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Showing posts from September, 2012

“INTEREST ON BORROWED CAPITAL IS RESTRICTED TO RS. 30,000/- IF HOUSE CONSTRUCTION IS NOT COMPLETED WITHIN A PERIOD OF 3 YEARS”

TAX TALK-24.09.2012-THE HITAVADA
TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant) “INTEREST ON BORROWED CAPITAL IS RESTRICTED TO RS. 30,000/- IF HOUSE CONSTRUCTION IS NOT COMPLETED WITHIN A PERIOD OF 3 YEARS” Query 1]
I have booked a house in Bhilai, under the scheme of Chattisgarh state Housing Board in the year December 2008. The house was financed partly from my company in the year 2009 in March and subsequently part from the Bank started in May-2010. Now even after elapsing of 3 years, the Housing Board is unable to provide me the booked house. It is still under construction and installments are timely paid as per agreement/progress. The issue seems to be between contractor and the housing board. Now the CG Housing board has once again assured that they will deliver the completed houses to all allottees by 2013-July. Although there might be possibility of time overrun due to conditions beyond our control. Now my queries are 1.Whether there is any restriction in the time perio…

“WHETHER RETURN FILING MANDATORY FOR CHARITABLE TRUST/ SCHOOL & COLLEGES?”

TAX TALK-17.09.2012-THE HITAVADA
TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant) “WHETHER RETURN FILING MANDATORY FOR CHARITABLE TRUST/ SCHOOL & COLLEGES?” Query 1]
I have a few queries regarding the society and schools. Kindly spare some time to answer them: 1.Whether the charitable societies registered u/s 12A of the I.T.Act-1961 are required to file tax return even if their income is below the exemption limit? 2.Which I.T. Return Form is to be used for such societies? Form No. 5 or Form No.7? 3.When is audit required to be done in case of societies for I.T. Purposes? 4.Whether schools and colleges are required to file income tax return even if their income is below the exemption limit? Which return form is required in their case? Form No. 5 or Form No.7? 5.Are schools and colleges required to get themselves registered u/s 12A of I.T. Act? [jyoti_ag@sify.com] Opinion: 1.If the total income of the charitable trust (without claiming deduction u/s 11, 12 & 13A) exceeds the max…

Commissioner of Income-tax v. B.C.Srinivasa Setty [1981] 128 ITR 294 (SC)

[1981] 128 ITR 294 (SC)

SUPREME COURT OF INDIA

Commissioner of Income-tax

v.

B. C. Srinivasa Setty

P.N. BHAGWATI, V.D. TULZAPURKAR AND R.S. PATHAK, JJ.

CIVIL APPEAL NOS. 1146 OF 1975, 1378 OF 1976 AND 926 OF 1973

FEBRUARY 19, 1981



JUDGMENT



Pathak J. —The question in these appeals is whether the transfer of the goodwill of a newly commenced business can give rise to a capital gain taxable under section 45, IT Act, 1961.

The assessee, a registered firm, manufactured and sold agarbattis. Clause (13) of the instrument of partnership executed on the 28th July, 1954, showed that the goodwill of the firm had not been valued, and the valuation would be made on dissolution of the partnership. The period of the partnership was extended by an instrument dated 31st March, 1964, and it contained a similar clause (13). Subsequently, the assessee-firm was dissolved by deed dated 31st December, 1965. At the time of dissolution, it seems, the goodwill of the firm was valued at Rs. 1,50,000. A new partnership b…

“PROPERTY GIFTED TO WIFE & INCOME FROM PAYING GUEST SERVICES”

TAX TALK-10.09.2012-THE HITAVADA -

TAX TALK
BY CA. NARESH JAKHOTIA (Chartered Accountant) “PROPERTY GIFTED TO WIFE & INCOME FROM PAYING GUEST SERVICES” Query 1]
Mr. A proposes to sell his independent house and buy two flats- one in his own name and the other in joint name with Mr. B. There is no problem if the sale and purchase considerations are equal. But if in such transactions, the sales proceeds (X) are more than the investment in the flats (Y), please let me have your advices on the following: 1.What expenses would be eligible to be classified as investments to constitute the value of Y and what expenses are deductible from X? 2.What would be the options with Mr. A as regards payment of Capital gains tax? 3.In case, Mr. A decides to pay Tax on Capital Gains in the Financial Year in which the income accrues, which I am told would be @ 10% on (X minus Y), what treatment will be given to the amount (Z = X minus Y) in subsequent Financial Years if the Investments are made in Bank …

“CONSTRUCTION OF FIRST FLOOR ON MY EXISTING RESIDENTIAL HOUSE PROPERTY & LTCG EXEMPTION”

TAX TALK-03.09.2012-THE HITAVADA TAX TALK BY CA. NARESH JAKHOTIA (Chartered Accountant) “CONSTRUCTION OF FIRST FLOOR ON MY EXISTING RESIDENTIAL HOUSE PROPERTY & LTCG EXEMPTION”
Query 1] What is the basic difference between Dividends received from Companies & Co-operative Bank with respect to taxability in the hands of recipient under Income Tax Act? Dividend from companies is exempt in the hands of recipient. Whether Dividend received from Co-operative Banks is also exempt in the hands of recipient under Income Tax Act? [rakeshngp76@gmail.com] Opinion 1.The Domestic Company declaring or paying the dividend (whether interim or final) is liable to pay the Dividend Distribution Tax (DDT) u/s 115-O of the Income Tax Act-1961. All the Dividend on which DDT has been paid by the company is tax free in the hands of recipient u/s 10(34). 2.Co-operative bank/ society are not required to pay any DDT & the income there from is also not tax free in the hands of receiver.
Query 2] I had sold …