Just a moment...

⚠✕
❮ Top
☎ Help
☰
×

By creating an account you can:

Logo TaxTMI
Keyword Search :
AI Tools : New
Ask tax questions in natural language. Powered by AI trained on the TaxTMI legal database. Use AI Tools ➞
Call Us / Help / Feedback✕

Contact Us At :

✉ E-mail: [email protected]

✆ Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search ✕
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
    6. Text Search
  6. The system will try to fetch results that contains ALL your words.
  7. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
    8. Text Search
╳
Add to...
You have not created any category. Kindly create one to bookmark this item!
✕
Create New Category
Hide
Title :
Description :
❮❮ Hide
❮ Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search ❯
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text ❯
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----❯
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ---- ❯
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    Case LawsIncome Tax
    Navigating Legal Timelines: The Impact of Incomplete ITBA Orders on Appeal Limitations.
    Case LawsIncome Tax
    Navigating the Thin Line Between Charity and Commerce: Amendment of Trust Deed and Compliance with S...
    Case LawsIncome Tax
    Changing Objectives of Registered Societies: Exemption u/s 11 and survival of the Registration u/s 1...
    Case LawsIncome Tax
    Judicial Scrutiny of Residential Status and Jurisdictional Shift in Income Tax Cases
    Case LawsIncome Tax
    Scrutinizing the Genuineness of Gifts in Income Tax Law: Taxability of Gift u/s 68
    Case LawsIncome Tax
    Interpreting TDS Liability u/s 194-I against Lease Payments: A Legal Analysis of Security Deposit vs...
    Case LawsGST
    Analyzing GST Implications on Free of Cost Supplies in Service Agreements: A Case Study
    Case LawsIncome Tax
    Evaluating Jurisdictional Validity in Taxation: The Significance of Draft Assessment Orders under Se...
    Case LawsIncome Tax
    Breaking Down the Supreme Court's Decision on Double Taxation Avoidance Agreements
    Case LawsIncome Tax
    Balancing Sovereignty and Law: India's Treaty-Making Powers and Domestic Enforcement
    Case LawsIncome Tax
    Navigating DTAAs: A Comparative Analysis of India, Netherlands, France, and Switzerland
    Case LawsIncome Tax
    The OECD Membership Puzzle: Interpreting 'Is' in Double Taxation Agreements
    Case LawsIncome Tax
    The Dual Life of Treaties: Understanding Their Enforcement in Indian Law
    Case LawsPMLA
    Bail, Arrest, and Rights: A Close Look at Recent PMLA Judgment
    Case LawsCustoms
    Classifying Data Collection Devices in Import Regulations: The Kronos 4500 Touch ID Terminal Case
    Case LawsGST
    The Power to Rectify versus Power to review of assessment order: Tax Assessments
    Case LawsPMLA
    From Land Transactions to Money Laundering: A Legal Odyssey
    Case LawsIncome Tax
    Assessment Proceedings and Validity of Section 143(2) Notices: Jurisdictional Clarity and Monetary L...
    Case LawsIndian Laws
    Landmark Judgment on Admissibility of Electronic Evidence: A Legal Analysis
    Case LawsVAT / Sales Tax
    Eligibility of Input Tax Credit (ITC) for purchases made during the manufacturing process of goods: ...
❮
❯
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Open Link
    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    Case LawsIncome Tax
    Navigating Legal Timelines: The Impact of Incomplete ITBA Orders on Appeal Limitations.
    Show AI Summary
    Incomplete assessment communication can delay the start of the limitation period for appeals when essential contents are not disclosed.
    Incomplete ITBA order uploads do not void an assessment but may postpone the commencement of the limitation period for appeals because knowledge of decision requires understanding the essential contents; defective communication can justify extension of time even though the assessment's substantive validity remains unaffected.
    Case LawsIncome Tax
    Navigating the Thin Line Between Charity and Commerce: Amendment of Trust Deed and Compliance with S...
    Show AI Summary
    Charitable status preserved where incidental surplus, trustee payments, or deed amendments further educational objectives without private benefit.
