{"id":723,"date":"2015-12-19T10:25:51","date_gmt":"2015-12-19T10:25:51","guid":{"rendered":"http:\/\/caindelhiindia.com\/blog\/?p=723"},"modified":"2021-07-14T12:31:57","modified_gmt":"2021-07-14T12:31:57","slug":"corporate-professional-update-december-14-2015","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/corporate-professional-update-december-14-2015\/","title":{"rendered":"CORPORATE & PROFESSIONAL UPDATE DECEMBER 14, 2015"},"content":{"rendered":"

CORPORATE & PROFESSIONAL UPDATE DECEMBER 14, 2015<\/strong><\/span><\/h2>\n
\"www.caindelhiindia.com;<\/a>
www.caindelhiindia.com; LLP<\/figcaption><\/figure>\n

INCOME TAX ACT<\/strong><\/span><\/p>\n

SECTION 2(15)<\/span><\/strong><\/p>\n

CHARITABLE PURPOSE<\/strong><\/p>\n

Object of general public utility – Banking technology service :\u00a0<\/strong>Where assessee-society was established by RBI to provide Banking Technology services and to carry out research which was charitable in nature; merely because it had generated surplus during course of carrying on ancillary objects, it could not be denied exemption under section 11 –\u00a0[2015] 63\u00a0<\/em>\u00a0297 (Hyderabad \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 4<\/span><\/strong><\/p>\n

INCOME – CHARGEABLE AS<\/strong><\/p>\n

Compensation for closure of business :\u00a0<\/strong>Where assessee-company was formed for carrying out bottling activities for Coca Cola Co. in a particular area, in view of fact that Coca Cola Co. subsequently decided to set up its own bottling plant, compensation paid by it to assessee for closure of business was to be treated as capital receipt not liable to tax –\u00a0[2015] 63\u00a0<\/em>\u00a0338 (Mumbai \u2013 Trib.)\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 <\/em><\/strong><\/p>\n

SECTION 11<\/span><\/strong><\/p>\n

CHARITABLE OR RELIGIOUS TRUST – EXEMPTION OF INCOME FROM PROPERTY HELD UNDER<\/strong><\/p>\n

Application of income :\u00a0<\/strong>Once it is held that assessee-society is eligible for exemption under section 11, as a logical corollary, its income has to be computed on commercial principles –\u00a0[2015] 63\u00a0<\/em>\u00a0297 (Hyderabad \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 13<\/p>\n

CHARITABLE OR RELIGIOUS TRUST – DENIAL OF EXEMPTION<\/strong><\/p>\n

Sub-Section (1)(c) :\u00a0<\/strong>Where assessee, an educational institution, entered into an agreement with managing trustee for purchase of his land and paid certain amount to him in advance and subsequently said agreement was cancelled and managing trustee returned principal amount along with interest, it could not be said that money was diverted for interest of managing trustee and hence there was no violation of section 13(1)(c) –\u00a0[2015] 64\u00a0<\/em>\u00a046 (Chennai \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 14A<\/span><\/strong><\/p>\n

EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME<\/strong><\/p>\n

Tax free bonds :\u00a0<\/strong>Where assessee claimed that interest bearing borrowed funds were utilized entirely for purpose of business and investment in tax free bonds had been made out of its own funds and Assessing Officer having noticed that assessee had kept all funds in one common pool partly disallowed interest paid on borrowed funds applying section 14A, disallowance of interest paid not justified –\u00a0[2015] 63\u00a0<\/em>\u00a0345 (Bombay)<\/em><\/strong><\/p>\n

SECTION 32<\/span><\/strong><\/p>\n

DEPRECIATION – ALLOWANCE\/RATE OF<\/strong><\/p>\n

In case of trust :\u00a0<\/strong>Where assessee-trust was eligible for exemption under section 11, it was not entitled for depreciation under section 32 –\u00a0[2015] 64\u00a0<\/em>\u00a046 (Chennai \u2013 Trib.)<\/em><\/strong><\/p>\n

Hiring of vehicles :\u00a0<\/strong>Where assessee-owner of vehicles, was engaged in business of hiring and leasing of those vehicles to third parties, higher rate of depreciation had to be allowed in respect of leased out vehicles –\u00a0[2015] 63\u00a0<\/em>\u00a0338 (Mumbai \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 37(1)<\/span><\/strong><\/p>\n

BUSINESS EXPENDITURE – ALLOWABILITY OF<\/strong><\/p>\n

Research expenses :\u00a0<\/strong>Where assessee incurred expenditure for obtaining technical feasibility research reports, for further selling to its customers, said expenditure was allowable as revenue expenditure as it was for expansion of business –\u00a0[2015] 63\u00a0<\/em>\u00a0344 (Delhi \u2013 Trib.)<\/em><\/strong><\/p>\n

Professional fee :\u00a0<\/strong>Whether where assessee paid certain amount to ‘R’ towards professional fees in connection with negotiation, drafting agreements and finally receiving compensation from Coca Cola Co., payment so made was to be allowed as business expenditure –\u00a0[2015] 63\u00a0<\/em>\u00a0338 (Mumbai \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 40(a)(ia)<\/span><\/strong><\/p>\n

