Documentos de Académico
Documentos de Profesional
Documentos de Cultura
SEC.
ABOUT REQUIREMENT
OTHER NOTES
1. If not compliance then 144 ,not required notice 144
2. Return filed u/s 142(1)(i) may revised but loss can not
carried forward
imp Note - in 147 no evidence that income is escaped but a.o. want to give direction for special audit - No 142(2A) possible because intt
of revenue is not
Note - A.O will give an opportunity of being heard (execept where 144 is made) if any material gathered on the basis of 142(2A)
is proposed to be utilised for the purposes of assessment
2. Approval of CC or Commissioner
3. C.A. and fees will apoint by CC/C
4. Total time limit is max. 180 days (after extention)
from the date on which direction received by assessee
on requestof assessee or by sue- moto by A.O. but
not on request ofC.A.
6. If delay in audit/a. report by C.A. firm then no 144
7. Assessee will furnished report to A.O. rather C.A.
142A
143(1)
143(2)
143(3)
144
3. if reply of SCN u/s 144 is satisfactory for non-filing ROI then 144
procedings shall droped
144A
148
i) first proviso- 148 can not issued after expiry of 4 years if all
following conditions are satisfied-
manner of 143(3)
- in order to give effect in order of S.C. or Any other Law - to All Assessee
- in order to give effect in order of H.C. - Only to Juridictional Assessee
- in order to give effect in order of H.C. - Only to Juridictional Assessee
- in order to give effect in order of 250,254,263,264 - this is possible only two cases - any income is excluded from the toral income of the assessee for an A/Y and include in another A/Y for that assessee
- any income is excluded from the toral income of the one person and include in another person
10 147
the F/Y in which return filed u/s 148 other wise 147 will
origionaly assessed
note: 147 is in the benefit of Revenue
and both of these are not declared in books of assessee then deemed that income is escaped assessment. Then A.O. shall be empowered to issue notice u/s 148 to make
assessment/ re-assement and time limit for this purpose shall be..
11 153(2A) Time limit where assessment is cancelled/set-aside and order to A.O to make fressh assessment
Time limit for completion is 1 year from the end of P/Y in which order 263,264 passed by CIT OR order 254 received by CIT
1. This overruled sec. 153(1),153(2)
Note- it is possible only in 254,263,264.because H.C.,S.C. decide only case law while cancelled is the metter of fact
12 150
Only these are cases where no time limit for issue 148
See sec 148 point (iv)
Note:- in case of a firm, an assessment is made on the partner of the firm in consequence of 147 on the firm then there is no time limit
13 153(3)
Only these are cases where no time limit for completion of assessment 147
See sec 148 point (iv)
Note:- in case of a firm, an assessment is made on the partner of the firm in consequence of 147 on the firm then there is no time limit
note:- see explation 1 on pg. 68
14 154
1. 154 order shall be passed till 4 years from the end of the F/Y
in which order/Intimat sought to be amended was passed
imp
imp 2. If assessee make application within prescribed time no time limit for
15
16 158A
Repetitive Appeals
17 133
18 133A
Power to Survey
1. I.T.Authority may enter only at which Business/profession is carried and other place where relevant things is kept
2. Only during the hours at such place is open for conduct of business and in other place,only after sunrise before sunset
19 133B
Power to Summon
I.T.Authority & DRP have power as civil courti) discovery and inspection- i.e. he can go at the site
ii) enforcing the attendance of any person and examining him on oath (receiver can not sand others on his behalf)
Note-Impound and retain in his custody books and other documents before it- after recording reasons for so doing but not more than 15 day (excl Holiday) if more approval of CC or DG,CIT,D
Note- For making an inquiry or investigation in respect of any person in relation to an agreement referred to in sec. 90 or 90A for any I.T.Auth. Not below A.C. to exercise the powers of 131(1)
21 132
Note : Search can be take place at any time and at any place even in mid night at businesh place or resindential place
Note- Such authorisation could take place if the authority(in 1&2) on the basis of infor.in his possession , has reasons to believe that-
Reason to Search - authority who will authorise have reason to believe thati) a person whom 131 or 142(1) has been issued, has been faild to comply this
ii) a person is in possisson of any article or any things, mony etc. which is concealed
Order of Restraint : See book on pag.131, note- such order shall not be in force for a period exceeding 60 days from the date of the order in any case
imp
Note : Authorised officer shall not retained seized books,other documents for a period exceeding 30days from date of the order of assessment u/s 153A unless the reasons for retaining are
recorded by him in writing and approval of CCIT,CIT for such retention is obtained but further it is noted that CCIT,CIT shall not authorise the retention for a period exceeding 30 days after all
22 153A
5. The time limit of completion of 153A,143(3)/144 will 2 years (excl. stay period) form the end of the F/Y in which search was completed
imp 6. If assessement/reassessment of any specified years in u/s 143(1),144,147 are pending on the date of initiation of search u/s 132,then such pending assessment/reassess
23 153C
Where the A.O of the person on whom sec 153A is applicable satisfy that all seized items are blong to other porson then said A.O shall do hand over such items to respective
A.O who have juridiction on such other person and that A.O. shall assess/reassess income of such other person as same in sec. 153A and the date of search shall be deemed tha date will same
- Time limit for completion of search -: same as in point 5 of sec. 153A or 1 year from the end of F/Y in which seized books or other asset are handed over to respective A.O (which ever is later)
24 153A(2) If order of assessment/reassement of 153A has been annulled by higher authority(in appeal,writ) then the assessement/reassm relating to any A/Y which was abated shall
stand revived from the date of receipt of such annulment order by the CIT and further suvh revival shall cease to have effect,if such order of annulment is set aside
And in above case the time limit of completion revived asssessment/reassessment of 143(3),144,147 will be as - whichever is later
- within 1 year from the end of the month of such revival or
25 132A
- the period commencing from the date of annulment of proceedings u/s 153A till the date of order setting aside the order of such annulment by the CIT
Powers to requisition books of accounts,etc.
Where the DG.D,CCIT,CIT, in consequence of information in his possession, has reason to believe that -
then the said authority may authorise any A.O. (called requisitioning officer) to require to take delivery such books,other documents of assesst after it when the other
law authority if of the opinion that it is no longer necessary to retaiin the same in his or its custody then that shall be delivered to reuisition officier
at last when requisition officer will received above items then sec 132,132B shall apply
26 132B
i)
ii)
iii)
27 amend
Sec.-: The processing of a return shall not be necessary, where a notice of 143(2) has been issued to the assessee even iin case of refund is due on the basis of ROI
28 amend
No exemption would be available to a trust or institutuion for tha p/y in which the receipts from commercial/trading activities exceed Rs. 25 Lacs. Whether
or not approval granted to such trust or institution has been cancelled. And also iin sec 143(3) in such a circumstances no effect shall be given by A.O., of
exemption in that p/y. these rule shall see in seprate-2 year
29
30
The Loss of PGBP and C.G. cannot C/F if ROI is not furnished within time
Condone of Delay in filing of ROI having a claim of C/F
- If the returned oss is upto Rs. 10000 -- CIT
- If the returnedloss exceeds 10000 but upto Rs. 100000 --- CCIT
- If the returned loss exceeds 100000 --- CBDT
31
ROI can be filed/revised up to the date of 139(1),139(4),139(5) or the date of completion of assessment- which ever is earlier
32 imp
When A.O. is doing 143(3) and A.O. required any iniformation to assessee u/s 143(2) and assessee does not give reply then A.O. shall do 144 and issue
SCN u/s 144 if after assessee give repl of SCN u/s 144 satisfactory then A.O. shall drop 144 and should complete 143(3)
33
34
sec. 152
35
If case is not panding any where then any judgement of S.C. or Juridictional H.C. is come out in any other assessee cases then assessee can go for 154 or 264 within time liimit if not expired
36
SEC.
55
ABOUT REQUIREMENT
Cost of acquisition of Intengible asset
If acquired - the amount of purchase
In any other case - nil
OTHER NOTES
FMV on 01/01/1981 option is not available because it is no possible to find out
Note - there are some self generated asset where C.G. shall chargable to tax otherwise no tax see pg 21
55
Cost of Improvement
Goodwill of business,Right to manuf,produ,process,right to carry on business - NIL
Any other assets - all capital expenditure on/after 01/04/1981 even in the case of Previous owner
Indexation is not availavle on debentures and bonds (except capital index bond)
50C
10(38)
i)
ii)
iii)
SDV - It is applicable in the case of sale (not in gift) of Land, Bulding,Both held as capital asset not SIT
L.T. capital assets which are entered(in i&ii) in Recognized S.E (subject to STT). Sales of equity shares 0.125%
Sale of unit of an qquity oriented fund
0.125%
Sale unit of equity oriented M.f. to M.f.
0.025%
as above case L.T.C.G. will exempt u/s10(38). If said hold as Capital Asset but not SIT
Deduction of STT is available if security held as SIT
10(38) is not available buyback,openoffer for sale,sale of right etc
Acquisition mode is not relevant
Tax Planning Sales the share other than on stock exchange LTCL will be allowed to be set off and c/f since 10(38) is not applicable
imp.
