Baroda CPE Study Circle Issues on Taxation Matters By CA Amar Shah 20/12/2016 Amar Shah & Associates Chartered Accountants

Issues on Business Deduction Baroda CPE Study Circle 12/20/2016 Issues on Business Deduction 1.The ‘a’ has claimed certain amount as miscellaneous expenses. The AO has disallowed 50% of expenditure on ad hoc basis and on the basis of the assumption that “a” was not doing any business activity ? 20/12/2016 Amar Shah & Associates Chartered Accountants CA AMAR SHAH

Baroda CPE Study Circle 12/20/2016 2. Interest paid for the late deposit of service Tax is allowed as expense or not? 20/12/2016 Amar Shah & Associates Chartered Accountants CA AMAR SHAH

3. Penalty charges paid to 3. Penalty charges paid to Pollution Control Board for failure to install pollution control equipment at factory premises is allowable as expenditure or not? 20/12/2016 Amar Shah & Associates Chartered Accountants

4. Interest paid on Share application money pending allotment is allowable as Revenue expenditure? 20/12/2016 Amar Shah & Associates Chartered Accountants

5. If ‘a’ filed application for approval of Gratuity Trust but same was not granted & pending before CIT. Can AO make disallowance of contribution made by ‘a’ to gratuity trust during pendency of approval? 20/12/2016 Amar Shah & Associates Chartered Accountants

6. If ‘a’ has made payment to subcontractor through banking channel and after receipt of progress report & deduction of TDS. ‘a’ has not received invoice from sub- contractor. can AO make disallowance on account of bogus expenses? 20/12/2016 Amar Shah & Associates Chartered Accountants

Issues on sec. 14A 7. Can AO disallow expenses u/s 14A after A.Y.2008-09 simply mentioning Rule 8D ? If he does so what is the remedy available with assessee ? 20/12/2016 Amar Shah & Associates Chartered Accountants

Issues on sec. 14A 8. Can Share application money included while working average value of investment for disallowance u/s 14A? 20/12/2016 Amar Shah & Associates Accountants

Issues on sec. 14A 9.Interest paid on partners' capital does qualify as expenditure for the purpose of Section 14A? 20/12/2016 Amar Shah & Associates Chartered Accountants

Issues u/s 40(a)(ia) 10 .The assessee has made payment of wages. The wages payments had been made to workers through 3 persons at different sites. The assessee has not deducted TDS . The AO has disallowed payments on the contention that payment had been made to contractors/subcontractors without TDS. Can disallowance be sustainable? 20/12/2016 Amar Shah & Associates Chartered Accountants

Issues u/s 40(a)(ia) 11.The assessee is buyer of materials. The assessee has paid reimbursement of Transportation expenses to supplier under an agreement. The “a” has not deducted TDS. The AO has disallowed the expenses on the contention of non- deduction of TDS? 20/12/2016 Amar Shah & Associates Chartered Accountants

Distinction between Setting. up new unit/business & commencement of Distinction between Setting up new unit/business & commencement of Business 12) Setting up of New Units on similar building was held to be allowable as Revenue Expenditure or Capital Expenditure? 20/12/2016 Amar Shah & Associates Chartered Accountants

Distinction between Setting up & commencement of Business 13.Expenditure in respect of Project which did not materialize has to be treated as Revenue expenditure or capital expenditure? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain Sec 54 14.The ‘a’ has entered into a construction agreement with Builder/Developer. The construction of house could not be completed in spite of payment by ‘a’. Non completion of house is beyond control of ‘a’. Can ‘a’ be eligible for exemption u/s 54? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain Sec 54 15. If ‘a’ has utilized profit on sale of property for residence purpose. The ‘a’ got occupancy certificate beyond 4 years and such delay was beyond control of ‘a’. Can a claim of ‘a’ allowable as deduction u/s 54? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain Sec 54 16) Sec 54F deduction is allowable to ‘a’ If builder could not complete project on time? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain 17) If ‘a’ utilized profit on sale of house & commercial property to purchase a land for construction of house. The said land sold by ’a’ & he purchased new house. Whether benefit of deduction u/s 54 is allowable ? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain Sec 50C 18) Stamp Valuation, proviso to Sec 50C is inserted by Finance Act,2016 w.e.f. 01-04-2017.It should accordingly be given retrospective effect from 1.04.2003 i.e. Date effective from which Sec 50C was introduced. 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain 19)Is there any stipulation in Law that Sales Consideration itself needs to be invested in New Asset for claiming benefit of deduction u/s 54 or 54F? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain 20) Is relief u/s 54F available when ‘a’ is already owner of one residential house and also a co-owner of Second residential house? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain sec 54(2) 21) Capital Gain arise and if not utilized for investment than same will be first put in the Capital Gain deposit Account before filling return of income u/s 139(1) or 139(4) and thereafter property should be purchased or constructed. Then long term capital gain is taxable? 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain sec 54(2) For e.g. a) Capital gain arises of Rs. 50 Lacs in F.Y.2013-14 (Date of sale 1.08.2013) b) ROI filed on 30.07.2013. c) Capital Gain A/C opened on 01.07.2013. & deposited Rs. 50Lacs for purchase assets in future. d) Asset/New house purchased on 10.07.2014 of Rs. 50 Lacs out of withdrawals of Rs 50 Lacs from Capital Gain A/C. 20/12/2016 Amar Shah & Associates Chartered Accountants

Capital Gain sec 54(2) Suppose ‘a’ does not open a LTCG Account before 31.07.2013 and directly purchase house on 10.7.2014.Whether he is eligible for Sec 54 Deduction? 20/12/2016 Amar Shah & Associates Chartered Accountants

Penalty u/s 271(1)(c) 23.Concealment penalty can not be imposed if the AO does not specify whether penalty is for “concealment of Income” or for “furnishing inaccurate particulars”? 20/12/2016 Amar Shah & Associates Chartered Accountants

For any query contact: CA Amar Shah Amar Shah & Associates Chartered Accountants Address: 11, Vikas Nagar Society, Nandalaya Compound, Old Padra Road, Vadodara-390020 Gujarat, India Contact No.: Office - +91-0265-2356565 Mobile - +91-9227101188 Email Id.: amarshahca@hotmail.com 20/12/2016 Amar Shah & Associates Chartered Accountants

THANK YOU 20/12/2016 Amar Shah & Associates Chartered Accountants