Agency
This query is : Open
18 July 2011
a govt compnay is acting as implementing agency 4 govt in an infrastructure proj of govt.the co: has acquired land,constructed buildins nd other ativities in proj area.howevr it has kept the accounts of infrastructure project seperately and its unaudited for past 15 yrs.
nw it has sold tis proj land to a joint venture co: under a g.o.tis govt co: has 26% shareholding in joint venture co as per tis g.o.the lease premium is adjusted against tis shares and tds dedcuted wit govt co: PAN.
the lease premium cums 2 6.5 crores.nw govt co: dus not want 2 show tis incum in books due to tax prob.suggest a solution since shares r issued in the name of tis govt co:both the investment and incum needs to be off-financial statements
nw it has sold tis proj land to a joint venture co: under a g.o.tis govt co: has 26% shareholding in joint venture co as per tis g.o.the lease premium is adjusted against tis shares and tds dedcuted wit govt co: PAN.
the lease premium cums 2 6.5 crores.nw govt co: dus not want 2 show tis incum in books due to tax prob.suggest a solution since shares r issued in the name of tis govt co:both the investment and incum needs to be off-financial statements
19 July 2011
First of all the question is not clear as you have mentioned abbreviation at many places Secondly the dates are missing when the land was purchased and when it is sold.
Give full facts of the case for proper reply
Give full facts of the case for proper reply
22 July 2011
thank u sir for your reply.sir i am re-posting my query with modifications:
1)a govt company is acting as implementing agency 4 govt in an infrastructure proj of govt.
2)the co: has acquired land in its name(in 1997),constructed buildings and other activities in project area entirely out of grants received from central and state governments(no financial stake by company in project)
3)however the govt company has kept the accounts of infrastructure project seperately as a cost centre and has not included it in its audited accounts for past 15 yrs. Hence the infrastructure project has no legal status or constitution of its own.
4)Now the acquired land has been sold to a joint venture co: under a G.O dtd 29.9.10. This G.O states that the govt co: has 26% shareholding in joint venture co:.the joint venture company has tis land on lease(but ownership already transferred) under condition that 10% will be paid at start,40% in 1 year and remaining 50% with interest as and when payable on demand(as per g.o)
5)1st installment of sale consideration(10% of 65 crores) Rs.6.5 crores has been adjusted against this 26% shareholding and shares issued and registered in the name of this company in F.Y 2010-2011.
6)The joint venture company has deducted TDS from this payment(Rs.67 lacs)in the PAN of this govt company.
7)govt co: has not shown this investment or income in its books but debited this investment and credited this consideration both to cost centre account(debit and credit to same account)
8)Statutory auditors opine that the investment needs to be shown in the books against corresponding income of 6.5 crores.
9)the company is not willing as tax liability wud be huge.
10)kindly suggest a solution for getting the income off P&L account and a method of constitution for infrastructure project.
11)There is no instruction from govt for treating the income and the govt's intention seems to be to place the burden on this company.
1)a govt company is acting as implementing agency 4 govt in an infrastructure proj of govt.
2)the co: has acquired land in its name(in 1997),constructed buildings and other activities in project area entirely out of grants received from central and state governments(no financial stake by company in project)
3)however the govt company has kept the accounts of infrastructure project seperately as a cost centre and has not included it in its audited accounts for past 15 yrs. Hence the infrastructure project has no legal status or constitution of its own.
4)Now the acquired land has been sold to a joint venture co: under a G.O dtd 29.9.10. This G.O states that the govt co: has 26% shareholding in joint venture co:.the joint venture company has tis land on lease(but ownership already transferred) under condition that 10% will be paid at start,40% in 1 year and remaining 50% with interest as and when payable on demand(as per g.o)
5)1st installment of sale consideration(10% of 65 crores) Rs.6.5 crores has been adjusted against this 26% shareholding and shares issued and registered in the name of this company in F.Y 2010-2011.
6)The joint venture company has deducted TDS from this payment(Rs.67 lacs)in the PAN of this govt company.
7)govt co: has not shown this investment or income in its books but debited this investment and credited this consideration both to cost centre account(debit and credit to same account)
8)Statutory auditors opine that the investment needs to be shown in the books against corresponding income of 6.5 crores.
9)the company is not willing as tax liability wud be huge.
10)kindly suggest a solution for getting the income off P&L account and a method of constitution for infrastructure project.
11)There is no instruction from govt for treating the income and the govt's intention seems to be to place the burden on this company.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Registration u/s 80G of the IT Act
- Form 26QC_TDS paid at 5%
- Amazon.com Tax Report
- EWAY BILL BY SELLER TO MY BUYER DIRECTLY?
- HOW TO PAY GST --CALCULATION OF FORMULA....IF ANY
- TDS u/s 194-IA on the Home Loan Disbursement Amount
- HOW TO CALCULATE FOOD CHARGES
- Please help with SAC Codes (6 digits) for below mentioned services provided by Chartered Accountant
- Printing Press under Composition Scheme
- CSR funding for private limited companies
Trending Online Classes
-
GST LIVE Certification Course - 42nd Weekend Batch(With Govt Certificate)
Industry Expert17 May 2025
CAclubindia