111A
note- extra benefit to an individual or HUF, who are resident of india. See pg. 30
note- Chapter VI-A shall not allowed from 111A but it will allowed from other Income
Proviso Transfer of a long term capital asset, being to sec.112 listed securities (eg. Shares,scrips,bonds,debentures,debenture stock
units
zero coupon bond
and if benefit of indexation is not taken then L.T.C.G. shall be taxable @ 10%
note - this proviso is applicable to Residents as well as Non-Residents
56(2)(vii) Purchase/Gift received by INDIVIDUAL or HUF as capital asset in the hand of receipient
a)
b)
any sum money- without consideration - aggregate value exceed Rs. 50,000
any immovable property- without consideration - in every case value exceed Rs. 50,000
c)
any *movable property - without consideration or less than the FMB - aggregate value exceed Rs. 50,000
Note- in case of 56(2)(vii) the COA in the hand of receiver shall- FMV/SDV on the date of transfer
Note- in case of 56(2)(vii) the POH shall be from the date of transfer
Note - also see determination of FMV on pg. 198 to 200
56(2)(viia) where a Firm or Closely Held Company receives *Shares of a closely held company from any person
without consideration
consideration less than FMV
Note - if said assessee received other asset then 56(2)(viia) is not applicable
first proviso
of sec. 48
10 45(1A)
i) If capital asset destroyed and no insurance compensation received - No Tax Treatment,even scrap sold
ii) If capital asset destroyed (due to certain reason see pg. 54)insurance compensation received then -
IMP.
IMP.
IMP.
iii) If capital asset destroyed (any other reason)insurance compensation received then - Genrel rules shall applied
iv) If asset is partly destroyed and composation received then no C.G. shall arise
11 45(2)
Note - if SIT received without any cost then the FMV on that date shall be deemed the COA
Note - if shares convert in SIT and after sales in recognized stock exchange and STT paid then 10(38) shall not applicable
12
i) If Bonus share/security or right share were issued before 01//04/81 then FMV option is available
and if such asset issued before said period without any cost then COA will be FMV
ii) Equity share/P.Share,Unit of UTI,Unit of M.F./Zero coupon bond/Listed Debenture - L.T if POH is more than 12 months
13
i) If Bonus,Right share/security alloted then POH shall count from the date of such share/security allotment
ii) In case of renounced share/security - the POH shall be count from- in hand of renouncer - from the date when co. make offer
- in hand of renounceree - date of allotment
14
15 45(3)
A.o can not take FMV as sales consideration except following cases i) 45(1A) - insurance claim on damage
ii) 45(2) - conversion of capital asset into SIT
iii) 45(4) - distribution of asset on partition of FIRM/AOP/BOI
iv) 46(2) v) 55
Capital Asset transfer by partner/member to Firm/AOP/BOI then S.C will the amount recorded in Books
(Whether capital contribution or otherwise)
[in case of firm subject to 56(2)(viia)]
16 Imp.
Where a firm is dissolved but business is not discontinued - its SIT must be valued at the FMV or Cost (whichever is less)
Where a firm is dissolved and business is also discontinued - its SIT must be valued only at the FMV (PGBP income)
Exp.- where firm is dissolved and business has been taken by one partner,company,other firm,any company then stock
shall be valued at FMV or Cost whichever is less
17 45(4)
18
47
i)
ii)
iii)
iv)
any transfer of capital asset by holding co. to its INDIAN subdidiary co. (100% holding with nominee)
Sec. 47A- if holding co. with nominee cease to hold shares or capital asset converted in to SIT (for both 8 years from the date
when asset was transfered) then past capital gain shall be charged in the year of such event
Sec. 155- where sec. 47A is attracted,the assessment of the transferer co. will be rectified in sec. 154 and 4 years shall count
from the end of the previous year in which the such event occured
note - when 47A attracted them COA in the hand of transferee shall be the price was charged by transferor
v)
any transfer of capital asset by subsidiary co. to its INDIAN holding co. (100% holding with nominee)
Sec. 47A- same as in (iv)
Sec. 155- same as in (iv)
note - when 47A attracted them COA in the hand of transferee shall be the price was charged by transferor
note - if capital asset is transgerred as stock in trade in (iv) & (v) both then exemption u/s 47 shall not available
vi)
Any transfer in a scheme of amalgamation, of shares held in an indian company,by the amalgamating foreign co. to amalgamated foreign co.
if following condition are satisfied- see book pg. 100
49(1)
In above I to VII said cases cost of acquisition of the asset shall be deemed to the cost of previous owner (also consid COI)
(except in the case of gift to indi/huf)
2(42A)
in above I to VII cases the period of holding of previous owner shall be considered
(except in the case of gift to indi/huf)
vii)
see book pg. 101 , sec. 49(1) & 2(42A) shall not applicable
viii)
ix)
Any transfer of a capital asset, being any work of art, archaeological, scientific, or art collection, book, manuscript, drawing,
painting, photograph, print to the GVT.,UNIVERSITY,N.MUSEUM,N.A.G. etc.
x)
Any transfer by ways of conversion of bonds, or debentures or debenture stock of deposit certificates of a company into the
shares or debentures of that company
xa)
xi)
Any transfer by a shareholder, in a scheme of amalgamation of the shares held by him in the amalgamating company ifa- the transfer is made in consideration of allotment to him of the shares ini the amalgamated company and
b- the amalgamated company is an indian company
xii)
xv)
xiii)
- the aggregate of the shareholding(equity) in co. of partners is not less than 50% of the total voting power in co. and their
shareholding continues to be as such for a period of 5 years from the date of the succession - old shares held by partners shall also include
Note- if the co. allots shares to the wife or friends of partners then this will assume that such shares are transferred by the partners and sec.
56(2)vii attract in hand of receiver but relative will safe
Note- sec. 49(1) and 2(42A) shall apply
Sec. 47A - if fails in any condition then exempt tax shall be chargable to tax in the hand of successor company in that year
note- see book pg. no.109- analysis of sec. 47(xiii)
xiv)
Where Prop. Firm is succeeded by a Company in the Business carried on by it as a result of which the firm sells of otherwise
transfers any capital asset or intangible asset to the company
provided that - all assets and liabilities of prop. firm relating to business immediately before succession become assets and liabilities of co.
-the prop. of firm do not receive any consideration/benfit,directly or indirectly,in any form,other than by way of allotment of shares in co
- the aggregate of the shareholding(equity) in co. of prop. is not less than 50% of the total voting power in co. and his
shareholding continues to be as such for a period of 5 years from the date of the succession - old shares held by propr. shall also include
Note- if the co. allots shares to the wife or friends of partners then this will assume that such shares are transferred by the partners and sec.
56(2)vii attract in hand of receiver but relative will safe
Note- same as in xiii)
Note - same as in xiii)
Sec. 47A - same as in xiii)
(xiiib)
Transfer of a capital asset/intangible asset by private co. or unlisted public co. to LLP or transfer of a shares held in the co. by a shareholder
- all assets and liabilities of co. immediately before the conversion become assets and liabilities of LLP
- all shareholders(equity/preferance) of co. immediately before conversion become the partners of LLP and their capital contribution and
profit sharing ratio in LLP are in the same proportion as their shareholding in the co . on the date of conversion
- shareholders of co. do not receive any consideration directly or indirectly,in any form,except share in profit and capital contribution in LLP
- aggregate of profit sharing ratio of shareholders of co. in LLP shall not be less than 50% at any time during 5 years from date of conversion
- total turnover of co. in any 3 p/y preceding to p/y in which conversion take place does not exceed 60 lacs rupees. Even current year exceed
- no amount is paid, either directly of indirectly, to partner out of balance of accumulated profit standing in Books of co. on the date of
conversion for a period of 3 years from the date of conversion
Note- sec. 49(1) and 2(42A) shall apply
Sec. 47A - if fails in any condition then exempt tax shall be chargable to tax in the hand of LLP in that year
Note- MAT credit of co. shall not allowed to LLP
Note- where capital asset of u/s 35AD received to LLP then actual cost shall be NIL to LLP
Note- BOA shall be same as Co. to LLP
Note- Dep. shall be apportioned between co. and the LLP in the ratio of the no. of days for which asset was used
Note- VRS incurred by the co. shall be amortised in hands of LLP as if such conversion has not taken place
xii)
transfer of capital asset, being land of a sick industrial co . made, where such sick industrial co. is being managed by its workers' co-operative
provided conditionthis transfer of land should be made during = the period commencing from p/y in which said co. has vecome as sick industrial co. and ending
with the p/y during which the entire net worth of such co. becomes equal to or exceeds the accumulated losses
note- sick co. means a co. whose accoumulated loss is exceed net worth
xiii)
any transfer of a capital asset to a company in the course of demutualisation or corporatisation of a recognised stock exchange in india as a
result of which an AOP/BOI is succeeded by such copmany- provided some condition - all the assets and liabilities of AOP/BOI relating to business immeediately before succession become assets and liabilities of company
- a scheme should be approved by SEBI
note- Actual Cost and WDV of capital Asset in hand of co. shall be same as R.S.E.
xiiia)
any transfer of a capital asset being a membership right held by a member of a R.S.E. in india for acquisition of shares and trading or clearing
rights acquired by such member in that R.S.E. in accordance with a scheme approved by SEBI
COA- For equity shares - cost of acquisition of his origional membership of the exchange
COA- For trading and clearing rights of R.S.E. - nil
POH- for both equity & trading and clearing right - from that person was the member in R.S.E.
