Geebal charges paid to P_ 8 E a ‘Glowing remuneration to partners isnot allowable as deduction = (a) Salary to non-working partner Mr. $e. 8 540,000 +4= €1,35,000 (©) Salary to working partners not authorised by partnership deed ie € 40,000 *9 4 30,000. ‘ASSESSMENT OF ASSOCIATION OF PERSONS AND BODY OF INDIVIDUALS * c 12. Explain the concept of association of persons and body of individuals. Ans: The concept of association of persons and body of individuals is discussed (Association of Persons (AOR) : When persons combine together for Pr assessable as an AOP when they do not, in law, constitute a partnership. Persons must join in for a common purpose and common action and theit ol rot enough that the persons receive the income jointly. Co-heirs, co-legatees or co-donees joining together for, common purpose or action would be chargeable as an AOP. 2) Body of Individuals (BON) : It denotes the status of persons like executors or trustees who merely receive thy income jointly and who may be assessable in like manner and to the same extent as the beneficiaries individualy, Thus, co-executors or co-trustees are assessable as a BOL as their title and interest are indivisible. Income-tax shal not be payable by an assessee in respect of the receipt of share of income by him from BOT and on which the tx has already been paid by such BOI. (3) Distinction Between AOP and BOI: No.| Point ‘AOP BOL Creation | Itis voluntarily created by 2 or more persons. It is created by operation of law. as under ~ ‘omotion of joint enterprise, they Tn order to constitute an associat” ject must be to produce income; i, 2. [Member | Its members may consist of companies, firms, | Only individuals can be the members of HUFs or individuals. body of individuals. © scanned with OKEN Scannerf (0) Ammupnon wih intrest ieaclaled: Taxon ol nome determine on the bss of oder under section BUN ine Tava wl nce delve inthe aplestion led! unde section HECK [Notes i, ass consequence ofa ceder puss by the Satement Commision unde ection 245D(6B) to a dake apnent fom the str, the amount on which intrest payee eae eres ee, {Beinn sal enced or deceased acorn. (4) toes om rensessment unde section 147 oF 153 [Section 21003] (When inerent payable: Where, a rl ofan order of esessment or t-compuaion under section CERAM amount on sich nets payate under ection 2400) sree a (i), Rate of intrest Simpl interest © 198 per mother par of math, {ily Ped for which interests pyable: Tero starting rom th Ts Apri f the relevant Assesment year and “niin date on whch encanto r-computtion unr secon ao SSA emai © scanned with OKEN ScannerVANCETAX RECOVERY. INTEREST AND 20.14 Sa Ee ae ye a8 dtrmined on resem (Anon on wih ere ied 0 ln aa fr HA es Totti comet ander ti 1710 ISA scout unr eat 1/24 1 revisor oF tee, ty ern ttn ein hg Sn which tet spay fen eae Islan et a ol a ese he cin oct [GIT Bhagat Comtrction (Co. Pru Ltd and NRG Pls Toole and Others ane] SS3FTR 960) a tition for the payment of Thc Aree ko the Assn Commision nt conan an stone the ume of sees api rae lysate at mest os 248 as pale Th Tha eg Zeaingan Men nthe Ascent adr fr he pyre! the inet same ea ae Semundad a °CRASTERSTE Peat mdr te psf stn 24 the mea sable oy adam se ea Meh rh the sane nad y shan aes ls an 0 os Cindi ees le fy et o/s 2 Th ey ur ston sect oan prt fem INS 15 craig tn nee payican a eee get fof tases ode an osu dt forthe pment nee ee See ere Beeec hon aeo as Intra feteea 1 enna lertinn i s was wheta a ncemay Tor Rang ESE sntn/ ieee et und secton 218 ofthe Inometn, ee ae w comin rases demand ofthe sane inthe maid oe under scton fecitiathe 12) oo shee