Querry 10
Dear all
As Per the Section 3(iv)(c) of the Companies Act, 1956:
“The Public Company is a Company which is a private Company, which is a subsidiary of a Company of a Company which is not a Private Company”
The question arises that when the Private Company becomes the Subsidiary (or wholly owned subsidiary) of a Public Company:
1 Should the Private Limited Company has to increase its Paid- up capital from 1 lakh to 5 lakh as required for a Limited Company
2 Should the Private Limited Company has to increase its number of members from 2 to 7 as required for a Limited Company
3 Should the Private Limited Company has to increase number of directors from 2 to 3 as required for a Limited Company
SANDIP KUMAR KEJRIWAL, FCSCOMPANY SECRETARIES# 506, CENTRE POINT21 HEMANTA BASU SARANI(OPP GREAT EASTERN HOTEL)KOLKATA 700 001
‘_________________________
Ans.1 To Querry 10
Dear All,
It is not required that the subsidiary company should have 3 directors or 7 members or Rs. 5 lacs paid up share capital but its status is as of public limited company and for all other purposes where certain restrictions put on public limited company such as provisions of section 81 (1A)etc. that restrictions will also applicable to such subsidiary companies
‘________________________
Ans.2 To Querry 10
Hi Sandeep,
All three points mentioned in ur mail are not applicable to a pvt co whichis a subsidiary of a public company. The status of PUBLIC co is only toattract some of the provisions of Cos Act, 1956 and basics are not requiredto be followed.
this is a kind of deeming clause.
Regards,CS Aparna SinghCompany SecretarySanvijay Rolling & Engineering LtdNagpurM +91 93707 66361
Ans.3 To Querry 10
The structure of the company need not be changed by either increasing the size of the Authorised capital or by increasing the number of Directors consequent upon the company becoming a subsidiary of a public ltd company.By way of good secretarial practice once the company gets affected by Section 3(iv)(c),the Board should make a note of this event and record that the company has become a public company for all intents and purposes of law.The company will have to ensure all compliances as is expected of a public company hereonwards after becoming a subsidiary.If the company so desires,by choice it can make amendments to its Articles to withdraw the restrictions as regards number of members,free transferability of shares etc.This is however voluntary.you may also refer to the views of Dr Chandratre on this in his Book"company Law with secretarial practice page no 216(13thEdition).
regards
kalidas
Ans.4 To Querry 10
Dear Sandip
Above all this the company will have to remove the word "PRIVATE LIMITED" and will only use the word "LIMITED".
WITH REGDSCA Nilesh Maradia M: 98337 10601
Ans.5 To Querry 10
Dear all,
Readers are requested to refer to page no.109 (explanatory notes to Section 3) of “A. Ramaiya’s Guide to the Companies Act – 16th edition reprint 2006” which reads as follows:-
Private Company which is subsidiary of public company (Sub-section (1)(iv)(c) of Section 3:
In respect of several sections of the Act where a private company is exempted, it is provided that the exemption will apply only in the case of private companies which are not subsidiaries of public companies. The reason for this is that a private company which is subsidiary of a public company, is throughout in the Act put in the same position as a public company. For, where a private company is subsidiary of a public holding company, it is controlled by the latter, and treated as having the chacteristics of the holding company itself, enjoying the same privileges and rights and subject to the same restrictions, duties and liabilities. Its interests are the interests of the holding company and its acts are the acts of the holding company. Such a company is now statutorily declared as a public company for all purposes under the Act in view of section 3 (iv)(c).
In view of the above clarifications, private company, which is a subsidiary of a public company, is a public company for all practical purposes and are to follow the provisions applicable to a public company.
In other words, the number of members has to be increased to 7, the number of board of directors have to be increased to 3 and the paid-up capital has to be increased to Rs.5 lakhs.
Besides, such companies should also remove the resctrictive clauses from its Articles of Association, which are applicable to only private companies, refer Sec. 27(3) of the Act.
If others have different views/opinions, I invite them to clarify with examples/Department of Corporate Affairs’ notifications/clarifications, if any.
Regards, K. Krishnamoorthy
Tuesday, August 11, 2009
Monday, August 10, 2009
Rates of Gold and Silver for Wealth Tax valuation Purpose along with valuation rules
Rates of Gold and Silver for Wealth Tax valuation Purpose along with valuation rules
Valuation of Jewellery
Jewelry Includes:
Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones, and whether or not worked or sewn into any wearing apparel.
Precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel.
In support of the valuation of jewellery, the prescribed form to be attached with the return is:
Where the value of the jewellery on the valuation date is upto Rs.5 lakhs, a statement in Form No. 0-8A, a prescribed by rule 13(c), signed by the assessee, or
Where the value of the jewellery on the valuation date exceeds Rs.5 lakhs, a report of Registered Valuer in Form No.0-8, as prescribed by rule 8D.
The report can be the basis for arriving at the valuation for 4 subsequent years. All that is needed is to substitute the value of gold, silver or any alloy of the base year with that of the relevant year. Again, adjustment for purchases and sales made during the relevant year will have to be carried out.
Rates of Gold and Silver for Wealth Tax valuation Purpose
Assessment
Year
Relevant
Valuation
Date
Std. Gold Rate
(24 Carrat for 10 gms
i.e. 0.87 tola.)
Silver Rate
(999 touch for 1 kg.
i.e. 85.734 tola)
1981.1982
01/04/1981
1670
2715
1991.1992
31/03/1991
3466
6646
1992.1993
31/03/1992
4334
8040
1993.1994
31/03/1993
4140
5489
1994.1995
31/03/1994
4598
7142
1995.1996
31/03/1995
4680
6335
1996.1997
31/03/1996
5160
7346
1997.1998
31/03/1997
4725
7345
1998.1999
31/03/1998
4045
8560
1999.2000
31/03/1999
4235
7615
2000.2001
31/03/2000
4355
7675
2001.2002
31/03/2001
4250
7200
2002.2003
31/03/2002
5010
7895
2003.2004
31/03/2003
5310
7695
2004.2005
31/03/2004
6081
11600
2005.2006
31/03/2005
6150
10500
2006.2007
31/03/2006
8560
16800
2007.2008
31/03/2007
9510
19500
2008.2009
31/03/2008
12280
23350
2009-2010
31/03/2009
15120 (Mumbai)
22230
Valuation of Jewellery
Jewelry Includes:
Ornaments made of gold, silver, platinum or any other precious metal or any alloy containing one or more of such precious metals, whether or not containing any precious or semi-precious stones, and whether or not worked or sewn into any wearing apparel.
Precious or semi-precious stones, whether or not set in any furniture, utensils or other article or worked or sewn into any wearing apparel.
In support of the valuation of jewellery, the prescribed form to be attached with the return is:
Where the value of the jewellery on the valuation date is upto Rs.5 lakhs, a statement in Form No. 0-8A, a prescribed by rule 13(c), signed by the assessee, or
Where the value of the jewellery on the valuation date exceeds Rs.5 lakhs, a report of Registered Valuer in Form No.0-8, as prescribed by rule 8D.
The report can be the basis for arriving at the valuation for 4 subsequent years. All that is needed is to substitute the value of gold, silver or any alloy of the base year with that of the relevant year. Again, adjustment for purchases and sales made during the relevant year will have to be carried out.
