The financial affairs of both the donors do not evoke confidence that they could have made the gift of large amounts compared to their incomes in a circumstance when their monies were locked up elsewhere. They themselves did not own any immovable property. These facts impinge directly on the genuineness of the gifts also.
For a finance company, money is the product with which it carries on the business. Since the directors have made maiden venture. The necessity of establishing good will and reputation, that too in a finance company, is of utmost necessity. At the same time, it cannot give a permanent license to the company to continue to violate the provisions of section 269SS/269T.
We have heard learned counsel for the assessee. Learned counsel for the assessee drew our attention to various clauses in leave and license agreement and submitted that the premises were given purely on license basis with fixtures and fittings. It was also pointed out that under the license agreement, the assessee also retained duplicate key of the main entrance door, which indicates that the control and possession of the premises was always with the assessee.
Shri Somendra Khosla is a NRI, he is in the business of development of real estate and he is a man of substantial means, in my opinion, if he has decided to invest in the real estate in India, the genuineness cannot be doubted unless there is any evidence to the contrary. The Revenue has doubted the genuineness merely on the basis of presumption and suspicion ignoring the documentary evidences produced by the assessee, which establish the genuineness of transaction.
The Taxpayer incurred interest expenditure on the funds borrowed for investing in shares of a company, with a view to acquire controlling interest. The ITAT held that the interest expenditure incurred is not allowable under Section 57(iii)(Section) of the Indian Tax Law (ITL), since it is not incurred ‘wholly and exclusively’ for the purpose of earning dividend income.
This Tax Alert summarizes a recent ruling of the Special Bench (SB) of Kolkata Income Tax Appellate Tribunal (ITAT) in the case of Shree Capital Services Ltd. (Taxpayer) vs. ACIT (ITA No. 1294 (Kol) of 2008) in which the SB held that, prior to financial year 2005-06 (assessment year 2006-07), derivative transactions in shares were covered by the definition of speculative transactions (ST). The SB further held that the exception to the definition of ST, from tax year 2005-06, in respect of eligible derivative transactions carried out on recognized stock exchanges, is not clarificatory in nature and does not have a retrospective effect for earlier years.
Taxpayers in the infrastructure sector are often engaged in the execution of construction activities, which form a minor portion of a contract for the development of an infrastructure facility. This ruling provides guidance on whether a contactor simplicitor would be entitled to tax holiday under the ITL, in respect of the construction activities carried out by it. This ruling makes it clear that tax holiday would be denied to a person who merely executes any works contract/construction activity but does not own the infrastructure developed by it. The ruling also holds that the person who does not undertake development of the entire facility but develops only part of it would not be entitled to tax holiday benefit.
The second proviso to section 10B(1) cannot be construed to be a qualifying condition for claiming deduction. It just permits additional benefit which may be allowed provided domestic profit is within the limit prescribed in the proviso. On the panoply of this proviso deduction cannot be denied. The assessee would be entitled to partial deduction proportionately on export turnover in view of the provisions of sub-section(4) of section 10B of the Income-tax Act, 1961.
This article summarizes a recent ruling of the Special Bench (SB) of the Mumbai Income Tax Appellate Tribunal (ITAT) [ITA No. 7315/Mum/2007] in the case of DCIT vs. Manjula Shah (Taxpayer) which held that, in the case of gifted capital asset, indexation benefit is available to a donee from the year of its acquisition by the previous owner. The SB adopted a purposive construction of the definition of ‘Indexed Cost of Acquisition’ (ICOA) by looking at the scheme of the Indian Tax Law (ITL), which seeks to grant the benefit of cost and holding period of the previous owner to the donee.
In this case, we noted that the Assessing Officer has not brought out any specific charge for which the penalty has been imposed on the assessee under section 271(1)(c) of the Income Tax Act. He has not brought out whether the assessee has concealed the income or whether the assessee has furnished the inaccurate particulars of income.
