Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Forum Articles Highlights TMI Notes SMS News What's New Calendar Imp. Links Database More...
Extracts
Home List
← Previous Next →

Trimurty Colonizers & Builders P. Ltd. Versus The DCIT, Central Circle-3, Jaipur

Disallowance of interest expenses u/s 40A(2)(b) - amount received being unsecured loan - Held that:- As both the authorities below have not commented upon as to how Sh. Udai Kant Mishra would be covered under the provisions of sec.40A(2)(b). However, having seen the pattern of shareholding, and after taking into consideration the totality of facts and judicial pronouncements, we are of the considered view that the reasonable rate of interest ought to have been adopted at 14% against 12.5% as ado .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Assessee by : Shri Rajeev Sogani ( CA ) and Shri Rohan Sogani ( CA ) Revenue by : Shri Varinder Mehta ( CIT ) ORDER Per Shri Kul Bharat, JM. This appeal by the assessee is filed against the order of ld. CIT (A)-4, Jaipur dated 07.02.2017 pertaining to assessment year 2012-13. The assessee has raised the following grounds of appeal :- 1. In law and in facts and circumstances of the case, the CIT (A) ought to have deleted the addition made by the AO u/s 40A(2)(b) of the Income Tax Act, 1961 since .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s submitted before the AO that the appellant having also paid interest @ 14.4% to outsiders, the interest payment commensurate with the prevailing industry norms. The impugned addition is baseless and contrary to the law. 4. In law, in the facts and circumstances of the case, the CIT (A) has grossly erred in confirming the impugned addition of ₹ 26,811/- of interest paid u/s 40A(2)(b) of the Act alleging the lack of commercial expediency. The impugned addition is therefore contrary to the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

unds of appeal. 2. Briefly stated the facts of the case are that the case of the assessee was picked up for scrutiny assessment and the assessment was framed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the Act) vide order dated 08.01.2014. While framing the assessment, the AO made disallowance of interest expenses by invoking the provisions of section 40A(2)(b) of the Act. Against this order, the assessee preferred an appeal before ld. CIT (A), who after consider .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Director of the company but the company itself. 3.2. On the contrary, the ld. D/R supported the orders of the authorities below. 3.3. We have heard rival contentions, perused the material on record and gone through the orders of the authorities below. The AO has decided this issue in para 4.3 of his order as under :- 4.3. I have considered the reply of the assessee carefully and not found satisfactory. The submission of the assessee in summary is that these loans were taken for commercial ex .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

. The submission of the assessee does not carry much weight. Even if it is accepted that loans were obtained for commercial expediency and it was compelled to take loans from key persons of the group due to market position/situation it does not justify the availing of loans by the assessee from key persons of the group at a very higher rate. Had there been business expediency as claimed by the assessee but no prudent business person will take loans on higher interest rate and give loans on low i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n higher side to the above person specified under section 40A(2)(b) which is allowable to extent of 12.50% as prevailing in the market and the assessee company itself received interest @ 12.50%. Hence interest calculated @ 12.50% per annum on interest paid to Shri Udai Kant Mishra is allowed and balance interest paid to them is disallowed and added back to the total income of the assessee. This would result an addition of ₹ 26,811/- which is worked out as under :- S.No. Name of the persons .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

plicable case laws relied upon by the assessee. In this case against total income of ₹ 12,40,330/- declared in the return of income for the year, AO completed the assessment order on 08.01.2015 at a total income at ₹ 12,67,140/- after making the addition of ₹ 26,811/- towards interest by invoking the provision of section 40A(2) of the Act wherein AO held that the interest paid to person specified u/s 40A(2)(b) of the Act is allowable to the extent of 12.5% which is market rate. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s: • Gujarat Gas Financial Services Ltd (Guj) • Enviro Control Associated (P) Ltd • Ramavatar Garg (ITAT Jaipur) • Udaipur Distillery Co. Ltd (Rajasthan) • Subhash Chandra (SOT ASR) • SA Builders Ltd (C) • Bansilar Gupta (SOT ASR) • Alfa rubber Industries (ASR) • Chamba Mal Roopchand (ASR) • Hynoup Food & Oil Industries Pvt Ltd(AHD) It has been repeatedly held by Hon ble Apex Courts that the expression for the purpose of business is wider in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

our view, S.A. Builders Ltd. vs. Commissioner of Income-Tax (Appeals) and Another, reported in 288 ITR 1 needs reconsideration ... In view of Hon ble Apex Court s observation, in this case, there is a need of the hour to clearly establish the principle of commercial expediency. But, assessee has failed establish the same before the AO and also during the appellate proceeding. Assessee s submission is not based on facts to establish its claim of commercial expediency. According, the same is exam .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

  ↓     Latest Happening     ↓  

Circular: Constitution of National Anti-profiteering Authority (NAA) under GST-reg.

Forum: import purchase

Highlight: Sharing of expenses - BAS - promotion of business of group companies - sharing of expenditure for common facilities cannot be treated as service by one to another in such arrangement.

Forum: Cess paid instead of SGST

News: RBI Reference Rate for US $

Forum: 3B mistake

Forum: Input credit of gst paid on urd

Article: Credit of unsold stock [Section 140(3)] - Actual Credit as well as Notional Credit - Part-I - GST Transitional provisions

Circular: Certain Clarifications sought on Construction Services provided in the Real Estate Sector reg.