Rates of Gold and Silver for Wealth Tax valuation Purpose
Assessment
Year
Relevant
Valuation
Date
Std. Gold Rate
(24 Carrat for 10 gms
i.e. 0.87 tola.)
Silver Rate
(999 touch for 1 kg.
i.e. 85.734 tola)
1981.1982
01/04/1981
1670
2715
1991.1992
31/03/1991
3466
6646
1992.1993
31/03/1992
4334
8040
1993.1994
31/03/1993
4140
5489
1994.1995
31/03/1994
4598
7142
1995.1996
31/03/1995
4680
6335
1996.1997
31/03/1996
5160
7346
1997.1998
31/03/1997
4725
7345
1998.1999
31/03/1998
4045
8560
1999.2000
31/03/1999
4235
7615
2000.2001
31/03/2000
4355
7675
2001.2002
31/03/2001
4250
7200
2002.2003
31/03/2002
5010
7895
2003.2004
31/03/2003
5310
7695
2004.2005
31/03/2004
6081
11600
2005.2006
31/03/2005
6150
10500
2006.2007
31/03/2006
8560
16800
2007.2008
31/03/2007
9510
19500
2008.2009
31/03/2008
12280
23350
2009-2010
31/03/2009
15120 (Mumbai)
22230
Transportation of Goods by Road in a goods carriage
QUERRY 8
Dear Seniors/Freinds,
Transportation of Goods by Road in a goods carriage is taxable under the head GTA service in Service Tax laws.
But when the services of any transport contractor is used for transporation
of raw materials/finished goods within the factory premises(by means of truck/dumpers), whether this service is taxable under service tax under the head GTA. If not, under which head in service tax, the same will be taxable?
Whether the service receiver will be entitled to take Cenvat credit of the same in above case as transporter doesn't issue any consignment note for the
same as the goods doesn't move outside the factory premises?
Kindly request to clarify the matter.
Best Regards
CA Dipak TodaniChartered Accountants53, N S B Road,RaniganjMob No. 09333847437
REPLY TO QUERRY 8
Dear Deepak,
Please refer to your query below.
Taxable event towards charging service tax under GTA category is a)Transportation of Goods by Road in a goods carriage and b) such transportersshould issue consignment note. Hence, both these conditions arepre-requirement for taxability.
The concept is to bring organised transport sector into taxability and notthe driver's with one or two trucks.
As regards activity involving movement of raw materials/finished goodswithin factory premises is concerned, same may appropriate fall under "CargoHandling Service". However, in such event liability of Service tax would beon provider of service.
Trust above clarification would meet your requirement.
Regards
REPLY TO QUERRY 8
Dear Friend,
I think that inward transportation service is taxable as GTA and service tax paid in this regard is also cenvatable subject to Rule 3 of CCR,2004.
With Regards,
Vinod.
Dear Seniors/Freinds,
Transportation of Goods by Road in a goods carriage is taxable under the head GTA service in Service Tax laws.
But when the services of any transport contractor is used for transporation
of raw materials/finished goods within the factory premises(by means of truck/dumpers), whether this service is taxable under service tax under the head GTA. If not, under which head in service tax, the same will be taxable?
Whether the service receiver will be entitled to take Cenvat credit of the same in above case as transporter doesn't issue any consignment note for the
same as the goods doesn't move outside the factory premises?
Kindly request to clarify the matter.
Best Regards
CA Dipak TodaniChartered Accountants53, N S B Road,RaniganjMob No. 09333847437
REPLY TO QUERRY 8
Dear Deepak,
Please refer to your query below.
Taxable event towards charging service tax under GTA category is a)Transportation of Goods by Road in a goods carriage and b) such transportersshould issue consignment note. Hence, both these conditions arepre-requirement for taxability.
The concept is to bring organised transport sector into taxability and notthe driver's with one or two trucks.
As regards activity involving movement of raw materials/finished goodswithin factory premises is concerned, same may appropriate fall under "CargoHandling Service". However, in such event liability of Service tax would beon provider of service.
Trust above clarification would meet your requirement.
Regards
REPLY TO QUERRY 8
Dear Friend,
I think that inward transportation service is taxable as GTA and service tax paid in this regard is also cenvatable subject to Rule 3 of CCR,2004.
With Regards,
Vinod.
Criteria for allocation of Statutory Auditors of RRBs - (10-08-2009)
Criteria for allocation of Statutory Auditors of RRBs - (10-08-2009)
I New firms to be empanelled from the list of audit firms whose Chartered Accountants should have Diploma in Information and System Accounting (DISA) qualification.
II Selection for new audit firms to be made only from category III and from category IV SP upto 20% of the total requirement in respect of vacancies.
III Re-appointment of on-going existing audit firms as SCA and SBA if they are in the list of ICAI.
IV Partnership firms having a minimum of two Chartered Accountants as partners, of whom at least one should be a full time partner, and the firm or at least one of the partners having a minimum of 5 years experience of bank audit.
V Audit firms that have served as SCA in one RRB consecutively for 3 years to be rested for two years.
VI Audit firms that have served as SBA (Statutory Branch Auditor) in one RRB consecutively for 4 years to be rested for two years.
VII Audit firms having experience of bank audit not less than 5 years to be considered.
VIII A panel of 2 firms as stand-by for SCA and 2 firms as stand-by for SBA of each of the RRBs is being prepared and provided to RRBs after GOI approval.
IX Sole proprietorship firms to be considered as SBA , to the extent of 20% of the total requirement.
I New firms to be empanelled from the list of audit firms whose Chartered Accountants should have Diploma in Information and System Accounting (DISA) qualification.
II Selection for new audit firms to be made only from category III and from category IV SP upto 20% of the total requirement in respect of vacancies.
III Re-appointment of on-going existing audit firms as SCA and SBA if they are in the list of ICAI.
IV Partnership firms having a minimum of two Chartered Accountants as partners, of whom at least one should be a full time partner, and the firm or at least one of the partners having a minimum of 5 years experience of bank audit.
V Audit firms that have served as SCA in one RRB consecutively for 3 years to be rested for two years.
VI Audit firms that have served as SBA (Statutory Branch Auditor) in one RRB consecutively for 4 years to be rested for two years.
VII Audit firms having experience of bank audit not less than 5 years to be considered.
VIII A panel of 2 firms as stand-by for SCA and 2 firms as stand-by for SBA of each of the RRBs is being prepared and provided to RRBs after GOI approval.
IX Sole proprietorship firms to be considered as SBA , to the extent of 20% of the total requirement.
Sunday, August 9, 2009
Representation by BCA to FM on difficulties being faced/likely to be faced by Assessees while filing Return of Income
Re: Hardships and Practical Difficulties being faced/likely to be faced by Assessees while filing the Return of Income for A.Y.2009-10, in view of directions contained in CBDT Circular No.03/2009 Dated 21.05.2009
We refer to the CBDT Circular No. 03/2009 dated 21.05.2009 in connection with the filing of the Income Tax Returns for A.Y. 2009-2010.
We appreciate the efforts made by CBDT with regards to e-filing of the Returns which has got desired results.
However, your honour will appreciate that an assessee is concerned primarily with proof of filing the Income Tax Return with the Department. The acknowledgement bearing the stamp of Income Tax Office is very much preserved and used by the assessees for various purposes including compliances under Income Tax Act, obtaining Bank loan, obtaining Visa/Passport, registration with various government authorities etc.
