Archived; click post to view. Excerpt: Filing of return under Income tax is compulsory for two classes of persons-company and firm. This is provided in proviso to section 139  of the I T Act. What happens when a company goes into liquidation? Darshan Khakhar of Ahmedabad asks “Does an official liquidator appointed by court bear any [...]

A recent decision of Punjab & Haryana High Court in the case of CIT vs Kartar Singh & Co. (P) Ltd. 300 ITR 440 has taken into account almost all the conflicting decision of various High Court as referred above and also the decision of the Apex Court in the case of Rajesh Jhaveri Stock Brokers (P) Ltd. and held that CIT has no power of revision under section 263 in case of summary and acknowledgement are sent to the Assessee after filing of return.

Archived; click post to view. Excerpt: There is a fundamental difference between Sales tax and Service tax. In case of Sales tax , the seller is responsible to deposit the sales tax even if he has not collected that from the customer but in case of service tax the liability of service provider arises only [...]

The power of summon u/s 131 of the I T Act is great power vested with income tax authorities. These powers are equivalent to powers vested in judge of a court under the Code of Civil Procedure, 1908 (5 of 1908), when trying a suit. The section u/s 131 of the I.T.Act is as und

Section 14A of the I T. Act is regarding disallowance of expenditure incurred on the income which is exempt from tax . The bone of contention between taxpayer and income tax department is mainly on the issue of expense on earning of dividend income . While the assessee claims that no expenditure was incurred for earning tax free dividend income, whereas the Assessing Officer apportion the total expense debited in P & L account in the proportion of total income . The government later on notified the Rule 8D for computation of such disallowance u/s 14A

Archived; click post to view. Excerpt: Under Income Tax Act, A.O has power to reopen a case upto six years from the end of relevant assessment year. So, for example, an A.O can reopen a case pertaining to Assessment year 2001-02 upto 31/03/2008. The issue is if he issues notice for reopening on last week [...]

Scrutiny of the case is done by officer of the rank of Income Tax Officer (ITO ) and Assistant Commissioner of Income Tax (ACIT) ot Deputy Commissioner of Income tax. The jurisdiction has been distributed among these ranks as per return income. As per CBDT instruction , generally the ITOs have jursidiction over cases where return income is below Rs 10 lakhs whereas the jurisdcition of ACIT/DCIT are on all kinds of cases without any limit if return income.

The issue is whether accounting treatment of a particular item of income or expenditure in its books of account decide whether the same can be treated as income or expenditure. For example , an assessee can treat an expenditure as revenue in nature and debits its P & L account . Whether his treatment as expenditure is final for computing his income.

Any expenditure incurred wholly and exclusively for the business is alloowable expenditure u/s 37 of the I.T.Act. The premium paid on insurance policy on any employee life is also allowable expenditure. The insurance company sells Keyman insurance policy which basically means as per Explanation to section 10(10D) as under

The definition of dividend is contained in section 2(22) of the I.T. Act. Subclause (e) of section 2(22) defines deemed dividend. In simplest terms, it syas that if a company in which public has no shareholding up to 25 % gives loan or advance to any shareholder having 10 % shareholding or to any concern in which such person has 20 % shareholding or interest , such loan or advance or credit shall be considered taxable deemed dividend to the extent of accumulated profits.

Archived; click post to view. Excerpt: The answer is in negative  by Supreme Court in Goetze (India ) Ltd. vs. CIT [2006] 284 ITR 323 (SC) which held  that if assessee did not claim the deduction or exemption in return, the claim can not be made to A.O without filing revised return. The decision of the Apex Court [...]

Archived; click post to view. Excerpt: Income tax refund is one subject which ordinary taxpayer seriously doubt  that they would get it from department. Therefore,Supreme Court’s decison on  interest on interest is of great import. The issue in l before the Hon’ble Suprime Court  in Sandvik Asia Ltd.vs CIT 280 ITR 643 (SC) was whether [...]

Archived; click post to view. Excerpt: The answer is NO as as per the decision of  Supreme Court in CIT vs Kurji Jinabhai Kotecha(1977) 107 ITR 101(SC) . The decision of the court is very clear as far as issue of carry forward of speculative loss in illegal business is concerned . “The second question is [...]

Archived; click post to view. Excerpt: Yes, under transfer pricing mechanism , there is scope of notional interest taxation.  This is held by Delhi bench F in Perot Systems TSI ( India) Ltd. vs. DCIT, ITA No. 2320 to 2322/Del/08, Delhi Bench ‘F’ order dated 30.10.2009. Facts of the case The aseessee, an India company, advanced interest free [...]