The obligation of a banker to honour his customer’s cheque is extinguished (not accepted or clear) on receipt of an order of the Court, known as the Garnishee order, issued under Order 21, Rule 46 of the Code of Civil Procedure, 1908.
A court order instructing a garnishee (a bank) that funds held on behalf of a debtor (the judgement debtor) should not be released until directed by the court. The order may also instruct the bank to pay a given sum to the judgement creditor (the person to whom a debt is owed by the judgement debtor) from these funds.
If the debtor fails to pay the debt owned by him to his creditor, the latter may apply to the court for the issue of a garnshee order on the banker of his debtor.
The account of the customer with the banker, thus, becomes suspended and the banker is under an obligation not to make any payment thereof.
The creditor at whose request the order is issued is called the judgment creditor; the debtor whose money is frozen is called judgment debtor and the banker who is the debtor of the judgment debtor is called the Garnishee.
The Garnishee order is issued in two parts
The court directs the banker to stop payment out of the account of the judgement-debtor
ORDER NISHI
After the bank file his explanation, if any, the court may issue the final order, called ORDER ABSOLUTE
The obligation of a banker to honour his customer’s cheque is extinguished (not accepted or clear) on receipt of an order of the Court, known as the Garnishee order, issued under Order 21, Rule 46 of the Code of Civil Procedure, 1908.
A court order instructing a garnishee (a bank) that funds held on behalf of a debtor (the judgement debtor) should not be released until directed by the court. The order may also instruct the bank to pay a given sum to the judgement creditor (the person to whom a debt is owed by the judgement debtor) from these funds.
If the debtor fails to pay the debt owned by him to his creditor, the latter may apply to the court for the issue of a garnshee order on the banker of his debtor.
The account of the customer with the banker, thus, becomes suspended and the banker is under an obligation not to make any payment thereof.
The creditor at whose request the order is issued is called the judgment creditor; the debtor whose money is frozen is called judgment debtor and the banker who is the debtor of the judgment debtor is called the Garnishee.
The Garnishee order is issued in two parts
The court directs the banker to stop payment out of the account of the judgement-debtor
ORDER NISHI
After the bank file his explanation, if any, the court may issue the final order, called ORDER ABSOLUTE
Objectives & Agenda :
Cross-border mergers and acquisitions have rapidly increased reshaping the industrial structure at the international level. A cross-border merger means any merger, amalgamation or arrangement between an Indian company and a Foreign Company in accordance with the Companies Act, 2013. The Webinar will cover the provisions in the Companies Act, 2013, FEMA Regulations and Income-tax implications relevant to Cross Border Mergers. Additionally we will also look relevant statistics.
elationship between banker and customer
,
definition of a banker and customer
,
definition of banking
,
general relationship between banker and customer
,
relationship as debtor and creditor
,
special relationship: banker as trustee
,
pawner and pawnee
,
bailer and bailment relationship
,
mortgager and mortgagee relationship
,
executer
,
attorney
,
guarantor
,
duties of a customer
,
rights and duties of the banker towards the custom
,
rights of a banker
,
garnishee order
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
Charge of Income Tax
Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.
It is charged on the total income of every person for the previous year.
Total Income is to be computed as per the provisions of the Act
Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
Background of Company Law in England,
Background of Company Law in India,
Definition of Company,
Nature & Characteristics,
Features of Company,
Lifting the corporate veil,
Types of Companies,
Formation of a Company,
Memorandum & Article of Association,
Prospectus,
Share & Share Capita,
Company Management & Director,
Meetings,
Borrowing Powers,
Debentures & Charges,
Accounts & Auditors,
Prevention of oppression & Mismanagement,
Winding up,
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
Objectives & Agenda :
One of the charitable forms of organisation is Trust. It is generally formed for the benefit of public at large (public charitable trusts) or for a specified group of persons (private trusts). Formation of trusts is governed by different legislations and involves various registrations under several Acts. The webinar dwells upon the aspects of formation of trust under relevant legislations, various types of trusts, registration of trusts, taxation of trusts and other relevant aspects of management of trust.
