In this article, the proposed amendments by The Finance (No. 2) Bill, 2009 relating to sections 56(2), 57, 145A, 271(1) Explanation 5A and 281B, are briefly discussed. These amendments proposed in the Finance (No. 2) Bill, 2009, are aimed towards rationalizing the provisions of the Income-tax Act, 1961 (“the Act”) in order to bring out the true and correct intention of the legislature for enacting the above provisions.
It was zero-tax companies, which were profitable and paid dividends to shareholders but owing to various deductions/sops available under the tax laws did not have a taxable income and thus did not pay tax, that caught the attention of the legislators and led to the introduction of MAT. Under the existing provision a company is liable to pay minimum tax u/s. 115JB on its book profit @ 10% if the tax payable by such company on the total income under the other provisions of the Act is less than the tax payable under MAT. The credit of taxes such paid can be carried forward u/s. 115 JAA for 7 years to be set off against the tax liability arising under the other provisions of the Act. At the same time the section provides for the specific additions and deductions that are to be made to book profit in order to arrive at the profit as per section 115JB of the Act.
Amendment of section 90 :-The Finance Bill (No. 2) 2009 proposes to replace the existing Section 90 with a new section 90. The new section 90 is substantially the same as earlier section 90 except that the proposed amendment seeks to empower the Central Government to enter into an agreement with the Government of any country outside India or a specified territory outside India, inter alia, for avoidance of double taxation of income.
Definitions – Manufacture – Clause 3 – S 2 (29BA):- Clause 3 of the Finance Bill 2009 has sought to introduce sub section 29BA in section 2 of the Income Tax Act wherein the manufacture is defined for the first time The amendment is to take effect retrospectively from 1st April, 2009 and would apply in relation to Assessment Year 2009-2010 and subsequent years. . The amendment read as follows:
The Finance Bill, 2009 has introduced changes in the provisions relating to deduction for scientific expenditure incurred by an assessee in connection with his business. Clause 12 of the Finance Bill, 2009 proposes to substitute the following words in sub-section 2AB of section 35 of the Income-tax Act:
The newly proposed section 56 [2][vii] in the Finance Bill, 2009 is no ‘rosagoola’. When the Hon’ble Finance Minister ‘pronounced’ his budget in the Parliament, there was not even a whisper of reference to this section in his speech. And in this silence, lurked a deadly Bengal Tiger called ‘section 56 [2][vii]’.
The present article discusses amendment proposed by Finance Bill (No. 2) 2009 regarding provisions of Dispute Resolution Panel (DRP) and deduction u/s. 80-IB(10). Though the provisions relating to Dispute Resolution Panel are not a complete code for full and complete resolution of dispute referred to it, it is a step in right direction. Litigation is time consuming and it has been demand of AIFTP from time to time that Law must provide for Alternative Dispute Resolution mechanism for settling of dispute at the option of the assessee.
Question. The dealer has purchased plant along with land from Financial Institution in auction. The original owner of plant was declared sick unit and was liable to discharge sales tax dues for past years. The Sales Tax Department is contemplating to recover the said dues from the dealer who has purchased the plant and land in auction. Whether the department is justified in such demand?
The facts are that the dealer is registered under CST Act in Andhra Pradesh as well as in Maharashtra. Order is placed by AP branch on Tamil Nadu dealer for supply of goods against H form. The supplier prepares invoice mentioning Maharashtra address. The goods are delivered by TN party in AP from where dealer exports the goods. The dealer accounts the said invoice of TN party in its books in Maharashtra and shows the same in the Maharashtra Sales Tax returns. The H form issued by Maharashtra authorities is issued to TN party. Whether the above course of action as per law?
The subject of works contract is one of the most confusing and litigated issues. The Constitution (Forty Sixth Amendment) Act, 1982 granted powers to State Governments to enact laws for providing the levy of tax on the transfer of property (whether as goods or in some other form) involved in the execution of works contracts. Builders and Developers undergo untold hardship and misery while computing the gross and taxable turnovers. Each State has prescribed its own law, rules and methodology for determining the gross and taxable turnovers.
