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Commentary
Updated up to The Finance Act, 2014
Search :
57 Records 
UNDISCLOSED INCOME - BACKDROP
0.1 Non-reporting/under-reporting of income
0.2 Scheme of Taxation of sections 68 to 69D
CASH CREDITS
1.0 Legislative history of section 68
1.2 Section 68 not restricted to cash transactions
1.3 Section 68 makes no distinction between a banking concern and non-banking concern
1.4 Limited Applicability of section 68 to non-resident assessees
1.5 Conditions to be satisfied for applicability of section 68
1.6 Addition under section 68 not mandatory but discretionary
1.7 Credits to which section 68 is commonly applied
1.8 Distinction between sections 68 and 69
1.9 Section 68 vis-a-vis section 69D
1.10 Section 132 vis-a-vis section 68
WHETHER GIFTS TAXABLE AS CASH CREDITS U/S 68
2.1 Meaning of gift
2.2 Gifts as a means of money laundering-converting black money into white
2.3 Measures to combat money laundering through bogus gifts
2.4 In respect of gifts received on or after 1-9-2004, whether section 68 applicable or section 56(2)(v)/(vi)/(vii) applicable or both are applicable
2.5 Section 68 as applicable to gifts received prior to 1-9-2004
TAXATION OF SHARE APPLICATION MONEY/ SHARE CAPITAL/SHARE PREMIUM
3.1 Share premium received by closely held companies in excess of FMV taxable - New section 56(2)(viib)
3.2 Additional onus on closely-held companies regarding share capital received by closely-held cos. from residents
3.3 Issues arising from new clause (viib)
3.4 Where assessee-company fails to discharge even initial burden cast by main provisions of section 68
3.5 Widely held companies
WHETHER CAPITAL GAINS FROM SHARES TAXABLE U/S 68
4.1 Where credits representing sale of listed shares held to be genuine
4.2 Off-market deals in shares through brokers who were members of CSE
4.3 Where credits representing sales proceeds of shares held to be bogus
TAXATION OF LOANS AND DEPOSITS
5.1 Loans as means of ‘balancing books’ and explaining unaccounted income
5.2 Section 68 applicable to both commercial and non-commercial loans
5.3 No double taxation
5.4 Loan details in tax audit report - Whether amounts to satisfactory explanation
5.5 Lenders not traceable
5.6 Cases where onus held to be discharged
5.7 Points to be kept in mind while furnishing confirmation for unsecured loans etc
DEPOSITS FROM TENANTS
6.1 How to discharge onus u/s 68 in respect of deposits received from tenants
FIRMS
7.1 No presumption that firm maintains books based on clause in partnership deed
7.2 Section 68 - Applicability to credits in firm’s books in partner’s name
7.3 First day first year credit in firm’s books
7.4 When credits in firm’s books assessable as firm’s income under section 68
7.5 Whether same amount assessable in firm’s hands u/s 68 and also in partner’s hands u/s 69
TAXATION OF SUNDRY CREDITORS/TRADE CREDITORS BALANCES AS UNEXPLAINED CREDITS
8.1 Where credit purchases and trading results accepted by AO as genuine, no additions u/s 68
8.2 Circulation transactions
UNEXPLAINED INVESTMENTS
9.0 Section 69 - Constitutionally valid
9.1 Ingredients of section 69 - Unexplained investments
9.2 Meaning of ‘investments’
9.3 Word “assessee” does not include legal heirs
9.4 Books of account, if any
9.5 Duty of assessee to offer explanation
9.6 Value of investments deemed to be income
9.7 The word ‘may’ in section 69
9.8 Value of investment made in construction of property
9.9 Stamp duty value/FMV of house purchased exceeds consideration shown in sale deed
9.10 Addition in respect of undisclosed gold ornaments u/s 69
9.11 Additions for household articles in absence of bills/purchase invoices
9.12 Additions in ‘no account’ cases
9.13 NSCs and FDRs seized from assessee’s divorced wife where divorce was by mutual consent
9.14 When ornaments seized not considered unexplained
9.15 Whether addition called for on grounds that cash book not updated
9.16 Additions in respect of difference in inventory prepared by search party and book stock
9.17 Additions for unaccounted stock of fabric