Objectives & Agenda :
Cross-border mergers and acquisitions have rapidly increased reshaping the industrial structure at the international level. A cross-border merger means any merger, amalgamation or arrangement between an Indian company and a Foreign Company in accordance with the Companies Act, 2013. The Webinar will cover the provisions in the Companies Act, 2013, FEMA Regulations and Income-tax implications relevant to Cross Border Mergers. Additionally we will also look relevant statistics.
elationship between banker and customer
,
definition of a banker and customer
,
definition of banking
,
general relationship between banker and customer
,
relationship as debtor and creditor
,
special relationship: banker as trustee
,
pawner and pawnee
,
bailer and bailment relationship
,
mortgager and mortgagee relationship
,
executer
,
attorney
,
guarantor
,
duties of a customer
,
rights and duties of the banker towards the custom
,
rights of a banker
,
garnishee order
Lecture notes on scope of total income and residental status under income ta...Dr. Sanjay Sawant Dessai
Lecture notes prepared for the students of Income tax , based on Income tax Act of India 1961. topic covered are Residential status and scope of total income of assessee.
Charge of Income Tax
Income tax is charged in assessment year at rates specified by the Finance Act applicable on 1st April of the relevant assessment year.
It is charged on the total income of every person for the previous year.
Total Income is to be computed as per the provisions of the Act
Income tax is to be deducted at source or paid in advance wherever required under the provision of the Act.
Person u/s 2(31) includes,
An Individual,
Hindu Undivided Family (HUF),
A Company,
A Firm,
An Association of Persons(AOP) or Body of Individuals (BOI),
A Local Authority,
Every other Artificial Juridical Person
Incidence of Tax
Incidence of Tax
Background of Company Law in England,
Background of Company Law in India,
Definition of Company,
Nature & Characteristics,
Features of Company,
Lifting the corporate veil,
Types of Companies,
Formation of a Company,
Memorandum & Article of Association,
Prospectus,
Share & Share Capita,
Company Management & Director,
Meetings,
Borrowing Powers,
Debentures & Charges,
Accounts & Auditors,
Prevention of oppression & Mismanagement,
Winding up,
Meaning of agricultural Income, Examples, Non Agricultural Income , Is Agricultural Income taxable? Case study, Examples of Agricultural Income and Non-Agricultural Income
Objectives & Agenda :
One of the charitable forms of organisation is Trust. It is generally formed for the benefit of public at large (public charitable trusts) or for a specified group of persons (private trusts). Formation of trusts is governed by different legislations and involves various registrations under several Acts. The webinar dwells upon the aspects of formation of trust under relevant legislations, various types of trusts, registration of trusts, taxation of trusts and other relevant aspects of management of trust.
What are the practical difficulties faced by NGOs while applying for tax exemptions? What are the caution points to avoid their withdrawal? Why do donors or NGOs need to put internal controls in place? What are the types of fund raising and the checklist that must be answered before accepting a donation? What is funding mix? How to combat the difficulties faced by NGOs during fund raising?
How to prepare budgets and what are the check points that make budgets an effective reporting tool?
Get all your queries answered.
To know the need for registration of trust under the Income Tax Act, 1961. To understand the procedure for registration of trust and to analyse Form 10A (Application for registration). To know the procedure for 80G registration by trusts and to analyse Form 10G (Application for grant of Approval under 80G). Further, the webinar shall touch upon caveats to be kept in mind while filing the Forms.
Here we are with the Thirtieth successive issue of our monthly ‘Missive’.
We trust you will enjoy reading this Missive, even while soaking in thecontents. We would very much
appreciate your feedback which consistently helps us in improving and upgrading the contents.
Taxability of Receipts under section 68 of Income Tax Act, 1961.pptxtaxguruedu
Income Tax Act 1961, provides statutory powers to the parliament to levy and collect tax on the income of the persons. The act provides 5 different natures of income called as 5 heads of income under which an income is taxed. Apart from these 5 heads of income there is another category of income which is treated separately and tax accordingly and that is undisclosed income or the black money.
From Yizhou HuangTo Professor BoyerSubject FRAUD INVESTIGATI.docxhanneloremccaffery
From Yizhou Huang
To: Professor Boyer
Subject: FRAUD INVESTIGATION: MOUNTAIN SPORTING GOODS
10/16/2017
Fraud refers to deliberate efforts by a party to conceal information to other parties for his/her benefits to the detriment/loss of the party to whom the information is being hidden. Not many organizations’ management will readily accept fraud has occurred. As a result, not may fraud cases will be detected especially by outsiders.
