Monthly Archives: September 2015

section 115JB Govt grant for modernization of machinery is liable to MAT

By | September 28, 2015

Whether while computing book profit under section 115JB, Central Government grant received by assessee for modernisation of machinery and compensation received from State Government for loss to its compound wall, could  be deducted from net profit computed as per Parts II and III of Schedule VI of Companies Act, 1956 ? The Assessing Officer has… Read More »

section 40(a)(ia) Payer not liable for TDS default due to retrospective amendments

By | September 28, 2015

Whether disallowance under section 40(a)(ia) should be made on the basis of subsequent amendment brought into the Act with retrospective effect.? Summary of Case on section 40(a)(ia) :- Where Assessing Officer on basis of amendments introduced in section 9(1)(vi) with retrospective effect held that assessee was liable to deduct tax at source from licence fee… Read More »

CBEC :Circulars contrary to Supreme Court judgment need not be followed

By | September 28, 2015

Q Whether Circulars contrary to Supreme Court judgment need to be followed? As per the following clarification Circulars contrary to Supreme Court judgment need not be followed CLARIFICATION REGARDING BINDING NATURE OF CIRCULAR AND INSTRUCTIONS CIRCULAR NO. 1006/13/2015-CX, DATED 21-9-2015 A large number of judgments have been delivered by the Hon’ble Supreme Court on various… Read More »

Gains from sale of shares out of investment portfolio are capital gain and not business profits

By | September 26, 2015

Whether Gains arising out of investments portfolio are business income or Capital Gain ? Where assessee company had maintained accounts with applicable accounting standards and revenue was unable to find fault with assessee’s claim, capital gains arising out of investments portfolio was to be taxable under head ‘Capital gain‘ and not as business income HIGH… Read More »

section 44BB service tax were to be excluded from gross receipts

By | September 26, 2015

Whether receipts  on account of service tax were to be included in the gross receipts for the purpose of determining income under section 44BB of the Income-tax Act, 1961 ? Service tax was to be excluded from gross receipts while determining income under section 44BB IN THE ITAT DELHI BENCH ‘G’ Sundowner Offshore International (Bermuda) Ltd. v.… Read More »

Proportionate interest is disallowable under Section 14A

By | September 26, 2015

Whether Proportionate interest is disallowable under Section 14A even if bank’s current deposits exceed tax-free investment ? Interest liable to be disallowed u/s 14A on proportionate basis even if assessee-bank’s current deposits exceed its investments yielding tax-free returns. Assessee-bank cannot escape disallowance of interest u/s 14A by taking the plea that its interest-free funds (own… Read More »

ICAI proposes to divide Ind AS 115 into two separate standards

By | September 26, 2015

ICAI proposes to divide Ind AS 115 into two separate standards     The Institute of Chartered Accountants of India (ICAI) proposes to divide Ind AS 115, “Revenue from Contracts with Customers” into two separate accounting standards, first is Ind AS 11, “Construction Contracts” and second is Ind AS 18, “Revenue”. National Advisory Committee on… Read More »

Compensation received by prospective employee on termination of employment

By | September 24, 2015

whether Compensation received by prospective employee on termination of employment contract is taxable ? An amount received by a prospective employee ‘as compensation for denial of employment’ was not in nature of profits in lieu of salary. It was a capital receipt that could not be taxed as income under any other head HIGH COURT OF… Read More »

ICAI opinion in guidance note can be used to compute taxable income

By | September 22, 2015

whether the assessee could take recourse to the “guidance note” issued by the Institute of Chartered Accountants of India qua accounting for lease in determination of its income, and whether the deduction as claimed by the assessee ought to be allowed ? Where assessee had maintained accounts as per guidance note on accounting for leases… Read More »

Ind AS 107 Financial Instruments

By | September 21, 2015

Indian Accounting Standard (Ind AS 107) Financial Instruments: Disclosures (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective of Standard on Financial Instruments: Disclosures 1. The objective of this Indian Accounting Standard (Ind AS) is to require entities to… Read More »

