The respondents-partners were, in addition to their share in profits, entitled to salaries for services under the firms. The sole controversy turns on whether the sums so drawn as salaries were wholly liable to income-tax or only to the extent of 40% thereof which fell within the non-agricultural sector.
whether the show cause notice issued by the respondent is illegal and defective as the same did not provide for a time period of 15 days as prescribed in the statute and also because it did not disclose materials leading to the satisfaction of the concerned authorities justifying the issuance of such a show cause notice- Section 11 E (2) of Bengal Finance (Sales Tax) Act, 1941.
This ruling provides guidance to taxpayers on the issue that merely making a claim in the return of income, which is disallowed by the Tax Authority, cannot tantamount to furnishing inaccurate particulars of income, which would attract levy of penalty.
Section 43A, before its substitution by a new Section 43A vide Finance Act, 2002, was inserted by Finance Act, 1967 with effect from 1.4.1967, after the devaluation of the rupee on 6 June, 1966. It applied where as a result of change in the rate of exchange there was an increase or reduction in the liability of the assessee in terms of the Indian rupee to pay the price of any asset payable in foreign exchange or to repay moneys borrowed in foreign currency specifically for the purpose of acquiring an asset.
Section 291 of the Companies Act provides that subject to the provisions of that Act, the Board of Directors of a company shall be entitled to exercise all such powers, and to do all such acts and things, as the company is authorized to exercise and do. A company, though a legal entity, can act only through its Board of Directors. The settled position is that a Managing Director is prima facie in-charge of and responsible for the company’s business and affairs and can be prosecuted
It is a well known canon of construction that when Court is called upon to interpret provisions of a social welfare legislation the paramount duty of the Court is to adopt such an interpretation as to further the purposes of law and if possible eschew the one which frustrates it.
CIT vs. Reliance Petroproducts Pvt. Ltd., (2010) 11 SCC 762 = (2010) 322 ITR 158. As the assessee had furnished all the details of its expenditure as well as income in its Return, which details, in themselves, were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the authorities to accept its claim in the Return or not.
The words the whole of the amount of profits and gains of business in section 80P(2)(a) emphasise that the income in respect of which deduction is sought must constitute the operational income and not the other income which accrues to the Society.
In a recent ruling Supreme Court in the case of TRF Ltd. on the issue of whether a taxpayer, while claiming deduction of bad debts in its return of income, is required to establish that the debts have, in fact, become irrecoverable. The SC held that post the amendment to Section 36(1)(vii) (Section) of the Indian Tax Law (ITL), for claiming deduction of bad debts
In order to claim a bad debt as a deduction under section 36(1)(vii) of the Income tax Act (Act) it has been a long drawn controversy between the Taxpayer and the Revenue whether in addition to write-off the debt in the books of account, it is obligatory on the Taxpayer to establish that such debt has become a bad debt, especially after the amendment brought in by the Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1 April 1989.
