Financial Reporting Dossier

From Published Accounts

Date of Capitalisation of Property, Plant and Equipment

Allied Laws

Part A : Company Law

NBFCs: Scale-Based Regime

Important Amendments by The Finance (No. 2) Act, 2024 – Charitable Trusts

Important Amendments by The Finance (No. 2) Act, 2024 – Capital Gains

Important Amendments by The Finance (No. 2) Act, 2024 – Buy-Back of Shares

Important Amendments by The Finance (No. 2) Act, 2024 – Re-Assessment Procedures

Important Amendments by The Finance (No. 2) Act, 2024 – Block Assessment

Important Amendments By The Finance (No. 2) Act, 2024 – Other Important Amendments

Whether the Order Passed Under Section 139(9) Invalidating the Return Is Appealable?

Glimpses of Supreme Court Rulings

Business expenditure — Capital or revenue expenditure — Software development expenses — Product abandoned on becoming obsolete due to development in technology — No enduring benefit accrued to the Assessee — Expenditure incurred revenue in nature and allowable

Charitable purpose — Exemption — Denial of exemption by AO on grounds that assessee did not furnish proper information to Charity Commissioner, that there was shortfall in provision for indigent patients fund, that assessee had generated huge profits, that hospital did not serve poor and underprivileged class, and assessee paid remuneration to two trustees — Grant of exemption by appellate authorities on finding that orders for earlier assessment years not set aside in any manner or over-ruled by court — No infirmity in order of Tribunal granting exemption

Non-resident — Double taxation avoidance — Income deemed to accrue or arise in India — Royalty — Meaning of — Difference between transfer of copyright and right to copyrighted article — Provision of customer relationship management services by resident of Singapore — Fees received not royalty within meaning of Act — Not also taxable in India under DTAA between Singapore and India.

Reassessment — Change of law — Jurisdiction — Notice issued under existing law and reassessment order passed and becoming final — Issue of notice u/s. 148A pursuant to subsequent direction of Supreme Court in UOI vs. Ashish Agarwal — Without jurisdiction and therefore quashed

Reassessment — Notice — Limitation — New procedure — Extension of period of limitation by 2020 Act — Supreme Court ruling in UOI vs. Ashish Agarwal [2022] 444 ITR1 (SC) — Effect — Notice for reassessment u/s. 148 after 31st March, 2021 for A.Y. 2015–16 — Extension of period not applicable where limitation had already expired — Notice does not relate back to original date — 2020 Act would not extend limitation

Reassessment — New procedure — Notice — Reason to believe — Necessity of live link between belief and material available — Information from “insight” portal that assessee had transacted with mutual fund found to be involved in scam — No nexus between belief and material — AO not clear whether assessee had claimed loss or dividend in mutual fund — Non-application of mind — Notices and order set aside.

Reassessment — Notice after three years — Limitation — Extension of limitation period under 2020 Act — Notice for A.Y. 2016–17 issued after April 2021 — Alleged escapement of income less than R50 lakhs — Notice barred by limitation

Section 37: Payments under a Memorandum of Settlement with the trade union — Expenditure not covered by Section 30 to Section 36, and expenditure made for purposes of business shall be allowed under Section 37(1) of the Act.: Section 40A(9) of the Act.

Section 22 vis-à-vis 28 — Income from house property” or “business income” — Rule of consistency — Applicable to tax proceeding

Section 69C — Bogus Purchase — Genuineness of purchase transaction

Mistake in tax calculation whereby tax was calculated at slab rate instead of rate mentioned in section 115BBE is a mistake which can be rectified under section 154 and therefore provisions of section 263 cannot be invoked in such a scenario

It is not necessary that the consideration of the original asset be invested in new residential house. Construction of new house can commence before the date of transfer of original asset. Where return of income is filed under section 139(4), investment in new residential house till the date of filing of such return qualifies for deduction under section 54

Section 250(6) of the Act obligates the CIT(A) to state points for determination in appeal before him, the decision thereon and the reasons for determination. CIT(A) has no power to dismiss appeal of assessee on account of non-prosecution and without deciding on the merits of the case

Sec. 68 r.w.s. 148: Where nothing was brought on record by the Assessing Officer to substantiate that assessee had taken accommodation entry, reopening notice was to be quashed

Sec. 153D: Approval u/s 153D is a mandatory and not procedural requirement and mechanical approval without application of mind by the approving authority would vitiate assessment orders

S. 45 — Revaluation of asset held by partnership firm and crediting amount of said revaluation to partners’ capital account is transfer taxable section45(4) and the fair market value fixed by stamp authorities should be taken as deemed value of consideration for purpose of section 48

S. 12A / 12AB — Where the show cause notice was issued on 6th October, 2022, CIT(E) could not have cancelled registration retrospectively with effect from 1st April, 2014 in so far as section 12AA /12AB do not provide for cancellation of registration with retrospective effect

S. 12A, 13 — CIT(E) cannot deny registration under section 12A by invoking section 13(1)(b) since section 13 can be invoked only at the time of framing assessment and not at the time of grant of registration

Article 13(4) of India-Mauritius DTAA — on facts, assessee was not a conduit company and hence, qualified for exemption of capital gains under Article 13(4) of India-Mauritius DTAA

Faceless, Fair and Friendly

BCAS President CA Anand Bathiya’s Message for the Month of September 2024

Valuations of Corporate Guarantee

Goods and Services Tax

Recent Developments in GST

Digital Tax War and Equalisation Levy

Qualify to Adore a Position

MISCELLANEA

Regulatory Referencer

Society News

Contingent Liabilities and MRL – Management Representation Letter

Interesting Productivity Tools at the Workplace and For Personal Well-Being