Lower TDS under section 194LC extended to any type of long term foreign currency bonds.

Lower TDS deduction at the rate of 5% under section 194LC extended to any type of long term bonds raised in foreign currency subject to compliance of conditions specified under circular 15/2014.

Section 194LC of the Income-tax Act, 1961, introduced by the Finance Act 2012,provided for lower withholding tax at the rate of 5% on the interest payments by Indian companies on borrowings made in foreign currency by such companies from a source outside India. The benefit was available in respect of borrowings made either under an agreement or by way of issue of long term infrastructure bonds. Continue reading

Estimation of Income under section 145 without disclosing materials relied on is invalid.

The estimation of income made by the AO without disclosing the materials relied on and also denying assessee an opportunity was not only in violation of the statutory provisions but also in violation of the principles of natural justice.

In the case M/s. Podikunju Musaliar Memorial Educational& Charitable Trust Chandanathope, Kollam Versus Commissioner of Income Tax-KERALA HIGH COURT

Search and seizure under Section 132 of the Income-tax Act has been conducted in the premises of the assessee. After completing all procedural formalities, assessments for the years 2003-04 to 2009-10 were reopened. Accordingly, the assessments were completed where, rejecting the books of accounts of the assessee and estimated the gross profit at 40% of the gross receipts and estimated the net profit at 15% of the gross receipts. Continue reading

No capital gain on merely issuing allotment letter for giving possession

No capital gain accrued by mere issuing allotment letter which merely entitles the possession of the plot to the prospective buyers.

In the case of Sujata Farms Pvt. Ltd. Versus DCIT, Circle – 6, Pune – ITAT PUNE

The Assessing Officer claimed that the assessee company is following mercantile system of accounting and therefore, it was required upon the assessee company to recognize sales, on handing over the possession of the plot of land i.e. the date of letter of allotment. In the opinion of the Assessing Officer the assessee company has not recognized the sales and accordingly, correct income has not been declared in all these assessment years.

However assessee company claims that merely handing over possession of plots of land to the buyers by issuing the letters of offer and allotment, transactions would not declared as a sales. Continue reading