FAQ on E payment of Income tax and other direct taxes

By | September 20, 2015

 E PAYMENT OF INCOME TAX,  TDS, ADVANCE TAX ,WEALTH TAX (DIRECT TAXES) There are two modes of payment of direct taxes (i) physical mode i.e. payment by furnishing the hard copy of the challan at the designated bank; and (ii) e payment mode i.e. making payment by using the electronic mode i.e using internet banking facility of… Read More »

Computation of Taxable Income and Tax

By | September 19, 2015

Computation of Taxable Income and Tax under Income Tax Act 1961 [As amended by Finance Act, 2015] Reference: www.Incometaxindia.gov.in Under how many heads the income of a taxpayer is classified for computing Taxable Income?​ ​S​ection 14​ of the Income-tax Act has classified the income of a taxpayer under five different heads of income, viz.: Salaries Income from… Read More »

Income tax Questions and Answers

By | September 19, 2015

Income tax Act 1961 ​What is Income tax? It is a tax levied by the Government of India on the income of every person. The provisions governing the Income tax Law are given in the Income tax Act, 1961.​ ​What is the administrative framework of Income tax?   The revenue functions of the Government of… Read More »

Revaluation loss on index linked debentures can be claimed

By | September 18, 2015

Can the Assessee claim revaluation loss on index linked debentures issued by the assessee ? The Hon;ble Supreme Court has considered the issue relating to the effect of changes in foreign exchange rates in the case of Woodward Governor India (P) Ltd (supra). In the case of foreign currency also, the conversion rates keep fluctuating and… Read More »

Construction for an educational institutions and service tax Exemption

By | September 18, 2015

Whether for the construction of educational institutions, service tax is exempted as per Circular No. 80/10/2004 ST, dated 17.9.2004 upto 30.6.2012 ? Section 65(105)(zzzza), read with section 65(25b), of the Finance Act, 1994 Taxable services – Works contract services Period October, 2008 to June 2012 Facts of the Case Assessee constructed classrooms, hostels, etc., for educational… Read More »

SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR SEARCH AND SEIZURE) REPEAL REGULATIONS, 2015

By | September 18, 2015

THE GAZETTE OF INDIA EXTRAORDINARY PART III – SECTION 4 PUBLISHED BY AUTHORITY NEW DELHI, SEPTEMBER 17, 2015 SECURITIES AND EXCHANGE BOARD OF INDIA NOTIFICATION Mumbai, the 17th September,2015 SECURITIES AND EXCHANGE BOARD OF INDIA (PROCEDURE FOR SEARCH AND SEIZURE) REPEAL REGULATIONS, 2015 No. SEBI/LAD-NRO/GN/2015-16/020.– In exercise of the powers conferred by section 30 of… Read More »

Capital Gain and Income Tax Provisions

By | September 17, 2015

 Income Tax Provisions for Capital Gain ​What incomes are charged to tax under the head “Capital Gains”? Any profit or gain arising from transfer of a capital asset during the year is charged to tax under the head “Capital Gains”.​ ​What is the meaning of capital asset? Capital asset is defined to include: a) Any kind… Read More »

Gift and Income Tax Provisions

By | September 17, 2015

Provisions of Income Tax on GIFT Are monetary gifts received by an individual or Hindu Undivided Family (HUF) taxable? If the following conditions are satisfied then any sum of money received (i.e, monetary gift may be received in cash, cheque, draft, etc.) by an individual/ HUF will be charged to tax (*): Sum of money… Read More »

Presumptive taxation scheme of Income Tax

By | September 17, 2015

Presumptive taxation scheme of Income Tax 1961 What is the meaning of presumptive taxation scheme?  As per sections 44AA of the Income-tax Act, 1961, a person engaged in business is required to maintain regular books of account under certain circumstances. To give relief to small taxpayers from this tedious work, the Income-tax Act has framed… Read More »

