NOTES 1.pdf

NOTES 1.pdf - FINAL C.A – DIRECT TAX J.K.SHAH CLASSES...

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J.K.SHAH CLASSES FINAL C.A. – DIRECT TAX : 1 : REVISION NOTES – MAY ‘19 The term “business” has been defined in section 2(13) to “include any trade, commerce or manufacture or any adventure or concern in the nature of trade, commerce or manufacture”. The term “profession” has not been defined in the Act. It means an occupation requiring some degree of learning. The term ‘profession’ includes vocation as well [Section 2(36)] INCOME CHARGEABLE UNDER THIS CHAPTER (SECTION 28) 1. Income from business, profession or vocation: Income arising to any person by way of profits and gains from the business, profession or vocation carried on by him at any time during the previous year. 2. Any compensation or other payment due to or received in course of business and profession 3. Incentives received or receivable by assessee carrying on export business (Profit on sale of import entitlements, Cash assistance, Customs duty or excise duty re-paid or repayable as drawback, Profit on transfer of Duty Entitlement Pass Book Scheme.) 4. Value of any benefit or perquisite: The value of any benefit or perquisite whether convertible into money or not, arising from business or the exercise of any profession. 5. Sum due to, or received by, a partner of a firm 6. Any sum received under a Keyman insurance policy. 7. The fair market value of inventory as on the date on which it is converted into, or treated as, a capital asset 8. Sum received on account of capital asset referred under section 35AD 9. Any sum received or receivable, in cash or kind, under an agreement for not carrying out any activity in relation to any business or profession Section 29 : COMPUTATION OF INCOME FROM BUSINESS According to section 29, the profits and gains of any business or profession are to be computed in accordance with the provisions contained in sections 30 to 43D. Section Particulars 30 Rent, rates, repairs and insurance for buildings - Notional Expenses not allowed - Capital expenditure not allowed under this section 31 Repairs and insurance of machinery, plant and furniture - Notional Expenses not allowed - Capital expenditure not allowed under this section 32 Depreciation 1. The assets in respect of which depreciation is claimed must belong to either of the following categories, namely: a) buildings, machinery, plant or furniture, being tangible assets; b) know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, being intangible assets PROFITS AND GAINS FROM BUSINESS AND PROFESSION
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J.K.SHAH CLASSES FINAL C.A. – DIRECT TAX : 2 : REVISION NOTES – MAY ‘19 2. The assets should be actually used by the assessee for purposes of his business or profession during the previous year - The asset must be put to use at any time during the previous year. The amount of depreciation allowance is not proportionate to the period of use during the previous year. ( Use includes passive use ) 3. The assessee must own the assets Mysore Minerals Ltd v. CIT (1999) 239 ITR 775 – One who has invested in the
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  • Fall '19
  • Expense, Generally Accepted Accounting Principles, scientific research

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