Forum: transfer of shares

Forum: Input tax credit

News: Anti-dumping duty on import of bus/truck tyres from China

News: Fast-track GST refund, else ₹ 65K cr may be stuck: Exporters

Highlight: It is open to the Settlement Commission to use best judgment in arrival of the figure. Nonetheless it has to explain the manner in which the best judgment figure has been arrived at by the Settlement Commission - HC

Highlight: Deemed dividend u/s 2(22)(e) - advances given to societies - in the absence of legal right of the assessee in the said society the amount advanced cannot be treated as deemed income.

Highlight: When electrical installations are treated as plant and machinery the depreciation has to be allowed @ 25% as per provisions contained u/s 32

Forum: GST return filing software online | Easy GST compliance management

TMI Note: Capital Gain - transfer of right in the land or transfer of land itself - addition u/s 50C - Harassment to the honest tax payers

Highlight: Option to avail composition scheme under GST by electronically filing an intimation in FORM GST CMP-02 and FORM GST ITC-03 upto 30-9-2017 - See Rule 3(3A)

TMI Note: Does ICDS apply for the purposes of computing exemption u/s 11 to 13.

Highlight: Voluntary Reporting of Estimated Current Income and Advance Tax Liability - CBDT issues draft notification

TMI Note: Certain ICDS provisions are inconsistent with judicial precedents. Whether these judicial precedents would prevail over ICDS.

Highlight: Provisions of ICDS shall prevail w.e.f. AY 2017-18 to the transactional issues dealt therein over earlier judicial pronouncements.

Notification: Levy of anti dumping duty on New/unused pneumatic radial tyres with or without tubes and/or flap of rubber (including tubeless tyres) having normal rim dia code above 16 originating in, or exported from China PR

News: Voluntary Reporting of Estimated Current Income and Advance Tax Liability

TMI Note: In case of conflict between ICDS and other specific provisions of the Income-tax rules, 1962 governing taxation of income like rules 9A, 9B etc. of the Rules, which provisions shall prevail.

TMI Note: Does ICDS apply to computation of Minimum Alternate Tax (MAT) u/s 115JB of the Act or Alternate Minimum Tax (AMT) u/s 115JC of the Act.

TMI Note: Where a term has not been defined under ICDS, nor under the Act, but has different interpretations given to it by the courts in tax cases, and in ICAI Accounting Standards, which interpretation would prevail while interpreting ICDS.

TMI Note: Whether the provisions of ICDS apply to a non-resident who claims the benefit of a double taxation avoidance agreement (DTAA).

TMI Note: In case any of the ICDS provisions is contrary to a circular or press release issued by the CBDT, which would prevail over the other.

TMI Note: ICDS-I requires disclosure of significant accounting policies and other ICDS requires specific disclosures. Where is the taxpayer required to make such disclosures specified in ICDS.

Notification: Income Computation and Disclosure Standards (ICDS) - New ICDS to be effective from AY 2017-18

News: RBI Reference Rate for US $

Highlight: GST - Detention of goods under transport - discrepancy in documents - the statutory provisions provide a mechanism for adjudication following detention of goods including for the provisional release thereof pending adjudication - HC

Highlight: Reassessment - first few paragraphs of the assessment order dealt with objections and disposed of accordingly - Unfortunately, the manner in which the AO has decided the issue is wholly unsustainable in law - HC

Highlight: Business expenditure u/s 37 - liquidated damage - breach of contract terms - Expenditure was not incurred for any purpose which is an offence or which is prohibited by law - cannot be disallowed - HC

Highlight: Valuation - inclusion of reimbursement of expenses - managing participation of clients in certain mela, fairs, promotional activities etc. - They are liable to service tax on the gross amount received - They cannot restrict their tax liability to only agency commission

Highlight: TDS liability - ITAT confirmed the liability - We do not see how it is possible for us to uphold the order of the Tribunal and when it purports to decide two Appeals of the Revenue by single paragraph conclusion - HC

Highlight: Reopening of assessment - sufficiency of material available with the AO to form a belief that income chargeable to tax had escaped assessment - bogus purchases - seller refused to respond - notice would not be interfered with - HC

Highlight: Exemption u/s 11 - education activities - transport and hostel facilities surplus cannot be considered as business income of the assessee society

News: Draft Notification for insertion of new rule 39A in the Income-tax Rules, 1962 comments and suggestions-reg.

Highlight: Genuineness of labour wages expenses, embroidery charges, fabrication expenses etc. - getting work done through small workmen who do not have any permanent place of residence - disallowance of ad hoc expenditure deleted.

Highlight: Project import - Since the goods were never used for the purpose for which it was imported, the actual user condition has been violated - Redemption fine and penalty imposed.

Highlight: Penalty u/s 112 (a) - CHA - Lack of due diligence and failure to take more precautions can not, by itself, bring in penal consequences

Highlight: Import of services - GST - The fact that those services were received outside India will not change the fact that the services have been paid for by the beneficiary appellant, who is located in India. - Demand confirmed.

Notification: SEZ for IT/ITES at Madhurwada Village, Visakhapatnam District in the State of Andhra Pradesh - denotified.

Highlight: Merely because payment is received in Indian rupee, it cannot be said that payment against export has not been received in convertible foreign exchange.

Highlight: Merely vehicle numbers was not mentioned on the invoices cannot be the reason to deny Cenvat Credit

Highlight: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017 - Circular

Circular: Extension of time limit for submitting the declaration in FORM GST TRAN-1 under rule 120A of the Central Goods and Service Tax Rules, 2017



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version