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November 2019

Direct Tax Amicus: October 2019

Article

Deduction for additional employment - Simple yet ambiguous
by Karanjot Singh Khurana

The article in this issue of Direct Tax Amicus examines some of the hurdles likely to be encountered by the taxpayers while claiming the deduction under Section 80JJAA of the Income Tax Act, 1961. The author of the article, with the help of an example, demonstrates the position of a taxpayer which though has incurred cost of additional employment and had satisfied all other conditions provided in said section but does not stand to gain tax benefit from such cost. Further, according to the author, interpretation derived from the Annexure of Form 10DA (required to be furnished by the taxpayer along with its return of income), is seemingly not in line with either the literal reading of provisions of Section 80JJAA or its legislative intent. Pointing out lack of clarity and certain ambiguities in the provisions, the author believes that some clarity in respect of these provisions in the upcoming Budget may go a long way to avoid any litigation....

Notifications and Circulars

  • Clarification on availment of MAT credit and carry forward of brought forward loss on account of additional depreciation

Ratio decidendi

  • Gift of shares under restructuring scheme when not a taxable transfer
  • Enhancement of income by CIT(A) based on accounts submitted to AO is not a ‘new source of income’
  • Commencement of certain activities out of a set of activities for which the company was incorporated satisfies commencement of business
  • Test of beneficial ownership of interest is dominion and control without obligation to pass on the interest
  • Expenses incurred as part of government’s flood relief programme is deductible under Section 37(1)
  • Benefit test is not one of the prescribed methods and cannot be applied to compute ALP

October, 2019/Issue-61 October, 2019/Issue-61

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