Opinion Of Eminent Legal Luminaries On Controversial Issues

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Can Jain Being Of Minority Community Continue In The Status Of HUF?

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QUERY: As per F. No. 4-2/2014 –NCM., G.O.I. Ministry of Minority Affairs, dated February 6, 2014, Jain Community are covered under section 2(c) of National Commission of Minority Act 1992 as minority. So, can Jain continue with HUF under the Income-tax Act?
ANSWER: Click here to read the full answer of the expert
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There is no restriction on Jains to be assessed under the status of “HUF” under the Direct Tax laws, even though Jain community has been declared as a minority community.

No separate definition of the expression HUF has been attempted in any of the Direct Tax laws because the term has a definite connotation under the Hindu Law.

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Can RTI Be Invoked For Knowing Reason For Scrutiny Notice?

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QUERY: Can the assessee call for information under R.T.I. Act for his case selected on manual basis i.e. the reason for selection of his case for detailed scrutiny?
ANSWER: Click here to read the full answer of the expert
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No, as per the Guidelines for Income tax scrutiny for financial year 2010/11 i.e. assessment year 2011/12 published on September 27, 2010, it has been clarified that:

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What Is The Law On Impartible Estate Of HUF Property?

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QUERY: What is the Law laid down by Hon. Supreme Court in respect of impartible estate of HUF property?
ANSWER: Click here to read the full answer of the expert
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Section 6 of the Hindu Succession Act, 1956 as it stood before its substitution by the Hindu Succession (Amendment) Act, 2005 w. e. f. September 9, 2005 is reproduced as under:

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What Is The Value Of Ornaments That Can Be Taken Outside India?

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QUERY: My wife expired in 2006, left certain gold ornaments & jewellery for my son, who is Indian Origin, U. S. Citizen. Please inform how much worth ornaments can be taken outside India?
ANSWER: Click here to read the full answer of the expert
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From the fact, it is clear that querist’s son is Indian origin, U. S. Citizen, who has inherited certain gold ornaments and jewellery from his mother.

As per sub-regulation (2) of regulation 4 of Foreign Exchange Management (Remittance of Assets) Regulations, 2000, a Non-Resident Indian (NRI) / Person of Indian Origin (PIO), may remit an amount,

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Is It Permissible Under FEMA To Set Off Foreign Receipts And Payments?

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QUERY: An Indian Company X which is situated in the Special Economic Zone, has entered into transactions during the financial year 2013-14 with a foreign Company Y in relation to the purchase and sale of goods or services. Co. X wishes to set off (or netting off) the export receipts against the amounts payable for imports. Whether the setting off (or netting off) of export receipts against amounts payable for imports by Co. X is permissible as per the Indian Exchange Control Regulations?
ANSWER: Click here to read the full answer of the expert
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As per section 7 of FEMA 1999, exporters have to receive full value of export of goods or services:

Any arrangement involving adjustment of value of goods imported into India against value of goods exported from India, shall require prior approval of the Reserve Bank of India

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Is It Necessary For A Charitable Trust To Register Itself Under FCRA?

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QUERY: Can a charitable trust registered under the Income-tax, 1961 having exemption under section 11 of the Act; receive donation from NRI staying outside India; without being getting registered or prior permission under Foreign Contribution Regulation Act, (FCRA)?
ANSWER: Click here to read the full answer of the expert
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The main object of FCRA, 2010 is to consolidate the law to regulate the acceptance and utilization of foreign contribution or foreign hospitality by certain individuals or associations or companies and to prohibit acceptance and utilization of foreign contribution or foreign hospitality for any activities detrimental to the national interest and for matters connected therewith or incidental thereto.

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Whether In Accrual Basis CSR Expenses Be Provided On Accrual Basis?

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QUERY: Whether it is necessary to provide (Corporate Social Responsibility) CSR expenses in the books of account on accrual basis, considering AS–29 “Provisions, Contingent Liabilities and Contingent Assets”?
ANSWER: Click here to read the full answer of the expert
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Section 128 of the Companies Act, 2013 mandates every company to maintain its books of account on accrual basis. As per AS-1 “Disclosure of Accounting Policies” on accrual basis, cost and revenue are accrued that is recognised as they are incurred or earned and recorded in the financial statements of the periods to which they relate:

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What Company Should Do For Claiming Higher Depreciation Under The Companies Act?

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QUERY: As per Schedule II of the Companies Act, 2013 the useful life of Plant and Machinery and in generation of power is 40 years, but as per the company, useful life is much less. What the company should do?
ANSWER: Click here to read the full answer of the expert
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Note no. 3(i) of Part ‘A’ of Schedule II of the Act, provides as under:

“The useful life of an asset shall not be longer than the useful life specified in Part ‘C’ and the residual value of an asset shall not be more than five per cent of the original cost of the asset.

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What Is The Reporting Responsibility Of The Auditor Of Company Has Not Complied With Law Of Deposit?

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QUERY: What is the reporting responsibility of the auditor if company is not complying the law of deposit under new Companies Act, 2013?
ANSWER: Click here to read the full answer of the expert
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The MCA has issued Companies (Auditor’s Report) Order, 2015 and notified on April 10, 2015 and it is applicable since then.

Clause (v) of the said report requires an auditor to report:

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Can Retiring Auditor Be Reappointed?

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QUERY: A member has sent a special notice under section 190(I) of the Companies Act, 1956 well within clear 14 days proposing a name of Auditor to be appointed for the current year in place of retiring auditor with a draft resolution. The company has not taken any action on the notice and filed it intimating that no action can be taken on the notice and referred to section 188 of the Act not been complied with. Whether retiring auditor can accept the appointment as auditor of the company and that the retiring auditor was well aware of the stand of the company not taking any action on the special notice served by a member of the company.
ANSWER: Click here to read the full answer of the expert
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First of all, a notice sent by a member under section. 190 of the Companies Act was not proper. A special notice under section 225 of the Companies Act ought to have been served for a resolution that an ensuing general meeting a person other than retiring auditor should be appointed.

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Credit: Several of the queries and answers are reproduced with permission from the AIFTP Journal. We thank AIFTP for generously allowing us to host their research material.
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