THE WEEKLY TAX GNAN (w-02)

1)    Non-deduction of TDS on freight charges paid to a non-resident shipping company will not be disallowed u/s 40a(ia). Non-resident shipping companies are covered u/s 172 of the Income Tax Act, 1961. Section 172 is the overrides section 40a(ia).

 

2)    Though the payments made to the unapproved gratuity fund are dis-allowed u/s 40A(7), the same shall be allowed as deduction u/s 37(1). Bangalore Tribunal in Dy. CIT vs. ADC India Communication Limited.

 

3)    An application with the Dispute Resolution Committee shall be filed within 30 days from the date of the aggrieved order. Assessee whose Total Income is less than Rs. 50 lakhs or the amount of variation in an order passed is less than Rs. 10 lakhs can file an application.

 

4)    GST is applicable to voluntary payments made by the members of the housing societies. Payment is nothing but the consideration received by the society for various services rendered by it during the period of stay of member, repairs, shifting charges, etc. – Maharashtra AAR in the matter of Monalisa Co-operative society.

 

5)    The non-compete fees paid by the assessee is eligible for depreciation as intangibles. Payment is in the nature of “any other business/commercial rights” and the same shall be capitalized; hence, the depreciation on such payments is allowed as intangibles. Dy. CIT in Milacron India Private Limited.

 

6)    Interest paid on the purchase of house property can be claimed as the cost of acquisition while computing the Capital gains arising on the sale of the property. The deduction u/s 24b and u/s 48 can be claimed simultaneously. ITAT Chennai in ITO V/s Smt. R Aishwarya.

 

7)    The interest received by the land owners on enhanced compensation u/s 28 of the land acquisition act is exempt in the hands of the land owners. So, TDS u/s 194A is not required to be deducted on payment of such interest.

 

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CA Ramakrishna Sanjay