Under the present scheme, the acknowledgement form i.e., Form ITR-V was required to be signed by assessee either digitally or manually. In case the return is furnished with digital signature, the date of uploading the return electronically as mentioned in ITR-V is treated as date of filing of the Return. Same position continues even for filing of return for A.Y. 2009-2010. So long as the assessee has uploaded the return with digital signature, there is no problem whatsoever. However, large number of assessees [especially, non-corporate assessees] do not keep/possess digital signatures for various genuine practical reasons. Therefore, they are not covered by this procedure.
In case the return is uploaded without a digital signature, in the last year [i.e. Asst. Year 2008-2009], the assessee was required to furnish the acknowledgement form ITR-V duly signed with the Assessing Officer having jurisdiction over his case within 15 days from the date of uploading the return electronically. This enabled assessees to get an acknowledgement from Income Tax Department for having furnished ITR-V with the concerned officer having the jurisdiction. If the physical acknowledgement is dated within 15 days from the date of furnishing the return electronically, the return is deemed to have been furnished on the date on which it was uploaded and date of acknowledgement No. mentioned in ITR-V was treated as the date of filing the return.
However, from the Asst. Year 2009-10, in view of the above referred circular, the position has been drastically changed and made difficult. Those assessees furnishing the returns without digital signature are facing and are also likely to continue to face unintended difficulties and hardships for the following reasons:
(1) The ITR-V duly signed by the assessee has to be furnished by ordinary post to Department, Centralised Processing Centre, Post Box No.1, Electronic City Post Office, Bangalore – 560 100, Karnataka within 30 days after date of uploading the data electronically. The assessee may not have in his possession any acknowledgement as the ITR-V is to be sent by only Ordinary Post. Unfortunately, no other mode of sending the same is feasible under the new system and hence, the assessees will have to rely only on the efficiency of the postal department. If such ITR-V does not reach the CPC at Bangalore within the specified period of 30 days, the return of income electronically transmitted by the assessee will become automatically invalid.
(2) Under the new system, the assessee gets to know about the fact and date of receipt of such ITR-V by the CPC at Bangalore only when he receives the intimation by E-Mail to that effect from the CPC and till then, uncertainty continues and the assessee is effectively helpless to do anything in that regard.
(3) All the assessees do not have an e-mail ID to receive the e-mail in due course from CPC, Income Tax Department, Bangalore and acknowledgement for having furnished such ITR –V.
(4) The vagaries of the Postal Department are too well-known to be commented upon and assessee will be at the mercy of GOI, Postal Department over which neither CBDT nor the assessee has any control.
(5) Though assessees have started receiving e-mail from CPC stating that their return submitted electronically will be valid only if ITR-V is sent to CPC within 30days, such e-mails are ordinarily sent by CPC after 20 days of furnishing.
(6) Number of claims such as carry forward and set of losses and allowances, claim of deduction u/s.80 and various other benefits depend very much upon filing of the return on or before due date mentioned u/s. 139. Assessee will have to undergo a serious hardship, if such claims are disallowed in future for no fault on his part merely because some other Agency, in this case – the Postal Department, caused the delay and the assessee has nothing on hand to prove that he had done whatever was required. The onus that is likely to be cast on the assessee is going to be of a serious nature over which he will have no control whatsoever.
(7) Since the return will be deemed to have not been furnished at all in case duly signed ITR-V is, for some reasons or other, not delivered to CPC, assessee will be saddled with the litigation on liability for payment of interest u/s. 234A, 234B and levy of penalties u/s.271(1)(c) etc.
In view of the above, the assessees will have to face undue hardships without any fault on their part. Apart from this, is it fair to expect every such assessee in the country from different places [however remote it may be] to send such ITR-V to Bangalore by post? Consider the cost involved in aggregate for the country as a whole [though, unfortunately, that has to borne by the assessees] and the unnecessary avoidable huge extra burden on the already over-burdened postal department. Will this not be severe national waste?
Why should taxpayers be not permitted to furnish such ITR-V at their respective places in the Office of Assessing Officer or at any centralised places in the Local Income-tax Office and thereafter, the department can forward the same to CPC at Bangalore? This will also enable the assessee to get proper acknowledgement with regard to the date on which such ITR-V is submitted so that there remains no ambiguity about the date of their furnishing the same and consequent date of furnishing return of income. Is it unreasonable on the part of the Tax-Payers to expect such reasonable procedure?
In view of the above, it is earnestly requested that the procedure followed in the last year [Asst.Year 2008-2009] for furnishing returns of income in such cases should continue to be followed and the assessees, after transmitting their returns of income electronically, are permitted to submit such ITR-V in their respective Local Income-tax Offices.
We believe that an urgent action is needed in this regard on the above line so that the members of our organization and the taxpayers in general do not continue to suffer on account of above referred new system introduced.
Thanking you,
Sincerely yours,
Ameet Patel, Kishor Karia Rajesh Shah
President, Chairman, Co-chairman,
Taxation Committee, Taxation Committee,
CC:
(1) Shri S.S. Palanimanickan, Hon.Union Minister of State for Finance.
(2) Shri S.S.N. Moorthy, Chairman, CBDT.
(3) Shri Rahul Gandhi, Gen.Secretary, Indian National Congress.
We refer to the CBDT Circular No. 03/2009 dated 21.05.2009 in connection with the filing of the Income Tax Returns for A.Y. 2009-2010.
We appreciate the efforts made by CBDT with regards to e-filing of the Returns which has got desired results.
However, your honour will appreciate that an assessee is concerned primarily with proof of filing the Income Tax Return with the Department. The acknowledgement bearing the stamp of Income Tax Office is very much preserved and used by the assessees for various purposes including compliances under Income Tax Act, obtaining Bank loan, obtaining Visa/Passport, registration with various government authorities etc.
Under the present scheme, the acknowledgement form i.e., Form ITR-V was required to be signed by assessee either digitally or manually. In case the return is furnished with digital signature, the date of uploading the return electronically as mentioned in ITR-V is treated as date of filing of the Return. Same position continues even for filing of return for A.Y. 2009-2010. So long as the assessee has uploaded the return with digital signature, there is no problem whatsoever. However, large number of assessees [especially, non-corporate assessees] do not keep/possess digital signatures for various genuine practical reasons. Therefore, they are not covered by this procedure.
In case the return is uploaded without a digital signature, in the last year [i.e. Asst. Year 2008-2009], the assessee was required to furnish the acknowledgement form ITR-V duly signed with the Assessing Officer having jurisdiction over his case within 15 days from the date of uploading the return electronically. This enabled assessees to get an acknowledgement from Income Tax Department for having furnished ITR-V with the concerned officer having the jurisdiction. If the physical acknowledgement is dated within 15 days from the date of furnishing the return electronically, the return is deemed to have been furnished on the date on which it was uploaded and date of acknowledgement No. mentioned in ITR-V was treated as the date of filing the return.
