method of accounting - Page 7

Allowability of interest due and payable to financial institution u/s. 43B of Income Tax Act, 1961

Triveni Engineering & Industries Ltd. Vs. CIT (Delhi High Court)

We do not find any error in the approach of the authorities below. Merely because the interest was debited in the books of accounts maintained on mercantile basis would not mean that the interest had become due and accrued because admittedly the interest liability would become due not during the relevant previous year but only for the fir...

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In mercantile method of accounting allowability of expenditure depend on liability to pay

CIT Vs Panacea Biotech Ltd. (Delhi High Court)

So far as the contention with regard to the disallowing the claim on the expenditure incurred on the purchase of two machineries is concerned, the counsel for the Revenue has urged that though with respect to the first machinery an advance payment was made within the Assessment year, with respect to the second machinery no payment at all ...

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Section 145A have disabled the assessee from frequently changing the method of valuation of the stocks

Ananta Raj Proteins Ltd. Vs DCIT (ITAT Delhi 'A' Bench)

13. It may be mentioned that provisions of section 145A were inserted by the Finance Act No. 2, 1998 w.e.f. 1-4-1999. It may be mentioned that prior to assessment year 1998-99 the entire provisions relating to method of accounting were contained in sec. 145 only. As per that sec. The income under the head 'profits and gains of business' o...

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Interest earned on bank deposits received from clients is business income

ACIT Vs Bilawala & Co. (ITAT Mumbai)

In this case it is not disputed that the assessee is a firm of Solicitors & Advocates. It would be necessary to first examine as to whether The Bombay High Court (Original Side Rules are applicable in the case of the solicitors and then to consider the obligations of the Solicitor firm under the said Rules, if found applicable. For this p...

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Allowability of estimated loss on valuation of fixed price contract under the Income Tax Act, 1961

Mazagon Dock Ltd. Vs JCIT (ITAT Mumbai)

9. We have considered the rival submissions and perused the record o the case. The short dispute is whether the anticipated loss on the valuation of fixed price contract, in view of the mandatory requirements of AS-7, is to be allowed in the year in which the contract has been entered into or it is to be spread over a period of contract, ...

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Chargeability of interest income to tax when same is only technically accrued

Brahamputra Capital & Financial Services Ltd. Vs ITO (ITAT Delhi)

8. We have carefully deliberated on the rival contentions raised by the learned AR and DR. The controversy here revolves around chargeability of interest income to the tax which even though technically accrued as per the mercantile-system of accounting being followed by the assessee, but the same was not accounted for as income in view of...

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hit fund following the ‘completed contract method of accounting’ and offering income at the end of the chit, held, approving the method

CIT vs. Bilahari Investments (Supreme Court) - In the case of a chit fund following the ‘completed contract method of accounting’ and offering income at the end of the chit, held, approving the method: (i) Recognition/identification of income under the Act is attainable by several methods of accounting including the completed contract...

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Subsidiary reimburses non-resident parent company for mobilisation and demobilisation charges – if TDS not deducted on payments, provisions of Sec 40(

WITH India getting rapidly integrated to the global economy, making payments either for services or reibursement to a non-resident company or individual has become common for the India Inc. But what has not become common is the practice of deducting tax at source (TDS) under Sec 195. And this case is illustrated best in the latest decisio...

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Posted Under: Income Tax |

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June 2021