Loan from Relative of Director of Pvt Company

By | September 16, 2015

As per the notification by MCA, now the Private Companies can accept the loan from Relative of Director TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART II, [Section 3 sub-section (i)] Government of lndia Ministry of Corporate Affairs Notification New Delhi, dated,15th september 2015 G.S.R. – (E). – In exercise o{ the powers conferred… Read More »

salary income and Income Tax Questions

By | September 16, 2015

Income Tax on salary income ​What is considered as salary income? S​ection 17(1) ​ of the Income-tax Act defines the term ‘salary’. However, not going into the technical definition, generally whatever is received by an employee from an employer in cash, kind or as a facility [perquisite] is considered as salary. ​What are allowances in salary… Read More »

TAN Questions and Answers on Tax Deduction and Collection Account Number

By | September 16, 2015

What is TAN?​ TAN i.e. Tax Deduction and Collection Account Number is a 10 digit alpha numeric number required to be obtained by all persons who are responsible for deducting tax at source or collecting tax at source. It is compulsory to quote TAN in TDS/TCS return (including any e-TDS/TCS return), any TDS/TCS payment challan,… Read More »

Govt Defence equipment companies exempted to disclose Additional information of Schedule III

By | September 15, 2015

Govt. Defence equipment companies exempted to disclose Additional information of Schedule III to the Cos Act, 2013 SECTION 129 OF THE COMPANIES ACT, 2013 – FINANCIAL STATEMENT – NOTIFIED PARAS RELATING TO ADDITIONAL INFORMATION OF GENERAL INSTRUCTIONS FOR PREPARATION OF STATEMENT OF PROFIT AND LOSS IN SCHEDULE III OF SAID ACT NOT TO APPLY TO… Read More »

Apples Import through Nhava Sheva Port

By | September 15, 2015

[TO BE PUBLISHED IN THE GAZETTE OF INDIA EXTRAORDINARY PART-II, SECTION – 3, SUB-SECTION (ii)] GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT OF COMMERCE NEW DELHI NOTIFICATION NO. 21/2015-2020 Dated: September 14, 2015 Subject: Amendment in import policy conditions of apples under Exim code 0808 10 00 of Chapter 08 of ITC (HS),… Read More »

specially designed ponds are plants and eligible for depreciation

By | September 15, 2015

whether ‘natural pond’ which is  specially designed for rearing prawns would be treated as ‘plant’ within Section 32 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the purposes of allowing depreciation thereon ? since the ponds were specially designed for rearing/breeding of the prawns, they have to be treated as tools… Read More »

Foreign exchange loss is not Speculative Loss if

By | September 15, 2015

When will  Foreign exchange loss in forward contract is not speculative Loss and is allowed as Business Loss ? Foreign exchange loss incurred by assessee on account of entering into forward contracts with banks for purpose of hedging loss in connection with its import/export business has to be regarded as business loss subject to condition that… Read More »

Mineral Resources Exploration and Evaluation Ind AS 106

By | September 14, 2015

Indian Accounting Standard (Ind AS 106) Exploration for and Evaluation of Mineral Resources (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Question : What are the Objectives of standard on “Exploration for and Evaluation of Mineral Resources” ?… Read More »

Non-current Assets Held for Sale and Discontinued Operations Ind AS 105

By | September 14, 2015

Indian Accounting Standard (Ind AS 105) Non-current Assets Held for Sale and Discontinued Operations (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Question :What are the objectives of standard on Non-current Assets Held for Sale and Discontinued Operations ?… Read More »

Insurance Contracts Ind AS 104

By | September 13, 2015

Indian Accounting Standard (Ind AS 104) Insurance Contracts (see Note-1) (This Indian Accounting Standard includes paragraphs set in bold type and plain type, which have equal authority. Paragraphs in bold type indicate the main principles.) Objective 1. The objective of this Indian Accounting Standard (Ind AS) is to specify the financial reporting for insurance contracts by… Read More »