anyother means avilable o AO recover th inne, (Marks, May 2012) ‘elton: The above problems have en deus aston OO ain tin 30a ny fan ane vol aby bane sae Sen a pant hata te pan oe a ek © pomeranian ee yin othe Seaton nx yea 20 ar ae SS AMEE Nn te sing eeu rst ay ee he er iy ct tle 0 Sos a edie st dt ea hen re nde on 8 im pyet eae s Our the Asaslng Oar can cover inert nie saan 20104) fromthe deat for fare ode sok triste under ston Sag ae per month or pr ee ‘ech is actly pid y way fase a 2 —— © scanned with OKEN Scannersoos Tex: ADVANCE TAX RECOV! a abn a Vins SONNY INTEREST AND REND 20.15 i 9 ners wr ein Epansaareu ne ec yf spe ee aM Coreen ntti nossa oo ‘Determine interest leviable on Mr. X u/s 24B(1) & 24863), ignoring the interest u/s 234A and 234C. tat ete 8 0 Computing of terest wer ection 2B): He MX mien aon 1-7 be he aye (0 Pr th ce eb ad wa nn Oh noses et pase sop an (cereeuicimm eee pcm {0 Pdr othe we paid-2207034908-fnena pacers acne eta Sanam ar asec ea eee ceevanteian tenn Seite sens tan etme 9 cuetnaetonee deci Si meres ioecinchmue canto comirorennmenenrriokemreucttns Or imaaarin seta Ce ee acer ete ere ere 18 How sal the interest be calle unde section 26C fr deferment of vance a. ‘An Interest foe deferment of advance wx [Seton 2C] fn asso fa 6 py any instant of vance tax ot Rae eiitty iene ot avance tx hn isto oy ieest under section 4 ws under= {Incas an anne the thon those covered under Seton AD and Section MADA : nese of an assesice In cat of an ees on IAD) snd section ADAG) thenerest hl be the aggregate ofthe lowing Conditions Tate [Months] — Amount on which interest payable] Hiewavance paid on or blo Tunes] Pepin | 3/6 f the wx due on retumed income es an 2% of tax doh returns noe os vane x pai upto 15 Jane esr on or bore] Ti pm | 3 [9% ofthe tx due on returned income Sepcmer r ess than, 36% of 1 doe on Ioeadvance tx paid up 19" September return inca Se a pil on w teow [te pm || 9] of te x due on tamed ome [Deemer ess tan 75% of tx doe om lessadvane tax pid upto 19 December ruined income Se damon Wash] Top | 1 [10MG fr doe on tad nce Te stem han 10% of tax done incre vance tx pad upto 1 Macc a rrancfling under Section SAD and SADA: Incase ofan ase who dees profits and a eae teres tne rowers of Secion HAD() or Secon HADAQ), a the case may te eae {he aggregate ofthe lowing ~ © scanned with OKEN Scanner20.16 oe INTEREST AND ner 1p TAX RECOVERY INTEREST AND REFUNg ADVANCE Te en “Tomi [Amount on Which interest payatie 0% of tax due on Fetued income sere toc 01 Ma Condon Were advance x pid om or bfoe 15° Meh] 1 PO stess than 10% a tx dc on rere nore ‘Other pointe: decor inthe return of he tot income - (1) Tax du on returned income” esi ta chargeable om ecco ta! Se ly me Zanes oS 2 noc sirream rence a Sea eras te mh ——— Coe ieee [Bsn 10~Adoance tx on Habity on recep of dividend income: X (0 years) is earrying on busine and come forte previous year 018-19 € 2650000. His avingbankieret in acount wth nations ae | 2000 He deposits 150000 in publ provident fand on 2043-2019 Dividend vesived by him fom deena, Sepa is follows 0000 on 0-5-2018, € 80900 on 0-10-2018, & 50,00 on 0112-2018 and € 40010 228 Clete mount of sarc ov istalmens (dos not wan pay inet ander ston 20) Solution: Divided rom domestic companies isnot abl, quan of dividend ds not exceed € 100,00 Blo (12.2018 dividend income ls than € 10 advance tox afer 112.2018 Fst ola 000. Therefore, vend income wil be consiered onl for payee mens of advance fx may be aleuat as follows amount in 8 Taro a st Sg) a tex: Dedeon unr acon CF Dae "a0 Less: Deduction under section 80TTA (saving bank interes) “oom