19
43C
1)
2)
A capital asset transfers as SIT by amalgamating co. to amalgamated co. then COA shall be the aggregate of- COA of said asset to the transferor
note for 1) & 2)-: FMV as on 01/014/81 is not available for sec. 43C
note for 1) & 2)-: Cost of improvement incurred before 01.04.81 shall be considered for sec. 43C
20
72A
21
22
Note - Revaluation of assets shall be ignored whether current year or past years
Note - U/D of the said undertaking shall not be available to the transferee for carry forward while U/L will available
imp
23
G.Note - only one block of asset should create for same rate assets even there are more than one business is runing by same assessee
24
45(5)
- Interest in enhance compulsory acquisition shall be taxable on cash bases even assess followed accrual system, In IFOS only 50%
- the enhace comps. Received by any other person by any reason then the C.G shall be chargeable in hand of receiver
- while original compensation shall be chargeable in hand of original assessee
note - if compensation is reduced then any authority can be done 155(15) till 4 years from the end of the year in which the
order of reducing was passed by court
25
10(37)
not- rural agriculture land is exempt for capital gain in all cases
26
50
S SEC.
ABOUT REQUIREMENT
OTHER NOTES
Note: i) Amount received of keyman insurance policy shall be taxable in hand of employee under head Salary
ii) Amount recd of keyman insurance policy and if employee-employer relation is not exit then it shall taxable in hand of receiver in head IFOS
Note: Any benefit or perquisite ,whether convertible into money or not,arising from any business/profession shall be taxable under head PGBP
Note: any sum on a/c or any capital asset(other than land or goodwill or financial instrument) being demolised,destroyed,discarded or transferred,
if the whole of the expenditure on such capital asset has been allowed u/s 35AD shall chargeable in PGBP
Note: If any assessee is purchaseing trading and clearing right in stock exchange then it shall be treated as intagible asset
Note: It is not required that asset should be registered in the name of assessee beneficial ownership is sufficient
Note: For calaiming Dep. Actual put to use is required rather than ready to use,except standby assets
Note: Tea bushes or livestock are not included in P&M
Note: A building shall be deemed to be used mainly for residential purposes if the built up floor area used for residential purposes is not less than
66.67% of the totoal built up floor area
Note: Insurance compensation received/receivable shall be deductiable from WDV in the year in which assets destroyed while
Capital Gain shall be taxable in the year in which compensation is received
50 Computation of C.G. in case of Depreciable Assets. Note- always S.T.C.G/L on Depreciable Assets
(A) the total sales consideration arising as a result of transfer of one or more asset but Block of asset is exit
Sales Consideration
Less:
X
Y
ii) Actual cost of the assets falling within the block acquired during the previous year
A-X-Y-Z
OR
(B) where any block of assets ceased to exist for the reason that all assets in that block are transferred during the p/y
Sales Consideration
Less:
Z
A-X-Y-Z
S.T.C.G/L
imp Note:- if any asset is not the part of BLOCK OF ASSET then sce. 50 shall not applicable and C.G. shall calculated as normal and it is not
mandatory to claim dep.
imp Note:- Exp. on transfer shall not deduct from WDV,while it shall be considered at the time of C.G.
If an asset is stolen/damaged from BOA and no insurance compensation is received A) if there are other assets in Block then no tax treatment .Loss shall be contained in WDV and dep. Shall allowed
B) if there are no other assets in Block then No Tax Treatment. It shall capital loss
Note:- for A&B Sec 50 shall not applicable because it shall not treated transfer
Additional Depreciation- only on new Plant & Machinery @ 20% (if used less 180 days then 10%)
- Only in the Business of Manufacture of Production of any article or thing
Or
- In the Business of Genetation or Generation and Distribution of Power
Provided# Not on ships and aircraft, road transport
# Before installation used outside india by other person
# Any office appliances
# Any P&M ,the whole of the actual cost of which is allowed as a deduction (by way of depreciation or otherwise)
6
5
5
4 43(1) Actual Cost means the actual cost of the asset to the assessee
DETERMINATION OF ACTUAL COST IN SPECIAL CASES: "Note- for the purose of C.G. the S.C. shall remain same it is only for WDV"
i)
ii)
Special Case
Actual Cost
- nil
the actual cost to the previous owner
iii)
iv)
less- dep. allowable after a/y 1987-88 as if the asset was only asset in BOA
or
actual price for which the asset is reacquired by him
which is lower
v)
vii)
the actual cost to the other person (seller) at the time of transfer
note- if more then one intermediate seller then W.D.V. at the time of first sales
on that asset)
- if whole BOA is transferred and condition of 47 satisfied then-transferer has claimed dep.
then- W.D.V. of BOA in hand of holding co. at beginning of the P/Y in which transfer made
vii)
same as above
viii)
ix)
less: notional dep(from purchasing date). At the rate applicable on that date
less: notional dep(from purchasing date). At the rate applicable on that date
x)
same as above
(note: this will not applicable if N.R. sells asset to company/firm in india in which he is shareholder/partner respectively)
xi)
5
10
If income is derived,partly from agriculture and partly from business then dep Shall be computed as if entire income is business income and such dep shall fully allowed
Where assessee is carrying on the business of TEA, COFFEE, RUBBER and deposit amount in Development Account before the due date of
furnishing the ROI
then-
NOTE:- Any amount can be withdrawn from following said purpos from account i) for the purposes *specified in the scheme of Board or
ii) in following circumstances- to see pg. 64
* non specified purposes- see pg. 65
note- amount withdrawn and not utilized fully or partly for specified purpose in same year in which was withdrawn or
If said asset is sold or transferred in any P/Y before the expiry of 8 years from end of P/Y in which it was acquired then it shall taxable as PGBP(40%of said amount)
excpt. of above note- Asset can sold/transferred to govt,a local authority, a corporation,govt co.,succession of firm by a company before 8 years
11
11
b)
Any sum paid to research association or to a University, College, or Other Institutions to be used for S.Research : 175%
i) above should be approved by prescrived authority
ii) S.R. whether related or not related to assessee's business
imp- which main object is only S.R
c)
d)
Any sum paid to a research association or to a University, College, or Other Institutions to be used for Social Science or Statistical Research: 125%
e)
- Deduction Allowed
b) Capital Gain (only when S.C. is more than original cost)
- S.C. - Actual cost of asset(subject to indexation)
f)
* National Laboratory or a University or an IIT or Other Specified person, under a programme approvedby prescribed authority
g)
Note:- this deduction shall be allowed only if the co. has entered into an agreement with the prescribed authority
imp
NOTE: if a asset is not eligible for deduction u/s 35 then normal dep. can claim
*relevant p/y means- i) in case where the said payment is made before the commencment of business-
p/y in which such business commenced till the p/y in which licence will expired
ii) in any other case, the p/y beginning with the p/y in which said payment has made till the p/y in which licence will expired
where the licence is transferredi) where fully licence transfer and S.C. is less than WDV :- if WDV(cost-deduction allowed) - S.C
ii) where a part of the licence is transferred and S.C. is less than WDV -:
- WDV- S.C. = Loss allowed in balance no. of years as PGBP in equal and in this case no C.G/C.L.
iii) where fully or any part transferred and S.C. is more than WDV :a) PGBP income- least of the following
- S.C. - WDV(Cost-Deduction)
- Deduction Allowed
b) Capital Gain (only when S.C. is more than original cost)
- S.C. - Actual cost of asset(subject to indexation)
imp
imp
imp
note: for computation of L.T.C.G or S.T.C.G. period of holding shall count from the date of obtaing licence to the date of transfer
note: indexation is available
if asset is transferred to indian co. in case of amalgamation/demerger then above rule of tranfering not applicabe
14 35D
*Expenditure on specified purposes means the following expenditure incurred on- see book pg. 84
Amount of Deduction- see book pg. 85 point 4
Cost of project, Capital employed- see book pg. 85
note : see note on pg. 84 & 85
note: in case of amalgamation, demerger the deduction shall be allowed to resulting indian co.
note : audit is mandatory
- note : if exp. Incurred by amalgamating co. then it can calim only 1/5th exp. in ithe year of amalgamation
not: if amalgamation/demerger scheme is disapproved by court then these exp. will allowed as revenue exp. not exp u/s 35DD
16
Amortisation of expenditure incurred under VRS
35DDA - Only for INDIAN COMPANY incurs
- 1/5th from the P/Y in which actual payment is made till 5 years
note- in case of amalgamation,demerger,converion of private/unlisted co. in to LLP than the deduction shall allowed to resulting co.
17
Expenditure on Agricultural Extension Project
35CCC Any Assessee incures exp. on said project notified by the board than 150% deduction of such expenditure
18
Expenditure on Skill Development Project
35CCC where a COMPANY incures exp.(not being Land or Building) on said project notified by board than 150% deduction of such expenditure
19 35AD 150% DEDUCTION AVAILABLE TO ASSESSEES CARRYING ON SPECIFIED BUSINESS- IF ESSENTIAL FOR INDIAN ECONOMY
i) to v) see amended pg
150%
100%
No capital gain/loss- so (i) if sale price/insurance compensation of such asset shall be taxable as "PGBP".
note: in case of slum sale the value of said asset shall be taken nil
Actual cost in various cases on pg. 94- shall be taken nil
20 35E
21
22
24
25
26
27
Premium for insurance on health of Employees allowed deduction provided that any mode of payment other than cash
Bonus or Commission paid to Employees for services rendered whether it exceed Bonus Act but it would have not been payable as profits to employee
Interest is not deductible where borrowed money is loaned to a director without charging any interest
Guarantee Commission paid to the bank in relation to income tax deptt, is not allowed as exp.