At onset, I am aware that Mountain Sporting Goods, and I particular Pawn shop will not be an exception to the above. As such, my findings may not be conclusive of all the fraud which has occurred in Pawn Shop or Mountain Sporting Goods.
It is the duty of the management to come up with plans and programs which will safeguard the organizations assets, deter and detect fraud, and ensure the integrity of its accounting records. In the Pawn shop scenario, I am aware that this may be a red flag to check in my investigations. Since the members of the company were of the opinion that the business was not going well, I decided to approach the engagement with a free mind but cognizant of the fact that it is possible they are right.
No organization is safe from fraud regardless of its size. Therefore, an organization should create a fraud risk assessment plan and ensure that proper internal controls are in place. Mountain Sporting Goods were supposed to have one. For this to work, the owners or management must fully understand the business and the environment in which it is working in.
However, when the proprietor, JD, the family did not understand the business and eventually entrusted their friend TW to manage and run the business.
Pawn shop management was expected to put in place controls to provide reasonable assurance regarding the achievement of the objective, effectiveness and efficiency of operations reliability of financial reports.
Phase I: red flags, fraud hypothesis:
1. Misappropriation and misuse of company assets. This may include assets such as cash, data and property. This may include theft of resources and assets.
2. Financial fraud schemes.
3. Corruption. This is done through bribery in order to ensure a person with information does not disclose it, extortion by a person with influence over another and conflict of interest.
Red flags:
1. Tw is not a owner manage business: college student, not efficiency
2. sales are increasing each year, but NI is going down significantly, not making projection. Company has the ability to generate revenue, but NI decrease
3. Pawn shop sales for the year is really small- not the growth area, failure of the business
4. Inventory for the Pawn shop is not on the book (ending inventory that was not redeemed should recorded)- inflating sales, purchases , sales will not recorded on the book(pawn), inventory not on the book, loan repayment by cash—workman can take home some cash, inventory… no traces on sales, cash, inventory
Loan(pawn) GAAP
Purchase 100 Inventory ...
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CANCELLATION OF REGISTRATION OF TRUST U/S 12AA
1. CANCELLATION OF REGISTRATION OF
TRUST U/S 12AA
Commissioner of Income Tax
(Exemptions), Kolkata
v.
Batanagar Education Research Trust
[2021] 129 taxmann.com 30 (SC)
2. LEGENDS USED
CIT Commissioner of Income Tax
HC High Court
ITAT Income Tax Appellate Tribunal
RTGS Real-Time Gross Settlement
SC Supreme Court
SCN Show Cause Notice
3. PRESENTATION SCHEMA
Facts of the Case Issues & Orders of the Case Observations of the case
Contentions at the forums Conclusion
5. GENERAL FACTS
Batanagar Education Research trust was
registered u/s 12AA and it is approved u/s
80G(vi) of Income Tax Act, 1961 on 6-8-2010
In a survey conducted on School of Human Genetics
and Population Health, it was observed that the
trust is not carrying on the activities according to the
objectives of the trust
The trust was receiving bogus donations for claiming
exemptions and it returns the money to the donors
classifying it as payment towards capital expenditure
7. ISSUES
Whether the trust misused its
status conferred upon it by
Section 12AA of the Act.
Whether trust was not entitled
to retain and enjoy its status as
a trust and cancellation of
registration u/s 12AA and 80G
are justified.
8. ORDERS
CIT
Cancelled the registration
granted u/s 12AA and
approval u/s 80G of the Act
ITAT
The activities of the
Assessee were not genuine
and hence their registration
is liable to be cancelled u/s.
12AA of the Act,
HC
The trust is not involved in
any illegal activities of the
donor. Hence, the order of
cancellation of the
registration of the trust is
set aside.
Appeal was made to the
Honourable SC regarding
the same
In favour of revenue
In favour of assessee
10. QUESTIONS RAISED BY THE DEPARTMENT
1. Please confirm the authenticity of the Corpus Donation.
2. Why are you saying that a major part of the donations received
were not genuine?
