Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
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
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. 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
    ManualsIncome Tax
    What is the impact of ICDS X containing transitional provisions.
    ManualsIncome Tax
    Under ICDS X, whether reversal of an asset and the related income would mean that the entry which wa...
    ManualsIncome Tax
    Can any expenditure should set off against a provision recognised for another expendiure.
    ManualsIncome Tax
    Expenditure on post-retirement benefits like provident fund, gratuity, etc. are covered by specific ...
    ManualsIncome Tax
    What is the manner of recording the borrowing costs.
    ManualsIncome Tax
    What are the activities necessary to prepare inventory for its intended sale as per ICDS IX.
    ManualsIncome Tax
    There are specific provisions in the Act read with Rules under which a portion of borrowing cos...
    ManualsIncome Tax
    How to allocate borrowing costs relating to general borrowing as computed in accordance with formula...
    ManualsIncome Tax
    Under ICDS IX does borrowing cost include exchange differences arising from foreign currency borrowi...
    ManualsIncome Tax
    Whether bill discounting charges and other similar charges would fall under the definition of borrow...
    ManualsIncome Tax
    Which are the borrowing costs covered by ICDS IX.
    ManualsIncome Tax
    What is the manner in which securities held as stock-in-trade are required to be valued.
    ManualsIncome Tax
    Para 9 of ICDS-VIII on securities requires securities held as stock-in-trade shall be valued at actu...
    ManualsIncome Tax
    Which ICDS would govern derivative instruments.
    ManualsIncome Tax
    For subsidy received prior to 1st day of April 2016 but not recognised in the books pending satisfac...
    ManualsIncome Tax
    How to deal with a situation where compensation is payable for the purposes of giving ‘immediate f...
    ManualsIncome Tax
    Whether a grant which is not directly relatable to non-depreciable assets should be concluded as an ...
    ManualsIncome Tax
    Where the grants are received for assets which are outside the block of assets, then what is the tre...
    ManualsIncome Tax
    Whether grants should be recognised even in cases where there is no certainty that the conditions at...
    ManualsIncome Tax
    How are Government grants to be recognized.
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