Tax Audit Fees,Litigation exp. In relation to income tax cases are allowable as deduction
Discount on Zero Coupon Bond
zero coupon bond means- a bond issued by any infrastructure capital co,infrastructure capital fund, public sector co., scheduled bank
, in respect of which no payment and benefit is received or receivable before maturity/redemption
Discount:- the difference between the amount received/receivable at the time of issuing the bond and the amount payable at the time
of maturity/redemption
Computation of pro-rata amount of discount- the period of life of the bond shall be converted onto number of calendar month
28
29
A Bed Debt shall be allowed as deduction if the following conditions are satisfiedi) the bed debt should be written off as irrecoverable in books of account of the assessee for the p/y in which deduction is claimed
ii) the debt should have been taken into account in computing the income of the any p/y OR debt represents the money lending
the ordinary course of business of money lending /banking carried on by the assessee
30
where a bed debt deduction has been allowed and sebsequently recovered, then the amount so recovered shall be deemed to be
income of PGBP of the p/y in which amount is so recovered even business/profession is not in existence but assessee should same
note: who claimed the deduction of bed debt and the assessee who recovers the bed debt must be same
31
Deduction of revenue expenditure incurred by a company for the purposes of promoting family planning amongst its employees
where Capital Expenditure incurred on family planning for employees then 1/5th deduction allowed till 5 years
note: when said capital asset sold thennote- in case of amalgamation,demerger than the deduction shall allowed to resulting indian co.
14
15
16
17
Any sum payable to (i) outside india or (ii) in india to a non-resident or to foreign co
TDS shall be deduct and paid- for april to feb.- 31st march, march- 30th april
provided that if not paid within above time this deduction shall allowed in the subsequent p/y in which TDS deposit
and Deductor shall deemed to be Assessee in Default
18
19 41(1) i) where any loss or expenditure has been allowed as deduction and subsequently any amount is received then it shall
be taxable as PGBP even business is not in existence . In case of successor it shall be taxable in hand of successor
ii) where a deduction has been allowed in respect of a trading liability and subsequently there is a remission/cessation of
trading liability, then it shall be taxable as PGBP even business is not in existence. In case of successor same as in point i)
20
21
Insurance compensation received for loss of SIT that shall taxable as PGBP
22
Bank waived- i) Loan amount ii) Intt thereon then loan is not trading liabilityso 41(1) not applicable and Intt would have disallowed u/s 43B
23
24
25 43B
26 43D
27
b) amount received or deemed to be received in india, shipped at any port outside india
note: in 44B business loss can carried forward while U/D can not carried forward
note: in 44B chapter VIA deduction can claimed
- on receipt of a return, A.O. shall assess income and determine sum payable as tax thereon as rates which is applicable to the total income of a co.
- NO order assessing the income shall pass after expiry of 9 months from the end of f/y in which the return under point 5 is furnished
note: owner of charter can claim before the expiry of relevent assessment year that an assessment should be made on his total
income of the p/y accordance with 44 B. then the tax paid by him in 172 shall be deemed as advance tax
note:- no set off is permissible, no VI A allowed
29
30
PGBP of Foreign companies engaged in the business of Civil Construction etc. in certain turnkey power project
- overruled sec.28 to 44AA
where a foreign company is engaged in business of civil construction, or business of erection of P&M, or testing & commissioning thereof
31 44BB
APPEAL TO CIT(APPEAL)
At the tiime of appeal these documents are required- Two copies of form 32
- Two copies of statement of fact
- Two copies of form ground of appeal
- Two copies of Order passed
- Original copy of demand notic u/s 156
- Challan fees
- Our summission (it may be summit at the heiring time)
Appeal shall be furnished within 30 days of the following date (if holyday on 30th day then the day before)
a) where the appeal is u/s 248- the date of payment of tax
b) where the appeal is relates to any assessment or penalty- the date of service of notice of demand
c) in any other case- the date on which order sought to be appealed is served
note : appeal may admit after expiry of the above said period if assessee has sufficient cause
imp note : if the CIT(A) does not admit appeal then no remedy except 264
No appeal shall be admitted unless at the time of filling the appeal
a) where a return has been furnished - the assessee has paid the due tax on the return income
b) where a return has not been furnish - the assessee has paid the tax assessed by assessing officer
Exception of'b'-on application of assessee CIT(A) may exempt(fully /partly) to assessee from condition of payment by recording good and sufficient reason in writing
note:- if assessee has not paid tax on demand in case a) or b) or Exception of 'b' then whether appeal is admitted but assessee shall be deemed to be
assessee for in default non- payment of demand, unless stay of demand taken
Stay of Demand
- where an assessee file an appeal to CIT(A), then A.O may in his discretion and subject to such conditions, treat the assessee as not
being in default In respect of the amount in dispute in the appeal, from begaining to the date till such appeal is not disposed off
note: no appeal is possible against refuesal of A.O. in above regarding
note: A.O may grant stay while the time period of 30 days of payment of demand has expired
note: assessee can give application to CIT.CCIT for granting stay of demand when case is panding before CIT(A) and A.O. refuesed to grant stay
note:if application of stay of demand is panding before higher authority then A.O can not deemed in default to assessee untill the request is rejectied by that authority
- where A.O. has refused to grant stay of demand then CIT(A) can grant stay at the time when appeal is pending before him, from the
first day when payment is required to made till to date of appeal dispossed
- where CIT(A) has refused to grant stay of demand then CCIT can grant stay at the time when appeal is pending before CIT(A), from
first day when payment is required to made till to date of appeal dispossed
- where CIT(A) or CCIT has refused to grant stay of demand then ITAT can grant stay at the time when appeal is pending before ITAT,
from the first day when payment is required to made till to date of appeal dispossed but if ITAT can grant stay then ITAT shall dispossed the case
within 180 days otherwises stay will expire after 180 days and assess shall be treated in default from begaining. provided that if the delay is cause by
ITAT then ITAT can extend stay but total stay time will 365 days. If appeal is not dispossed in this time then after 365 days asssess deemed in default
imp
imp
For filing an appeal to CIT(A),H.C,S.C there is no condition in law that the demand should be paid
CIT(A) may at the time of disposing of any appeal make such further inquiry as he thinks fit or may direct the A.O. to make further
inquiry and report the result of the same to the CIT(A)
CIT(A) may allow to go any ground of appeal which is discussed in order if he satisfy that there is no willful or unreasonable of omission
The additional documents/evidence can not produce to CIT(A) excepti) where A.O. has refused to admit evidence
ii) appellant was prevented by sufficient cause
iii) where A.O. did not provide sufficient time to produce evidence
Providedi) no additional evidence shall be admitted unless the CIT(A) record in writing the reason for it admission
ii) CIT(A) shall not admit any addition evidence produced unless the A.O. has been given a reasonable opportunity to cross examine
the evidence and witness
8 imp " The CIT(A) may pass order u/s 250 within 1 year from the end of the F/Y in which such appeal is filed"
If assessee has not claimed a deduction in ROI while deduction was available then assessee can not claim this dedution at the
time of appeal to CIT(A). Decided in case of Gurjargravures P.LTD
10
If assessee has not claimed a deduction(on based on case of law even available) in ROI or At the time of Assessment and that the
ground became available on account of change in circumtances or law, then CIT(A) can admit this dedution
11
Power of CIT(A)
i) To confirm, reduce, enhance or *annul(void) the assessment
* where technical requirment is not fullfilled by A.O. now A.O. shall not make fress assessment in same sec.
12
Where under an agreement, the tax deductible on any income,u/s 195 is to borne by the deductor,and such person having paid tax,
claim that no tax was required to be deducted on sich income, he may appeal to CIT(A)
13
APPEALS TO ITAT
14
15
16
Appeal should be filed within 60 days from the date on which the appealable order is communicated to assessee or to CIT
except. If there was sufficient cause to not file within said time
17
ii)- Assessee may file memorandum of cross objection to ITAT withiin 30 days
ii)- Dpt. may file memorandum of cross objection to ITAT withiin 30 days
18
ITAT any time within 4 year from the date of own order , can rectify u/s 254(2) on application of A.O./Assessee/Suo-moto. If in benefit of
19
20
ITAT shall decide appeal within a period of 4 years from the end of the F/Y in which such appeal is filed
21
If the writ petition is dismissed by H.C., then assessee can file a SLP to the S.C. challenging the fact finding process of ITAT . If S.C. is satisfied
22
The ITAT has power to admit any ground,deduction,additional evidence which is not presented/claim before A.O. or CIT(A)/ROI with
then it will quash the order of ITAT and direct to ITAT to do the fact finding in a proper manner and/or as per the direction of S.C.
permission of ITAT after giving opportunity of being heard to assessee and department and also do suo-moto on said matter except. 80A
23
24
25
The ITAT during the rectification processing can not admit additional evidence
Pg. 81 imp.
