| QUERY: | Whether Agreement for sale or Agreement to sale Stamp Duty is payable? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Banking Regulation Act, Bombay Stamp Act, Companies Act |
Section 2(g) of the Bombay Stamp Act, 1958 defines conveyance, which includes:
(i) a conveyance on sale,
(ii) every instruments,
(iii) every decree or final order of any Civil Court
| QUERY: | Please enlighten whether the plot of land given on rent for use by the tenant for storing his stone blocks/cattles rest will be Treated asset or not, for the purpose of Wealth tax? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 2(ea) of Wealth Tax |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Wealth Tax Act |
The plot of land given on rent is an asset u/s. 2(ea) of the Wealth Tax Act, 1957, as the same does not fall under the exception of meaning ‘urban land’. Further, the definition of ‘assets’ excludes only ‘any residential property that has been let out for a minimum period of three hundred days in the previous year.’
| QUERY: | In the course of search under section 132 or survey under section 133A of the Act, entries of cash loans, expenditure and investments are generally found. Can the correctness of the entries be disregarded in computing the total income of the assessee under section 153A who is required to rebut the presumption as to truth of the assets, entries in seized documents raised in section 292C of the Act? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 153A, 292C |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | presumptive taxation, search assessment |
Section 292C deems that when any material is found in premises of a person searched or surveyed, it may be presumed that material belongs to the person, that the contents of such material is true and handwriting in that document is of that person.
| QUERY: | Mr. Champaklal is a practising Advocate. His gross fees for the year ended 31st March, 2009 were Rs. 27,00,000/-. During the year ended 31st March, 2010 the following issues have arisen on which Mr. Champaklal seeks advice from you (a) For academic interest, Mr. Champaklal wants to understand the meaning of ‘interest’ on which tax is required to be deducted at source u/s. 194A (b) Mr. Champaklal has taken a loan of Rs. 2,00,000/- taken by him from his wife for investing in a new car which forms part of his block of fixed assets. The loan carries interest @ 10% p.a. The loan was taken on 1st February, 2008. No interest was paid in the F.Y. 2008-09. As per the term of the loan agreed upon between Mr. Champaklal and his wife, the loan is to be treated at par with a Cumulative Time Deposit and interest is to be actually paid over only on expiry of 3 years. Mr. Champaklal wants to know whether he should account for the interest in his books (he follows cash method of accounting) and if yes, whether tax is required to be deducted at source. Also, if he now accounts for interest for the period 1st February, 2008 to 31st March, 2009 then whether there is any likelihood of it being disallowed on the ground that it is a prior period expenses? (c) Mr. Champaklal purchased three computers, a printer and office furniture from Departmental Store. For this purpose, he utilized a special card issued by the Store to him (as he was a regular customer in the store). The card entitled him to make payment in the same manner as a Credit Card. However Mr. Champaklal has chosen to take credit rather than pay the card dues. He has therefore not paid the dues. The Store has charged interest on the delay in payment. Now, Mr. Champaklal has decided to opt for Direct Debit facility offered by his bank for paying off the Departmental Store card payments. He wants to know how the TDS obligation on the interest paid to the Departmental Store is to be satisfied if the payment is made by direct debit to his bank account. |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194(C), 194A, 194J, 2(28)(a) |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | PAN Card, tax ded |
S. 2(28A) defines – Interest.
“Interest” means interest payable in any manner in respect of any moneys borrowed or debt incurred (including deposit, claim or other similar right or obligation) and includes any service fee or
| QUERY: | Mr. Champaklal seeks further advice from you on behalf of his clients. (a) One of Mr. Champaklal’s clients is a financier and he has asked him whether section 194A would apply to Bill Discounting Charges paid by him to another financier. Mr. Champaklal seeks your advise in the matter (b) The same financier client of Mr. Champaklal also wants to know whether the difference between price and face value of Commercial Paper is to be treated as interest or as discount. Mr. Champaklal seeks your advice in this matter also. (c) Taking a cue from an exporter whose writ petition (in respect of 80HHC matter) had been handled by him. Mr. Champaklal has started the practice of levying interest in his Memo of Fees itself in respect of some of his regular clients who are regularly irregular in payment of his fees. His clients have enquired as to whether they would be liable to deduct tax at source u/s. 194A in respect of the interest charged by him. |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194A, 2(28)(a), 80HHC |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | HUF, tax audit, tax deducted at source |
CBDT Cir.No. 65{F. No. 275/79/TTJ] dt. 2/9/71.
