scheme, 2019 w.e.f. 12th December, 2019 vide notification No. G.S.R. […]...

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Posted Under: Income Tax |

Deferred tax Considered under MAT as per 115JB?

The treatment of deferred tax charge in determining the tax liability under the special provisions of Section 115JB of the Income-Tax Act is one such case. Section 115JB levies minimum alternate tax (MAT) at 10% of book profits (plus surcharge and cess thereon) if such tax is higher than the tax payable under the normal provisions of the ...

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‘KOSH MULO DAND’ written on ITR Acknowledgment – Meaning

The water mark printed on the ITR V in English states Income Tax Department and in Hindi it states  ‘KOSH MULO DAND‘. If translate income tax department in Hindi it will be AYAKAR VIBHAG and translation of ‘KOSH MULO DAND’  in Layman Language is as  follows :- KOSH – Fund MULO – Principal / Main DA...

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Income Tax Department carries out searches in Delhi, NCR & Haryana

Release ID: 1664884 (15/10/2020)

Ministry of Finance Income Tax Department carries out searches in Delhi, NCR and Haryana Posted On: 15 OCT 2020 The Income Tax Department has carried out a search and seizure action on 14.10.2020 in the case of a leading advocate practicing in the field of commercial arbitration and alternate dispute resolution. He was suspected to [&hell...

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Extend due date for filing TAR to 28.2.2021 & ITR to 31.03.2021

Karnataka State Chartered Accountants Association requested for extension of due dates as applicable for AY 2020-21 for filing tax audit reports from 30th October 2020 to 28th February 2021 and extension of due date for filing of return of income under section 139(1) from 30th November 2020 to 31st March 2021. Text of the Representation [...

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In absence of any defect DCF valuation method of Assessee cannot be rejected

Intelligrape Software Pvt. Ltd. Vs ITO (ITAT Delhi)

Intelligrape Software Pvt. Ltd. Vs ITO (ITAT Delhi) When the assessee Company had opted for valuation of unquoted equity shares in accordance with DCF method as prescribed under clause (b) of specific Rule 11UA(2) as applicable, the AO/CIT(A) had no power/authority to change such valuation methodology and adopt a different book value meth...

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No penalty for deduction of TDS at Lower Rate under wrong section

Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore)

Jitendra Sharma Vs JCIT (Intl Taxation) (ITAT Indore) ITAT Indore held that no penalty under Section 271C to be levied for deduction of tax under Section 194IA @1% instead of Section 195 @ 20.6% on purchase of property from Non Resident. FULL TEXT OF THE ITAT JUDGEMENT The above captioned appeals filed at the instances […]...

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Ministry of Finance clarification on Vodafone arbitration appeal

Release ID: 1664705 (15/10/2020)

A speculative news story being circulated in some section of media claiming that Attorney General has  given opinion  in favour of  not appealing in the Vodafone Arbitration award is totally incorrect and without any factual basis....

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Tax planning for foreign Chinese-invested enterprises in Kenya

In this article we look at need for tax planning for foreign Chinese-invested enterprises in Kenya. What is a foreign Chinese invested enterprise? Guo Shui Fa [2009] No. 82 (circular by SAT) defines a foreign Chinese invested enterprise as an enterprise ‘registered and established outside the territory of China in accordance with the la...

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Expenses incurred to keep setup of business in existence during temporary lull was allowable

Atul Babubhai Shah Vs JCIT (ITAT Ahmedabad)

Atul Babubhai Shah Vs JCIT (ITAT Ahmedabad) Conclusion: All the expenses incurred by assessee during the temporary lull period were eligible for deduction as the same were necessary to incur or keep its business setup in existence. Held: During assessment proceedings, AO observed that assessee for the year under consideration claimed bus...

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No injunction against BFA for infringement of CFA registered mark

CFA Institute Vs Brickwork Finance Academy (Delhi High Court)

CFA Institute Vs Brickwork Finance Academy (Delhi High Court) Conclusion: High Court refused to grant an injunction against the Banking Financial Analyst (BFA) for the alleged infringement of Chartered Financial Analysts (CFA) registered mark as the class of customers who were likely to avail/pursue the courses of the either CFA or BFA wo...

