Direct Tax Laws & International Taxation - November 2015

It is clarified that an appeal should not be filed merely because the tax effect in a case exceeds the monetary limits prescribed above. Filing of appeal in such cases is to be decided on merits of the case. For further details regarding the meaning of ‘tax effect in different situations and methodology to be followed in such cases, the detailed circular may be referred. Cases where adverse judgments should be contested on merits even if tax effect is less…

1. PQR Ltd. is a company in which the whole of its share capital was held by LMN Ltd. Both PQR Ltd. and LMN Ltd. are Indian companies. PQR Ltd. had made investment in shares of Berkley Ltd. in 1992 for % 7,00,000 which it sold to LMN Ltd. on April 1, 2010 for a consideration of = 42,00,000. The fair market value of these shares of Berkley Ltd., as on April 1, 2001 is = 32,00,000. LMN Ltd. disinvested…

2. Ms. Janani reports to you that her gross receipt from interior decoration profession carried on by her during the year ended 31-03-2019 is = 47,80,000. Her net income as per income and expenditure account is = 25,00,000 before adjustment of depreciation of = 1,50,000. She did not pay any amount by way of advance tax during the financial year 2018-19. She has two residential house properties, of which one is self-occupied for residence and another is let out for…

3. Calculate the capital gains/loss on transfer of listed equity shares (STT paid both at the time of acquisition and transfer of shares) for the AY.2019-20, in the following cases: (i) Mr. Ravi purchased 500 shares in Tapti Ltd. on 15.11.2016 ata cost of ₹1,200 per share. The Fair Market Value (FMV) of the share as on 31.1.2018 is ₹2,300. Ravi sold all the shares of Tapti Ltd. on 15.5.2018 for $3,000. (ii) Mr. Giri purchased 700 shares in Narmada…

4. PQR Ltd. is engaged in the manufacture of multi-layer tubes and other speciality packaging and plastic products. It came out with an initial public issue of shares during the year 2017-18 and deposited the share application money received in banks till the allotment of shares was completed. The company earned interest of $75 lakhs on such deposits, which it set off against the public issue expenses, while computing total income for AY.2018-19. Accordingly, the company paid the tax on…

5. ABC Ltd. has approached the Supreme Court under a special leave petition. There has been a delay of 439 days in filing the appeal under section 260A for which reason ABC Ltd. requested for a condonation of delay under section 14 of Limitation Act, 1963. The company submitted that the delay was on account of pursuing an alternate remedy of filing a miscellaneous application before the Income-tax Appellate Tribunal (ITAT) under section 254(2). From the above facts, examine whether…