3. Who were the intermediaries and what were the modes of
returning the money?
4. In response to the earlier question you have stated that you were
"instructed". Who gave you the instruction?
5. The ledger copy for the period from 1-4-2014 to 4-9-2014 of your
trust having details of the donors is being shown to you to identify the
bogus donations along with bogus donors.
A questionnaire was issued to managing trustee whereby the following questions were raised
11. RESPONSE BY THE MANAGING TRUSTEE
1. Please confirm the
authenticity of the Corpus
Donation
• Donations that claimed
exemption u/s 11(1)(d) were
not genuine and were in the
nature of accommodation
entries, the reason being
• To show the amount as
capital reserve to procure
loans from banks
• Need of funds for
expansion of college.
2. Why are you saying that a
major part of the donations
received were not genuine?
• A part of donation received
for the above
accommodation entries was
returned back to the donors
through intermediaries
3. Who were the
intermediaries and what were
the modes of returning the
money?
• Mode - RTGS to the following
7 person
• Santwana Syndicate
• P.C. Sales Corporation
• Kalyani Enterprises
• Riya Enterprises
• Laxmi Narayan Traders
• Hanuman Traders
• Rani Sati Trade cum Pvt.
Limited
Section 11(1)(d) - Income in the form of voluntary contributions made with a specific direction, that they
shall form part of the corpus of the trust or institution, shall be fully exempt.
booked as capital expenditure
under the head Building
12. CONTD..
4. Who gave you the instruction to transfer the
money?
• Shri Gulab Pincha, was the key person to return
back the money received as bogus donation to
different parties and booking it as capital
expenditure.
• He collected the money receipts / 80G
certifications on behalf of the donors.
5. The ledger copy of your trust is being shown to
you to identify the bogus donations along with
bogus donors.
• Donation-I and II having total amount of Rs.
6,03,07,550/- is bogus and out of which Rs.
5,96,29,973/- was returned back through RTGS
to the above mentioned persons following the
instructions of the mediators.
14. CONTENTIONS BY CIT
Society/Trust has misused the provision of Section 12AA and 80G(5) (vi).
They have violated the objects of the trust as converting cheque received
through corpus donation in cash beyond-the-objects. The society was found
to be involved in Hawala activities.
Corpus donation received is not voluntary, merely an accommodation entry
and fictitious.
Activities of the trust are not genuine as well as not being carried out in
accordance with its declared objects.
Even in-genuine and illegal activities carried on by assessee through money
laundering do not come within the conceptual framework of charity.
Therefore, the appeal is dismissed.
15. CONTENTIONS OF THE TRIBUNAL
• The Managing Trustee of
the Assessee admitted that it
got donations and returned
to donors in cash.
• The statement given by the
Managing Trustee is already
been extracted.
• It is clear from the evidence
on record that the activities
of the Assessee were not
genuine and hence their
registration is liable to be
cancelled u/s 12AA(3) of the
Act, and was rightly cancelled
by the CIT
The appeal is therefore
dismissed
Section 12AA(3) – If the activities of the trust or institution are found to be non-genuine or its activities are
not in accordance with the objects for which such trust or institution was established, then the registration
can be cancelled.
16. CONTENTIONS OF HC
The respondent revenue has not been
able to establish the case so as to
warrant cancellation of the registration
of the appellant trust under section
12AA(3) of the Act
The Revenue also has not been able to
prove any involvement of the trust in
any illegal, immoral or irregular activity
of the donors.
Appeal allowed in favour of the assessee
18. FINAL RULING BY HONOURABLE SC
The answers given by the Managing trustee proves that the bogus funds were received and a
part of it were returned to the donors in cash.
Hence, it is clear that the registration conferred upon by the trust u/s 12AA and 80G of the
Act was misused by the trust.
The HC did not attempt to understand or consider the views of CIT and ITAT whether they
are correct or valid.
The order passed by CIT and Tribunal were right and they are restored.
Hence the registration of the trust stands cancelled.
19. WAY FORWARD
The benefit under section 11 and section 12 have been provided with an intent of
promoting the welfare of the society. However if such status is being misused for
other illegal activities, such status is likely to be cancelled and be subject to serious
consequences.