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


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

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