“Where the supplier of goods makes over the usance bill/hundi to his bank which discounts the same and credits the net amount to the supplier’s A/c. straightway without waiting for realization of the bill on due date,
| QUERY: | The Finance Act, 2015 has amended clause (v) of sub section (3) of Sec. 194A w.e.f. June 01, 2015. Accordingly TDS is now required to be deduc-tion by a Co-op Bank from interest payment to its members subject to other provisions. Now, can payment be made by other Co-operative Bank to other Co-operative Society without TDS? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194A |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | co-operative bank, tax deducted at source |
Section 194A(1) of the Income tax Act, 1961 provides
“Any person, not being an Individual or a Hindu Undivided Family, who is re-sponsible for paying to a resident any income by way of interest other than in-come by way of interest on securities shall at any time of credit of such income
| QUERY: | Assessee engaged in imports and/or exports engage services of Clearing and Forwarding (C & F) agents. Payments to such C & F agents typically comprises of following: (a) Reimbursement of freight paid to shipping companies or airlines. (b) Reimbursement of freight on local transportation. (c) Reimbursement of import or export clearing expenses like payments to Port Trust, Airport Authorities of India, miscellaneous charges, etc. (d) Reimbursement of bonded warehousing charges. (e) Reimbursement of Customs duties and Octroi. (f) Reimbursement for Crane and Machinery charges to Port Trust. etc. (g) Agency service charges. (h) Service tax. Whether any tax is liable to be deducted u/s. 194C of the Income-tax Act, 1961 on any of the above payments to C & F agents? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194(C) |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Contractor, reimbursement, tax deducted at source |
In ITO vs. Dr. Willamer Schwable India (P) Ltd. [3 SOT 71 (Del.)], the Tribunal has held that reimbursement of actual expenses where no profit element is involved, is not liable for the TDS. Similarly, it has been held by the Delhi High Court in Handicrafts & Handloom Export Corpn. of India vs. ITO [140 ITR 532]; that the amounts received by an assessee
| QUERY: | Mr. X pays freight charges of Rs. 3,00,000 in a year to ABC Pvt. Ltd, whose business is only to arrange truck owned by different persons. The said companies does not own any truck but acts only as a commission agent. The buyer of goods pays freight charges to the said company and obtain its PAN. Now, whether payer is liable to deduct tax u/s. 194C of the Act while mak-ing payment to the said company, not knowing who is the owner of the truck and whether such person owns more than 10 trucks? If not wheth-er any declaration from the Transport Agent needs to be obtained in terms of amended Sec. 194C w.e.f. June 01, 2015. |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194(C) |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Contractor, freight charges, tax deducted at source |
From the query, it is clear that a payer, is seeking help from the company, for arrangement of trucks from others. The company does not own any truck therefore it is only entitle for commission. Hence, the payer is paying to the company not for carrying out any work.
| QUERY: | A Ltd. is engaged in the business of running a call centre. The company also runs a training centre for people wanting to join call centre. The company has appointed through written contracts various franchisees to run training centres in various parts of the city. As per the terms of the contract, the franchisees collect training fees and after retaining certain amount towards recoupment of their cost and commission, remit balance amount to A Ltd. Is TDS applicable in such case? If so, on what amount and at what rate? How will this be practical since A Ltd. is not directly making any payment to the franchisees? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194H |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | commission, PAN Card, tax deducted at source |
– Theory of Principal and Agent would apply.
– A Ltd. – Principal in agreement with Franchisees
| QUERY: | BIDCO which is a State Industrial Development Corporation grants a 99 year lease and collects a lump sum premium for granting the lease amounting to Rs. 40 crores. Yearly rent is Rs. 1,000/- . Whether section 194I is applicable on the lump sum amount? |
| ANSWER: | Click here to read the full answer of the expert |
| EXPERT: | CA. H. N. Motiwalla |
| SECTION(S): | 194I |
| GENRE: | Taxation (Domestic) |
| CATCH WORDS: | Capital receipts, tax deduc |
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
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