The Hindu Business Line : Time limit for levy of penalty

I am a retail trader having turnover exceeding Rs 40 lakh. I opted for presumptive income scheme under Section 44AF. The facts relate to assessment year 2007-08. I received a notice for levy of penalty under Section 271A for not maintaining the books of account under Section 44AA of the I-T Act. The notice dated December 29, 2007, was served on me on December 31, 2007. I did not appear before the AO and he levied penalty vide his order dated September 10, 2008. What is the remedy?

Tax on book-profit: While computing book-profit under Section 115JB, our company compared the aggregate of loss and brought-forward depreciation as per the books of account and claimed the lesser of the two as deduction.

The assessing officer (AO) compared each year’s book-loss and unabsorbed depreciation and adopted lesser of the two as eligible for deduction under Section 115JB. Under law, is the deduction to be reckoned on aggregate basis or on each year comparison basis?

Excavators whether covered by Section 44AE: We are having a JCB — earthmoving machinery used for excavation of earth, lifting of heavy materials, etc. It is a machine mounted on a truck. The truck is registered under the Motor Vehicles Act, 1988. We have admitted the income under Section 44AE of the Act, whereas the tax officer wants to adopt the income as per the books of account maintained. He has advised us that we are not eligible to claim the presumptive income scheme of Section 44AE for the said earthmoving machinery. Please advise us.

Reassessment notice by predecessor and passing of order by successor: I am a doctor admitting income of more than Rs 10 lakh every year. I received a notice alleging escapement of income for the assessment year 2006-07 in January 2008 and thereafter an order was passed in December 2008 by fixing my total income at Rs 15 lakh.

On perusal of reassessment notice issued under Section 148 and reassessment order made subsequently, my tax counsel opines that the assessment is bad in law for the reason that the notice was issued by the predecessor and the reassessment was completed by the successor without issuing a fresh notice under Section 148. I have been advised to contest the order on its technicality than on merits. Is it possible?

Disallowance of expenditure without any test check: We are a construction company executing projects on turnkey basis. In the course of assessment, the AO disallowed 5 per cent of the labour expenses for the simple reason that we maintained only self-made vouchers and there could be some inflated claim of expenditure. The books of account were audited under section 44AB. The AO without verifying the genuineness of expenditure even on test check basis has made this disallowance. How to manage the situation?.

Reassessment based on valuation report of department valuation officer: My total income consisted of long-term capital gain arising from sale of land and building for Rs 35 lakh. The return was processed under Section 143(1) and later the AO made a reference to the Departmental Valuation Officer (DVO) who estimated the value of capital asset at Rs 47 lakh. The AO based on the valuation report initiated proceedings under Section 147 by issuing notice under Section 148. Is he justified?

Withdrawal and deposit from PPF account: My PPF account is more than 10 years old and I have about Rs 2 lakh in it. For the current year I and my wife have income exceeding Rs 4 lakh. By mistake all the insurance premiums were paid by cheque from my bank account.

Now I plan to withdraw money from my PPF account and later my wife would make a deposit into my PPF account and claim deduction under Section 80C.

My withdrawal has no nexus to her deposit. By this, cash resources of my family would not be affected. Is this plan valid in law?

PracticeProblems.blogspot.com