9.18 Additions in respect of imported camera not declared to customs
9.19 Addition in respect of ‘on money’ paid to builders
9.20 Stock additions for excess stock where such additions in sales tax assessments accepted by assessee
9.21 Gold in jeweller’s premises belonging to customers
9.22 Additions on account of unrecorded purchases
9.23 Valuation of undisclosed stock for making additions
9.24 Additions in respect of old AC, TV, VCR and furniture at residence in absence of proof of cost of these items
9.25 Rough memoranda showing unrecorded sales of jewellery and inflation of purchases
9.26 Year of taxability of unexplained investments u/s 69
9.27 Additions in public issue
9.28 Sale agreement showing higher consideration than sale deed
9.29 Additions in respect of dds purchased
9.30 Additions based on partner’s admission before central excise authorities
9.31 Jewellery seized already declared in WT returns
9.32 Excess jewellery found explained as belonging to married daughter left behind
9.33 Surrender made during survey
9.34 Additions in stock due to non-recording in books due to accountant’s carelessness
9.35 Additions in respect of purchases since suppliers not traceable - Whether justified
9.36 Set off of excess stock against unaccounted profit from unaccounted sales
9.37 Justifiability of addition where stock figure accepted by sales tax deptt
9.38 Non-maintenance of stock register
9.39 Inadvertent non-entry or delayed entry in books of withdrawals from bank
9.40 Additions for suppressed production based on increased electricity consumption
9.41 Additions for FDRs in relatives name
9.42 Additions in respect of unaccounted sales
9.43 Joint savings account with mother
9.44 Where receipt from party credited in bank account exceeds gross receipts declared in return less TDS
UNEXPLAINED INVESTMENTS IN LOTTERY TICKETS
10.1 Lottery ticket investments - Purchase from prize winner instead of lottery ticket dealer
ADDITIONS ON BASIS OF STOCK STATEMENTS SUBMITTED TO BANKS
11.0 Pledge v. Hypothecation of stocks to banks - Differences in reliability of stock statements
11.1 Difference between stock statement given to bank dated 28th March and book stock of 31st March
11.2 Where part of stock in stock statement belonged to sister concern/partner/principal (consignor)
11.3 Difference in valuation
11.4 Difference between stock register and bank stock statements
11.5 Survey and stock surrender
11.6 Estimate v. Physical stock difference
11.7 No difference in quantities, only in values
UNEXPLAINED MONEY ETC.
12.1 Ingredients of section 69A
12.2 Ownership
12.3 ‘Other valuable article’ - Meaning of
12.4 Meaning of expression ‘may’
12.5 Recording in books of account
12.6 Burden of proof on assessee and not on his legal heirs
12.7 Addition to be based on AO’s satisfaction, not that of some other authority
12.8 The word ‘income’ in section 69A
12.9 Relevant date for valuation of unexplained gold bars
12.10 No deduction of any expenditure for computing income under section 69A
12.11 FDRs in the name of untraceable third persons
12.12 Undisclosed sales
12.13 Excess cash explained as withdrawal from bank 140 km away
12.14 Cash representing advance against sale of land - no addition
12.15 Cash belonging to relatives
12.16 Withdrawn from bank on 9 Nov. but entered in cash book on 12 Nov.
12.17 Withdrawals cover cash deposits but there is a time lag
12.18 Jewellery disclosed in wealth tax return
12.19 Cash explained as belonging to an organisation
12.20 Unexplained primary gold and US Dollars found by ED during raid
12.21 Huge cash found by CBI at a raid on a Govt. servant - Illegal gratification explained as loans from moneylenders
12.22 Income from sale of trees
12.23 Cash found by CBI at his premise explained by politician as belonging to his party
12.24 Acquittal under section 124 of Bombay Police Act - Whether discharges onus under section 69A
12.25 Ornaments said to be belonging to customers lying with assessee for periods as long as 1-15 years
12.26 Amount recovered from possession of another person