compo a tbo 2009 a Fs tient dra pda. 28 5943 xa Ads yt en 225 eae silencers series Income from other Sources : =e Pred rene 1000+ 80000» 50000-1000 a Saving bark nee |__ soon Gross total income : tes: Dedcon ne ston 8 (08 De Ber Es Deacon ne son TIA fk ny ‘am Pee Net Income sum) Tax on (te. dividend income) taxable @ 10% u/s 115BBt [000 Tax online 2730000" Came ste eee su ee © scanned with OKEN ScannerTota taxint nga of anc pa ncuding Hc [3 mt of eon eaten 126M tSyanp ceases cases {EA see 7 1Saban6 tos af ESN) = Cos CAT H| TAN asta dived o 400900 on 2.43201. al we ee 193 Taw wl av fo pay taxon inane ono fo encore — _ —_ eu her Soares = Dvd income (0960 € : 7 erty and Saving tak Inter (© upg + ganana +X 599H00- €1000080 *] snag ‘roel income 1000 ha Deion under secon 80 (PF Depots) "e000 Le action ner section SOFTA avi ak eres) |_ “0 nent 80080 ind ion) eS fs HHO oo Pe alnc nome (3.50000 80000) tte sla a 517500 597500 laa oss "2500 Total ac icading EC 321100 am Advance tx pid ()IROLSBL C4 81910 + COANE LAASO] S7oato unc a payabe ono before 1-3-2008 00 {CASE Interest payable even f not mentioned Inthe ssasment oder bt spied in wot of demand: The eee cuter termine the tal income af he snes for assessment yest 208-20, No specie nde ein Jee" Sitecorded by te Assening Ofer, However, im complain sheet annexed to the assent fer FES Under sation 24 and 34C was cmpsted wile determining the ea um payable bythe ase The a ec toe levy of inet olding th iret under scion 240 and 34C canot be charg! ee suc int et mation a he oss rr, Die ight of decd eases whee the enon of sesso itera a0? sae ines te wes czcuse into CIT Asam nea Development Corporation Ld (2010) 320 ITR 149 fi ph Cour tae der scons 29 and 4s of mandatory nature Here, ven (Gam) whee he ph oo neuen oder competed and charged inthe computation sheet in the peste sme eect emert andr sed ons bythe Asweing fcr, isan order in writing deerme {Ges payable under section 145Q) ans anil prof the assessment onde. ‘App the same ional to the present cas, the asec cannot one th REET e sed in absence of specie dvecton nthe assesment ot. interest under soon 2348 and 231C ‘station'33 Deemer ie san isMonh ss ‘Total 2 -22,00,000 Titcome retured by the fi £80 as under the head “busines” and €15 nbs by ay of lmgerm aia ene spp ced 8 09 PR ec ry 0 ae res Sct 248 ad Sean ZAC oe em A ae meer yer S057 Asn hat um foe os don. 2019 an x wa fal pad poses Sie oid Nex 199) Sotion Computation oft a ity ofthe amounts [Sepeemontme a SH Galan cpa gas [e800 8%) 312mm [ Ton TB sae ) Computation of interest under section 258 @ Period for which interes is tobe pid = 01-04-2019 to 31-17-2019 = 4 months. i)_Amount on which interest payable = & 2508 00 ~% 22,0000 « & 60800. (i) Interest payable «& 608,000» 1% «= & 24320. 2) Computation of interes under section 234C (amount in): [iapacel, | Taphe | Aisne [Amount [ Ansunt | Show! [Rat [Note] Taker instalment | “due | tardue | payable | "paid [iB June ans] ausemeo] 15% | 37400) 1.00000] —27aq00] Te | 3 | a 25¥Sept.2018 J 2496000[ a5 [1125200] 209000] 925200] 1% | 3] 27a] [23 Dec.208 [2496000] 75% | 1872000] 000,000] 8.72000] 1% | 3 | 2610 [ase Mar. 2019 2.08,000] 100% | 208,00] 2200000) — 60g o00] 1% | 1] 6000 Total interest under section 21 8 ‘Therefore, total interest charge under section 234B & 231C = %24,320 + € 68,168 = € S2A88 Working Note: While calculating interest under section 234C, tax on long-term capital gain of € 312,00 is to be included in the last instalment only, as the asset was sold on 01-03-2019 andl the next instalment due for that Purpose i 15-03-2019. © scanned with OKEN Scanner