Financial Reporting Dossier

From Published Accounts

Ind AS 16 – Property, Plant And Equipment Capitalization Of Costs In Case Of A Company Constructing A Single Asset

Auditor Independence: SMP Perspective

Continuous Accounting: CFO’s Secret Weapon

Correlation between Indirect Taxes and Contractual Clauses

Essential Insights into SA 260: Strengthening Auditor-Governance Communication

Finally Tax Justice in Sight – Procedure before the GSTAT

Allied Laws

Company Law

Conditional Gifts v/s Senior Citizens Act – Beneficial Legislation Rules

Mutual Fund “Lite” – Rewriting The Grammar Of Passive Investing

Point Of Taxability of Dividend, Interest, Royalties & FTS Income of Non-Residents Under Double Taxation Avoidance Agreements (DTAA)

Glimpses Of Supreme Court Rulings

Non-resident — Income deemed to accrue or arise in India — Payment to non-resident — Royalty — Amount paid for use and resale of computer software through distribution or end user licence agreement is not royalty — Not assessable in India.

Reassessment — Limitation — Notice challenged in writ petition before the High Court — Direction of the Court and quashing of assessment order — Case sent back for deciding assessee’s objection and to pass further orders — No observations on the merits of the case — Applicability of extended period of limitation — In consequence of or to give effect to any finding or direction Department cannot claim the benefit of extended period of limitation – Assessment order passed u/s. 143(3) r.w.s. 147 and 144B is beyond the period of limitation.

Return — Condonation of delay — Mistake in filling appropriate columns in the return vis a vis intimation by CPC — Assessee submitted corrected return in response to intimation dated 03.09.2019 issued by the CPC — Since the time to file revised return had expired on 31.03.2019, the Assessee filed corrected / revised return u/s. 119(2)(b) — Respondent was only required to consider the revised return as there was only a correction of mistake in the presentation of the correct figures — No impact of the corrected return on the income of the Assessee — It was only to facilitate the CPC to process the return so that Assessee is entitled to refund — Respondent ought to have allowed the application to condone the delay in filing the corrected / revised return.

TDS — Credit for TDS — Tax deducted by employer but not deposited with Government — In view of provision of section 205, it is made clear that the assessee shall not be called upon to pay the tax himself to the extent to which tax has been deducted from that income — Both the circular dt. 1st June 2015 and the Office Memorandum dt. 11th March 2016 have been issued in consonance with the provisions contained in section 205 — Department shall not deny the benefit of tax deducted at source by the employer during the relevant financial years to the assessee — Credit of the tax shall be given to the Assessee and if in the interregnum, any recovery or adjustment is made by the Department, the assessee shall be entitled to the refund, with statutory interest

TDS — Statutory authority — Duty to be fair in its commercial dealings — Statutory authority entering into contract with firm for supply of material and performance of engineering work — Tax deducted at source not deposited with Department — Statutory authority retaining part of bill amounts due to firm for its income-tax contingency — Statutory authority had no right to retain any amount due to firm — High Court directed the statutory authority to return withheld amount with interest — Cost imposed on statutory authority to be recovered from its managing director.

Capital Asset – Loss – The insurance claim received against dead horses – Taxability.

Rectification of Mistake – Subsequent ruling of the Hon’ble Supreme Court cannot be a ground for invoking the provisions of Section 254(2).

Charitable Trust – Condonation of the delay of 24 days in filing Form 10B.

Assessment order framed by the ITO u/s 143(3) of the Act, without an order under section 127 conferring jurisdiction on him, is bad in law and needs to be quashed.

S. 36(1)(iii) : Interest on unpaid conversion fees for the period after the mall has been put to use, constitutes revenue expenditure and is allowable under section 36(1)(iii) of the Act. S. 43CA : If as on the date of agreement to sell, the collectorate rates for levy of stamp duty are not available, then the value declared by assessee in sale deed on which stamp duty has been paid is to be construed as the correct value and no addition is required to be made. S. 43CA : For the purpose of section 43CA, interest on delayed payment of consideration needs to be aggregated with the sale consideration and such aggregate amount is to be compared with the valuation done by DVO.

Notice under section 143(2) of the Act which has not been issued in consonance with the CBDT Instruction F No. 225/157/2017/ITA-II dated 23.06.2017 is invalid and an assessment framed consequent to such invalid notice is also invalid and needs to be quashed.

Only profit element embedded in unaccounted receipts can be taxed and not the entire amount of such receipts.

Exemption under Section 11 should not be denied to the assessee merely on account of delay in filing audit report in Form 10B within the stipulated time if the same was furnished before passing of intimation under section 143(1).

Where the assessee made donation to a foundation approved under section 80G in pursuance of its CSR obligations, it was entitled for deduction under section 80G.

Where the assessee had opted for presumptive taxation under section 44AD, the AO could not make an addition on account of alleged bogus purchase since the assessee was under no obligation to explain individual entries of purchase.

Corporate Social Responsibility (CSR) Expenditure – Deduction under Chapter VI-A – Allowability of CSR expenditure under Section 80G despite disallowance under Section 37(1) – Voluntariness of contribution not a precondition – No reciprocal benefit to donor – Deduction permissible subject to fulfillment of conditions of Section 80G.

No additions under section 68 when the identity and creditworthiness of the loan lender was established.

Article 13 of India-Cyprus DTAA – Investment Holding Company located in Cyprus is a tax resident of Cyprus – qualifies for benefit under Article 13 of DTAA in respect of gain arising from sale of shares of Indian company.

Articles 7 and 12 of India-Korea DTAA – the Assessee is entitled to set off business loss incurred by PE against Fees for technical services (FTS) earned by HO

Independence

From The President

Joint Development Agreements – Revisited

Goods And Services Tax

Recent Developments in GST

International Taxation

सन्मित्रलक्षणमिदं प्रवदंति संत: !

76th Annual General Meeting and 77th Founding Day

Height Of Gratitude !

ICAI and Its Members

Miscellanea

Regulatory Referencer

Representations

Learning Events At BCAS

Statistically Speaking