    The Court analysed whether surplus generation, fee policies, deed amendments, and payments to trustees removed an educational trust's charitable purpose. It held that incidental surplus and deed changes furthering objectives do not automatically negate charitable character, and payments for genuine services do not necessarily amount to private benefit. Cancellation of registration requires proof of lack of genuineness or objective deviation; mere shortcomings or commercial elements aimed at sustainability are insufficient.
    Case LawsIncome Tax
    Changing Objectives of Registered Societies: Exemption u/s 11 and survival of the Registration u/s 1...
    Show AI Summary
    Alteration of objects: failure to notify tax authority can jeopardise a society's registered status under section 12A.
    A material amendment of a registered society's objects, coupled with failure to intimate the Commissioner under rule 17B and Form No.10A, undermines the basis of registration under Section 12A; Section 12AA(3) addresses activities inconsistent with objects, whereas fundamental change in the objects themselves requires statutory intimation to preserve the original registration.
    Case LawsIncome Tax
    Judicial Scrutiny of Residential Status and Jurisdictional Shift in Income Tax Cases
    Show AI Summary
    Residential status determination can shift tax assessment jurisdiction when overseas activities do not qualify as employment.
    The Tribunal examined whether the appellant's overseas activities constituted employment for residential-status purposes, applying ejusdem generis and noscitur a sociis to conclude they did not. Consequently, the officer of international taxation's assumption of jurisdiction based on non resident status was improper once residential status was contested; the file should have been transferred to the territorially competent assessing officer or an authorised officer. An assessment conducted without such lawful jurisdiction was characterised as legally defective and without effect.
    Case LawsIncome Tax
    Scrutinizing the Genuineness of Gifts in Income Tax Law: Taxability of Gift u/s 68
    Show AI Summary
    Genuineness of gifts requires proof of donor identity and capacity, otherwise taxability follows under assessment rules.
    The High Court examined taxation of receipts treated as gifts, stressing that the assessee must prove the genuineness of gifts by establishing donor identity and the donors' capacity and creditworthiness; acceptance by lower authorities does not relieve the recipient of the burden of proof, and inadequate documentary corroboration justifies reassessment where donations are doubtful.
    Case LawsIncome Tax
    Interpreting TDS Liability u/s 194-I against Lease Payments: A Legal Analysis of Security Deposit vs...
    Show AI Summary
    Advance rent characterization alters TDS obligations under Section 194-I, requiring payers to deduct tax at source.
    Payments labelled as a security deposit that are contractually reduced and adjusted against periodic rent payments are treated as advance rent rather than refundable security, and thus constitute rent for TDS purposes, obliging the payer to deduct tax at source under the statutory withholding framework.
    Case LawsGST
    Analyzing GST Implications on Free of Cost Supplies in Service Agreements: A Case Study
    Show AI Summary
    Non-monetary consideration: free diesel treated as part of taxable value for GTA services under GST implications.
    Whether diesel supplied free of cost by a service recipient constitutes consideration for GST valuation of Goods Transport Agency services is examined, with the analysis concluding that non-monetary benefits provided by recipients may be added to the taxable value and that contractual allocation of free supplies does not displace the statutory valuation framework.
    Case LawsIncome Tax
    Evaluating Jurisdictional Validity in Taxation: The Significance of Draft Assessment Orders under Se...
    Show AI Summary
    Draft assessment procedure required under law: omission invalidates assessment proceedings and denies assessee DRP objection rights.
    Section 144C mandates a non-obstante, mandatory draft assessment procedure for eligible assessees, requiring issuance of a draft order, opportunity to file objections, and consideration by a three-member Dispute Resolution Panel. A foreign entity qualifying as an eligible assessee must be afforded this process; failure to issue the draft order is a substantive lapse that deprives the assessee of the DRP forum and engenders jurisdictional infirmity in any consequent final assessment, demand, or penalty. Revisionary powers do not obviate the Section 144C mandate.
    Case LawsIncome Tax
