Income Tax - Article analyses Budget Proposals by the Finance Act (No. 2), 2019 – Relevant for International Tax, Transfer Pricing & Non-Resident which includes Amendment of section 9 – Gift made to person outside India (non-resident), Amendment of section 9A – Providing relaxation in condition for offshore funds, Amendment of sectio...
Read MoreIncome Tax - The provisions of section 56(2)(viib) of the Act provides for charging of the consideration received for issue of shares by certain companies, where such consideration exceeds the fair market value of such shares. However, the Central Government is empowered to notify that the provisions of this section shall not be applicable to consider...
Read MoreIncome Tax - The existing provisions of the section 56 of the Income-tax Act, inter alia, provide that income by way of interest received on compensation or on enhanced compensation referred to in section 145A(b) shall be chargeable to tax. The Finance Act, 2018 substituted the provisions of section 145A with sections 145A and section 145B. However, n...
Read MoreIncome Tax - The existing provisions of the section 56(2)(x) of the Income-tax Act, inter alia, provide for chargeability of income in case of receipt of money or specified property for no or inadequate consideration. For determining the amount of income for receipt of certain shares, the fair market value of the shares is taken into account. Similarl...
Read MoreIncome Tax - The existing provisions of the said section 56 of the Income-tax Act, inter alia, provide that where a company, not being a company in which the public are substantially interested, receives, in any previous year, from any person being a resident, any consideration for issue of shares that exceeds the face value of such shares, […]...
Read MoreIncome Tax - Start-ups and their investors filing requisite declarations not to be subjected to any scrutiny regarding valuations of share premiums E-verification mechanism proposed for establishing identity of the investor and source of his funds TV programme proposed exclusively for Start-ups within the DD bouquet of channels Government to launch ...
Read MoreIncome Tax - Central Board of Direct Taxes had issued Circular 10/2018 dated 31.12.2018 to clarify that provisions of section 56(2)(viia) of the Income-tax Act, 1961 being anti-abuse provisions shall not be applicable in cases of receipt of shares by the specified company or firm as result of fresh issuance of shares including by way of bonus shares, ...
Read MoreIncome Tax - Bombay Chartered Accountants' Society has made a Representation on 'Suggestions for Amendments in the Income Tax Act', on 24th May, 2019, to the Joint Secretary TPL, Central Board of Direct Taxes, Ministry of Finance, Government of India....
Read MoreIncome Tax - The Department of Industrial Policy & Promotion(DIPP) has taken notice of the news reports regarding issue of notices by Income Tax authorities to Angel Investors/Start-ups. DIPP in consultation with the Department of Revenue (DoR) has put in place a mechanism since April 2018 to grant exemption from the provisions of Section 56(2)(vi...
Read MoreIncome Tax - Income Tax Rule 11UA deals with Valuation of jewellery, archaeological collections and shares and securities for the purpose of Section 56. Erstwhile as per Clause (b) of Sub-Rule 2 of Rule 11UA earlier merchant banker and Chartered Accountant were allowed to do valuation of unquoted equity shares under Discounted Free Cash Flow method bu...
Read MoreCinestaan Entertainment P. Ltd. Vs ITO (ITAT Delhi) - Where there was an option under Rule 11UA(2) to determine the FMV by either the ‘DCF Method’ or the 'NAV Method', AO had no jurisdiction to discard the valuation report of the CA mainly on the ground that valuation of equity shares carried out by assessee was based on projection of revenue which...
Read MoreRadhika Roy Vs DCIT (ITAT Delhi) - Enhancement of assessee's income on account of difference between the purchase price of the shares of NDTV limited at Rs 4 per share and the market price of those shares quoted on recognized stock exchange at Rs. 140 per share was a benefit taxable u/s 56 (2)( vii) as assessee could not justify th...
Read MoreSh. Jai Pal Gaba Vs ITO (ITAT Chandigarh) - Sh. Jai Pal Gaba Vs ITO (ITAT Chandigarh) The very language of the section 28(iv) speaks about the value of any benefit or perquisite arising from business or exercise of a profession. Now considering the facts and circumstances of the case, though, the loan was taken for the purpose of business but...
Read MoreAgro Portfolio Private Ltd. Vs ITO (ITAT Delhi) - Agro Portfolio Private Ltd. Vs ITO (ITAT Delhi) We are unable to accept the contentions of the assessee that in view of the provisions under section 56(2)(viib) of the Act read with Rule 11UA(2) of the Rules the Ld. AO had no jurisdiction to adopt a different method than the one adopted by the asses...
Read MoreShri Satyendra Nath Kukreja Vs ITO (ITAT Delhi) - Shri Satyendra Nath Kukreja Vs ITO (ITAT Delhi) AR for the assessee challenging the impugned order passed by ld. CIT (A) contended that since the assessee has received the amount in question as a nominee of Shri Tek Chand Bhardwaj after his death being a childhood friend, the same is not liable to b...
Read MoreNotification No. G.S.R. 127(E) - (19/02/2019) - A Start-ups will be eligible for exemption under Section 56 (2) (viib) of Income Tax Act, if it is a private limited company recognized by DPIIT and is not investing in any of the following assets: i. building or land appurtenant thereto, being a residential house, other than that used by the Start-...
Read MoreG.S.R. 34(E) - (16/01/2019) - A Startup which is recognised by DIPP under para 2(iii) (a) shall be eligible to apply for approval for the purposes of clause (viib) of sub-section (2) to section 56 of the Act for the shares already issued or proposed to be issued if the following conditions are fulfilled‑...
Read MoreCircular No. 02/2019 - (04/01/2019) - CBDT Withdraws Circular No. 10/2018 dated 31.12.2018 on applicability of section 56(2)(viia) of the Income-tax Act, 1961 for issue of shares by a company in which public are not substantially interested. It is learnt that Same is been withdrawn considering the Negative Impact it may have on National...
Read MoreCircular No. 10/2018 - (31/12/2018) - It is hereby clarified that section 56(2)(viia) of the Act shall apply in cases where a specified company or firm receives the shares of the specified company through transfer for no or inadequate consideration. Hence, the provisions of section 56(2)(viia) of the Act shall not be applicable in cases...
Read MoreNotification No. 23/2018-Income Tax [S.O. 2087(E)] - (24/05/2018) - Amendment in Rule 11U and 11UA omitting reference to the term accountant, thereby permitting only merchant bankers to determine the FMV of unquoted equity shares as per the Discounted Free Cash Flow Method ...
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Cinestaan Entertainment P. Ltd. Vs ITO (ITAT Delhi) -