However, from the Asst. Year 2009-10, in view of the above referred circular, the position has been drastically changed and made difficult. Those assessees furnishing the returns without digital signature are facing and are also likely to continue to face unintended difficulties and hardships for the following reasons:
(1) The ITR-V duly signed by the assessee has to be furnished by ordinary post to Department, Centralised Processing Centre, Post Box No.1, Electronic City Post Office, Bangalore – 560 100, Karnataka within 30 days after date of uploading the data electronically. The assessee may not have in his possession any acknowledgement as the ITR-V is to be sent by only Ordinary Post. Unfortunately, no other mode of sending the same is feasible under the new system and hence, the assessees will have to rely only on the efficiency of the postal department. If such ITR-V does not reach the CPC at Bangalore within the specified period of 30 days, the return of income electronically transmitted by the assessee will become automatically invalid.
(2) Under the new system, the assessee gets to know about the fact and date of receipt of such ITR-V by the CPC at Bangalore only when he receives the intimation by E-Mail to that effect from the CPC and till then, uncertainty continues and the assessee is effectively helpless to do anything in that regard.
(3) All the assessees do not have an e-mail ID to receive the e-mail in due course from CPC, Income Tax Department, Bangalore and acknowledgement for having furnished such ITR –V.
(4) The vagaries of the Postal Department are too well-known to be commented upon and assessee will be at the mercy of GOI, Postal Department over which neither CBDT nor the assessee has any control.
(5) Though assessees have started receiving e-mail from CPC stating that their return submitted electronically will be valid only if ITR-V is sent to CPC within 30days, such e-mails are ordinarily sent by CPC after 20 days of furnishing.
(6) Number of claims such as carry forward and set of losses and allowances, claim of deduction u/s.80 and various other benefits depend very much upon filing of the return on or before due date mentioned u/s. 139. Assessee will have to undergo a serious hardship, if such claims are disallowed in future for no fault on his part merely because some other Agency, in this case – the Postal Department, caused the delay and the assessee has nothing on hand to prove that he had done whatever was required. The onus that is likely to be cast on the assessee is going to be of a serious nature over which he will have no control whatsoever.
(7) Since the return will be deemed to have not been furnished at all in case duly signed ITR-V is, for some reasons or other, not delivered to CPC, assessee will be saddled with the litigation on liability for payment of interest u/s. 234A, 234B and levy of penalties u/s.271(1)(c) etc.
In view of the above, the assessees will have to face undue hardships without any fault on their part. Apart from this, is it fair to expect every such assessee in the country from different places [however remote it may be] to send such ITR-V to Bangalore by post? Consider the cost involved in aggregate for the country as a whole [though, unfortunately, that has to borne by the assessees] and the unnecessary avoidable huge extra burden on the already over-burdened postal department. Will this not be severe national waste?
Why should taxpayers be not permitted to furnish such ITR-V at their respective places in the Office of Assessing Officer or at any centralised places in the Local Income-tax Office and thereafter, the department can forward the same to CPC at Bangalore? This will also enable the assessee to get proper acknowledgement with regard to the date on which such ITR-V is submitted so that there remains no ambiguity about the date of their furnishing the same and consequent date of furnishing return of income. Is it unreasonable on the part of the Tax-Payers to expect such reasonable procedure?
In view of the above, it is earnestly requested that the procedure followed in the last year [Asst.Year 2008-2009] for furnishing returns of income in such cases should continue to be followed and the assessees, after transmitting their returns of income electronically, are permitted to submit such ITR-V in their respective Local Income-tax Offices.
We believe that an urgent action is needed in this regard on the above line so that the members of our organization and the taxpayers in general do not continue to suffer on account of above referred new system introduced.
Thanking you,
Sincerely yours,
Ameet Patel, Kishor Karia Rajesh Shah
President, Chairman, Co-chairman,
Taxation Committee, Taxation Committee,
CC:
(1) Shri S.S. Palanimanickan, Hon.Union Minister of State for Finance.
(2) Shri S.S.N. Moorthy, Chairman, CBDT.
(3) Shri Rahul Gandhi, Gen.Secretary, Indian National Congress.
Tuesday, August 4, 2009
ITR :ISSUE DATED 10-8-2009 Volume 315 : Part 1
ITR :ISSUE DATED 10-8-2009 Volume 315 : Part 1: HIGHLIGHTS
SUPREME COURT JUDGMENTS
1. Amount of enhanced compensation is deemed to be income of previous year in which it is received even if received under orders of court pending decision and assessee has to offer security : CIT v. Ghanshyam (HUF) p. 1.
2. Assessee keeping controlled commodities in its godown and delivering to retailer shops : Commission from State Government not entitled to deduction u/s 80P(2)(e) : Udaipur Sahkari Upbhokta Thok Bhandar Ltd. v. CIT p. 21
HIGH COURT JUDGMENTS
1. Order of pre-emptive purchase quashed where Appropriate Authority following empirical method and finding fair market value exceeded consideration : Ross Murarka (India) P. Ltd. v. Appropriate Authority, S. K. Laul, Member (Bom) p. 41
2. Society running a school entitled to grant of approval u/s 10(23C)(vi) where no evidence to prove surplus earned utilised for personal profit or gain of anyone including founder-manager/director : City Montessori School (Regd.) v. UOI (All) p. 48
3. Sea freight for transportation of goods not entitled to weighted deduction : CIT v. Roadmaster Industries of India P. Ltd. [FB] (P&H) p. 66
4. Sale of right to purchase open plot : Issue whether income to be treated as capital gain or casual income not decided while passing assessment order : AO justified in issuing notice for reassessment : Yuvraj v. UOI (Bom) p. 84
5. Additional commission : Expenditure allowable where assessee satisfactorily establishing that expenditure incurred exclusively for purpose of business : CIT v. Textool Co. Ltd. (Mad) p. 91
6. Expenditure on advertisement and sales promotion not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
7. Proportionate charges pertaining to printing and stationery expenses not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p.
8. Surtax not deductible u/s 37 : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
9. Fees paid to Registrar of Companies : Capital expenditure : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
10. Interest u/s 201(1A) not a penalty : Interest paid to be split and spread over from date interest directed to be paid till payment : CIT v. Oriental Insurance Co. Ltd. (Karn) p. 102
11. Tribunal finding sum in question was assessee's income from undisclosed sources : Addition of credit and disallowance of interest proper : Mangilal Jain v. ITO (Mad) p. 105
12. Tribunal justified in annulling assessment where notice u/s 143(2) issued after expiry of 12 months from filing of return : CIT v. PL. Gandhi (Mad) p. 110
13. Assessee filing return and represented by auditor : : Tribunal directing hearing afresh : No interference : Sumitra Menon v. Asst. CIT (Mad) p. 111
APPELLATE TRIBUNAL ORDERS
1. Contribution to employees' provident fund before due date for filing return entitled to deduction : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
2. Book profit : Profits on sale of rubber estate excludible : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
3. Sale of every asset attributable to specified sum of consideration not a slump sale : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
4. Profits arising on sale of agricultural land : Surplus not a capital asset : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
5. Shares held by assessee as investments : Loss is capital loss : Entitled to set off : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
6. Replanting expenditure : Disallowance merely because expenditure incurred attributable to agricultural operations not justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
7. Licence fee : Deletion of disallowance based on earlier deletion by Tribunal's order justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
8. Sale of rubber trees not a case of capital gains : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
9. Computation of business income at surplus earned over fair market value as on 15-1-1998 : Fair market value on that date not available on record : Matter restored for recomputing income : Smt. Naynaben R. Desai v. ITO (Ahd) p. 19
10. Export or transfer of film software, etc. : Assessee receiving only service charges and not having proprietary rights in the product : Deduction u/s 80HHF not available : Deputy CIT v. Kas Movie Makers P. Ltd. (Delhi) p. 25
11. Public undertaking under bona fide belief that gift coupons given to employees to commemorate prestigious awards earned by it not in nature of payment of salary : Employees paying regular taxes on coupons as perquisites : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
12. Loss on cancellation of forward contracts claimed as business expenditure : Disallowance of small part of commission payments for want of confirmation letters : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
13. Shipping company in UK engaged in transportation of cargo in international traffic on ships chartered by it and on ships operated by other enterprises under slot chartering arrangements : Not liable to tax in India : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
14. Meaning of "operation of ships : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
15. Interpretation of double taxation avoidance agreements : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
SUPREME COURT JUDGMENTS
1. Amount of enhanced compensation is deemed to be income of previous year in which it is received even if received under orders of court pending decision and assessee has to offer security : CIT v. Ghanshyam (HUF) p. 1.
