From Published Accounts

Whether A Change In The Interpretation Of An Accounting Standard Constitutes A Change In Accounting Policy/Estimate Or A Prior Period Error?

Taxing Escrows and Earn-Outs In Share Purchase Agreement

Principles of Applying Ethics In Professional Judgement

Role of Audit Committees And Challenges

Assured Returns under FEMA

Financial establishments – Deposit – loan transaction – Applicability of MPID Act – Investment carrying assured return held to constitute “deposit”. [Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act, 1999, S.2(c), 2(d), 3]

Forgery of Will – Purchaser under registered sale deed – Absence of material showing conspiracy – Criminal proceedings quashed against bona fide purchaser. [Indian Penal Code, 1860, S.420, 467, 468, 471, 120B; Code of Criminal Procedure, 1973, S.482]

Insolvency – Real estate projects – Project-wise resolution – Homebuyers’ interests – CIRP can proceed project-wise. [Insolvency and Bankruptcy Code, 2016]

Mediclaim reimbursements are independent contractual entitlements and cannot be deducted from compensation awarded under the Motor Vehicles Act.

Satinder Singh Bhasin v. Government of NCT of Delhi: Utilizing company funds for a director’s personal bail deposit violates Section 185, leading to forfeiture and bail cancellation

V Sundar v. Registrar of Companies: Striking off a company’s name for non-compliance is unjustifi ed if material evidence establishes its active operational status.

Transmission of Flats: Post-Probate Scenario

Corporate Governance: Overview and Challenges

Applicability Of Presumptive Taxation To Partners Of A Partnership Firm

Glimpses Of Supreme Court Rulings

Exemption u/s. 11 — Educational trust — Denial of exemption — Form 10B filed manually within prescribed period — Electronic filing made after delay of 2,732 days — Application for condonation of delay rejected — Held by High Court that assessee’s conduct neither informed with lethargy nor indolence — Rejection of application for condonation of delay in electronically filing unsustainable and orders set aside.

Income from Other Sources — S. 56 — Buy-back of shares at a price lower than the fair market value — Buy-back of shares as per section 68 of the Companies Act, 1956 — Extinguishment of shares — Cannot be held as purchase of property or acquisition of capital asset — S. 56 (2) (x) not applicable.

Penalty — Limitation u/s. 275(1)(c) — Penalty u/s. 271E — Acceptance and repayment of deposits in cash in excess of prescribed limit — Assessment order passed on 31/12/2010 with initiation of penalty proceedings — Reference to Additional Commissioner made on 07/06/2011 and penalty order passed on 30/12/2011 — Held by High Court that penalty order barred by limitation — Six months’ limitation period u/s. 275(1)(c) has to be reckoned from date of initiation of penalty proceedings.

Reassessment — New procedure — Time limit for issue of notice u/s. 148 — Exclusion of period for computation of period of limitation — Effect of decision of Supreme Court in case of Ashish Agarwal and Rajeev Bansal — “Surviving period” referred to by Court — Exclusion of time allowed to assessee to respond to initial notice — Held by High Court that Number of days remaining for passing order of issuance of notice would be two days — Period of two days expiring on 10/06/2022 or 27/06/2022 — Notice issued on 27/07/2022 issued much after surviving period — Notice barred by limitation.

Revision — S. 263 — Lack of enquiry and inadequate enquiry — Explanation 2 to section 263 of the Act invoked for verification of documentary evidence regarding the claim of utilization out of accumulations made u/s. 11(2) of the Act — No prior show cause notice issued for invocation of Explanation to section 263 —Assessee furnished details during the assessment proceedings — Enquiry was made and possible view taken — Commissioner cannot re-open the matter u/s. 263 because there was another view or because the Commissioner desires further enquiry.

TDS — Credit for tax deducted — S. 199 — Assessee bank received sale proceeds from auction of borrower’s property under SARFAESI Act — Tax was deducted at source u/s. 194-IA — Property ownership remained with borrower — Sale consideration was not bank’s income — Assessee bank was entitled to credit/refund of TDS from sale proceeds.