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Roaming Charges Not Liable for TDS under section 194J

DCIT - TDS Vs Reliance Communications Ltd. (ITAT Mumbai)

The issue under consideration is whether the roaming charges paid by the assessee to the other telecom service provider are in the nature of ‘Fee for technical Services’ and hence liable for deduction of tax at source u/s 194J of the Act?...

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Expenditure on Lease Premises towards Civil Furniture etc. is Capital Expenditure

CIT Vs N. Viswanath (Madras High Court)

The issue under consideration is whether the expenditure incurred by the assessee on the lease premises towards civil furniture, etc. is a revenue expenditure or capital expenditure?...

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Extend Due Date of filing of Tax Audit & Income Tax Return

We would request you to further extend the due date of filing tax audit report to 28 February 2021 and Income tax return filing to 31 March at the earliest. The entire fraternity of tax payers and professionals will highly appreciate if this is done soon enough (i.e. well in advance)....

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Tax deductibility of ESOP expense

Prologue The shares allotted by the employer under Employee Stock Option Plan (ESOP) are taxable in the hands of the employees as perquisite u/s 17(2)(vi) of the Income-tax Act, 1961 (‘the Act’) under the head salary. Regarding ESOP, the bone of contention between the employer Assessee and the tax department is on the tax deductibilit...

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FAQ’s on TCS on sales of Goods- Section 206C(1H)

From October 1, 2020, our Government has introduced a new provision for collecting TCS for the sale of goods and depositing the same to the Government. These provisions are given in Section 206C (1H) of the Income Tax Act. 1. What is Tax Collected at Source (TCS)? Tax Collected at Source (TCS) is the tax payable by […]...

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Process for PAN application for Resident Indian

Permanent Account Number is a number allotted to a person by the Assessing Officer for the purpose of identification. PAN of the new series has 10 alphanumeric characters and is issued in the form of laminated card with photograph. ...

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Football & Income Tax- Penalty, in both, is Hefty

Arjuna, while playing on the Football Ground if, a player pushes other players or creates any obstruction then the referee whistles and show a Yellow Card. Yellow Card represents a mild penalty. If you look at Income Tax, the taxpayers are intimated by a prior notice and thereafter a penalty is levied...

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India is My Country & Paying Other’s Taxes is My Duty

Taxpayer will have to pay TDS as per provisions of Income Tax. It means while giving remuneration to other, tax is required to be deducted and deposited with the government....

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Extend GSTR-9, GSTR-9C ITR & Tax Audit Due dates

वित्तीय वर्ष 2019-20 (कर निर्धारण वर्ष 2020-21) के लिए आयकर कानून के अंतर्गत प्रस्तुत की जाने वाली ऑडिट रिपोर्ट तथा आयकर विवरणी एवं जी एस टी ...

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Treat foreign exchange loss in accordance with Section 43A: ITAT

Shin-Etsu Polymers India P. Ltd. Vs DCIT (ITAT Chennai)

Shin-Etsu Polymers India P. Ltd. Vs DCIT (ITAT Chennai) We have observed that the authorities below have commented while disallowing these foreign exchange losses on conversion of outstanding balance in foreign currency into Indian rupee on the date of Balance Sheet as at year end to be on account of outstanding unsecured loans which were...

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ITAT upheld TP adjustment for outstanding debtors beyond agreed period

Bharti Airtel Services Ltd. Vs DCIT (ITAT Delhi)

Bharti Airtel Services Ltd. Vs DCIT (ITAT Delhi) In the present case the service agreement clearly says that the amount of payment is to be made by the associated enterprises to the assessee within 15 days. Such payment was not made within that period but beyond that. The learned assessing officer held that the amount […]...

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Section 14A disallowance not sustainable if proper satisfaction not recorded

Vinay Bhasin Vs. ACIT (ITAT Delhi)

Vinay Bhasin Vs ACIT (ITAT Delhi) Assessee made heavy investments for earning of exempt income and being a busy professional, he requires the management of such a portfolio by incurring expenses, diversion of man-power/staff for indulging in investment activities to various activities like visiting banks, use of vehicle and telephone, use...