2. Assessee keeping controlled commodities in its godown and delivering to retailer shops : Commission from State Government not entitled to deduction u/s 80P(2)(e) : Udaipur Sahkari Upbhokta Thok Bhandar Ltd. v. CIT p. 21
HIGH COURT JUDGMENTS
1. Order of pre-emptive purchase quashed where Appropriate Authority following empirical method and finding fair market value exceeded consideration : Ross Murarka (India) P. Ltd. v. Appropriate Authority, S. K. Laul, Member (Bom) p. 41
2. Society running a school entitled to grant of approval u/s 10(23C)(vi) where no evidence to prove surplus earned utilised for personal profit or gain of anyone including founder-manager/director : City Montessori School (Regd.) v. UOI (All) p. 48
3. Sea freight for transportation of goods not entitled to weighted deduction : CIT v. Roadmaster Industries of India P. Ltd. [FB] (P&H) p. 66
4. Sale of right to purchase open plot : Issue whether income to be treated as capital gain or casual income not decided while passing assessment order : AO justified in issuing notice for reassessment : Yuvraj v. UOI (Bom) p. 84
5. Additional commission : Expenditure allowable where assessee satisfactorily establishing that expenditure incurred exclusively for purpose of business : CIT v. Textool Co. Ltd. (Mad) p. 91
6. Expenditure on advertisement and sales promotion not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
7. Proportionate charges pertaining to printing and stationery expenses not entitled to weighted deduction : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p.
8. Surtax not deductible u/s 37 : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
9. Fees paid to Registrar of Companies : Capital expenditure : CIT v. Zenith Steel Pipes and Industries Ltd. (Bom) p. 95
10. Interest u/s 201(1A) not a penalty : Interest paid to be split and spread over from date interest directed to be paid till payment : CIT v. Oriental Insurance Co. Ltd. (Karn) p. 102
11. Tribunal finding sum in question was assessee's income from undisclosed sources : Addition of credit and disallowance of interest proper : Mangilal Jain v. ITO (Mad) p. 105
12. Tribunal justified in annulling assessment where notice u/s 143(2) issued after expiry of 12 months from filing of return : CIT v. PL. Gandhi (Mad) p. 110
13. Assessee filing return and represented by auditor : : Tribunal directing hearing afresh : No interference : Sumitra Menon v. Asst. CIT (Mad) p. 111
APPELLATE TRIBUNAL ORDERS
1. Contribution to employees' provident fund before due date for filing return entitled to deduction : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
2. Book profit : Profits on sale of rubber estate excludible : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
3. Sale of every asset attributable to specified sum of consideration not a slump sale : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
4. Profits arising on sale of agricultural land : Surplus not a capital asset : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
5. Shares held by assessee as investments : Loss is capital loss : Entitled to set off : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
6. Replanting expenditure : Disallowance merely because expenditure incurred attributable to agricultural operations not justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
7. Licence fee : Deletion of disallowance based on earlier deletion by Tribunal's order justified : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
8. Sale of rubber trees not a case of capital gains : Harrisons Malayalam Ltd. v. Asst. CIT (Cochin) p. 1
9. Computation of business income at surplus earned over fair market value as on 15-1-1998 : Fair market value on that date not available on record : Matter restored for recomputing income : Smt. Naynaben R. Desai v. ITO (Ahd) p. 19
10. Export or transfer of film software, etc. : Assessee receiving only service charges and not having proprietary rights in the product : Deduction u/s 80HHF not available : Deputy CIT v. Kas Movie Makers P. Ltd. (Delhi) p. 25
11. Public undertaking under bona fide belief that gift coupons given to employees to commemorate prestigious awards earned by it not in nature of payment of salary : Employees paying regular taxes on coupons as perquisites : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
12. Loss on cancellation of forward contracts claimed as business expenditure : Disallowance of small part of commission payments for want of confirmation letters : Penalty not exigible : Indian Petrochemicals Corp. Ltd. v. Joint CIT (Ahd) p. 40
13. Shipping company in UK engaged in transportation of cargo in international traffic on ships chartered by it and on ships operated by other enterprises under slot chartering arrangements : Not liable to tax in India : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
14. Meaning of "operation of ships : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
15. Interpretation of double taxation avoidance agreements : Deputy Director of I. T. (International Taxation) v. Balaji Shipping (UK) Ltd. (Mumbai) p. 62
VERIFIED BY VISA MASTER SECURE CODE NEW SECURITY FOR CREDIT CARD PAYMENTS
VERIFIED BY VISA MASTER SECURE CODE NEW SECURITY FOR CREDIT CARD PAYMENTS
If you are making a payment online by debit or credit card on or after 1st August then you must have register for a extra lever of security .This security lever is called "verified by Visa" for visa cards and "Master card Secure code" in case of Master card enable cards.There are two ways to register
One Go To your bank site now and register your new Security code.
or Register at the time while making payment on or or after 01.08.2009
Remember this security code will be of six digit and you have to enter the same in all prospective payment through your debit/credit card.Now, you can confidently transact on the Internet without worrying about the security of your financial information. With Verified by Visa and MasterCard SecureCode your card will be just as secure over the net as it is over the counter.Verified by Visa & MasterCard SecureCode services are free to cardholders(in some banks may have one time charges) and were developed to help prevent unauthorized use of cards online.Verified by Visa & MasterCard SecureCode protects cards with personal passwords, giving cardholders reassurance that only they can use their cards online.Once your card is activated, your card number will be recognized whenever it's used at participating online stores. A window will automatically appear and your Visa/MasterCard card issuer will ask for your Internet Banking password linked to your card. You'll enter your password to verify your identity and complete your purchase.(read RBI circular given below)
RBI/2008-2009/387
RBI / DPSS No. 1501 / 02.14.003 / 2008-2009
February 18, 2009
The Chairman and Managing Director / Chief Executive OfficersAll Scheduled Commercial Banks including RRBs /Urban Co-operative Banks / State Co-operative Banks /.District Central Co-operative Banks
Madam / Dear Sir
Credit/Debit Card transactions-Security Issues and Risk mitigation measures
The use of Credit/Debit Cards has been increasing in the country. We have been reviewing various options to enhance the security of online card transactions. After extensive consultations with banks/card companies, it has been decided as under:2. It would be mandatory to put in place with effect from August 01, 2009:i) A system of providing for additional authentication/validation based on information not visible on the cards for all on-line card not present transactions except IVR transactions (for which separate instructions will follow).ii) A system of "Online Alerts" to the cardholder for all 'card not present' transactions of the value of Rs. 5,000/ and above.3. Banks are advised to strictly adhere to the instructions and time discipline indicated in this circular. Non-adherence to the directives shall attract penalties prescribed under the Payment and Settlement Systems Act 2007 (Act 51 of 2007).4. This directive is issued under section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).5. Please acknowledge receipt.
