Clipped from: https://www.taxscan.in/ministry-of-msme-mandates-treds-onboarding-for-large-companies-by-march-2025/454901/
The Ministry of Micro, Small, and Medium Enterprises (MSME) has issued a notification requiring all companies with a turnover exceeding тВ╣250 crore and all Central Public Sector Enterprises to register on the Trade Receivables Discounting System (TReDS) platforms by March 31, 2025.
This move will help improve MSME financing by improved access to liquidity and ensuring timely payments to small and medium businesses.
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The notification was issued on November 7, 2024, under Section 9 of the MSME Development Act, 2006, and supersedes earlier notifications from November 2018. This regulatory push seeks to address the challenges MSMEs face due to delayed payments from larger entities, a factor that has long hindered the growth of this sector.
The TReDS platform, created under the guidelines of the Reserve Bank of India, facilitates discounted payments for receivables, enabling MSMEs to convert their receivables into liquidity without waiting for credit terms to lapse.To Read the full text of the Notification CLICK HERE
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ITAT quashes Disallowance u/s 36(1)(iii) of Income Tax Act on Interest-Free Advances given to Sister Concern of Assessee [Read Order]
In a recent ruling, the Bangalore Bench of the Income Tax Appellate Tribunal ( ITAT ) quashed the disallowance under Section 36(1)(iii) of the Income Tax Act, 1961, on interest-free advances provided to the assesseeтАЩs sister concern.
In this case, the assessee, Deccan Charters Pvt. Ltd., is a company in the aviation services business based in Bengaluru and filed its Income Tax Returns for the assessment year ( AY ), declaring a total loss of Rs. 10,93,70,970.
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During the scrutiny proceedings, it was noted by the assessing officer ( AO ). The AO noted that the assessee had given interest-free advances to related concerns while paying interest on borrowed loans. After reviewing the details furnished by the assessee, the AO disallowed Rs. 2.56 crore under Section 36(1)(iii) of the Income Tax Act.
The assessee, who was aggrieved by the order of AO appealed before the Commissioner of Income Tax ( Appeals ) [ CIT (A) ]. The CIT(A) rejected the submissions made by the assessee that the impugned advances were extended by the assessee to its sister concern, M/s. Deccan Emerging Business Ventures Pvt. Ltd., during the financial year relevant to AY 2012-13 and upheld the decision of AO.
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The assessee approached the ITAT for relief.
The assessee contended that the advance was not given during the year under consideration and that the balance shown is the outstanding carried forward from earlier years.
The counsel on behalf of the assessee contended that the outstanding advance to the sister concern has decreased from Rs. 38.47 crore in 2012 to Rs. 22.54 crore in 2018, making the disallowance under Section 36(1)(iii) of the Income Tax Statute on grounds that insufficient own funds were not available was not tenable.
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It was vehemently argued by the counsel on behalf of the respondent that the assessee cannot take shelter on the ground that when the advance was extended, the assessee had sufficient own funds.
The ITAT bench found merit in the assesseeтАЩs contention that no new advance was extended to the sister concern.
The ITAT bench, comprising George George K ( Vice President ) and Padmavathy S. ( Accountant Member ) allowed the appeal filed by the assessee and held that the AO was incorrect in making the disallowance under Section 36(1)(iii) of the Income Tax Act, 1961, and directed the AO to delete the disallowanceTo Read the full text of the Order CLICK HERE
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