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Tax rates specified in DTAA in respect of dividend must prevail over DDT

Giesecke & Devrient [India] Pvt Ltd. Vs Add. CIT (ITAT Delhi)

Giesecke & Devrient [India] Pvt Ltd. Vs ACIT (ITAT Delhi) To recapitulate, the DDT is levy on the dividend distributed by the payer company, being an additional tax is covered by the definition of ‘Tax’ as defined u/s 2(43) of the Act which is covered by the charging section 4 of the Act and charging […]...

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CBDT assigns role of Pr.CCsIT (Jurisdictional) and Pr. CCIT (NFAC)

F No. 187/3/2020-ITA-I (14/10/2020)

With the launch of the Faceless Appeal Scheme, 2020, the Income Tax Department is moving towards minimal interface with maximum governance. In order to effect the same, the National Faceless Appeal Centre (hereafter referred to as NFAC), Delhi has been created under Principal Chief Commissioner of Income-tax (NFAC) and 4 Regional Faceless...

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TDS on purchase of licensed software cannot be made retrospective

Acer India Private Ltd. Vs DCIT (ITAT Bangalore)

The decision holding that the payments made for purchase of software was in the nature of royalty came to be pronounced on 15.10.2011. Accordingly, assessee could not be treated as an assessee in default for not deducting TDS under section 195 in respect of payments made for purchase of licensed software prior to 15.10.2011....

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Extend dates for filing Tax Audit Report & ITR for AY 2020-21

Tax Practitioners Association, Indore has made a request for Extension of Due Dates for filing Tax Audit, Audit Reports under Income Tax Act and ITR for Assessment Year 2020-21 to Smt. Nirmala Sitharaman, Ministry of Finance. Text of the Representation is as follows:- Dated: 13th Oct., 2020 To, Smt. Nirmala Sitharaman, Ministry of Finance...

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Tax Audit – New clauses inserted in form 3CD wef 01.10.2020

Tax Audit -New clauses inserted by Income Tax (22nd Amendment) Rules 2020 in form 3CD with effect from 01st October 2020 1. As per the Notification No. 82/2020/F. No. 370142/30/2020-TPL dated 1st October 2020 (Notification) issued by the Central Board of Direct Taxes (CBDT), the Income Tax (22nd Amendment) Rules 2020 have been notified ef...

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TCS Under Section 206C(1H)

TCS Under Section 206C(1H)  Background: Section 206C of the Income-tax Act, 1961 (‘the Act’) provides for the collection of tax at source (‘TCS’) on stipulated kinds of goods. TCS is a procedure where payee collects an amount as TCS from the buyer in addition to amount of receipt of sale consideration and pays to ...

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TDS on Payment to Contractors- section 194C – Income Tax Act, 1961

1. INTRODUCTION The term TDS refers to tax deducted at source. The concept of TDS was introduced with an aim to collect tax from source itself. It fulfills dual purpose of Govt. i.e. advance receipt of tax and requirement to regulate person making certain payments or receiving any sum. Govt. is using TDS as its […]...

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TCS on Foreign Travel under Income Tax Act, 1961

Tax shall be collected by seller of an overseas tour programme package @ 5% if buyer has furnished his PAN, otherwise tax shall be collected @ 10% in accordance with section 206CC....

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TCS on Foreign Remittance under Income Tax Act, 1961

1. INTRODUCTION The population of India is 125 crores and only 1.46 crores people pay tax in India i.e. around 1.15% people pay tax. Looking to lower number of people paying taxes Govt. is making way to widen tax base by collecting tax from source itself. It means seller shall collect certain percentage of tax […]...

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Breaking Partnerships- Partnerships, Politics & its Taxation

Partnership means more than one person come and work together. Business partnerships are carried out with the intention of earning Profits. But in Political partnerships there is no objective of earning profits, however nowadays it seems that they are made for profits only. In politics rules are not followed. If business Partnerships diss...

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Avoid gifts in cash to stay outside taxman’s radar

Under the latest provisions, any sum of money received without consideration (in excess of Rs 50,000), by an individual or Hindu Undivided Family (HUF), during a financial year, are taxable in the hands of the recipient. For the purpose of computation of the threshold limit of Rs 50,000, the aggregate value of gifts received from all sour...

