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July 2019

Direct Tax Amicus: May 2019


Director’s liability under the Income tax law – An insight
by Bharathi Krishnaprasad


Legislations in India impose various liabilities on the director for any wrongdoing by a company. The Income Tax Act, 1961, vide Section 179, imposes joint and several liabilities on every director of a private company. Upon the section becoming applicable, the directors would step into the shoes of the company and provisions relating to recovery would apply on the director as they would apply on the assessee company. The article in this issue of Direct Tax Amicus discusses at length Section 179 and its scope. It deliberates on as to who can be made liable, when the liability would get triggered, non-applicability of Section 179 when duty performed with due diligence, meaning of ‘tax due’, and the precautions that need to be taken by the directors. According to the author, proving the director as not liable under Section 179 would largely depend on the facts and circumstances of case but, such reasons need to be built...

Circular

  • Form 3CD: CBDT defers reporting requirement on GAAR and transaction with GST registered /non-registered entities

Ratio decidendi

  • Performance incentive is not a statutory bonus and deduction can be claimed for provisioning
  • AMP expenses incurred by assessee is an international transaction requiring separate benchmarking
  • ‘Multiple’ counting of employees in a single day impermissible while construing service PE threshold
  • Immovable property representing share in partnership transferred to retiring partner on reconstitution not taxable
  • Deeming fiction created under Section 50C has to be given full effect to while computing capital gain (u/s. 45) and amount of exemption (u/s. 54EC)
  • AMP expenditure incurred in case of an independent distributor not considered as separate international transaction

May, 2019/Issue-56 May, 2019/Issue-56

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