Assessing Officer has not made out any case for disallowing even a part of deduction allowable under Section 80IA. Once any condition laid down under Sub Section 10 of Section 80IA are not satisfied that Sub Section cannot be invoked and therefore no disallowance of deduction under that section can be made.
Income Tax Appellate Tribunal was right in holding that the assessee was entitled to claim deduction for bad debts of Rs.38,20,417/- in respect of the money lending business which was closed down during the accounting year relevant to the assessment year in 1998-99, without following the ratio of the decision of the Supreme Court in the case of Commissioner of Income Tax vs. Gemini Cashew Sales Corporation and contrary to the provisions of Section 36(2)(i) of the Income Tax Act. Merely because the money lending business was subsequently discontinued, that is in the subsequent accounting year relating to the relevant assessment year, it cannot be held that the assessee was disentitled to claim such a deduction though such claim as bad debt was, as a matter of fact, not in dispute.
When the interest payable on the original loan is not allowable u/s 24(1)(vi), then the interest paid or payable on the second loan for repayment of original loan is also not allowable.
This article summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) in the case of JCIT v State Bank of Mauritius Ltd. (Taxpayer) [2009-TIOL-712- ITAT-MUM]. The ITAT held that the Taxpayer, a company incorporated in Mauritius, having established a Permanent Establishment (PE) in India, is entitled to the deduction of expenses, incurred for the purpose of the business of the PE, in computing the profits of the PE under Article 7(3) of the India-Mauritius Tax Treaty (Tax Treaty). In view of the specific provisions of the Tax Treaty allowing the deduction for such expenses, such a deduction is not subject to restrictions prescribed under the Indian Tax Law (ITL).
This article summarizes a recent ruling of the Mumbai Income Tax Appellate Tribunal (ITAT) in the case of Panatone Finvest Ltd.(Taxpayer) [2009-TIOL-717-ITAT-MUM]. 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.
A plain reading of language used in the definition of `loan or deposit’ in section 269T clearly provides loan or deposit means any loan or deposit of any nature. Thus, there is no question of excluding current loan for the purpose of section 269T of the Act.
. In this case, the assessee filed his return of income on 29.06.1999 declaring total income at Rs. 15,77,534/-, wherein the arrears of rent was included while computing the income under the head “income from house property”. The A.O. processed the return of income u/s 143(1) at a returned total income of Rs. 15,77,534/-.
Section 271(1)(c) provides that if the AO or the Commissioner (Appeals) or the Commissioner, in the course of proceedings in this Act is satisfied that any person has concealed the particulars of his income or furnish inaccurate particulars of income, he may direct that such person shall pay by way of penalty a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by a reason of the concealment of particulars of his income.
The use of word developing’ in juxtaposition to infrastructure facility in section 80-1A(4) indicates that what is eligible for deduction under this sub-section is the profits and gains derived from the development of infrastructure facility and not something de hors it; so in order to be eligible for deduction the development should be that of the infrastructure facility as a whole and not a particular part of it; it may be possible that some part of development work is assigned by the developer to some contractor for doing it on his behalf; that will not put the doer of such work into the shoes of a developer; therefore, a mere contractor cannot be conferred with the benefit as provided in section 80-IA.
The penalty proceedings and the assessment proceedings both are different. Explanation 1to section 271(1)(c) in respect of any fact relating to the computation of total income states that the amount added or disallowed in computing the total income of an assessee shall be deemed to be the income in respect of which particulars have been concealed. This deeming provision for concealment is not absolute one.