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Section 153C Assessment has to be based on material found in the course of search which relates/belongs to Assessee

Sree Lakshmi Vs DCIT (ITAT Bangalore)

Sree Lakshmi Vs DCIT (ITAT Bangalore) We have already examined the legal position with regard to validity of initiation of proceedings u/s. 153C of the Act de hors incriminating material found in the course of search which belong or relate to the assessee. Admittedly, no such incriminating material was found in respect of any of […...

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Depreciation eligible on goodwill recorded pursuant to a business transfer agreement

DCIT Vs Ebix Software India Pvt. Ltd. (ITAT Delhi)

DCIT Vs Ebix Software India Pvt. Ltd. (ITAT Delhi) The Assessing Officer has held that the cost of the purchase consideration over the tangible assets is to be treated as payment for the non-compete fees as there was no goodwill with the seller and creation of the goodwill is misleading. The aforesaid finding is based […]...

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Assessee can claim proportionate deduction under Section 80IB(10) relating to eligible units

DCIT Vs Shree Venkatesh Associates (ITAT Pune)

DCIT Vs Shree Venkatesh Associates (ITAT Pune) The issue of pro-rata deduction u/s. 80IB(10) for eligible units has been considered by the jurisdictional ITAT, Pune in case of Ramsukh Properties (supra) and M/s D.S. Kulkarni Developers Ltd (supra) and IT AT, Nagpur in case of AIR Developers(supra) and allowed such pro-rata deduction. The ...

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Appeal not Justified if there is Lack of Strong Contrary Evidence

Sudhakar Motiram Kadam Vs ITO (ITAT Pune)

The issue under consideration is whether the assessee can challenge the order of AO for which he has agreed before without there being any contrary evidence?...

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No Recourse with Revenue to Reconsider Similar Facts & Evidences

PCIT Vs Goyal Builders (Punjab & Haryana High Court)

The issue under consideration is whether the re-opening of assessment is justified if it is based on the similar issues and evidences which have been already considered in original assessment?...

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Section 147 Reassessment justified for Cash Deposit in Bank but not disclosed in ROI

Shri Pillu Ram Sahal Vs ITO (ITAT Jaipur)

The issue under consideration is whether the re-opening of assessement u/s 147 is justified in law?...

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Funds raised by FCCB Buy Back at Discounting Rate is Not Business Income

Ok Play India Ltd. Vs JCIT (ITAT Delhi)

The issue under consideration is whether the funds raised from buy back of FCCB at discounting rate is  considered as business income and tax u/s 28 of the Income Tax Act?...

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Section 206C(1H)- New TCS Provision on Sale of Goods

Provision of section 206C(1H) is applicable only on the Sale of goods of the value exceeding fifty lakh rupees and Supply of Services has been kept out of the purview of this sub-section. Therefore, the provision is not applicable on the consideration received in relation to Supply of Services....

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Practical Case Studies on Tax Payable under Vivad se Vishwas Scheme, 2020

Direct Tax Vivad se Vishwas Act, containing the provisions relating to the specified due dates for payment of tax payable by the declarant under the Vivad se Vishwas scheme, has been made and accordingly the due date of making payment of disputed tax (without any additional amount), was extended from the originally stipulated due date of ...

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Once quantum addition deleted, penalty u/s. 271(1)(c) has no legs to stand

ACIT Vs Thermax Limited. (ITAT Pune)

ACIT Vs Thermax Limited (ITAT Pune) Revenue has not doubted the genuinity of the return filed by the assessee and has not said that the particular of expenses claimed in the return were not correct. The expenses were claimed and quantum additions have been upheld by the Tribunal. However, in the separate proceedings of penalty […]...

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Extend due date of filing of Tax Audit Report & Income Tax Return

Request for extension of due date of filing of Tax Audit Report & Income Tax Return for A.Y.2020-21 as there was delay in notification of ITR forms/release of schema and due to Covid-19 pandemic....

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How to fill ITR 3 from Tax Audit Report – An Analysis

In case of assessee who has to obtained and upload Audit Report under section 44AB of the Income Tax Act, 1961 has to file income Tax Return for the same previous year. As there are some information or data which are same in Income Tax Return and in Tax Audit Report. So assessee has to […]...

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Received Gift – Whether it is Taxable or Not?

