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II. Useful Updates:
1. [Contribution by CA Arinjay Kumar Jain and contributor is is available atarinjay2009@gmail.com ]
A Presentation on "Analysis of Ruling of AAR in the case of Orient Green Power Pte. Ltd."
(Click here for detail)
2. [Contribution by CA Manoj Anand and contributor is is available atanandmanoja@gmail.com ]
An article on "Spouse and Law of Nomination"
(Click here for detail)
3. Smt. Gita Yogendra Divecha Vs. ITO, ITA No. 2430/Mum/2011, Date of pronouncement : 01-08-2012, ITAT – Mumbai
Interest from partnership firm need to offered for tax on accrual basis
Accrual of income is a well-known concept of taxation jurisprudence. It is a fact that assessee is following the mercantile system of accounting and as per the established principles of that system, whatever accrues to an assessee in a particular AY has to be offered for taxation for that particular year. In our opinion the concept of real income or no real income can never be a concept which can work if it is at variance with the statutory provisions. Under section 5 of the Act the moment there is an accrual of income by way of interest income, it has to be inevitably offered to tax and even if it is not so offered, it is the duty of the income tax authorities to bring it to tax. In other words the accrual of income must be real. What really accrues to the assessee has to be found out and what accrues must be considered from the point of view of real income taking the probability or improbability of realization in a realistic manner and dovetailing of these factors together, but once the accrual takes place on the conduct of the parties subsequent to the year of closing, an income which has accrued cannot be made as no income.
(Please click here for judgment)
4. M/s Foxconn India Developer (P) Ltd. Vs. ITO, I.T.A. No. 492/Mds/2010, Date of Pronouncement : 30.04.2012, ITAT- Chennai
Issue:
Whether upfront charges paid by the assessee for allotment of land as rent advance, making the assessee liable for deduction of tax at source under Section 194-I of Income-tax Act, 1961
Held:
While interpreting “rent” as mentioned in Section 194-I, we have to apply the definition given to “rent” in the explanation thereto. The definition of “rent” given under Explanation to Section 194-I of the Act will squarely cover the payment made by the assessee to M/s SIPCOT Ltd. and render such payment as something on which assessee was obliged to deduct tax at source. We are, therefore, of the opinion that assessee having not deducted such tax at source, rigours of Sections 201(1) and 201(1A) of the Act are attracted. However, the payee has included the charges in its income and paid taxes thereon, there cannot be any doubt that TDS could not be recovered from the assessee on such amounts despite assessee being one in default. Nevertheless, assessee would be liable for interest under Section 201(1A) of the Act.
(Please click here for judgment)
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