Yours faithfully
G. Padmanabhan)
Chief General Manager
If you are making a payment online by debit or credit card on or after 1st August then you must have register for a extra lever of security .This security lever is called "verified by Visa" for visa cards and "Master card Secure code" in case of Master card enable cards.There are two ways to register
One Go To your bank site now and register your new Security code.
or Register at the time while making payment on or or after 01.08.2009
Remember this security code will be of six digit and you have to enter the same in all prospective payment through your debit/credit card.Now, you can confidently transact on the Internet without worrying about the security of your financial information. With Verified by Visa and MasterCard SecureCode your card will be just as secure over the net as it is over the counter.Verified by Visa & MasterCard SecureCode services are free to cardholders(in some banks may have one time charges) and were developed to help prevent unauthorized use of cards online.Verified by Visa & MasterCard SecureCode protects cards with personal passwords, giving cardholders reassurance that only they can use their cards online.Once your card is activated, your card number will be recognized whenever it's used at participating online stores. A window will automatically appear and your Visa/MasterCard card issuer will ask for your Internet Banking password linked to your card. You'll enter your password to verify your identity and complete your purchase.(read RBI circular given below)
RBI/2008-2009/387
RBI / DPSS No. 1501 / 02.14.003 / 2008-2009
February 18, 2009
The Chairman and Managing Director / Chief Executive OfficersAll Scheduled Commercial Banks including RRBs /Urban Co-operative Banks / State Co-operative Banks /.District Central Co-operative Banks
Madam / Dear Sir
Credit/Debit Card transactions-Security Issues and Risk mitigation measures
The use of Credit/Debit Cards has been increasing in the country. We have been reviewing various options to enhance the security of online card transactions. After extensive consultations with banks/card companies, it has been decided as under:2. It would be mandatory to put in place with effect from August 01, 2009:i) A system of providing for additional authentication/validation based on information not visible on the cards for all on-line card not present transactions except IVR transactions (for which separate instructions will follow).ii) A system of "Online Alerts" to the cardholder for all 'card not present' transactions of the value of Rs. 5,000/ and above.3. Banks are advised to strictly adhere to the instructions and time discipline indicated in this circular. Non-adherence to the directives shall attract penalties prescribed under the Payment and Settlement Systems Act 2007 (Act 51 of 2007).4. This directive is issued under section 18 of Payment and Settlement Systems Act 2007, (Act 51 of 2007).5. Please acknowledge receipt.
Yours faithfully
G. Padmanabhan)
Chief General Manager
Bangalore Income Tax department, Central Processing Center (CPC) Helpline Number
To assist taxpayers, a limited call center service with two agents has been established at ITD-CPC, Bangalore. Taxpayer queries on status of ITR-V receipt at CPC, Bangalore will be answered on 080-43456700 between 9:30 AM to 6 PM. The service will be available in English, Hindi and Kannada.
Monday, August 3, 2009
Fixed Deposits-Financial or Non Financial Assets?
Dear All,
Please advice whether Fixed Deposits will be considererd as Financial Assets or Non Financial Assets for deriving whether the company is engaged in NBFC activities or not u/s 45-IC of RBI Act, 1934.
Thanks & Regards,
CA. Ajay Goel
Please advice whether Fixed Deposits will be considererd as Financial Assets or Non Financial Assets for deriving whether the company is engaged in NBFC activities or not u/s 45-IC of RBI Act, 1934.
Thanks & Regards,
CA. Ajay Goel
Querry :if the flat value appreciate at the time of registration
Querry :
Dear Members,
Yesterday somebody told me that as per new budget if somebody booked his/her flat for Rs. 20lacs and due to appreciation in market value if his/her flat value came to Rs.30lacs at the time of registration then he/she has to pay stamp duty for Rs.30lacs and also pay long term capital gain tax on the difference figure of Rs.10lacs which will be treated as his/her notional income.
If somebody has any idea about all this then please help me, as the person also told me that it will came in effect from 1st October 2009.
Regards,Vishal Jain
Answer 1
Hi,
LTCG arises on transfer i.e. sale etc. and not on purchase.
As per newly amended provisions u/s 56(2)(VI) difference between registered value and declared purchase price will be treated as income from other sources.
Later on at the time of sale, the registered value will be treated as cost.
The provision is applicable for individuals and HUF.
ThxRajesh Kr, Agrawal, FCA
Answer 2
It is the receipt[ient who will be taxed
Rgds
CA SKChoudhary
Answer 3
YES YOU HAVE HEARD RIGHT. AS PER SECTION 56 NEWLY AMENDED, ANY PROERTY BOUGHT AT LESS THAN ITS REGISTRARE'S ASSESSABLE MAERKET VALUE, YOU HAVE TO T PAY TAX ON THE DIFFRENCE BETWEEN THE DDEED VALUE AND THE REGIASTRAR 'S ASSESSED VALUE FOR THR PURPOSE OF STAMP DUTY.
G L Singhal
Answer 4
Yes.As per the new provision of Finance Act 2009 Rs. 10 lacs will be treated as income from other sources. Suvanjan Ghosh
Answer 5
Dear Vishal ji,
Pl. go thru provisions of new insertion in sec 56 which will be applicable from 01.10.2008RgdsCA.Dinesh Agarwal33/1 N S Road, Kolkata-700001Landline:033 22102227Mobile : +91 97487 80534
Dear Members,
Yesterday somebody told me that as per new budget if somebody booked his/her flat for Rs. 20lacs and due to appreciation in market value if his/her flat value came to Rs.30lacs at the time of registration then he/she has to pay stamp duty for Rs.30lacs and also pay long term capital gain tax on the difference figure of Rs.10lacs which will be treated as his/her notional income.
If somebody has any idea about all this then please help me, as the person also told me that it will came in effect from 1st October 2009.
Regards,Vishal Jain
Answer 1
Hi,
LTCG arises on transfer i.e. sale etc. and not on purchase.
As per newly amended provisions u/s 56(2)(VI) difference between registered value and declared purchase price will be treated as income from other sources.
Later on at the time of sale, the registered value will be treated as cost.
The provision is applicable for individuals and HUF.
ThxRajesh Kr, Agrawal, FCA
Answer 2
It is the receipt[ient who will be taxed
Rgds
CA SKChoudhary
Answer 3
YES YOU HAVE HEARD RIGHT. AS PER SECTION 56 NEWLY AMENDED, ANY PROERTY BOUGHT AT LESS THAN ITS REGISTRARE'S ASSESSABLE MAERKET VALUE, YOU HAVE TO T PAY TAX ON THE DIFFRENCE BETWEEN THE DDEED VALUE AND THE REGIASTRAR 'S ASSESSED VALUE FOR THR PURPOSE OF STAMP DUTY.