Section 143(3), rws 144B – Faceless Assessment – Show Cause notice not granting sufficient time to reply – Violation of principles of natural justice – Standard Operating Procedure dated 03.08.2022 :

Sec 148 – Reassessment – beyond a period of three years – Approval – the specified authority was the authority contemplated by Section 151(ii), and not in Section 151(i) – Defect not a mere procedural irregularity – Approval by a wrong authority – Proviso to Section 151 cannot be read retrospectively

Section 170A- modified return of income- Assessment – Limitation – restricted to the modified return of income or to give effect to the Order of amalgamation and not seek to re-open the entire assessment:

TDS credit cannot be denied merely because corresponding income is not taxable in the hands of the assessee. Rule 37BA which stipulates grant of TDS credit does not mandate corresponding income being offered for tax.

TDS credit deducted during the current year is allowable despite the fact that revenue has been offered for taxation in an earlier year i.e. TDS credit is allowable despite the timing mismatch between the year of recognition of income and year of deduction of tax.

Compensation received from RERA is taxable as Capital Gains and not Income from Other Sources.

Claim for deduction under section 54 made for the first time in return of income filed in response to reassessment notice cannot be denied merely on the ground that such a claim was not made in the original return of income

Proviso to section 68 mandates establishing source of source.

Where AO fails to record satisfaction in the assessment order that the assessee has under-reported his income and/or fails to direct initiation of penalty proceedings, the initiation of penalty under section 270A is bad in law and the proceedings need to be quashed.

Where the cancellation proceedings under section 12AB were initiated by CIT(E) on the basis of reference made by the Assessing Officer under second proviso to section 143(3), CIT(E) was required to provide a copy of such reference to the assessee. In order to cancel registration under Section 12AB, CIT(E) must clearly specify the relevant category of “specified violation” under the Explanation to Section 12AB(4) applicable to the assessee.

Where the assessee earned long-term capital gains from the sale of certain shares and claimed exemption under section 54F, while also incurring long-term capital loss on the sale of other shares and carried forward such loss, such carry forward was allowable since section 54F overrides section 70(3) for the purpose of computation.

In the absence of any adverse finding regarding charitable nature of objects or genuineness of activities, CIT(E) cannot reject registration under section 12AB / 80G on the ground that the charity granted scholarship to Indian students for education abroad which amounted to application of income outside India in violation of section 11(1)(c).

Sec. 68 – Share capital and share premium – Preferential shares issued to holding company – Identity, genuineness and creditworthiness established through ROC records, financial statements and banking trail – Investment reflected in books of investor and compliant with FEMA/RBI regulations – Addition deleted Sec. 14A r.w. Rule 8D – Interest disallowance – Own funds substantially exceeding investments yielding exempt income – Presumption that investments made out of interest-free funds – Disallowance deleted.

Sec. 145 – Method of accounting – Builder and developer consistently following project completion method – AS-7 applicable only to construction contractors – Revenue recognition under AS-9 dependent upon transfer of risks and rewards – Revenue having accepted method in earlier years – Addition by applying percentage completion method resulting in double taxation deleted Sec. 69A r.w.s. 144 – Loose diary seized during search containing receipt entries – Surrender made by director representing gross receipts – No corroborative evidence regarding actual undisclosed income or expenditure – Entire amount could not be taxed – Addition restricted on estimated basis.

Article 12 of India-UK DTAA – Amended definition of royalties in Explanation 6 to section 9(1)(vi) of the Act could not be read into India-UK DTAA unless DTAA language was amended, and hence, service fee paid for uplinking and downloading satellite signals for television broadcasting was not in nature of royalties under India-UK DTAA.

Article 24 of India-Denmark DTAA – Limitation of deduction under Section 94B of Income-tax Act, 1961, in respect of interest paid to non-resident AEs is discriminatory in terms of Article 24 of India-Denmark DTAA

Section 5(2)(a) of the Act – Receipt of salary by a non-resident in an Indian NRE Account for services rendered outside India cannot be taxed on a receipt basis

Geography Is History – Regional to National to Global

From The President

Validity Of Composite SCN For Multiple Financial Years

Recent Decisions in GST

Recent Developments in GST

Tax Relief On Income From Foreign Retirement Funds

Time – A Human Construct or Universal Truth

ICAI and Its Members

AQPAAS

Miscellanea

Regulatory Referencer

30th International Tax and Finance (ITF) Conference

Learning Events At BCAS

Statistically Speaking