If Deduction of chapter VI A other than 80A is not claim in ROI then it can be claim in 154 if proper evidence is available
30 imp The H.C. may determine any issue whicha) has not been determined by the ITAT. i.e. raised in ITAT but ITAT did not decide by forgetten[note: assessee may opt 254(2) or 260A]
b) has been wrongly determined by the appellate tribunal by reason of question of law
note: new issue even inbolve question of law can not raise in H.C. which is not raised in ITAT
An appeal shall lie to S.C. against any judgement of H.C., in any case where the H.C. certifies to be a fit one for appeal to the S.C.
If not certifies by H.C. then no remedy
33
If Deptt. not filed the appeal against reason other than monetary limit then it will deemed that Deptt accept defeat so
Deptt can not file appeal in tha case of same assessee in other A/Y or other assessee in any A/Y
Monetary Limit
300000
1000000
2500000
36
33
CIT u/s 263 can do i) Increase the income by passing an order u/s 263 or
ii) Cancel/set aside the assessment and direct the A.O. to make fress assessment
note:- an opportunity of being heard is required before passes order u/s 263 otherwise it will void-ab-initio
34
If CIT starts revision proceedings u/s 263 and assessee proves that no income has escaped then CIT shall drop proceedings u/s 263
35 imp The Order u/s 263 shall not be made after expiry of two years from end of the F/Y in which A.O. order to be revised was passed
except give effect to the order of H.C./S.C
36 imp Note: if a deduction is retrospectively disallowed,revison u/s 263 is possible upto 2 years from the end of the F/Y in which order
sought to be revised was passed
37 imp CIT u/s 263 cancel the assessment and direct A.O. to make fresh assessment then A.O. shall complete that assessment in origional sec.
and if assessee is not satisfy with order of fresh assessment then the appeal can move to CIT(A) not in ITAT
38
comparision of Sec. 263 and Sec. 264 form book pg. no. 76
38
CIT can do 264 either of his own motion or on an application by the assessee for revision
39 imp After 263, 264 is not possible while after 264, 263 is possible on other issue
40
263 may be many time for same A/Y while 264 may only once
The CIT may pass an order not being and order prejudicial to the assessee
43 imp CIT under section 264 can cancel/set aside the order of assessment of A.O. and direct him to make a fresh assessment and such
direction shall not be prejudicial to the assessee
44
CIT shall not revise any order on his own motion if order has been made more than 1 year previously from the date of passing order
45
Assessee can make application for revision within 1 year from the date on which the order was served to him except sufficient cause
46
Revision u/s 264 is possible if the assessee has not filed an appeal to CIT(A) on any issue and
i) The time period for filing an appeal to CIT(A) has expired or
ii) where the time for filing appeal to CIT(A) has not expired,the assessee has waived his right to appeal to CIT(A)
47
An order by CIT u/s 264 dcelines to interfere shall not be deemed to be an order prejudicial to the assessee
48 imp New ground,deduction can claim at the time of 264 even i t is not claimed before A.O. or Return
49 imp An order shall be passed by CIT within 1 year from the end of F/Y in which such application made by assessee otherwise it shall be
deemed that the reliefs claimed by assessee in the application u/s 264 have been allowed
50
No appeal is possible against the order of 264 by assessee or department even the application is totally rejected but order u/s264
can be challenged in H.C. through a WRIT and thereafter in S.C. through a SLP
A.O passed the order u/s 143(3) or orher sec. in direction of DRP then appeal can move to ITAT but not CIT(A)
S SEC.
ABOUT REQUIREMENT
OTHER NOTES
ASSESSEE IN DEFAULT
1 220 Any amount, otherwise than by advance tax, in a notice 156 shall be paid within 30 days of the service of notice otherwise assessee shall
be deemed in default and liable to pay simple intt at 1% for every month or part of a month from the day immediately following the end
of the period till the day on which amount is paid
note: where A.O. believe that it will be deterimental to revenue then he may reduces the time period of 30 days
2
Where as result of an appeal,revision,set-comm the amount on thich interest was paid/payable u/s 220 is reduced, the intt shall be reduced accordingly
The CCIT /CIT may reduce or waive the amount of interest paid/payable by an assessee if he is satisfied that i) payment of such amount has caused or would cause genuine hardship to the assessee
ii) default in the payment of the amount was due to circumstances beyond the control of the assessee
iii) the assessee has co-operated in inquiry
A.O has power to extend the time for payment or allow payment by installments,subjects to such conditions
If,in a case where payment by installments is allowed as per point no. 4, the assessee commits defaults in paying any one of installments
within time fixed , assessee shall be deemed to be in default as to whole of the amount
"CASES" which can be refered to ITSC- Any proceedings for * assessment of any previous year which is ** PENDING before
SETTLEMENT COMMISSION
an A.O. on the date on which an application is made to ITSC
*assessment means proceesings u/s 143(3)/144/153A
**case becomes pending if SCN is issued in case of 143(3),144. and in case of 153A the notice issued for six previous year and P/Y in which
search is conducted the date shall first day of the A/Y
note: in case of 153A it is mandatory to go with six year to ITSC
10 imp In following cases assessee shall not allow to make application before the ITSC a) Assessement/Reassessment proceedings u/s 147
b) Proceedings for making fresh assessment where original assessment was set aside or cancelled by 254,263,264
11
ii) in any other case, the additional amount of tax payable on the income disclosed in the application exceeds Rs. 1000000 (exl intt)
iii) Pay such tax,intt on this disclosed amount as considered as filing return to A.O. and attech the proof of payment alongwith the application
note: intt 243A,B,C shall computed
12
13
Assessee also intimate, on the date on which he make application to ITSC , to A.O.
14
15
On receipt of application,ITSC shall,within seven days, issue a notice to applicant requiring him to explain as to why application proceeded
16
The ITSC shall within a period of 14 days from the end of when the application is made , by an order in writing reject/allow the application to be proceeded
note: where no order has been passed within period of 14 days by then application shall be deemed to have been allowed to be proceeded
note: the order of rejection passed by ITSC is final so no appeal is possible except - writ in H.C. and thereafter SLP in S.C.
17
the copy of order of acceptance or rejection shall be sent to the applicant and to the CIT
18
ITSC shall, in respect of an application which is allowed to be proceeded , within 30 days from the date on which the application was
made, call for a report from the CIT
19
CIT shall furnish the report within a period of 30 days of the receipts of aforsaid communication from ITSC
note: where the aforsaid report is not furnished within allowed time then the case shall be further proceeds without report
where a report of CIT called has been furnished within the specified time therein, the ITSC may,On the basis of the report and within a
period of 15 days of the receipts of the report , by an order in writing, declare the application in question as invalid, and shall send the
copy of such order to the applicant and the CIT
note: an application shall not be declared invalid unless an opportunity has been given to the applicant of being heard
20
If ITSC is opinion that any further enquiry or investigation in the matter is necessary, it may direct to CIT to make enquiry and furnish the
report within a period of 90 days of the receipt of communication from the ITSC
note: where the aforsaid report is not furnished within allowed time then the case shall be further proceeds without report
21
The ITSC shall pass the order within 18 months from the end of the month in which application was made
22
ITSC shall have all powers are vested in an ITA , so ITSC can initiate penalty and prosecution proceedings,levy penalty and levy intt 234A,B,C
23
ITSC, if it is satisfied that:i) any person who made the application has co-operated with it in proceedings before it and
ii) has made a full and true disclosure of his incomes
subject to conditions as it may think fit to impose,grant immunitya) prosecution for any offence under income tax act,wealth tax act,
b) imposition of penalty under income tax act
24
ITSC cannot grant any immunity from penalties & prosecution where proceedings for prosecution for any such offence have been instituted
before the receipt of application
25
An immunity granted by ITSC shall be withdrawn by ITSC if:i) the assessee fails to pay the sum specified in the order of ITSC within the specified time
ii) the assessee fails to comply with the conditions subject to which immunity was granted
iii) if it is found that the assessee has concealed any particular material of has given false evidence to ITSC
26
27
If Settlement becomes void, the income tax proceedings which was abate,shall be deemed to have been revived and A.O. can complete
such proceedings at any time before the expiry of 2 years from the end of the F/Y in which the settlement become void
28
If Settlement order still is valid then A.O. cannot re-open but A.O. can make investigation and if found any fraud then A.O. shall inform to
ITSC then ITSC can cancle the order after it A.O. shall complete such proceedings before aforsaid time
29
Where a person has made an application and if such application has been allowed to be proceeded ,such person shall not be subsequently
entitled to make an application even after order declared void
30
Only one order shall be passed by ITSC for various A/Y for which application is made
31
32
Provisional Attachment:- where during the pendency of any proceedings before ITSC, it is of opinion that for the purpose of protecting the revenue, it is
necessary to attach provisionally the property of the applicant.
note: the provisional attachment shall cease to have effect after the expiry of a period of 6 months from the date of order of provisional attachment.
