Cash transactions in immovable property u/s 269SS & 269T

One Step ahead to curb black money by covering cash/bearer cheque transactions in purchase/sale of immovable property u/s 269SS & 269T

The existing provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit if the amount of such loan or deposit is Rs.20,000/- or more, except through account payee cheque or account payee demand draft or through online transfer through a bank account.

However, certain exceptions have been provided in the section.

Similarly, the existing provision contained in the section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid if the amount of loan or deposit is Rs.20,000/- or more except through account payee cheque or account payee demand draft or through online transfer through a bank account.

In order to curb generation of black money by way of dealing in cash w.r.t immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as to provide that no person shall accept from any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer amount of such loan or deposit or such specified sum is Rs.20,000/- or more, except otherwise than by an account payee cheque or account payee demand draft or by electronic clearing system through a bank account. Continue reading

Total turnover not includes Scrap sale while computing deduction

For the purpose of calculating the deduction, according to the export related deduction provisions such as Section 10AA,80HHC, etc of the Income Tax Act, one has to take into account the profits from the business of the assessee, export turnover and total turnover.

The deduction is determined as under:

Profits of the Business          X              Export Turnover/Total Turnover

Thus, to determine the amount of deduction, the assessee and the Revenue must be aware of the following three ingredients:
i) Profits of the business
ii) Export turnover
iii) Total turnover

The term ‘turnover’ has neither been defined in the Act nor has been explained by any of the CBDT circulars. In the aforestated circumstances, one has to look at the meaning of the term ‘turnover’ in ordinary accounting or commercial parlance.

Now the dispute is that, whether sale proceed of scrap is constitute as a part of total turnover or not ?

One can very well see that if the total turnover increases, the advantage of deduction would decrease because the amount deductible substantially depends upon the ratio between the export turnover and total turnover.

IN THE SUPREME COURT OF INDIA, Commissioner of Income Tax-VII, New Delhi Versus Punjab Stainless Steel Industries Continue reading

No TDS require to be deduct on Interest payable on FDRs made in the name of the court

No Requirement to deduct TDS on Interest payable on FDRs made in the name of the Registrar General of court.

In the Honorable Delhi High Court, UCO Bank Versus DCIT

Facts:-

Bank accepted a Fixed Deposit (FD) in the name of Register General of this Court and issued a Fixed Deposit Receipt (FDR).

ACIT issued a show cause notice  to the petitioner bank for not deducting TDS on the interest accrued and to show cause why the petitioner bank be not treated as an assessee in default under Section 201(1)/201(1A) of the Act. The petitioner, by its reply, submitted that the said FD was in the name of Register General of this Court as a custodian and no TDS was deducted on the accrued interest because the actual beneficiary was not known as the matter was sub judice. It was also submitted that the TDS would be deducted on when payment is made to the beneficiary as may be decided by the Court. Continue reading

Roads Highway was a building & not a plant for the purpose of claiming depreciation

Whether  Bypass Toll Road Highway was a building and not a plant for the purpose of claiming depreciation?

Toll road was treated as building for the purpose of claiming depreciation @ 10% and not as a plant irrespective of the facts that assessee has sole object of construction of roads and highways.

In the case of Moradabad Toll Road Co. Ltd. Versus ACIT – DELHI HIGH COURT  Continue reading

A Basic about Income from House Property

How rental income from House Property is chargeable to tax?

The annual value of property consisting of building or supportive land is taxable in the hand of owner under the head of Income from House Property.

However, annual value of property is not taxable if property held for the purpose of running business or profession. Continue reading