Under the provisions of Section 56(2)(vi) certain gifts are liable to income tax as income from other sources. However, this provision is applicable only for individuals and Hindu Undivided Families (HUFs). Thus, if gift is received by any Trust or A.O.P., then it is not liable to income tax as "income from other sources". The provision o...

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Salary – Tax Treatment of Gratuities

The word ‘Gratuity’, has not been defined in the Income-Tax Act, 1961(the Act). In the absence of any definition of ‘Gratuity’ in the Act, its meaning as provided in the dictionaries has to be referred to. The word ‘Gratuity’ has been variously defined in the Advanced Law Lexicon by P.R. Aiyar. The aforesaid definition is to b...

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Income Tax Search & Seizure Check facts before worrying

Under the Income Tax Act, the Search and Seizure operations are a carefully and secretly devised plan of action on the basis of authentic and bonafide information and material (something more than a rumor and gossip), which may be gathered on its own or given by some informer....

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TCS Unresolved Controversy

BACKGROUND OF TAX COLLECTION PROVISIONS TCS was first introduced by Central Government through Finance Act 1988  (vide Chapter XVII-BB)  just to curb those sectors/ persons who are unidentified and mainly from unorganized sectors. Section 206C (1) – EVERY PERSON being seller AT TIME OF DEBITING OF BUYER “OR” AT TIME OF RECEIPT OF ...

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Extend due dates of Tax/Transfer Pricing Audits & Return Filing

Tax Bar Association, Jodhpur has made a representation to Smt. Nirmala Sitharaman, Hon’ble Union Minister of Finance & Corporate Affairs & Request for Extension of due date for filing of Tax Audit reports, Transfer Pricing Audits and Income-tax returns – AY 2020-21 till 31St March 2021. Text of the representation is as follows...

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Bill discounting Income computable as per accounting method regularly employed

Karur Vysya Bank Ltd Vs ACIT (Madras High Court)

Karur Vysya Bank Ltd Vs ACIT (Madras High Court) Facts- Only matter involved is income received in advance in the nature of interest income on discounting of bills against letter of credit is to be taxed on receipt basis or accrual basis. Assessee contended that there was no escapement of income. Assessee were following mercantile [&helli...

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Revised Jurisdiction Order regarding Equalization Levy

Jurisdiction Order No. 2/2020 (12/10/2020)

Principal Chief Commissioner of Income-tax (International Taxation), Delhi, in supersession of this office order no. 1/2020 dated 29.05.2020 (F.No. Pr. CCIT(IT)/Delhi/Juris./Eq. Levy/2020-21137), hereby authorise the income-tax authority/authorities specified in Col No.(2) below and having their headquarters mentioned in Column (3) and wo...

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Whether GST is to be included in gross turnover in presumptive taxation- An unending issue.

Whether the GST component will be calculated while calculating the Gross turnover for the applicability of the 44AD. Of late many assesses are seeking an opinion that whether the GST component will be included while calculating the threshold limit of the 2 crore as provided in the section 44AD and whether the 8 percent threshold […...

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ITAT Deletes section 271C Penalty for Failure to Deduct TDS on LTA

Canara Bank (Erstwhile Syndicate Bank) Vs ACIT (ITAT Bangalore)

The issue under consideration is whether the penalty u/s 271C levied due to failure to deduct tax at source (TDS) on LTA paid to employee is justified in law?...

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Additional claim can be made before ITAT despite no such claim in Return of Income

Bector Food Specialties Ltd Vs JCIT (ITAT Chandigarh)

The issue under consideration is whether submitting additional claims before tribunal, which is not claim in return of income will be sustain in law?...

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Matrix for Tax Audit Under Section 44AB for A.Y.2020-21

Article contains Matrix for Tax Audit Requirement Under Section 44AB for A.Y.2020-21. Matrix has been prepared after considering provisions of section 44AB and 44AD for A.Y.2020-21...

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Foreign Exchange Fluctuations allowable as Revenue Expense- Section 37

DCIT Vs. Coffee Day Global Ltd. (ITAT Bangalore)

DCIT Vs. Coffee Day Global Ltd. (ITAT Bangalore) The issue under consideration is whether foreign exchange fluctuations are allowed as revenue expense u/s 37 of Income Tax Act? ITAT states that, the Supreme Court in the case of CIT vs. Woodward Governor India Pvt. Ltd. (2009) 312 ITR 254 had already held that the actual […]...