However, the ITSC may,for reasons to be recorded in writing , extend the aforesaid period
Penalty other than 271(1)(C) shall not be imposable on the assessee if he proves that there was reasonable cause, while there can be no
reasonable cause for concealment of income
(i) A.O. in u/s 143(3)/144/147/153A, (ii) CIT(A) in u/s 250, (iii) CIT in u/s 263
3
4
Penalty proceedings must be initiated before levying any penalty . Penalty proceedings are initiated by issuing a SCN
A.O. must be initiated penalty proceedings u/s 271(1)(C) before completion of assessement, and CIT(A) must be initiated penalty
proceedings u/s 271(1)(C) before passing order u/s 250, and CIT must be initiated penalty proceedings u/s 271(1)(C) before passing order u/s 263
A.O. can levy penalty for concealment on the additions made by him not on the additions made by the CIT(A) . Similarly vice - versa
There will be no penalty for concealment of income on additions made on a Question of Law
Penalty other than 271(1)(C) can be levied by initiating penalty proceedings(by issuing SCN) and such peoceedings can be initiated at ANY TIME
8 imp Penalty Order and Assessement Order are distinct order . Similary, penalty proceedings and assessment proceedings are distinct proceedings
9
10
11
If A.O. disallows expenditure of u/s 14A(exp. on exempt income), this will not mean that the assessee has concealed income/exp.
12
INTANGIBLE ADDITIONS - Sometimes the A.O. makes additions for purely technical reasons eg. Application of a presumptive rate of G.P .
these additions are commonly referred as "INTANGIBLE ADDITIONS". Penalty for concealment of income cannot be levied on intangible
additions. Intangible additions represents the real income of assessee and can be used in subsequent assessment years for explaining the
unexplained investments, unexplained cash credits and unexplained assets
Intangible additions so used in explaining the unexplained investments etc. shall be deemed as concealed income and penalty u/s 271(1)(C)
shall levied and further provides that in such a case penalty proceedings can be initiated even after the completion of assessment. and
even after 6 A/Y year because A.O. is not opening case , he is imposing only penalty. Penalty shall be assable as the income of that year
in which intangible addition made
- if intangible additions is made then penalty u/s 271(1) will not imposed but this additions shall not increase capital. Therefore if assessee
wants to take this additions in books than penalty u/s 271(1) shall be charged
14
In case of concealment income these are requiredi) tax, ii) interest u/s 234A,B,C, iii) penalty u/s 271(1)
15
16
NEW LAW OF PENALTY FOR CONCEALMENT OF INCOME IN CASE OF SEARCH & SEIZURE
- the due date of furnishing of ROI u/s 139(1) or date on which period specified in the notice issued u/s 153A for furnishing of ROI as case may be
"SPECIFIED PREVIOUS YEAR" means the P/Yi) which has ended before date of search, but the date of furnishing the ROI u/s 139 for that year has not expired before the date of search and
assessee has not furnished the ROI before the date of search
ii) in which search was conducted
"UNDISCLOSED INCOME" meansi) any income of specified previous year represented, either wholly or partly, by any money, bullion, jewellery or other valuable article or thing
or any entry in the books or other documents or transactions found in course of search u/s 132, which has
a) not been recorded on or before the date of search in the books or other documents maintained in normal course relating to such P/Y
b) otherwise not been disclosed to the CIT before the date of search
ii) any income of the specified p/y represented, by any entry in respect of an expense recorded in books or other documents maintained in the
normal course relating to specified p/y which is found to be false and would not have been found to be so had the search not been conducted
A.O. may direct that, in case where search has been initiated on or after 01/07/2012,assessee shall pay by way of penalty, in addition to tax
a) a sum computed at the rate of 10% of the undisclosed income of the specified p/y, if such assesseei) in course of search, in a statement u/s 132(4), admits the undisclosed income and specifies manner in which such income has been derived;
ii) substantiates the manner in which the undisclosed incoome was derived; and
iii) on or before specified date- pays tax,intt., in respect of undisclosed income and furnishes ROI for specified p/y declaring such undisclosed income
b) a sum computed at the rate of 20% of the undisclosed income of the specified p/y, if such assesseei) in course of search, in a statement u/s 132(4),does not admits the undisclosed income in the manner given in clause (a) above; and
ii) on or before the specified date- declares such income iht ROI furnished for the specified p/y and pays tax,intt in respect of undisclosed income
c) if not follow the case a) or b) then minimum 30% or maximum 90% of the undisclosed income of the specified p/y
note:- No penalty u/s 271(1) shall be imposed upon assessee in respect of undisclosed income
note: if it is proved that the income does not belong to specified p/y then u/s 271(1) shall be applicable
note : if in any other case other than specified p/y penalty u/s 271(i) shall impossed
noteNo order imposing a penalty shall be made- a) by ITO exceeds 10,000, b) by a/c,d/c exceeds 20,000 except with prior apporval of j/c
17
273A(1) CIT may reduce or waive the penalty imposed or imposable u/s 271(1) by own motion or on an application made by assessee
note - CIT can excerise this power when- see pg. 17 point 3
note - no order said above shall be made by CIT without approval of CCIT or D.G. if amount of penalty is exceeds Rs. 5,00,000 for one a/y or more a/y
note - the benefit of said above shall be received only once in assessee's life
note - if assessee has already paid penalty then CIT will refund it to assessee
note - the benefit of said above shall not received in case of raid
note - after a favourable order u/s 273A(1), no further relief is possible u/s 273A(1)/273A(4)
273A(4) CIT may reduce or waive any penalty, on an application made by assessee, and after recording his reasons for doing so, if CIT is satisfied that-
a) this is genuine hardship to the assessee, having regards to the circumstances of the case and
b) the assessee has cooperated in any enquiry relating to assessment or any proceeding for the recovery of any amount due from him
note - the benefit of said above shall not received in case of raid
note - if penalty is waived and after assessee's financial status is boon then such penalty will not demanded by deptt.
note - no order said above shall be made by CIT without approval of CCIT or D.G. if amount of penalty is exceeds Rs. 1,00,000 for one penalty or more
note - Genuine Hardships should exist at the time at which the application is made by assessee and should also exist at the time of passing of an order
note - after a favourable order u/s 273A(4), relief can be obtained u/s 273A(1)/273A(4)
note- order of 273A is final order and no appeal is possible against such order but file writ in H.C. and SLP in S.C
note- order of 273A should be a speaking order otherwise it will invalid
imp there is no time limit for making an application u/s 273A. There is no time limit for passinig an order u/s 273A
CIT can excerise 273A even if assessee has challenged the penalty order in any appeal
note - if conditions referred to in 273A are satisfied then the CIT is duty bound to grant the relief in 273A
note - the prosecution proceedings shall be dropped for an a/y in respect of which penalty u/s 271(1) has been reduced or waived in 273A
CIT u/s 273A cannot waive or reduce interest u/s 234A,B,C
note:- see comparision between u/s 273A(1) and 273A(4) on pg. 19
18
129
19
275
Time Limits for passing the PENALTY ORDER for PENALTY FOR CONCEALMENT OF INCOME - see pg. 29
note: it is only maximum period for impossing penalty u/s 271(1), while penalty shall imposs immediately by passing penalty order
without waiting appeal/revision order and when the appeal order will received by A.O. then A.O. shall cancel, reduce, enhance, imposs penalty
by passing order u/s 275(1A)
note: the said order u/s 272(1A) shall be passed within 6 months from the end of the month in which order u/s 250/254/260A/262 is received
by CIT or order u/s 263/264 is passed by CIT
20
ADVANCE TAX
1
Advance Tax shall be calculated by estimating the current year income and then applying the tax rates in force
note: at the time of computation of advance tax agriculture income also include
2
3
For the computing the tax liability of advance tax of the assessee:- TDS or TCS is not deducted/collected from tax libility
of the assessee if tax deductor has not deduct TDS/TCS on the income paid/received to the assessee
Any amount paid by way of advance tax on or before 31st march shall also be treated as advance tax paid during the F/Y
210 If an assessment has already been made on assessee for any p/y, and A.O. is of the opinion that such person is liable to pay advance tax, then
A.O. may at any time during the F/Y but not later then the last day of febuary, by an order in writing require such person to pay advance tax
and also specify the amount of advance tax and the instalments in which such advance tax is to be paid
The A.O. shall compute the advance tax by taking:(i) the total assessed income of the latest P/Y for which assessment has been made or
(ii) the income declared in the ROI of any sbsequent p/y (p/y sebsequent to the p/y in which assessment is made)
whichever is higher, and apply the tax rates applicable in the current F/Y
note: if after making the above order, a ROI is furnished or an assessment is made, in respect of a later P/Y, then A.O. may amend his order
(before last day of febuary for current year) on the basis of the above income if income is increase comparision to past income. Such
sum shall be payable at the approptiate percentages on or before the due dates specified in sec. 211 falling after the date of amended order
note: if an order or and amended order has been made on the assessee requiring him to pay advance tax and as per the estimation of assessee, the
advance tax payable is more than the amount specified in order, then he may pay more amount
note:- If income is assessed in the year of before or same year shall not considered even income has been incereased
because the amended order can be passed only on the basis of a LATER YEAR
note: the said order is final order so no appeal is possible against this order
note: if assessee does not comply with the order, then he shall be treated as an assessee in default so accordingly provision shall applicable
note: the order of 210 can be made only if an assessement has been made on the assessee otherwise not applicable
note:- see pg 139
note:- see pg 143
note:- see pg 149
note : there are some cases when intt u/s 234A, 234B, 234C may waive or reduce by CCIT/Director General see pg. 141
note: intt on refund shall be granted from the 1st april to refund date (note exclude the delay in filing ROI by assessee)
S.N. SEC.
