GOETZE (INDIA) LTD. VS. COMMISSIONER OF INCOME-TAX (SUPREME COURT OF INDIA)

It is possible for an assessee to claim relief, which he had omitted to claim in the return of income by filing a revised return, if it is in time. However in case of scrutiny assessment assessee could have also wrote a letter and claimed the relief.

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 1.          Double Taxation Agreement between Belgium and the Hong Kong Special Administrative Region
             The Finance Minister, Didier REYNDERS has signed a new double Taxation Agreement between Belgium and the Hong Kong, Special Administrative Region.
 In order to stimulate the Belgian economy, the Finance Minister wishes to negotiate soon new agreements of this type.  This action  Read More

Taxation of undisclosed capital gain

1. Issue for consideration :
1.1 Chapter XIVB provides for special procedure for assessment of undisclosed income detected as a result of search. The said chapter lays down the rules for computation and assessment of such undisclosed income. An undisclosed income is defined by the said chapter to mean such income, which is detected as a result Read More

Method of accounting for non-residents

1. Issue for consideration :
1.1 S. 145 of the Income-tax Act provides that income under the heads ‘Profits and Gains of Business or Profession’ and ‘Income from Other Sources’ is to be computed in accordance with either cash or mercantile method of accounting regularly employed by an assessee. Effectively, it gives an assessee a choice to Read More

Premium on redemption of debentures — Year of accrual

1. Issue for consideration : 
1.1 Companies issue debentures for raising funds and as an incentive, provide for payment of premium on redemption or give discount on subscription. Debentures are usually issued for a period exceeding one year. It is common for companies to issue debentures which are redeemable after five to seven years or more. These Read More

Recording of reasons for penalty notice

1. Issue for consideration :
1.1 A penalty u/s.271 or u/s.273 is levied for violation of the specified provisions of the Act. This penalty is leviable only on satisfaction of the AO that the assessee has violated the specified provisions of the Act. S. 274 provides that no order of penalty under Chapter XXI shall be made Read More

Accumulation u/s.11(2) — Specification of purposes

1. Issue for consideration :
1.1 Under the provisions of S. 11(2), a charitable or religious trust is allowed to accumulate or set apart its unspent income for application to charitable or religious purposes in future years, not exceeding five years. Such accumulation requires the filing of a notice in Form No. 10 with the Assessing Officer, Read More

S. 80HHC Deduction for processed granite — Pre-amendment availability

1. Issue for consideration :
1.1 S. 80HHC of the Income-tax Act provides for a deduction of profits from the business of export of goods and merchandise to which the Section applies. Clause (a) of Ss.(2) of S. 80HHC provides that the Section applies to all goods and merchandise, other than those specified in clause (b).
1.2 Clause Read More

Recovery of taxes pending stay application

1. Issue for consideration :
1.1 An assessee has the right to apply to the Assessing Officer for stay of recovery proceedings initiated in consequence of a tax demand. S. 220(3) provides for an application by an assessee to the AO for extension of time for payment of tax demand. S. 220(6) empowers an AO to not Read More

Validity of reference to Valuation Officer by Commissioner (Appeals)

1. Issue for consideration :
1.1 U/s.16A of the Wealth-tax Act, 1957, for the purpose of making an assessment, the Wealth-tax Officer can refer the valuation of any asset to a Valuation Officer. Similar provisions are also to be found in S. 55A of the Income-tax Act, 1961.
1.2 Since the reference to the Valuation Officer can be Read More

Mutuality & Mutual Benefit Association

1. Issue for consideration :
1.1 Certain types of mutual benefit associations require all members to deposit money with the association, which is then utilised for giving loans to members who apply for such loans. In some associations, the interest earned on such loans is available for distribution amongst all the members of the association, while in Read More

Set-off of unabsorbed depreciation — Computing deduction u/s.80HHC

1. Issue under consideration :
1.1 S. 80HHC(1) grants a deduction in respect of profits derived from export in computing the total income of the year. S. 80HHC(3) requires that the profit derived from the export shall be computed in the manner laid down in that Section.
1.2 As the Section provides for a deduction and also provides Read More

Conversion of interest into loan — Whether payment ?

1. Issue for consideration :
1.1 S. 43B of the Income-tax Act provides that deduction for certain types of expenditure shall be allowed only on actual payment. One such type of expenditure covered by that Section is amount payable as interest on any loan or borrowing from any public financial institution or a state financial corporation or Read More

Occupation of building for business purposes

1. Issue for consideration :
1.1 The annual value of a property consisting of any buildings of which assessee is the owner is chargeable to income tax under the head ‘Income from house property’, in accordance with the provisions of S. 22 of the Income-tax Act.
1.2 S. 22 makes an exception to the charge in respect of Read More

Not Ordinarily Resident (NOR)

1. Issue for consideration : 
1.1 The scope of the total income of a person is determined, under the Income-tax Act, with reference to his residential status. While a resident is liable to tax in India in respect of his global or world income, a non-resident is generally liable to tax in respect of his Indian income Read More

Payment of PF dues within grace period — Allowability u/s.43B

1. Issue for consideration :
1.1 S. 43B of the Income-tax Act provides that certain expenditures, which would otherwise have been allowable as deductions in computing the total income under the Income-tax Act, shall be allowed as deduction only in the year of actual payment of such items by the assessee. These expenditures are listed in clauses Read More

S. 80-O deduction — Gross or net income ?

1. Issue for consideration :
1.1 S. 80-O of the Income-tax Act allows a deduction in respect of royalties, etc. received by an Indian company or a resident from a foreign company or enterprise in convertible foreign ex-change in India or, where received in convertible foreign exchange outside India is brought into India. Till A.Y. 1997-98, professional Read More

Right of revision on rejection of appeal

1. Issue for consideration :
1.1 The power to ask for revision of an order passed by an income-tax authority is an important right vested in the assessee. An application for revision can be made to the Commissioner of Income-tax within a period of one year by an assessee on payment of prescribed fees.
1.2 Ordinarily, an assessee aggrieved Read More

Allowability of higher education expenditure of a partner

1. Issue for consideration :
1.1 Expenditure on training or higher education of employees is normal revenue expenditure, since the increased proficiency of the employees would help the business in subsequent years. However, where a partnership firm incurs expenditure on higher education of its partner, the reason for incurring the expenditure becomes a matter of doubt, as Read More

Power to issue search warrant — Survey into search

1. Issue for consideration :
1.1 S. 132 of the Income-tax Act provides for the law relating to search and seizure. One of the necessary ingredients for conducting a valid search, is the issue of a warrant of authorisation. A search conducted without a proper warrant of authorisation is treated as an invalid search.
1.2 A warrant of Read More