    Breaking Down the Supreme Court's Decision on Double Taxation Avoidance Agreements
    Show AI Summary
    DTAA incorporation: notification requirement under domestic law limits automatic treaty application across countries and clarifies temporal scope.
    The decision holds that a DTAA requires a mandatory notification under Section 90(1) to be effective domestically, that provisions in a DTAA with one country do not automatically extend to other bilateral agreements without explicit amendment, and that the present-tense term "is" fixes the temporal application of treaty benefits to the date of treaty entry with India.
    Case LawsIncome Tax
    Balancing Sovereignty and Law: India's Treaty-Making Powers and Domestic Enforcement
    Show AI Summary
    Most favoured nation clause interpretation guides treaty effect, subject to domestic notification requirements for implementation.
    The Most Favoured Nation (MFN) clause in tax treaties must be interpreted under Article 31 VCLT principles as reflecting customary international law, with subsequent agreements and state practice serving as authentic means of interpretation. Domestic implementation procedures materially affect treaty operation: comparative practices of other states cannot substitute for India's requirement of formal domestic steps, including issuance of a notification after a treaty trigger event, to assimilate treaty amendments into national law.
    Case LawsIncome Tax
    Navigating DTAAs: A Comparative Analysis of India, Netherlands, France, and Switzerland
    Show AI Summary
    Treaty implementation procedures determine when DTAA modifications bind taxpayers, requiring domestic notification for enforceability.
    In India, DTAA modifications take effect only upon formal domestic notification, preventing automatic retroactive application of third country treaty changes and reflecting a dualist approach requiring assimilation of treaty amendments into domestic law before they bind taxpayers; by contrast, the Netherlands, France, and Switzerland rely on differing domestic mechanisms-executive decrees, parliamentary ratification, or referenda and implementing orders-that may permit retroactive application and integrate treaties into domestic enforceable law.
    Case LawsIncome Tax
    The OECD Membership Puzzle: Interpreting 'Is' in Double Taxation Agreements
    Show AI Summary
    Interpretation of "is" in tax treaties determines when OECD membership triggers treaty benefits under domestic implementation rules.
    Interpretation of the term "is" in DTAAs is context-dependent: although generally present in signification, its temporal application must be determined from the treaty text and purpose. Applied to OECD membership, the operative moment for eligibility to treaty benefits depends on when the DTAA relationship produces the relevant legal consequence, and this assessment must be reconciled with the domestic requirement for legislative action or notification for treaty enforceability.
    Case LawsIncome Tax
    The Dual Life of Treaties: Understanding Their Enforcement in Indian Law
    Show AI Summary
    Treaty Enforcement: legislative enactment required for treaties to create domestic rights; executive negotiation alone is insufficient.
    Treaties do not function as self-executing domestic law; the Union may negotiate and ratify international agreements but legislative enactment is required to create or alter domestic rights and obligations. Under the dualist approach, executive negotiation and foreign measures cannot substitute for domestic incorporation; implementing statutes and notification mechanisms are necessary for tax treaties to be recognized and applied by revenue authorities. Courts may consult treaty texts to resolve ambiguities in domestic implementing laws but cannot themselves import treaty provisions into domestic law absent parliamentary enactment.
    Case LawsPMLA
    Bail, Arrest, and Rights: A Close Look at Recent PMLA Judgment
    Show AI Summary
    Anticipatory bail rights affirmed: non-accused persons may seek protection and PMLA arrests require recorded reasons and prompt court production.
    Anticipatory bail under Section 438 Cr.P.C. is available even before formal accusation and persons not named in an ECIR have locus standi to seek it. Arrest powers under Section 19 of the PMLA require a recorded reasonable belief by the Director and strict compliance with statutory conditions; failure to record reasons or comply with the arrest provisions can vitiate the arrest. Arrested persons must be produced before the court within 24 hours, excluding transit time, to secure judicial oversight and protect liberty.
