. . CA. H. N. Motiwalla – Page 3 – Tax Questions and Answers

expert: CA. H. N. Motiwalla

  • Deduction at source – Non-resident -TDS on purchase of property by NRI

    As per Regulation 6 of Foreign Exchange Management (Remittance of Assets) (Amendment) Regulations 2014, dated October 31, 2014 the NRI / POI has been permitted to remit not exceeding US$ 2.5 lakhs per financial year of balance held in NRO accounts or sale proceeds of assets or sale proceeds of assets acquired in India by way of inheritance / legacy without prior permission of RBI. If the remittance is in relation to sale proceeds of immovable property the condition is that the property or deposit cumulatively must have been held for a period of ten years.

  • Deduction at source-Immoveable property -TCS on Immovable Property

    Section 194-1A of the Act provides that if consideration for transfer of an immovable property is Rs. 50/- lakh or above, a person being a transferee (purchaser) is responsible for paying to a resident transferor (seller) any sum by way of consideration for transfer of any immovable property (other than agricultural land) shall at the time of credit of such sum to the account of the transferor (seller) or at the time of payment of such sum in cash or by issue of a cheque or drafts or by any mode, whichever is earlier deduct an amount equal to @ 1% of such sum as income tax thereon.

  • Deduction at source – Rent -Lease premium for grant of lease

    In ITO (TDS) v. Navi Mumbai SEZ (P) Ltd. [38 Taxmann.com 218] the Mumbai Tribunal has taken a view that lease premium paid by the assessee to BIDCO for acquiring leasehold land for a period of 60 years in order to develop a SEZ amounted to capital expenditure which did not fall within meaning of rent under section 194-I of the Act.

  • Private company – Liability of directors -Applicability of section 179 of the I.T. Act.

    That the Department acquired or get jurisdiction to proceed against the directors of the private limited company, only after it had failed to recover the dues from the company, it was a condition precedent for the Assessing Officer to exercise jurisdiction under section 179(1) against the director of the company. The jurisdictional requirement was not satisfied by a mere statement in the order that recovery proceedings had been conducted against the defaulting company but it had failed to recover its dues. Such a statement should be supported by mentioning briefly the types of efforts made and the results. The notice under section 179(1) did not indicate or give any particulars in respect of the steps taken by the Department to recover the tax dues of the defaulting company and failure thereof.

  • Partition – Assessment – Hindu undivided family -Mandatory recording of Partition u/s. 171

    As per section 153(1) of the Act, time limit for completion of assessment is December 31, 2019 for assessment year 2017-18. So before this date the Assessing Officer should investigate the claim of partition and give finding. However, according to author, partition should have claimed in the assessment year 2016-17, as partition was on March 31, 2016.

  • Executors – Income -Return of Deceased

    Section 159 of the Act is meant to enable the revenue to make an assessment on legal representative in respect of income which accrued to or was received by the deceased till his death.

  • Assessment – Income of any other person – Search – S.133

    Section 153B provides time limit for completion of assessment under section 153A. Time limit for completion of assessment for all seven years i.e. preceding six years and the year of search, is two years from the end of the financial year in which last of the authorisation for search under section 132 or for requisition under section 132A executed.

  • Reassessment -Notice to non-existing company is invalid

    BDR Builders and Developers Pvt. Ltd. v. ACIT [397 ITR 529], Delhi High Court has held that notice issued after order of the court approving amalgamation in name of non-existent transferred company is invalid. On the same logic notice issued in the name of erstwhile company is also invalid. Therefore contention of the LLP is sustainable

  • Reassessment – Reopening of assessment – S. 147, 148

    Section 149 provides that no notice under section 148 shall be issued for the relevant assessment year – i) If four years have elapsed from the end of the relevant assessment year. ii) If four years but not less than six years, have elapsed from the end of the relevant assessment year unless income chargeable to tax which has escaped assessment amount to or likely to amount to one lakh rupees or more for that year.

  • Reassessment – Share application money -Chargeability of share application money

    The broad scheme of the Act is to charge all income to tax but only in the hands of the same person. So share application money received by Private Limited Company has to be taxed in whose hands? The Supreme Court in CIT v. Steller Investment Ltd. [251 ITR 263] has given answer by stating that even if it be assumed that the subscribers to the increased capital are not genuine, under no circumstances could the amount of share capital be regarded as undisclosed income in the hands of the company.