TaxTMI 
TaxTMI 
CBDT asks AOs not to allow deduction for interest in case of provisions for Micro, Small and Medium Enterprises Development Act.
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....e Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA, 2006) which provides for facilitating the promotion and development and enhancing the competitiveness of micro, small and medium enterprises has come into force from 2nd October, 2006. The provisions of Sections 22 and 23 of the said Act have a bearing on the assessment of 'buyers' under the Income Tax Act, 1961. Here, the term '....
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....harge for effective implementation. (Renu Jauhri) Director (ITA-II) ANNEXURE Relevant provisions of the Micro, Small and Medium Enterprises Development Act, 2006. " Section 22: Where any buyer is required to get his annual accounts audited under any law for the time being in force, such buyer shall furnish the following additional information in his annual statement of accounts, namely:- (i....
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.... to the small enterprise, for the purpose of disallowance as a deductible expenditure under section 23. Section 23: Notwithstanding anything contained in the Income-tax Act, 1961, the amount of interest payable or paid by any buyer, under or in accordance with the provisions of this Act, shall not, for the purposes of computation of income under the Income-tax Act, 1961, be allowed as deduction."....
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.... by such enterprises." 3. Section 7(1) of the Act defines micro and small enterprises. A "micro enterprise" means any class or classes of enterprises, whether proprietorship, HUF, Association of persons, co-operative society, partnership firm, company or undertaking, by whatever name called, if its investment in plant and machinery does not exceed twenty five lakh rupees if it is engaged in the ....