G L Singhal
Answer 4
Yes.As per the new provision of Finance Act 2009 Rs. 10 lacs will be treated as income from other sources. Suvanjan Ghosh
Answer 5
Dear Vishal ji,
Pl. go thru provisions of new insertion in sec 56 which will be applicable from 01.10.2008RgdsCA.Dinesh Agarwal33/1 N S Road, Kolkata-700001Landline:033 22102227Mobile : +91 97487 80534
Querry :Treatment of Reciept by Charitable Organisation
Querry :
Hello
If a charitable organisation running some vocational training and thereby selling it's product outside india. whether such receipt are treated as fcra receipt and credited to approved account only or eparately.
What will be the treatement of such receipt.
From B.K.Banka
Answer
It is an income from foreign source and is genrrtally taxable, unless established that it is part of the public charitable objectives of the trust / society.Regards,S. Dutt
Hello
If a charitable organisation running some vocational training and thereby selling it's product outside india. whether such receipt are treated as fcra receipt and credited to approved account only or eparately.
What will be the treatement of such receipt.
From B.K.Banka
Answer
It is an income from foreign source and is genrrtally taxable, unless established that it is part of the public charitable objectives of the trust / society.Regards,S. Dutt
Querrry :Allotment of shares
Querry :
Dear all,
My company which is a Govt limited Co incorporated in July 08. The first Board meeting was held on August 08.
The Co. has formed with a initial capital of Rs 5 lac (paid up capital). In February, 09 the authorised capital was increased to Rs 60 crore. Now the Govt has sent 34 crore towards equity contribution.
The Articles of the Company stated that Board will allot shares.
Can I do allotment in Board meeting or shall I have to go for general meeting because of Section 81(1) (a) which says - " Where at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares, then, --
"such shares shall be offered to the persons who, at the date of the offer, are holders of the equity shares of the company, in proportion, as nearly as circumstances admit, to the capital paid-up on those shares at that date."
The interpretation of Ramaiya states "that the provisions of section 81 should apply when the Board of Directors proposes to increase the subscribed capital of a company by allotment of further shares after the expiry of 2 years from the formation of the company or after the expiry of one year from the first allotment of shares, whichever is earlier. {Page 1018 of Ramaiya 16th edition 2008]
As my company incorporated is less than two years as on date and second alternative is ruled out that is first allotment, shall I have to go for general meeting for allotment of shares?
Kindly give your views.
RegardsAnirban SenCompany Secretary, KMRCL
Answer 1
Dear All,Section 81 (a) is applicable only when the Company issues share to persons other than existing shareholders. In your case, as you mentioned it is a govt. company, shares are proposed to issue to govt. which is a existing share holder. Therefore, Section 81 (a) is not applicable and the shares shall be issued in Board Meeting.
Regards,Sarvesh BhardwajNew DelhiMobile: 09350301058On
Answer 2
In ur case either of the option provided in section 81 is not full filled and as such according to my opinion u can go for allotment on BOM without going to AGM
slnsc99@gmail.com
Answer 3
Approval at AGM/EGM in terms of Sec. 81 required.
Regards,S. Dutt
Dear all,
My company which is a Govt limited Co incorporated in July 08. The first Board meeting was held on August 08.
The Co. has formed with a initial capital of Rs 5 lac (paid up capital). In February, 09 the authorised capital was increased to Rs 60 crore. Now the Govt has sent 34 crore towards equity contribution.
The Articles of the Company stated that Board will allot shares.
Can I do allotment in Board meeting or shall I have to go for general meeting because of Section 81(1) (a) which says - " Where at any time after the expiry of two years from the formation of a company or at any time after the expiry of one year from the allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares, then, --
"such shares shall be offered to the persons who, at the date of the offer, are holders of the equity shares of the company, in proportion, as nearly as circumstances admit, to the capital paid-up on those shares at that date."
The interpretation of Ramaiya states "that the provisions of section 81 should apply when the Board of Directors proposes to increase the subscribed capital of a company by allotment of further shares after the expiry of 2 years from the formation of the company or after the expiry of one year from the first allotment of shares, whichever is earlier. {Page 1018 of Ramaiya 16th edition 2008]
As my company incorporated is less than two years as on date and second alternative is ruled out that is first allotment, shall I have to go for general meeting for allotment of shares?
Kindly give your views.
RegardsAnirban SenCompany Secretary, KMRCL
Answer 1
Dear All,Section 81 (a) is applicable only when the Company issues share to persons other than existing shareholders. In your case, as you mentioned it is a govt. company, shares are proposed to issue to govt. which is a existing share holder. Therefore, Section 81 (a) is not applicable and the shares shall be issued in Board Meeting.
Regards,Sarvesh BhardwajNew DelhiMobile: 09350301058On
Answer 2
In ur case either of the option provided in section 81 is not full filled and as such according to my opinion u can go for allotment on BOM without going to AGM
slnsc99@gmail.com
Answer 3
Approval at AGM/EGM in terms of Sec. 81 required.
Regards,S. Dutt
Querry Sec 80C deduction on STCG
Querry
I have a query on the subject matter as follows: An individual has GTI of Rs. 3.5 lacs out of which business income is Rs. 45,000/ and balance is STCG on STT paid shares.Will the person be eligible to claim Section 80C benefit of full Rs. 1 lac or it will be restricted to only till his business Income.Kindly clarify on availability of Section 80C benefit on STCG.
Best regards,FCA Kavita Agarwal
Answer 1
Section 111A(2) reads as follows:
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
Section 80C is covered by chapter VIA hence cant be claimed on STGC u/s 111A.
Miraj D ShahD J Shah & CoTax Management Consultants2 Elgin RoadKolkata 70002091-33-22871487 / 22870767 / 40034672
Answer 2
u/s 111A of the Income Tax Act, STCG w.r.t sale of equity shares on which STT is paid shall be chargeable to tax @ 15% +SC+Ecess.
No deduction u/c VIA is available on STCG u/s 111A.
Basic exemption is available from such STCG .
In your given case :
Business Income = 45,000
Short Term capital gain from sale of shares on which STT paid = 3,05,000
Gross Total Income = 3,50,000
Less Deduction u/s 80C = 45,000
(limited to business income)
Total Income = 3,05,000
(Represents STCG on which STT paid)
Basic Exemption (Considered Male and < 65 yrs) = Rs. 1,50,000
Balance Rs 1,55,000
Tax @ 15.45% (including 3% Ecess) = 1,55,000 * 15.45% = Rs. 23,948/-
Except for STCG u/s 111A, deduction benefit u/s 80C is available.
Hope this clarifies the matter.
Regards
Sujit Talukder
Answer 3
80C benefit will be restricted to Rs.45000 only
J.P.Agrawal
Answer 4
Hi,No deduction is allowable under Chapter VI A on such STCG, Kindly refer subsection 2 of Section 111A, which is reproduced below.
Tax on short term capital gains in certain cases.111A. (1) Where the total income of an assessee includes any income chargeable under the head "Capital gains", arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund and-
(a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such transaction is chargeable to securities transaction tax under that Chapter,
the tax payable by the assessee on the total income shall be the aggregate of-
(i) the amount of income-tax calculated on such short-term capital gains at the rate of 49a[fifteen] per cent; and
(ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
(3) Where the total income of an assessee includes any short term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.