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

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    ManualsIncome Tax
    Show AI Summary
    Transitional provisions for ICDS X ensure recognition of provisions and contingent items to prevent double taxation or omission.
    Transitional recognition under ICDS X requires that provisions, contingent liabilities and contingent assets and related income be recognised for previous years commencing on or after 1 April 2016 in accordance with this standard, after taking into account any amount recognised for the same items for previous years ending on or before 31 March 2016; the rule aims to prevent double taxation or omission of income.
    ManualsIncome Tax
    Show AI Summary
    Supremacy of tax law: reversal of an ICDS-recognised asset must follow tax deduction rules, permitting write-off as bad debt.
    Reversal of an asset and related income recognised under ICDS X must conform to the Income-tax Act where conflicts arise; the Act's tax-deduction treatment applies, allowing write-off as a bad debt rather than simply reversing the original accounting recognition entry.
    ManualsIncome Tax
    Show AI Summary
    Set-off of provisions: expenditures may be set off only against the original provision, not provisions for different purposes.
    Under ICDS X, expenditures must be set off only against the original provision for which they were recognised; expenditures cannot be offset against provisions recognised for a different event or purpose, as that would conceal the separate financial effects of distinct events and undermine transparent disclosure of provisions, contingent liabilities and contingent assets.
    ManualsIncome Tax
    Show AI Summary
    Employee post retirement benefit provisioning excluded from ICDS X, governed by specific statutory provisions for income computation.
    Provisioning for employee post retirement benefits covered by AS 15 shall continue to be governed by specific provisions of the Act and are not dealt with by ICDS X; ICDS X does not apply to liabilities otherwise falling within AS 15.
    ManualsIncome Tax
    Show AI Summary
    Borrowing costs capitalization requires capitalizing interest for qualifying assets; inventory only when production is prolonged.
    Borrowing costs directly attributable to acquisition, construction or production of tangible and intangible assets must be capitalized as part of the asset cost. Inventory borrowing costs are capitalized only when the inventory requires an extended period to become saleable. Specific borrowings for a qualifying asset require capitalization of actual borrowing costs incurred during the qualifying period. For general borrowings, a formulaic allocation apportions borrowing costs to qualifying assets based on the ratio of qualifying assets to total assets.
    ManualsIncome Tax
    Show AI Summary
    Inventory preparation processes define activities included in inventory cost when making goods fit and saleable under accounting standards.
    Activities necessary to prepare inventory for its intended sale include all processes required to make inventory functional for its intended use and to render it saleable, notably quality control to verify fitness for use and primary packing where goods are normally sold in packed condition.
    ManualsIncome Tax
    Show AI Summary
    Borrowing cost capitalization must exclude portions disallowed by specific statutory provisions, only allowable amounts may be capitalised.
    Borrowing costs capitalised under ICDS IX must exclude amounts disallowed by specific provisions of the Act; only the portion of borrowing cost that remains allowable under the Act may be capitalised, because specific statutory disallowances override ICDS treatment.
    ManualsIncome Tax
    Show AI Summary
    Capitalization of borrowing costs: general borrowing must be allocated to qualifying assets and capitalized on an asset-by-asset basis.
    General borrowing costs computed under the ICDS-IX formula must be apportioned among qualifying assets and capitalized on an asset-by-asset basis, so that each qualifying asset's capitalized borrowing cost reflects its proportionate share of general borrowing under the standard.
    ManualsIncome Tax
    Show AI Summary
    Exchange differences excluded from borrowing costs under ICDS IX; foreign exchange effects governed by ICDS VI.
    Exchange differences from foreign currency borrowings that are treated as adjustments to interest are excluded from borrowing costs under ICDS IX; the effects of changes in foreign exchange rates, including those relating to interest, are governed by ICDS VI.
    ManualsIncome Tax
    Show AI Summary
    Borrowing cost: bill discounting and similar charges treated as borrowing cost, except when not tied to borrowed funds.
    The definition of borrowing cost is inclusive and generally covers bill discounting charges and similar charges as borrowing cost for income computation and disclosure; however, discounting charges that do not arise from borrowing funds are excluded from that definition.
    ManualsIncome Tax
    Show AI Summary
    Borrowing costs include interest and related charges such as commitment charges, amortised discount and finance lease charges.
    Borrowing costs under ICDS IX comprise interest and other costs incurred in connection with borrowing funds, including commitment charges, amortised discount or premium, amortised ancillary costs in arranging borrowings, and finance charges for assets taken on finance lease.
    ManualsIncome Tax
    Show AI Summary
    Valuation of securities as stock-in-trade: mandatorily at lower of actual cost and net realizable value.
    Securities held as stock-in-trade must be valued at the lower of actual cost initially recognized and net realizable value at year-end. Unlisted or unquoted securities held as stock-in-trade are to be measured at actual cost as initially recognized, under the income computation and disclosure standards framework.
    ManualsIncome Tax
    Show AI Summary
    Valuation of securities: aggregate category wise cost compared with net realisable value, lower amount taken as carrying value.
    For subsequent measurement under ICDS VIII, securities held as stock in trade are aggregated category wise; for each category the aggregate cost and aggregate net realisable value are compared, and the lower of the two is taken as the carrying value.
    ManualsIncome Tax
    Show AI Summary
    Derivatives accounting: ICDS VI governs typical derivatives, ICDS I applies residually, capital-asset derivatives are excluded.
    ICDS VI supplies guidance for derivative contracts such as forward contracts; derivatives outside ICDS VI's scope fall under ICDS I. Derivative instruments that qualify as capital assets are excluded from ICDS and thus not governed by those standards.
    ManualsIncome Tax
    Show AI Summary
    Recognition of government grants: pre-existing grants deemed recognised on receipt while later grants follow ICDS recognition criteria.
    Grants actually received before the ICDS effective date are deemed recognised on receipt under Para 4(2) of ICDS VII and remain governed by pre-ICDS law; grants received on or after the effective date must be recognised only when the ICDS VII recognition criteria in Paras 5-9 are satisfied, with recognition then following ICDS VII.
    ManualsIncome Tax
    Show AI Summary
    Government grant for immediate financial support must be recognised when receivable, irrespective of actual receipt.
    Government grants given as immediate financial support and not tied to specific expenditure must be recognised when the grantee is entitled and sums become receivable; actual receipt is immaterial. If the grant is confined to an individual enterprise and grant-related conditions are met, recognition occurs in the period of receivability, governing timing of income inclusion and disclosure under the income computation framework.
    ManualsIncome Tax
    Show AI Summary
    Government grants treatment: grants not directly relatable to nondepreciable assets treated as taxable income rather than reduction in asset cost.
    Grants not directly relatable to nondepreciable assets are to be recognised as taxable income under the Act rather than deducted from asset cost; the ICDS preamble confirms the Act prevails over ICDS, and paragraph 7 of ICDS VII applies solely to depreciable assets where reduction of asset cost is appropriate.
    ManualsIncome Tax
    Show AI Summary
    Recognition of government grants: generally recognized as income on receipt unless reasonable certainty permits spreading with related costs.
    Grants for assets outside the block of depreciable assets are to be recognized as income; statutory tax provisions control and preclude spreading recognition beyond the year of receipt, except where there is reasonable certainty of receipt permitting deferral and matching with costs incurred for obligations related to the non-depreciable assets.
    ManualsIncome Tax
    Show AI Summary
    Recognition of government grants: must occur on receipt; potential reversals are applied against unamortized deferred credit balances.
    ICDS VII requires government grants to be recognised on the date of receipt and prohibits deferral beyond receipt; where grants become refundable because attached conditions are unmet, reversal of initial recognition must first be applied to the unamortized deferred credit arising from the grant, so income recognition must reflect both receipt and the certainty of meeting conditions.
    ManualsIncome Tax
    Show AI Summary
    Recognition of government grants requires reasonable certainty of compliance and receipt; disclose in income computation accordingly.
    Under ICDS VII, government grants are to be recognized when there is reasonable certainty that the related conditions will be complied with and that the grants will be received; such grants should not be postponed beyond the actual receipt date for income computation and disclosure purposes.