BUSINESS DISALLOWANCE – INTEREST ETC., PAID TO A RESIDENT WITHOUT DEDUCTION OF TAX AT SOURCE<\/strong><\/p>\n

Deposit of tax :\u00a0<\/strong>Where assessee had deducted tax in last month of previous year and deposited same before due date of filing of return under section 139(1), Assessing Officer could not disallow said payment under section 40(a)(ia) –\u00a0[2015] 64\u00a0<\/em>\u00a047 (Mumbai \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 69<\/span><\/strong><\/p>\n

UNEXPLAINED INVESTMENTS<\/strong><\/p>\n

Purchases :\u00a0<\/strong>Where nothing was there on record to show that purchases and sale was made outside regular books of account by assessee, merely because assessee was prosecuted for keeping sugar beyond permissible limits, addition of value of excess sugar as undisclosed income was not justified –\u00a0[2015] 64\u00a0<\/em>\u00a043 (Punjab & Haryana)<\/em><\/strong><\/p>\n

SECTION 80G<\/span><\/strong><\/p>\n

DEDUCTIONS – DONATIONS TO CERTAIN FUNDS, CHARITABLE INSTITUTIONS<\/strong><\/p>\n

Condition precedent :\u00a0<\/strong>Filing of copy of registration under section 12AA along with application for grant of approval under section 80G is a condition precedent for consideration of request for grant of such approval –[2015] 64\u00a0<\/em>\u00a033 (Lucknow \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 92C<\/span><\/strong><\/p>\n

TRANSFER PRICING – COMPUTATION OF ARM\u2019S LENGTH PRICE<\/strong><\/p>\n

Comparables and adjustments :\u00a0<\/strong>Where foreign AE gave Indian assesseelicence to manufacture and market insulin and transactions arranged between assessee with Indian third party to get insulin manufactured also involved AEs, provisions of section 92B would be attracted and said transaction would be an international transaction between assessee and AE requiring determination of ALP under section 92(1) –\u00a0[2015] 63<\/em>\u00a0351 (Bangalore \u2013 Trib.)<\/em><\/strong><\/p>\n

Comparables and adjustments\/Comparable \u2013 Illustrations :\u00a0<\/strong>Huge turnover companies and companies in which extraordinary event of amalgamation had taken place could not be considered as comparables with assessee being a small company providing ITES –\u00a0[2015] 63\u00a0<\/em>\u00a0351 (Bangalore \u2013 Trib.)<\/em><\/strong><\/p>\n

SECTION 115JA<\/span><\/strong><\/p>\n

MINIMUM ALTERNATE TAX<\/strong><\/p>\n

Computation of book profit :\u00a0<\/strong>Excess provision for depreciation provided for in earlier years and credited to profit and loss account consequent to change in method of depreciation, would qualify for adjustment under clause (i) of Explanation to section 115JA –\u00a0[2015] 63\u00a0<\/em>\u00a0329 (Madras)<\/em><\/strong><\/p>\n

SEBI ACT<\/strong><\/span><\/p>\n

SECTION 11<\/span><\/strong><\/p>\n

POWERS AND FUNCTIONS OF BOARD<\/strong><\/p>\n

Where in order to comply with direction of SEBI that a company getting trading membership of NSE could not carry on any other activity apart from broking, appellant – PGSL was incorporated for taking over membership card of PCMIL, transfer of membership from PCMIL to PGSL was due to compulsion of law and appellant would be entitled to benefit of fee continuity and, thus, would not be required to pay fresh registration fees –\u00a0[2015] 64<\/em>\u00a0141 (SC)<\/em><\/strong><\/p>\n

COMPETITION ACT<\/strong><\/span><\/p>\n

SECTION 44<\/span><\/strong><\/p>\n

PENALTY FOR MAKING FALSE STATEMENT OR OMISSION TO FURNISH MATERIAL INFORMATION<\/strong><\/p>\n

Where appellants invoked jurisdiction of Commission by asserting that R-2 insurance company was in a dominant position and it had abused its position by not removing their names as defaulter from Specific Approval List, but suppressed a crucial fact that they had already availed similar remedy by filing writ petition before High Court, they would not be entitled to claim any relief –\u00a0[2015] 64\u00a0<\/em>\u00a029 (CAT – New Delhi<\/em><\/strong><\/p>\n

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional\u00a0endeavors. For query or help, contact:\u00a0info@caindelhiindia.com<\/a>\u00a0or call at\u00a0011-233 433 33.<\/p>\n

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CORPORATE & PROFESSIONAL UPDATE DECEMBER 14, 2015 INCOME TAX ACT SECTION 2(15) CHARITABLE PURPOSE Object of general public utility – Banking technology service :\u00a0Where assessee-society was established by RBI to provide Banking Technology services and to carry out research which was charitable in nature; merely because it had generated surplus during course of carrying on …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[647,142,116],"tags":[502,501,569,179,180,561,214,181,194,541,562,560,538],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/723"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=723"}],"version-history":[{"count":6,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/723\/revisions"}],"predecessor-version":[{"id":3121,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/723\/revisions\/3121"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=723"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=723"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=723"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}