Kindly clarify.

V. Kumar, email

There are quite a few case laws to support the argument that substance is more important than form. Therefore, submission of return in an old Form is not fatal so long as it gives all the information to the assessing officer (AO) to make a proper assessment. At any rate, nothing stopped the Department from refusing to accept returns in old forms.

Rest assured you are in the clear.

If I trade in derivatives in a stock exchange would that amount to a speculative transaction?

Velingiri Parasuppa, email

The position is made clear by Proviso (d) to Section 43(5) defining the term ‘speculative transaction’. It says an eligible transaction of trading in derivatives carried out in a recognised stock exchange shall not be treated as a speculative transaction.

At number of places, the Companies Act talks of ‘audited accounts’. Does this presuppose accounts as audited and signed by directors or approved byshareholders as well?

Murali Manohar, email

The Companies Act is not explicit about whether the accounts as audited need to be approved by shareholders at the AGM. Section 210 calls upon the board to lay the accounts before the AGM. But Section 173, while distinguishing between ordinary and special businesses, categorises ‘consideration’ of accounts under the ordinary category impliedly thus fortifying the legislative expectation if not the mandate that the shareholders must cast their imprimatur on the accounts. This inference flows from the use of the word ‘consideration’ in Section 173. A document when ‘considered’ obviously would have to be either approved or disapproved. Thus, the implicit requirement is that the shareholders must approve the accounts laid at the AGM. But, in my view, this does not mean that lack of approval by the shareholders would in any way impinge on provisions talking about audited accounts.

I had purchased a residential site from an urban development authority in June 2006 by borrowing from a bank. While taking the loan I had mentioned that I would start construction within a year and was hence sanctioned a housing loan instea d of a plot loan and at the instance of the bank I made my wife a joint owner though she does not have any regular source of income. Immediately after the purchase I was approached by a local trader to let the place to run his business after erecting a temporary structure. I agreed and let it on nominal rent. Now, I have decided not to go ahead with constructing a house as a lot of infrastructure development activity is taking place around the site and it is fast developing into a commercial area. Under which head should I disclose the rental income and will I be eligible for deduction on the interest, and if I have a loss from this transaction, can it be offset against my income from salary? Also should the rental income be split between me and my wife though the loan instalment and interest are paid out of my salary income?