    Case LawsCustoms
    Classifying Data Collection Devices in Import Regulations: The Kronos 4500 Touch ID Terminal Case
    Show AI Summary
    Classification of data collection devices clarified; device function governs tariff heading with chapter notes guiding treatment.
    The tribunal examined product documentation and found the Kronos 4500's data capture and transmission functions determinative; applying the General Rules of Interpretation and Chapter Note 5(E) to Chapter 84, it concluded the terminal's proximity/badge reader function governed tariff classification rather than mere central server processing capability.
    Case LawsGST
    The Power to Rectify versus Power to review of assessment order: Tax Assessments
    Show AI Summary
    Rectification vs review: assessing authority lacks power to reopen finalized tax assessments; appellate remedy available.
    The assessing authority distinguished between rectification of manifest errors and review of a finalized assessment, concluding it lacked power to review a completed tax assessment merely because the assessee later adjusted claimed input tax credit; the court emphasised the boundary between corrective filings and reopening concluded assessments and noted the availability of appellate remedy to challenge assessment orders.
    Case LawsPMLA
    From Land Transactions to Money Laundering: A Legal Odyssey
    Show AI Summary
    Money laundering investigations: quashing ECIRs premature where disclosure is not mandated, and coercive step restraints are constrained.
    Money laundering inquiries arising from land transactions and property registrations involve independent proceedings under the Prevention of Money Laundering Act; seeking to quash an ECIR is procedurally sensitive where the investigated person lacks a copy and disclosure is not mandated. Such inquiries treat witness status in predicate offences as not determinative of accused status in proceeds of crime investigations, and applications to preclude coercive investigative measures must not substitute for established remedies, while access to investigative records raises transparency questions without creating an absolute entitlement.
    Case LawsIncome Tax
    Assessment Proceedings and Validity of Section 143(2) Notices: Jurisdictional Clarity and Monetary L...
    Show AI Summary
    Jurisdictional validity of Section 143(2) notices: invalid issuance by wrong officer vitiates ensuing scrutiny proceedings.
    The tribunal found that a statutory scrutiny notice issued by an officer without jurisdiction at the time of issuance was defective, and that subsequent action by another assessing officer did not cure the initial defect; jurisdictional allocation must follow administrative monetary thresholds for metropolitan corporate returns, and failure to issue a valid notice at initiation vitiates scrutiny proceedings.
    Case LawsIndian Laws
    Landmark Judgment on Admissibility of Electronic Evidence: A Legal Analysis
    Show AI Summary
    Admissibility of electronic evidence: Section 65-B certificates may be produced at any trial stage if no irreversible prejudice arises.
    A Section 65-B certificate is not required when an electronic record is used as primary evidence; delay in producing the certificate is not per se fatal if it causes no irreversible prejudice, and procedural tools (including witness recall) may be employed to produce and examine forensic reports derived from seized electronic devices.
    Case LawsVAT / Sales Tax
    Eligibility of Input Tax Credit (ITC) for purchases made during the manufacturing process of goods: ...
    Show AI Summary
    Input Tax Credit eligibility limited to tax payable on sale value when purchased inputs are used in manufacturing.
    Eligibility of Input Tax Credit under the UP VAT Act is constrained by the statute's text: credit is allowed only to the extent of tax payable on the sale value of goods or manufactured goods, with a proportional allocation where exempt by products arise. A statutory deeming fiction treats purchased inputs as used in taxable manufacture when by products emerge, enabling ITC claims for taxable outputs and certain exempt by products but disallowing credit for non VAT goods, all governed by strict construction of the statute.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Home› TMI Notes › Bills › News › Category › This
      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Bills