12.27 Agreement for sale of property - Consideration received repaid on cancellation
12.28 Contents of bank locker jointly in name of assessee and her mother
12.29 Money belongs to pvt. co. of which assessee and husband the only directors
12.30 Whether additions can be made based on photostat copy of slip found by CBI
12.31 Totalling mistake in return of income
12.32 Contents of locker in name of assessee’s son
12.33 Savings made by wife out of money given household expenses
AMOUNT OF INVESTMENTS, ETC. NOT FULLY DISCLOSED IN BOOKS OF ACCOUNT
13.1 Ingredients of section 69B
13.2 Section 69B vis-à-vis sections 69 and 69A
13.3 Applicability of section 69b to investment in assets/articles not owned by assessee
13.4 Additions u/s 69b in respect of excess stock found during survey
13.5 Shares purchased at a price lower than quoted price and even its fair value
13.6 Stock pledged with bank disposed of during enquiry without informing AO
13.7 Applicability of section 50C for taxing undisclosed investments
13.8 Sale bills predating purchase bills - Whether liable for tax under section 69B
UNEXPLAINED EXPENDITURE
14.1 Ingredients of section 69C
AMOUNT BORROWED OR REPAID ON HUNDI
15.1 Ingredients of section 69D
15.2 Distinction between section 69D and sections 269SS and 269T
15.3 “Otherwise than through an account payee cheque” - Meaning of
15.4 Direct deposit in bank account of payee - Whether violation of section 69D
15.5 Hundi
15.6 Transactions between sister concerns - Whether attracts section 69D
FLAT 30% TAX ON UNDISCLOSED INCOME
16.1 Taxation of income under sections 68 to 69D at flat 30 w.e.f. A.Y. 2013-14
16.2 Rationale behind new section 115BBE
16.3 Amnesty scheme/legal money laundering scheme
ESTIMATE BY VALUATION OFFICER IN CERTAIN CASES
17.1 Provisions of section 142A
BACKDROP OF DONEE-BASED TAXATION OF GIFTS
18.1 Donor based gift-tax under the Gift-tax Act, 1958
18.2 Donee-based gift-tax introduced by the Finance (No. 2) Act, 2004
18.3 Amendments by TLA, 2006 to plug loopholes
18.4 Finance (No. 2) Act, 2009 - Concept of donee-based taxation extended to gifts in kind
18.5 Amendments made by the Finance Act, 2010
18.6 Amendments made by Finance Act, 2012 w.r.e.f. 1-10-2009
18.6A Amendments made by Finance Act, 2013 - transactions for inadequate consideration in immovable property made taxable w.e.f. A.Y. 2014-15
18.7 Summary
OBJECTS OF TAXATION OF MONETARY GIFTS
19.1 Objects of donee-based taxation of monetary gifts as explained by ITAT
19.2 Contradictory views of ITAT in Mayawati’s case
19.3 Objects (as explained by CBDT)
TAXABILITY OF MONEY GIFTS
20.1 Conditions for taxability of cash gifts received (for previous year 2010-11 and subsequent previous years)
20.2 Peculiar situation for assessment year 2010-11
20.3 Whether sums of money gifts received by a politician within the threshold limits of Rs. 50,000 [under section 56(2)(vi)/under section 56(2)(vii)] or Rs. 25,000 [under section 56(2)(v)] be taxed as profits and gains from business or profession under section 28
‘RECEIPT’ OF SUM/SUMS OF MONEY
21.1 Meaning of ‘sum of money’ used in section 56(2)(vii)(a)
21.2 Meaning of the word “receives” used in section 56(2)(vii)
21.3 Whether receipt of gift of Indian Millennium Deposit Certificates issued by SBI along with gift deeds is receipt of sum of money without consideration
21.4 Modes of receipt of sum of money
21.5 Date of receipt of gifts of money through cheque/DD
SUM OF MONEY RECEIVED WITHOUT CONSIDERATION
22.1 Consideration
22.2 The phrase ‘Receives ..... any sum of money, without consideration’ used in section 56(2)(vii)(a)
22.3 Lottery prize - Whether amount or property received without consideration
22.4 Money prizes won in contest - Whether sums of money received without consideration
22.5 Whether money can be laundered by corrupt civil servants, etc., by showing amounts as gifts under section 56(2)(vii)(a)
22.6 Amount received in lieu of giving up right to contest will
HOW TO COMPUTE THE LIMIT OF Rs. 50,000
23.1 Limit of Rs. 50,000 for cash gifts