Explanation.-For the purposes of this section, the expression "equity oriented fund" shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]
ThxRajesh Kr. Agrawal, FCA
Answer 5
Restricted to business income or 1 lac whichever is lower
Rgds
CA SKChoudhary
Answer 6
Kindly refer to sectin 111A. Deduction under chapter VIA will be limited toGTI as reduced by STCG i.e. in your case Rs. 45000/-.
Thanks
CA_Pankaj Agrwal
225, Central Zone, Tej Kumar Plaza, HazratganjLucknow 226001
Phone: 4009167 pankaj@mgcoca.com agrwal.pankaj@icai.org agrwalpankaj@gmail.com
Answer 7
He or she will be entiled to claim 80c deduction upto only from his or her other income on which he or she does not claim tax at special rate.Therefore no deduction will be allowed from short term capital gains which is taxed ar special rate
ghoshalco@hsisindia.com
Answer 8
He will only be entiltled to a deduction limited only upto his business income which in this case is only Rs.45000/-
With Regards CA.Vinod Kumar09810969836
Answer 9
Ms. Kavita Agarwal,
Hi. This the good question raised by you. As per Income Tax Act, no one can get benefit of
Section 80C on the STCG & LTCG whether STT paid or not. The individual get benefit of Rs. 45000 only as 80C benefit in the present case. Full benefit of Rs. 1.00, he cant claim. So benefit of 80C is not available on STCG. Please check Section 111A. You will find there that no benefit of 80C is not available on STCG
Thanks & regards,
Vikash Gadia
Answer 10
Dear Ms. Kavita, In your case, deduction u/s 80C will be Rs. 45,000/- i.e. limited to your GTI excluding STCG with STT in terms of Section 111A(2). Thanks & Regards, CA ANAND JHUNJHUNWALA Mobile : 9830355460
Answer 11
The tax implication on the matter as per me is as follows: 80 C will be allowable to the extent of income other than STCG (STT PAid) i.e. RS 45000.00 On the STCG however tax @ 15% will be applicable subject to the exemption limits allowable depending upon Gender and age.
ThanksCA Vikash Tibrewala
I have a query on the subject matter as follows: An individual has GTI of Rs. 3.5 lacs out of which business income is Rs. 45,000/ and balance is STCG on STT paid shares.Will the person be eligible to claim Section 80C benefit of full Rs. 1 lac or it will be restricted to only till his business Income.Kindly clarify on availability of Section 80C benefit on STCG.
Best regards,FCA Kavita Agarwal
Answer 1
Section 111A(2) reads as follows:
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
Section 80C is covered by chapter VIA hence cant be claimed on STGC u/s 111A.
Miraj D ShahD J Shah & CoTax Management Consultants2 Elgin RoadKolkata 70002091-33-22871487 / 22870767 / 40034672
Answer 2
u/s 111A of the Income Tax Act, STCG w.r.t sale of equity shares on which STT is paid shall be chargeable to tax @ 15% +SC+Ecess.
No deduction u/c VIA is available on STCG u/s 111A.
Basic exemption is available from such STCG .
In your given case :
Business Income = 45,000
Short Term capital gain from sale of shares on which STT paid = 3,05,000
Gross Total Income = 3,50,000
Less Deduction u/s 80C = 45,000
(limited to business income)
Total Income = 3,05,000
(Represents STCG on which STT paid)
Basic Exemption (Considered Male and < 65 yrs) = Rs. 1,50,000
Balance Rs 1,55,000
Tax @ 15.45% (including 3% Ecess) = 1,55,000 * 15.45% = Rs. 23,948/-
Except for STCG u/s 111A, deduction benefit u/s 80C is available.
Hope this clarifies the matter.
Regards
Sujit Talukder
Answer 3
80C benefit will be restricted to Rs.45000 only
J.P.Agrawal
Answer 4
Hi,No deduction is allowable under Chapter VI A on such STCG, Kindly refer subsection 2 of Section 111A, which is reproduced below.
Tax on short term capital gains in certain cases.111A. (1) Where the total income of an assessee includes any income chargeable under the head "Capital gains", arising from the transfer of a short-term capital asset, being an equity share in a company or a unit of an equity oriented fund and-
(a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and
(b) such transaction is chargeable to securities transaction tax under that Chapter,
the tax payable by the assessee on the total income shall be the aggregate of-
(i) the amount of income-tax calculated on such short-term capital gains at the rate of 49a[fifteen] per cent; and
(ii) the amount of income-tax payable on the balance amount of the total income as if such balance amount were the total income of the assessee:
Provided that in the case of an individual or a Hindu undivided family, being a resident, where the total income as reduced by such short-term capital gains is below the maximum amount which is not chargeable to income-tax, then, such short-term capital gains shall be reduced by the amount by which the total income as so reduced falls short of the maximum amount which is not chargeable to income-tax and the tax on the balance of such short-term capital gains shall be computed at the rate of ten per cent.
(2) Where the gross total income of an assessee includes any short term capital gains referred to in sub-section (1), the deduction under Chapter VI-A shall be allowed from the gross total income as reduced by such capital gains.
(3) Where the total income of an assessee includes any short term capital gains referred to in sub-section (1), the rebate under section 88 shall be allowed from the income-tax on the total income as reduced by such capital gains.
Explanation.-For the purposes of this section, the expression "equity oriented fund" shall have the meaning assigned to it in the Explanation to clause (38) of section 10.]
ThxRajesh Kr. Agrawal, FCA
Answer 5
Restricted to business income or 1 lac whichever is lower
Rgds
CA SKChoudhary
Answer 6
Kindly refer to sectin 111A. Deduction under chapter VIA will be limited toGTI as reduced by STCG i.e. in your case Rs. 45000/-.
Thanks
CA_Pankaj Agrwal
225, Central Zone, Tej Kumar Plaza, HazratganjLucknow 226001
Phone: 4009167 pankaj@mgcoca.com agrwal.pankaj@icai.org agrwalpankaj@gmail.com
Answer 7
He or she will be entiled to claim 80c deduction upto only from his or her other income on which he or she does not claim tax at special rate.Therefore no deduction will be allowed from short term capital gains which is taxed ar special rate
ghoshalco@hsisindia.com
Answer 8
He will only be entiltled to a deduction limited only upto his business income which in this case is only Rs.45000/-
With Regards CA.Vinod Kumar09810969836
Answer 9
Ms. Kavita Agarwal,
Hi. This the good question raised by you. As per Income Tax Act, no one can get benefit of
Section 80C on the STCG & LTCG whether STT paid or not. The individual get benefit of Rs. 45000 only as 80C benefit in the present case. Full benefit of Rs. 1.00, he cant claim. So benefit of 80C is not available on STCG. Please check Section 111A. You will find there that no benefit of 80C is not available on STCG
Thanks & regards,
Vikash Gadia
Answer 10
Dear Ms. Kavita, In your case, deduction u/s 80C will be Rs. 45,000/- i.e. limited to your GTI excluding STCG with STT in terms of Section 111A(2). Thanks & Regards, CA ANAND JHUNJHUNWALA Mobile : 9830355460
Answer 11
The tax implication on the matter as per me is as follows: 80 C will be allowable to the extent of income other than STCG (STT PAid) i.e. RS 45000.00 On the STCG however tax @ 15% will be applicable subject to the exemption limits allowable depending upon Gender and age.
ThanksCA Vikash Tibrewala
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