Thursday, November 24, 2011

Direct Tax Laws Oct 17

Merely because an educational society was charging fees and was getting surplus would not be a reason to deny registration under section 80G(5)(vi) - [2011] 15 taxmann 250 (Punjab and Haryana)

There is no bar in law to sent a notice under section 148 after return is filed by assessee; such a notice can be issued by Assessing Officer if on consideration of return assessee is found to have understated his income or claimed excessive loss or deduction in return - [2011] 15 taxmann 249 (Karnataka)

Notice under section 158BC is not a procedural requirement, but it gives very jurisdiction to Assessing Officer to proceed under section 158BC - [2011] 15 taxmann 264 (Chennai - Trib.)

MAT liability - In view of addition of clause (g) to section 115JA, provision for bad debts is to be added back for computing net profits.Under MAT, profit derived by industrial undertaking from business of generation and distribution of power has to be reduced from net profit whether or not such profit appears in P&L account; however, no addition of loss can be made to net profit. Just for reason that assessee has started making provision for first time, leave encashment cannot be disallowed. Equipment constructed or installed at other's premises does not give enduring benefit.Provision for wealth-tax would come within ambit of clause (a) of Explanation to 115JA - [2011] 15 taxmann 262 (Chennai - Trib.)

Guideline value collected from sub-registrar office is only a guiding factors for valuing a property and such guideline value need not be market value for all time. Market value is determined by so many external factors including prevalent market conditions and, therefore, a detailed enquiry is needed for arriving at a reasonable market value of property - [2011] 15 taxmann 257 (Chennai - Trib.)(TM)

Where assessee could not file appeal against penalty order within prescribed time period due to death of her husband, it constituted a sufficient cause and, thus, Commissioner (Appeals) was to be directed to condone delay in filing appeal and dispose it of on merits - [2011] 15 taxmann 256(Kolkata - Trib.)

Where stay of demand was granted to assessee and therefore balance outstanding demand was to be stayed - [2011] 15 taxmann 255 (Mumbai - Trib.)

Where DRP did not consider assessee's objections and passed a cryptic order a prima facie case for stay of demand arose during pendency of proceedings before Tribunal - [2011] 15 taxmann 254 (Mumbai - Trib.)

Where assessee, a manufacturer of ice cream, failed to prove source of deposits allegedly received from dealers said amount could not be added to assessee's taxable income under section 41(1) - [2011] 15 taxmann 253 (Ahmedabad - Trib.)

Expression 'shareholder being a person who is beneficial owner of shares' referred to in first limb of section 2(22)(e) refers to both a registered shareholder and beneficial shareholder - [2011] 15 taxmann 252 (Kolkata - Trib.)

Tax is not liable to be deducted at source under section 195 on payments made to foreign companies which do not have branches, or business place in India, and have rendered services outside India - [2011] 15 taxmann 251 (Chennai - Trib.)

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