23.2 Clubbing of gifts of money received by a minor from non-relatives
EXEMPT GIFTS FOR DONEES BEING INDIVIDUALS/ HUFs
24.1 Cases in which gift is not taxable under section 56(2)(vii)
24.2 Money or property received from a relative [clause (a) of the second proviso]
24.3 Sum of money or property received on the occasion of the marriage [clause (b) of the second proviso]
24.4 Sum of money or property received under a will or by way of inheritance [Clause (c) of the second proviso]
24.5 Sum of money or property received in contemplation of the death of the payer or donor [clause (d) of the second proviso]
24.6 Sum of money or property received from a local authority [clause (e) of the second proviso]
24.7 Sum of money or property received from charitable entity referred to in section 10(23C) [clause (f) of the second proviso]
24.8 Sum of money or property received from any fund or trust or institution registered under section 12AA [clause (g) of the second proviso]
‘ANY PERSON OR PERSONS’
25.1 Gifts may be received from ‘any person or persons’
25.2 Whether Government is a ‘person’
WHETHER INCOME/PROPERTY DISCLOSED UNDER CLAUSE (v)/(vi)/(vii) OF SECTION 56(2) ARE ‘KNOWN SOURCES OF INCOME’ IN ‘DISPROPORTIONATE ASSETS’ CASE
26.1 Supreme Court’s interpretation of ‘known sources of income’
IMMOVABLE PROPERTY - SCOPE OF THIS TERM
27.1 Immovable property
27.2 Gift received of rural agricultural land is exempt
27.3 Gift received is exempt if immovable property is the stock-in-trade of the recipient
OBJECTS OF DONEE-BASED TAXATION OF GIFTS OF IMMOVABLE PROPERTY
28.1 Objects of section 56(2)(vii) - Anti-abuse provisions
CONDITIONS FOR TAXABILITY OF GIFTS RECEIVED OF IMMOVABLE PROPERTIES
29.1 Conditions for taxability of immovable property received by Individual/HUF
RECEIVED WITHOUT CONSIDERATION
30.1 Receipts of immovable property covered by section 56(2)(vii)(b)
30.2 Consideration
30.3 Whether immovable property received as winnings of a lottery prize can be said to be received without consideration
IMMOVABLE PROPERTY RECEIVED FOR INADEQUATE CONSIDERATION
31.1 Immovable property received for inadequate consideration not taxable for assessment years prior to assessment year 2014-15
31.2 Amendments made by the Finance Act, 2013 - transactions for inadequate consideration in immovable property made taxable w.e.f. A.Y. 2014-15
DATE OF RECEIPT OF IMMOVABLE PROPERTY
32.1 Date of receipt of immovable property
VALUATION OF THE IMMOVABLE PROPERTY RECEIVED
33.1 Valuation provisions
33.2 Stamp duty value
HOW TO COMPUTE THE LIMIT OF Rs. 50,000
34.1 Limit to be applied to each transaction of receipt
34.2 Computation of limit for previous year 2009-10
34.3 Computation of limit for previous years 2010-11 to 2012-13
34.3A Computation of limit for previous year 2013-14 and subsequent previous years
34.4 Limit for immovable property is independent limit
34.5 Clubbing of gifts of money received by a minor from non-relatives
COMPUTATION OF CAPITAL GAINS ON TRANSFER OF IMMOVABLE PROPERTY TAXED AS GIFT
35.1 Cost of acquisition of immovable property taxed as gift
35.2 Holding period for determining whether capital gains are short-term or long-term
35.3 Importance of maintaining records
‘PROPERTY’ (OTHER THAN IMMOVABLE PROPERTY) (i.e. MOVABLE PROPERTY)
36.1 Property other than immovable property
36.2 Shares and securities
36.3 Artistic work
36.4 Jewellery
36.5 Bullion
36.6 Gold coins - Whether bullion or jewellery
36.7 Summary
OBJECTS OF DONEE-BASED TAXATION OF GIFTS OF ‘PROPERTY’
37.1 Objects of section 56(2)( vii ) - Anti-abuse provisions
CONDITIONS FOR TAXABILITY OF MOVABLE PROPERTY RECEIVED BY INDIVIDUAL/HUF
38.1 Conditions for taxability of movable property received by Individual/HUF
38.2 Amount taxable
RECEIVED WITHOUT CONSIDERATION/FOR INADEQUATE CONSIDERATION
39.1 Movable property received without consideration
39.2 Movable property received for consideration less than fair market value
39.3 Movable property received for consideration not determinable or not quantifiable
DATE OF RECEIPT OF SHARES AND SECURITIES, JEWELLERY, ETC.