      Rationalisation of provision of transfer of capital asset to partner on dissolution or reconstitution

      1 February, 2021

      Contents
      Plus +
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      Print Options

      Budget 2021-22 + FINANCE Bill, 2021

      Rationalisation of provision of transfer of capital asset to partner on dissolution or reconstitution

      The existing provisions of section 45 of the Act inter alia, provides that any profits or gains arising from the transfer of a capital asset shall be chargeable to income-tax under the head Capital gains and shall be deemed to be the income of the previous year in which such transfer takes place. Further sub-section (4) of the said section, provides that the profits or gains arising from the transfer of a capital asset by way of distribution of capital assets on the dissolution of a firm or other association of persons or body of individuals (not being a company or a co-operative society)or otherwise, shall be chargeable to tax as the income of such firm or other association of persons or body of individuals of the previous year in which the said transfer takes place. Further, the fair market value of the asset on the date of such transfer shall be deemed to be the full value of the consideration for the purposes of section 48.

      In this regard, it has been noticed that there is uncertainty regarding applicability of provisions of aforesaid sub-section to a situation where assets are revalued or self- generated assets are recorded in the books of accounts and payment is made to partner or member which is in excess of his capital contribution.

      Hence, it is proposed to substitute the existing sub-section (4) of section 45 of the Act with a new sub-section (4) and also insert a new sub-section (4A) to this section.

      New proposed sub-section (4) of section 45 of the Act applies in a case where a specified person who receives during the previous year any capital asset at the time of dissolution or reconstitution of the specified entity. The capital asset represents the balance in the capital account of such specified person in the books of the specified entity at the time of its dissolution or reconstitution. In this situation, the profit and gains arising from the receipt of such capital asset by the specified person shall be chargeable to income-tax as income of the specified entity under the head “capital gains” and shall be deemed to be the income of such specified entity of the previous year in which the capital asset was received by the specified person. For the purposes of section 48 of the Act, the fair market value of the capital asset on the date of such receipt shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset. The balance in the capital account of the specified person in the books of account of the specified entity is to be calculated without taking into account increase in the capital account of the specified person due to revaluation of any asset or due to self-generated goodwill or any other self-generated asset.

      New proposed section sub-section (4A) of section 45 of the Act applies in a case where a specified person receives during the previous year any money or other asset at the time of dissolution or reconstitution of the specified entity. The money or other asset is required to be in excess of the balance in the capital account of such specified person in the books of accounts of the specified entity at the time of its dissolution or reconstitution. In this situation, the profits or gains arising from the receipt of such money or other asset by the specified person shall be chargeable to income-tax as income of the specified entity under the head "Capital gains" and shall be deemed to be the income of such specified entity of the previous year in which the money or other asset was received by the specified person. For the purposes of section 48 of the Act,

      • value of the money or the fair market value of other asset on the date of such receipt shall be deemed to be the full value of the consideration received or accruing as a result of the transfer of the capital asset; and

      • the balance in the capital account of the specified person in the books of accounts of the specified entity at the time of its dissolution or reconstitution shall be deemed to be the cost of acquisition.

      The balance in the capital account of the specified person in the books of account of the specified entity is to be calculated without taking into account increase in the capital account of the specified person due to revaluation of any asset or due to self- generated goodwill or any other self-generated asset.

      For the purposes of these two sub-sections,-

      • specified person” is proposed to be defined as a person who is partner of a firm or member of other association of persons or body of individuals (not being a company or a cooperative society), in any previous year;

      • “specified entity” is proposed to be defined as a firm or other association of persons or body of individuals (not being a company or a cooperative society);and

      • “self-generated goodwill” and “self –generated assets” are proposed to be defined as goodwill or asset, as the case may be, which has been acquired without incurring any cost for purchase or which has been generated during the course of the business or profession.

      Consequential amendment is also proposed in section 48 of the Act to provide that in case of specified entity, the amount included in the total income of such specified entity under sub-section (4A) of section 45 which is attributable to the capital asset being transferred, shall be reduced from the full value of the consideration to compute income charged under the head “capital gains”. This is to be calculated in the manner to be prescribed later. This is to mitigate the double taxation which may have happened but for this provision in a situation where an asset which was revalued and for which income under the proposed sub-section (4A) of section 45 of the Act was brought to tax is transferred subsequently by the specified entity.

      These amendments will be effective from the 1st April, 2021 and will accordingly apply to the assessment year 2021-22 and subsequent assessment years.

      [Clauses 14 and 16]

       

      Full Text:

      Budget 2021-22 + FINANCE Bill, 2021

      Topics

      ActsIncome Tax
      Next ➔