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters
      Corporate Laws

      Small Industries Development Bank of India versus M/s. Sibco Investment Pvt. Ltd- Legal Position of NBFC in a civil suit.

      2 June, 2022

      Contents
      Acts
      Plus +
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      2022 (1) TMI 170 - Supreme Court

      Legal Position of NBFC in a civil suit.

      Section 45 MB of the RBI Act 1934. - Power of bank to prohibit acceptance of deposit and alienation of assets, Section 45 MC - Power of Bank to file winding up petition.

      Section 35A of the Banking Regulation Act, 1949 vests power in the RBI to give directions to banks and can take action, "to prevent the affairs of any banking company being conducted in a manner detrimental to the interests of the depositors or in a manner prejudicial to the interests of the banking company"

      A conjoint reading of the statutory provisions, makes it abundantly clear that for ‘public interest’ the RBI is empowered to issue any directive to any banking institution, and to prohibit alienation of an NBFC’s property.

      The term ‘Public interest’ has no rigid definition. It has to be understood and interpreted in reference to the context in which it is used. The concept derives its meaning from the statute where it occurs, the transaction involved, the state of society and its needs.

      It is not necessary for RBI to mention a specific provision before issuing directions, for it to have statutory consequences. All that is required is the authority under the law, to issue such direction.

      Therefore the RBI under Section 45-MB of the RBI Act, 1934 and 35-A of the Banking Regulation Act, 1949 has the requisite authority to issue the communication dated 09th June, 1997. Now the omission by the RBI to mention any enabling provision, doesn’t change the nature and status of the direction.

      The statutory arrangement and interpretation persuades to hold that actions in furtherance of grounds of ‘public policy’ by the RBI was justified, for issuing the Notification dated 10.04.1997. The notification itself clearly mentioned that it is issued for the benefit of "depositors and creditors" of CRB Capital.

      The actual status of the RBI Notification would have a bearing on the claim against the defendant in the suit and subsequent proceeding/s. The plaintiff, as can be noted, always had the option of challenging its legality but they have never specifically challenged those in the Suit. In a way the plaintiff " waived its right" by not challenging the RBI notification then/at that past point of time in the suit proceedings.

      The principle of waiver/acquiescence is applicable here.

      When the legality of the RBI Notification is not under challenge, relief can’t be granted in the Suit without determining its "legality". This in our perception can by itself, put a quietus on the issue at hand - the plaintiff cannot be granted parity with its predecessor-in-interest, Shankar Lal Saraf, who was paid interest which accrued in July, 1997 despite the RBI directive of 09.06.1997.

      The defendant defended this fallacy/aberration by clarifying that the payment to Shankar Lal Saraf was made before the defendant was in receipt of the RBI directive.

      Hence, the plaintiff cannot claim any advantage for themselves or parity with its predecessor-in-interest, on this cause. It amounted to sub-silencio acceptance.

      Suit barred by constructive res judicata.

      The cause of action for the plaintiff accrued the first time, when the defendant allegedly failed to pay timely interest. Since such a claim was not raised in the writ court, the subsequent Suit of SIBCO is barred by the principle of Constructive Res Judicata.

      Section 441(2) of the Companies Act, 1956 reveals that winding-up proceedings other than voluntary winding-up, are said to have commenced from the date of presentation of petition - A conjoint reading of Section 531 and 441(2) of the Companies Act, 1956 prima facie reveals that any transfer of property by or against a company in involuntary winding up, the suspect spell for deemed fraudulent transaction is six months before presentation of the winding up petition.

      In the present case, the petition for winding-up was submitted by RBI on 22.05.1997 and admittedly, the transfer in Shankar Lal Saraf’s favour was executed in February, 1997. The defendant’s contention as to the transfer being in the suspect spell, may be deemed fraudulent, cannot be rejected. 

      A question arose whether the present suit is barred by Constructive res judicata- It being decided that the cause of action for the plaintiff accrued the first time, when the defendant allegedly failed to pay timely interest. Since such a claim was not raised in the writ court/court of first instance, the subsequent Suit of SIBCO is barred by the principle of Constructive Res Judicata.

      This narrative makes us understand that a NBFC governed by the Banking  Regulation Act, 1949 and the  Reserve Bank of India Act, 1934 along with Section 531 and 441(2) of the Companies Act, 1956 is too subject to the common law principles and the Code of Civil Procedure, 1908 when in a civil suit before a Court of law.

       


      Full Text:

      2022 (1) TMI 170 - Supreme Court

      Topics

      ActsIncome Tax