ABOUT REQUIREMENT
1 2012 In computing toatal income of the p/y , any income of the prasar bharati shall be exempt from tax
10(23BBH)
2 2012 In computing total income of the p/y, any income received in india in Indian currency by a foreign company on
10(48) a/c of sale of crude oil to any person in India shall be exempt from tax
Provided thati) aggreement/ approval with C.G.
ii) national interest
iii) the foreign company is not engaged in any activity, other than receipt of such income, in india
In computing the total income of the p/y of any person, any income falling within the following clauses shall not be included :
10(26AAA) in case of an individual, being a Sikkimese, any income which accrues or arises to him-
In computing the total income of the p/y of any person, any income falling within the following clauses shall not be included :
10(26AAB) Any income of an agricultural produce market committee or board constituted under law for the purpose of regulating the marketing
of agricultural produce
Any allowance or perquisite, as may be notified by the C.G., paid to the Chairman or a retired chairman or any other member or
10(26AAB) retired member of the union public service commission, shall not be included in the total income
pg. 191
S.N. SEC.
1
REQUIREMENT
RATE
Exem-amoun
10%
EXCEPTION
It is paid to resident individual, HUF on debentures of public co. by account payee cheque and the
aggregate amount does not exceeds Rs 5000/- during the f/y
or
Where security is in demat form and is listed on stock exchange in india any amount of interest all assessee
or
Interest payable on any security of C.G. or S.G. any resident assessee and any amount
or
Interest payable to insurance co. in respect of any securities owned by it or in which it has full benceficial interest
10%
3 194A
4 194B
30%
30%
5000
30000 Note- at the time of payment or credit whether transfer in suspense a/c
75000 i)- if individual or HUF - 1%
ii)- if other - 2%
note:- i) on the invoice value excluding the value of material, if such value is mentioned separately in invoice
ii) on the invoice value, if such value is not mentioned separately in invoice
note:- individual & HUF cannot deduct TDS if it is in personal nature
Note:- no deduction of TDS to the account of a contractor during the course of business of plying hiring of leasing goods carriages, on furnishing PAN
Note:- no TDS is required to be deducted in case of transport operator if he furnishes his PAN
10%
20000
20%
10%
1000
7 194D
8 194E
9 194G
10 194H
10%
5000
Note:- commission to employees and employee directors will form part of salary income so on this case sec 192 shall applicable
Note:- transactions relating to securities are not covered in this sec. see pg. 21
note:- imp. case see book pg 21
11 194I
TDS ON RENT
180000 note:- in case of co-owner in property, the limit of 180000 will be applicable to each co-owner separately
note:- Rentals include municipal tax, ground rent. So TDS required if borne by the tenant
on pg 25 see point no. 11,12,13,15
12 194J
10%
5%
18
NO TDS SHALL BE DEDUCTED ON LONG TERM CAPITAL GAINS EXEMPT U/S 10(38)
19
TCS
S. SEC.
PARTICULARS
TAXATION OF NON-RESIDENTS AND FOREIGN COMPANIES
1 115BB Tax on winnings from lotteries, crossword puzzles, all races, card games and other games, gambling or betting
115BBA
where the total income of an assesseea) being a sportsman who is not a citizen of india and is a N.R., includes any income by way ofi) participation in india in any game (games other than 115BB)
ii) advertisement
iii) contribution of articles relating to any game or sport in inda
b) being a N.R. sports association or institution, amount paid in relation to any game or sport played in india
c) being a entertainer, who is not a citizen of india and is a N.R. includes any income from his performance in india
Tax Rate -: in all above cases- @20%, and on other balance income @ normal rate
4 115A TAX ON INTEREST IN CASE OF N.R. & FOREIGN COMPANIES note:- loan/investment given in foreign currency
I) Interest received by N.R. & F.C. from Govt. or an Indian concern ,- @20% of such income
ii) Interest received from an infrastructure debt - @5% of such income
iii) Interest received from the specified co. under a loan agreement or by way of issue of L.T. infrastructure bondas approved
by C.G. to extent to which such interest does not exceed the amount of intt calculated at the rate approved by C.G. - @5% of such income
5 115A TAX ON ROYALTY AND TECHNICAL SERVICES FEE IN CASE OF N.R. & FOREIGN COMPANIES
a) received from Govt. in pursuance of an agreement made by the N.R./F.C. with the Govt.
OR
b) received from Indian Concern in pursuance of an agreement made by the N.R./F.C. with the Indian Concern and the agreement is approved by C.G.
note:- no approval of C.G. in case of b) if agreement relates to a matter included in the industrial policy
Tax Rate:- If Services is received in pursuance of an agreement made on or before 31st may 1997 @ 30%
- If Services is received in pursuance of an agreement made after 31st may 1997 but upto 31st may 2005 @ 20%
- If Services is received in pursuance of an agreement made after 31st may 2005 @ 10%
imp
44DA
TAX ON ROYALTY AND TECHNICAL SERVICES FEE IN CASE OF N.R. & FOREIGN COMPANIES
a) received from Govt. in pursuance of an agreement made by the N.R./F.C. with the Govt.
OR
b) received from Indian Concern in pursuance of an agreement made by the N.R./F.C. with the Indian Concern and the agreement is approved by C.G.
note:- in a) & b) in both cases after 31/03/2003 if before then 115A shall apply
note:- no approval of C.G. in case of b) if agreement relates to a matter included in the industrial policy
where such N.R. or a F.C. Carries on business in india throung A PERMANENT ESTABLISHMENT situated in india,
OR A FIXED PLACE for performance in india
Then the income shall be computed under head "PGBP" and all other provision of act shall apply
provided - No expenditure shall allowed which is not wholly and exclusively incurred for the business of such PE or fixed place in india
115AB
TAX ON LONG TERM CAPITAL GAINS ARISING FROM TRANSFER OF UNITS PURCHASED IN FOREIGN CURRENCY @ 10% OF L.T.C.G.
115AC
imp
- TAX ON INTEREST INCOME FROM BONDS OR GDR PURCHASED IN FOREIGN CURRENCY @10%
- TAX ON L.T.C.G FROM BONDS OR GDR PURCHASED IN FOREIGN CURRENCY @10% OF L.T.C.G.
NOTE:- If such Bond or GDR transfer by N.R to other N.R. outside india then capital gain shall exempt u/s 47
Except:- 44DA
iii) deduction of chapter VI A shall not allowed from specified income except in case of royalty and know-how
iv) B/F losses shall set-off while U/D shall not set-off
v) No expenditure shall allowed because it is already tax at ceoncesional rate
v) TDS rate shall as specified tax rate in each cases
vi) No requirement of Books, Audit etc.
TAXATION OF N.R.I
9
N.R.I. means:- an individual being a citizen of india or a person of indian origin who is not a resident
Specified Asset:- means any of the following assets- note:- investment in foreign courency
i) Shares in an indian company
ii) debentures issued by a Public Limited Indian Co.
iii) Deposits in a Public Limited Indian Co.
iv) Any security of the C.G.
v) Any other asset which the C.G. may notify
Computation of Tax :a) INVESTMENT INCOME:- @ 20%
b) L.T.C.G:- @10% , NOTE:- first proviso of sec. 48 applicable, indextation not available, VIA not available
c) Balance other income- nomal tax rate, and normal provisions shall applicable, VIA available
Exemption :NRI derives LTCG and within 6 months from the date of transfer , invests the net consideration in specified assets then -
shall no taxable
Exemption from filling ROI:- if total income is only above said income and TDS deducted
Exemption:- chapter to apply even if NRI become resident- see pg no.205
OTHER PROVISION
10
10(38)
Any Income received in india in indian currency by a foreign co. on a/c of sale of crude oil to any person in india shall be
exempt from tax
provided that i) receipt of such income in india by foreign co . is pursuant to an agreement by C.G. or approved by C.G.,
ii) and foreign co . is not engaged in any activity, other than receipt of such income
11
115JG
DTAA
1
Bilateral Relief:- Countries are entering into DTAA with each othe r( sec. 90 and 91A)
Unilateral Relief:- When there is no agreement between two countries, country of the residence itself provide relief( sec. 91 )
90
AGREEMENT WITH FOREIGN COUNTRIES OR SPECIFIED TERRITORIES
1 The C.G. may enter into an agreement with the Govt. of any country outside india in following matters a)- for the granting of relief in respect ofsame income is to be taxed in both countries then DTAA shall provide that "tax paid in one country shall be allowed credit from
tax payable other country"
b)- DTAA provide that certain incomes shall be taxable in one country and not taxable other country
c)- for exchange of information for the prevention of evasion or avoidance of income tax in that country or investigation of cases
of such evasion or avoidance
d) for the recovery of income tax in that country
ANALYSIS :- DTAA will apply "if they are beneficial to the assessee" . If the Income Tax Act is more beneficial to the assessee,
then the income tax act shall apply
The effect of DTAA is thati) Income is taxed in only one country
or
ii) If income is being taxed in both the countries, then the tax paid in one country is allowed as credit from the tax payable in the other country
note:- An assessee, not being a resident in india , who want to take relief u/s 90 shall obtained a certificate from that country Govt.
