Loan to Director due to Urgent need of Finance in Company, reflected in Books will not attract S.

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench has held that the loan to the Director due to urgent need of finance in the Company which is duly reflected in the journal entries will not be a violation of section 269SS of the Income Tax Act, 1961 and therefore, penalty under section 271D will not be sustained.

The assessee, Analytical Technologies Ltd is a company engaged in the business of manufacturer of Pharma Instruments. The return filed by the assessee was rejected by the Assessing Officer by holding that while perusing the documents and bank statement, there was cash deposit in the bank account of Rs. 1,00,000/- on 25.11.2016 which is contravention of the provisions of Section 269SS (b) of the Act and therefore a proposal was referred to the Joint CIT for levying penalty u/s. 271D of the Act.

The assessee contended that there is no contravention of Section 269SS of the Act relating to the loan transactions made through banking channel, the same are availed by the Director and passed to the assessee company through ‘journal entry’ wherein penalty u/s. 271D cannot be levied.

A bench of Shri Waseem Ahmed, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member observed that the assessee clearly established that the loan availed by the Director Sivaprasad Patnam is transferred to the assessee company because of its company is urgent need of cash/finance.

“The same were being availed by way of loan from various banks and directly credited into the account of the assessee company and necessary journal entries have been made in the book of the assessee company. Thus, there is no violation of Section 269SS of the Act. Therefore, no question of levying penalty u/s. 271D of the Act relating to the journal entry amounting to Rs. 1,20,54,566/-. Thus, the finding made by the Ld. CIT(A) purely factual in nature, which does not require any interference and the same is hereby upheld,” the Tribunal said.

Income Tax Deduction for Expenses on Covid-19 Treatment: CBDT Notifies Conditions

The Central Board of Direct Taxes (CBDT) has notified the conditions and for availing income tax deduction for the expenses incurred on covid-19 treatment.

The Finance Bill, 2022 has provided for Separate income tax deduction for Covid-19 treatment.

As per the notification issued on Monday, the deduction is allowable if, the death of the individual should be within six months from the date of testing positive or from the date of being clinically determined as a COVID-19 case, for which any sum of money has been received by the member of the family, and the family member of the individual shall keep a record of the following documents, – (a) the COVID-19 positive report of the individual, or medical report if clinically determined to be COVID-19 positive through investigations in a hospital or an inpatient facility by a treating physician; (b) a medical report or death certificate issued by a medical practitioner or a Government civil registration office, in which it is stated that death of the person is related to corona virus disease (COVID-19).

“Statement of any sum of money received by a member of the family of a deceased person from the employer of the deceased person or from any other person or persons, on account of death due to COVID-19 for the purposes of clause (XIII) of the first proviso to clause (x) of subsection (2) of section 56 of the Income-tax Act, 1961 shall be verified and furnished in Form A,” the Notification said

No GST on ‘Sarais’ run by Religious/Charitable Trusts: CBICRead More: https://www.taxscan.in/no-gs

The Central Board of Indirect Taxes and Customs (CBIC) has recently clarified that GST cannot be levied on the ‘Sarais’ run by religious/charitable trusts.

The Board tweeted yesterday through its official twitter handle that “Certain sections of the media and social media are spreading the message that GST has recently been imposed with effect from 18 July, 2022 even on ‘Sarais’ run by religious/charitable trusts. This is not true.”

Based on the recommendations of the 47th GST Council meeting, GST exemption on hotel rooms having room rent upto Rs. 1000 per day has been withdrawn. They are now taxed at 12%. However, there is another exemption which exempts renting of rooms in religious precincts by a charitable or religious trust, where amount charged for the room is less than Rs. 1000/- per day. This exemption continues to be in force without any change.

“It has been stated that the three Sarais managed by SGPC in Amritsar have started paying GST with effect from 18.7.2022. These three Sarais are: 1. Guru Gobind Singh NRI Niwas 2. Baba Deep Singh Niwas 3. Mata Bhag Kaur Niwas,” the CBIC said.

In this regard, the Board has clarified that no notice has been issued to any of these Sarais. These Sarais may have on their own opted to pay GST.

“The precincts of a religious place, in terms of above notification, has to be given broader meaning to include a Sarai even if it is located outside the boundary wall of a complex of a religious place, in the surrounding area, and manged by the same trust/management. This view has been consistently taken by the Centre even in the pre-GST regime. State Tax authorities may also take the same view in their jurisdiction. These Sarais managed by SGPC may therefore avail the above stated exemptions in respect of renting of rooms by them,” the CBIC said.