-
Vodafone case: CBDT forms panel to study SC order (Click for detail)
-
FEMA : Master Circular on Compounding of Contraventions under FEMA, 1999 - MASTER CIRCULAR NO. 8/2011-12 (Click for detail)
-
RBI - Master Circular on External Commercial Borrowings and Trade Credits (Click for detail)
-
ICAI: The Committee for Capacity Building of CA Firms and Small & Medium Practitioners (CCBCAF & SMP) Initiative for arranging the Health Insurance Scheme for Members & Students (Click for detail)
II. Recent Updates:
1. AIRPORT AUTHORITY OF INDIA Vs. COMMISSIONER OF INCOME TAX, ITA No. 432/2008, Date of Judgment: 16.12.2011, HIGH COURT OF DELHI
The assessee incurred expenditure on removal of encroachments and claimed the same as a revenue deduction on the ground that the expenditure was incurred in the normal course of the business; High Court Held upheld the assessee contention -
Expenditure incurred for running the business or working it, with a view to produce profits is in the nature of revenue expenditure. While expenditure for acquisition of a source of income would ordinarily be capital expenditure, expenditure which merely enables the profit making structure to work more efficiently would be in the nature of revenue expenditure. Expenditure incurred to fine tune trading operations to enable the management to run the business effectively, efficiently and profitably leaving the fixed assets untouched would be an expenditure of a revenue nature even though the advantage obtained may last for an indefinite period. On facts, the land belonged to the assessee and the amount paid for removal of encroachers was not for acquisition of new assets. The payment was made to facilitate its smooth functioning of the business i.e. in relation to carrying on the business in a profitable manner.
(Please click here for judgment)
2. M/s Nandi Steels Limited Vs. The Assistant Commissioner of Income-tax, ITA No. 546/2008, Date of pronouncement: 09-12-2011, ITAT- BANGALORE
Gains arising from “business assets” not eligible for set-off against Brought forward business loss
The assessee sold land & building used for business purposes. Though the gain was offered as capital gains, Section 72 (1) allows brought forward business loss to be set-off against the “profits & gains of any business or profession” of the subsequent year. The expression “profits & gains of business” means income earned out of business carried on by the assessee and not just income connected in some way to the business or profession carried on by the assessee. The land & building were fixed & capital assets used by the assessee for its business purposes. The gains arising there from were assessable as capital gains and were not eligible for set-off against the brought forward business loss u/s 72.
(Please click here for judgment)
III. Today's Bottomline News :
New User? 
Subscribe Now