regarding resident
imp
note:- If the rates of DTAA are applicable then, such rates shall not be increased by surcharge and education cess
note:- if Govt of india defined the term not mentioned in DTAA by a notification then this term deemed to effective from the date
of aggreement
3 90A
ADOPTION BY C.G. OF AGREEMENTS BETWEEN SPECIFIED ASSOCIATIONS FOR DOUBLE TAXATION RELIEF
Any specified association in india may enter into an agreement with any specified association in the specified territory outside india
THEN provision of sec. 90A are exactly same as sec.90
Explanationa) Specified Association- see pg no.234
b) Specified territory- ssee pg. no. 234
91
2 80P
3) Income from investment with other co-operative societies by way of Interest, dividend
4) Income from letting of "godowns or warehouse"
B) General deduction to Co-operative societies for income other than above 1) to 4)
i) where such so-operative society is a consumers' co-operative society- 100000
ii) in any other case- 50000
LIQUIDATION OF COMPANIES
3
Every person-
a) who is the liquidator of any company which is bound up, whether under the orders of a court or otherwise OR
b) who has been appointed the receiver of any assets of a company
- within 30 days after he has become such liquidator, give notice of appointment to the A.O. of company
- then A.O. shall after making such inquiries as he may deem fit , notify to the liquidators within 3 months from the date on which he receives
notice of the appointment , about tax liabilities
HINDU-UNDIVIDED FAMILY
v) the provisions of coumputing income of HUF are the same for normal assessee
vi) C.G. is exempt on distribution of assets on partition of HUF
imp Partition of HUF takes place on the date on which the properties are actually physically divided or ment to divided in case of
non physically partisiable asset
imp Remuneration paid by HUF to karta or any member of HUF shall be allowed if- paid under a valid and bona fide agreement
- in the interest of business of HUF
- reasonable and not excessive
note If A.O. has satisfied that distribution of asset has been made then he shall pass order allowing partition of HUF, otherwise he shall
pass order to refuse partition of HUF
note If HUF is partitioned then the member shall be liable for tax liability
5
1
OR
b) sells the rights of exhibition of the film in respect of some of the areas; OR
c) himself exhibits the film on a commercial basis in certains areas and sell the rights of exhibition of the film in other areas
AND the film is released for exhibition on a commercial basis at least 90 days before the end of such p/y, the entire cost of
production of the film shall be allowed as deduction in that p/y
IF film is not released for exhibition on a commercial basis at least 90 days before the end of that p/y then - which is lower allowed
- Cost of production
- Amount realised by exhibiting the film and sale of rights of exhibition
and balance cost shall be allowed as deduction in next f/y
Deduction in respect of Expenditure on Acquisition of Distribution Rights of Feature Films in case of Film Distributor
i) Cost of Acquisition-: in relation to a feature film, means the amount paid by film distributor to film producer for getting the
exhibition rights of the films.
ii) same as for film producer " only replace the cost of production by cost of acquisition
iii) same as for film producer " only replace the cost of production by cost of acquisition
TAXATION OF AOP/BOI
i) The income of AOP/BOI is computed as per normal provision but some specific provision are as followingsii)- Sec. 40(ba) - any payment of INTEREST, SALARY, BONUS, COMMISSION OR REMUNERATION made by AOP/BOI to any of
its member shall be disallowed
Point to be noted:- Rent paid by AOP/BOI to its members, is allowed subjects to sec. 40A(2)
- the difference of interest shall be disallowed in case where AOP/BOI is paying intt. and also receiving intt from same member
- where individual is member in a AOP/BOI on behalf or benefit of any other person then the INTEREST paid to him by AOP/BOI
otherwise than as member in a representative capacity , shall not be disallowed
- where individual is member in a AOP/BOI otherwise than as member in a representative capacity then INTEREST paid to him by AOP/BOI
, shall not be disallowed if such interest is received by him on behalf or benefit of any other person
TAXATION OF FIRMS
I)- Every person who was a partner of a firm and the legal representativ during the p/y(even one day), shall be Jointly and Severally
liable along with the firm for any tax liability
II)- Every person who was a partner of a firm and the legal representativAt THE TIME OF DISCONTINUED , shall be Jointly and Severally
liable along with the firm for any tax liability
a) If payment of salary, bonus, commission or remuneration, to a only working partner and in case of remuneration if authorized by deed
6 13A
i) "Income from House Property, Capital Gain, Income from other sources" are exempt from tax
ii) any income by way of voluntary contributions receive by a political party is exempt provided that- keeps and maintains books
- in respect of such voluntary contribution in exceess of Rs. 20000, keeps maintain records, name, address of donner
- account should be audited
note:- if such pary do not summit report u/s 29c(3) then then no exemption available
Any voluntary contributions received by an electoral trust are Exempt in the p/y in which received
Provided that:a) such electorcal trust distributes to any political party, 95% of the "aggregate donation"
b) such electorcal trust functions in accordance with the rules of C.G.
otherwise it shall be deemed as income of that f/y in which was received in hand of such trust
Note: Any person who make donation to such trust, shall be entitied to deduction u/s 80GGB,80GGC
Note: The income in other head shall be taxable
Note: if such trust invests the donation received in bank and other places, then the interest from such investment is not exempt
Note: Aggregate donation means:- current year plus 5% of last year
Where Regular Income Tax Payable for a p/y by a person, other than a company, is less than the AMT payable for such p/y then
the Adjusted Total Income shall be deemed to be the Total Income of that person for such p/y and shall be taxable @ 18.50% +E.cess
- Adjusted Total Income :- total income meansTotal Income as Computed under normal provisions of I.T. Act
XXX
XXX
XXX
XXX
NOTE:- AMT is not payable by: Individual, HUF, AOP/BOI, AJP, and adjusted total income of such person does not exceed Rs. 20 Lacs
Note:- Every person on whome this sec. applies shall obtain a report, by C.A. certifying that the adjusted total income and AMT is
computed accordance provisions and furnish such report on or before the due date of ROI
Note:- Utiliztion of MAT CREDIT in folling way - The AMT CREDIT of an a/y to be allowed if AMT paid is excess over the regular income tax
- No Interest shall be payable on above
- The AMT CREDIT shall be C/F since 10 A/Y from the a/y for which AMT credit is available
- Any A/Y in which regular income tax exceeds the AMT, then AMT CRDIT shall allowed to be set-off to the exten of such excess
note: in case of AMT, it is adviseable to assessee that he should claim deduction u/s 35AD instead of 80IA to 80IE
Note:- Deduction u/s 80C to 80GGC and 80U are not to be added back i.e. these are allowed as deduction in AMT
SECTION 11:- Following income shall not be included in the total income of the previous year
a) Income derived from PROPERTY held under trust wholly for charitable or religious purposes
provided that:- to the extent to which such income is applied to such purposes in India
( note: 15% of such income is allowed as deduction on adhoc basis)
( note:- voluntary contributions other than corpus donation is included in (a)
b) Income in form of voluntary contributions made with a specific direction that they shall form part of corpus of trust/institution
Note:- Applied see on pg. 123
Note:- in the p/y, if applied to charitable or religious purposes in india falls short of 85% of the income derived during that yeari) for reason that income has not been received fully or partly
or
ANONYMOUS DONATION means :- any voluntary contribution, does not maintain a record of identity
Treatment of "anonymous donation" if received for the purposes of -:
- If wholly Charitable trust - to be taxed @ 30% and deduction of i) 5% of total donation(all types), ii) Rs 1,00,000 whichever is more, shall be allowed
- If wholly Religious trust - to be taxed as sec 11 & 12
- If wholly Religious & Charitable Purposes trust - to be taxed as sec 11 & 12 but if specific direction that such donation is for charitable purpose then taxable
note:- where corpus donation is received without identity then it shall be deemed anonymous donation
10
Venture Capital Company or Venture Capital Fund provides funds in form of loans to, or subscription to shares or certain unlisted companies (venture capital undertakings)
This sec. provides exemption in respect of- an income of a venture capital compnay or venture capital funds from investments in a venture capital undertaking
note:- the investment in VCU can be in form of loans or shares .
note:- the C.G. and Interest arising from such investments shall be exempt in hands of venture capital co. or venture capital fund
11
12
115BBD
13
10(44)
A) Tax Treatment in Hand of AIndividual:- Contribution made to NPS are excluded from total income
DIVIDEND STRIPPING
14
see book
BONUS STRIPPING
15
see book
BONUS STRIPPING
16
see book
17
see book
18
see book
19
Condition of Amalgamation :-
i) All the property and Liabilities of the amalgamating company immediately before the amalgamations becomes the property of the amalgamated company
ii) Shareholders holding not less than 75% in value of shares in amalgamating co.(other than shares held by amagamating co. in amalgamated co.)
become shareholdrs of amalgamating co.
Taxation of Shareholders :- there will be no transfer and hence no capital gains when a shareholder in this scheme transfer the shares, if following conditions are satisfyi) transfer is made in consideration of allotment of shares in the amalgamated co. (except where the sharehoder of amalgamating co. itself is amalgamated co.)
ii) the amalgamated co. is an Indian co.
Taxation of Amalgamating Company :- As per sec. 47 there will be no capital gains on transfer of capital asset to amagamated co., if amalgamated co. is an Indian co.
- There will be no capital gain on transfer of shares held in an Indian co. in this scheme by amalgamating foreign co. if these condition satisfy-
i) At least 25% of the shareholders of amalgamating foreign co. continue to remain shareholders of amalgamated foreign co. And
ii) Such transfer does not attract tax on C.G. in the country
Demerger - panding
pany