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Why Due dates for Tax/Transfer Pricing Audit & ITR filling should be extended? WHY

Section 44AB of the Income-tax Act, 1961 contains the provisions for the tax audit of an entity. As per these provisions, Tax audit will be conducted by a practicing chartered accountant who ensures the taxpayer have maintained proper books of account and complied with the provisions of the Income-tax Act. In view of the challenges [&hell...

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Posted Under: Income Tax |

Activities promoting Handloom Sector Eligible for section 11 & 12 Exemption

ITO (E) Vs Association of Corporation & Apex Societies of Handlooms (ITAT Delhi)

The issue under consideration is whether the activities involved towards promotion of handloom sector is eligible for exemption under section 11 and 12 of Income Tax Act?...

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Section 80IAB Deduction allowable to DLF on profit & gains from SEZ development

DLF Ltd. Vs. JCIT (ITAT Delhi)

DLF Ltd. Vs. JCIT (ITAT Delhi) Conclusion: Deduction of Rs. 1.78 Billion in respect of profits derived on account of development considerations of bare shells would constitute profits and gains derived from business of developing any Special Economic Zone within the meaning of Section 80 IAB and was allowable to DLF Limited. Held: Assesse...

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Genuineness irrelevant while disallowing expenses – Section 40A(3)

Vaduganathan Talkies Vs ITO (Madras High Court)

Revenue is right in contending that the genuinity of the transaction is hardly a matter, which should weigh in the minds of the Assessing officer while examining as to the whether the assessees had violated Section 40A(3) of the Act....

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No Tax on transfer of property under family settlement

Govind Kumar Khemka Vs ACIT (ITAT Delhi)

In this case, since there was a Family Settlement between the assessee and three brothers and they have acted upon Family Settlement Deed and distributed various properties among themselves and necessary rights and title are transferred in favour of each brother would show that parties have entered into genuine transaction....

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Interest on NPA loan can be taxed on receipt basis only

Chitradurga District Co-Op. Central Bank Ltd. Vs DCIT (ITAT Bangalore)

DCIT Vs. Chitradurga District Co-Op. Central Bank Ltd. (ITAT Bangalore) If an assessee adopts the mercantile system of accounting and in his accounts he shows a particular income as accruing, whether that amount is really accrued or not is liable to bring the said income to tax. His accounts should reflect true and correct statement of ...

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Unexplained jewellery: ITAT allows credit for 100 gms of jewellery to son of assessee

Parag Gupta Vs DCIT (ITAT Delhi)

Parag Gupta Vs DCIT (ITAT Delhi) The issue in the present ground is with respect to addition of Rs. 2,70,000/- on account of unexplained jewellery. It is the contention of the learned AR that if the correct quantity of jewellary (i.e. 671.53 gms is considered instead of 771.83 gms) and if the credit for jewellery […]...

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Income Tax Department conducts search in Ahmedabad

The Income Tax Department, based on credible intelligence, conducted a search & seizure action on 08.10.2020 at Ahmedabad in the case of a group engaged in the businesses of real estate, construction and land trading. Search was conducted at 27 premises, which included offices and residences of some associates also....

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Posted Under: Income Tax |

Understanding TDS with Judicial Judgements

The Tax deducted at source (TDS) is covered under chapter XVII of the Income Tax Act, 1961. There are number of sections & subsections under which TDS has to be deducted but the important which are most used by the assessee are given below:...

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Capital Gains Exemption – Section 54EC

All categories of persons are eligible to avail exemption benefit under section 54EC of the Income Tax Act. Section 54EC exemption is available only towards the capital gain arisen on account of transfer of long term capital asset (being land or building or both)....

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No further disallownce U/s. 14A warranted if Voluntary disallowance by Assessee exceeds exempted income

Coffeeday Enterprises Ltd. Vs DCIT (ITAT Bangalore)

The issue under consideration is whether CIT(A) is correct in confirming the enhancement of disallowance made by the AO over and above the amount disallowed by the assessee u/s 14A of the Act?...