40.1 The phrase ‘Receives……..any property, other than immovable property’ used in section 56(2)( vii )( c
40.2 Date of receipt of shares and securities
40.3 Date of receipt of jewellery, artistic work and bullion
DETERMINATION OF FAIR MARKET VALUE
41.1 Fair market value
41.2 Effective date of rules 11U and 11UA
TAXATION OF SHARES AND SECURITIES RECEIVED
42.1 Scope of the term ‘shares and securities’
42.2 Whether allotment of bonus shares by a company to its shareholders will attract tax in shareholder’s hands under section 56(2)( vii )(c
42.3 Whether allotment of rights shares by a company will attract tax in shareholder’s hands under section 56(2)(vii )(c
42.4 Fair market value of shares and securities received
42.5 Determination of fmv of unquoted preference shares
VALUATION OF JEWELLERY
43.1 Determination of Fmv of Jewellery
43.2 Interpretation of requirements
43.3 Registered dealer
43.4 Registered valuer
43.5 Valuation date
43.6 Invoice value - Whether inclusive of VAT or exclusive of VAT
43.7 What if assessee does not have/obtain relevant documents as above-Invoice/valuation report
VALUATION OF ARTISTIC WORK
44.1 Determination of FMV of artistic work
44.2 Interpretation of requirements
44.3 Registered dealer
44.4 Registered valuer
44.5 Valuation date
44.6 Invoice value - Whether inclusive of VAT or exclusive of VAT
44.7 What if assessee does not have relevant documents mentioned above such as invoice of registered dealer/valuation report
VALUATION OF BULLION
45.1 Determination of FMV of bullion
HOW TO COMPUTE THE LIMIT OF Rs. 50,000
46.1 Computation of limit of Rs. 50,000 for movable property
46.2 Computation of limit of Rs. 50,000 for previous year 2009-10
46.3 Computation of limit of Rs. 50,000 for previous year 2010-11
46.4 Computation of limit of Rs. 50,000 for previous year 2011-12 and subsequent previous years
46.5 Limits for movable property are independent limits
46.6 Clubbing of gifts received by a minor from non-relatives
COMPUTATION OF CAPITAL GAINS ON TRANSFER OF MOVABLE PROPERTY TAXED AS GIFT
47.1 Cost of acquisition of ‘movable property’ taxed as gift
47.2 Holding period for determining whether capital gains are short-term or long-term
47.3 Importance of maintaining records
GIFTS OF MOVABLE PROPERTY NOT TAXABLE IF STOCK-IN-TRADE OF RECIPIENT’S BUSINESS
48.1 Gifts of ‘movable property’ received not taxable in the hands of recipient if it is stock-in-trade of recipient’s business
48.2 Can a dealer in shares claim that unlisted shares received are his stock-in-trade
48.3 How to determine whether the recipient individual/HUF is a trader in shares or shares are held by him as a capital asset
DONEE BASED TAXATION OF GIFTS OF UNLISTED SHARES IN THE HANDS OF FIRMS/LLPs/COMPANIES - BACKDROP
49.1 Rationale for enacting clause 56(2)(viia)
CONDITIONS FOR TAXABILITY OF GIFT OF UNLISTED SHARES RECEIVED BY A CLOSELY HELD COMPANY
50.1 Conditions for taxability of unlisted shares received by closely held company/firm/LLP
50.2 Comparison of section 56(2)(viia) read with section 56(2)(vii)(c)
TRANSACTIONS EXEMPT FROM TAXABILITY UNDER SECTION 56(2)(viia)
51.1 Exempt transactions
51.2 Receipt of shares by the amalgamated foreign company in a transaction covered by section 47(via)
51.3 Receipt of shares by the resulting foreign company in a transaction covered by section 47(vic)
51.4 Receipt of shares in a transaction covered by section 47(vica)
51.5 Receipt of shares in a scheme of demerger - Section 47(vid)
51.6 Receipt of shares in a scheme of amalgamation - Section 47(vii)
RECEIPT OF SHARES
52.1 ‘Receives, in any previous year, . . . . any property being shares….’ - Meaning of this phrase in section 56(2)(viia)
DETERMINATION OF FAIR MARKET VALUE OF PREFERENCE SHARES
53.1 Fair market value of unquoted preference shares
53.2 Determination of FMV of unquoted preference shares
RECEIPT OF UNLISTED BONUS SHARES BY A CLOSELY HELD COMPANY/FIRM - WHETHER TAXABLE UNDER SECTION 56(2)(viia)
54/55.1 Whether receipt of unlisted bonus shares by a closely held company/firm is receipt of such shares without consideration
54/55.2 Whether receipt of unlisted bonus shares by a closely held company/firm is receipt of such shares without adequate consideration
RECEIPT OF UNLISTED RIGHTS SHARES BY A CLOSELY HELD COMPANY/FIRM - WHETHER TAXABLE UNDER SECTION 56(2)(viia)
56.1 Whether allotment of rights shares by a company will attract tax in shareholder’s hands under section 56(2)(viia)
TRANSFER OF SHARES RECEIVED AND TAXED AS GIFTS UNDER SECTION 56(2)(viia)
57.1 Cost of acquisition of ‘property’ taxed as gift