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No presumption that delay in approaching Court is always deliberate

Thunuguntia Jagan Mohan Rao Vs DCIT (Telangana High Court)

Thunuguntia Jagan Mohan Rao Vs DCIT (Telangana High Court) The issue under consideration is whether rejection of application of condonation of delay by the ITAT is justified in law? High Court states that, it held that there is no presumption that delay in approaching the Court is always deliberate and the words ‘sufficient cause...

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Extend Due Dates for filing Tax/Transfer Pricing Audit & ITR

Chamber of Tax Consultants has made a representation to Smt. Nirmala Sitharaman, Hon’ble Finance Minister, requesting Extension of Due Dates for filing Tax Audit, Transfer Pricing Audit and Income Tax Return for Assessment Year 2020-21. Text of the representation is as follows:- Date: 7th October, 2020 To, Smt. Nirmala Sitharaman, H...

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Income Tax Saving Investments For Salaried Individuals

Many individuals who are receiving income under the head salary ask about the methods which can legally help in saving tax on salaried people. It is a fact that are not allowed to claim expenses except those specified under the Income Tax Act. Therefore, they can only invest in or claim certain expenses which are […]...

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Posted Under: Income Tax |

Section 194H TDS not applicable on Payment gateway charges paid to banks/credit card agencies

ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad)

ACIT Vs. Head Infotech India Pvt. Ltd. (ITAT Hyderabad) Assessee hosts online games and when the customers make payments through banking Gateways by way of credit or debit card of the relevant banks ( which are referred to as Gateways) and while transferring money to the assessee’s account, banks invariably retain service charges. It is...

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AO cannot change share valuation Method opted by Assessee

Taaq Music Pvt. Ltd Vs ITO (ITAT Bangalore)

Taaq Music Pvt. Ltd Vs ITO (ITAT Bangalore) The law provides that, the fair market value may be determined with such method as may be prescribed or the fair market value can be determined to the satisfaction of the Assessing Officer. The provision provides an Assessee two choices of adopting either NAV method or DCF […]...

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Posted Under: Income Tax |

Capital gains under Income Tax Act 1961

Any Income derived from a Capital asset movable or immovable is taxable under the head Capital Gains under Income Tax Act 1961. The Capital Gains have been divided in two parts under Income Tax Act 1961. One is short term capital gain and other is long term capital gain....

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Understanding DTAA with Case Laws

There are two kinds of DTAA. Comprehensive Agreements & Limited Agreements. Comprehensive Agreements scope is to addressing all source of income whereas Limited Agreements scope to cover only. (a) Income from Operation of Aircrafts & Ships (b) Estates (c) Inheritance & (d) Gifts. Currently there are 90 Comprehensive Agreements & 13 L...

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Banking Transaction Tax

In fact, most of us would not know, but India has already tested the effectiveness of BTT from 01st July, 2005 till 31st March, 2009 in a very limited manner though, through the implementation of Banking Cash Transaction Tax during that period....

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Posted Under: Income Tax |

Exemption u/s 2(15) was allowable to Investor Financial Education Academy for conducting activities for charitable purpose

Investor Financial Education Academy Vs ITO-Exemption (Madras High Court)

Exemption under section 2(15) was allowable to assessee-Investor Financial Education Academy as the surplus of assessee could not be distributed, which was clearly spelt out in the Memorandum of Association, income and profit of the company, whatsoever derived should be applied solely for the promotion of its objects as set forth in the m...

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Latest Income Tax News

Income tax is the part of your income which you are required to pay to the Indian government for funding various infrastructural developments, pay salaries to those who are employed by the central or the state governments, etc. All the taxes which are imposed are based on law, and the law which governs provisions about taxes on income is the Income Tax Act, 1961.

Income tax needs to be paid by each and every individual, Hindu Undivided Family, Association of Persons, Body of Individuals, companies, corporate firms, local authorities and every artificial juridical person generating any income based on the income tax slab rates.

Income tax might seem to be a tedious tax for most us, and it has a lot to do with the fact it involves a lot of nitty-gritty and details while calculating and in paying income tax. However, if you need a clear picture about income tax which is simple and easy to understand then you are at the right place.
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