CORPORATE AND PROFESSIONAL UPDATE April 23, 2016
CORPORATE AND PROFESSIONAL UPDATE April 23, 2016
DIRECT TAX:
Receipt from the HUF of which the assessee was the member is to be treated as gift received from the relative-not taxable u/s 56(2). Held that – the relative explained in Explanation to s. 56(2)(vi) of the Act includes relatives and as the assessee received gift from his HUF , which is a group of relatives , the gift received by the assessee from the HUF should be interpreted to mean that the gift was received from the relatives therefore the same is not taxable under s. 56(2)(vi). (Smt. Biravelli Dhanalaxmi Vesus The Income Tax Officer, Ward-4, Karimnagar)- 2016 (4) TMI 669 – ITAT HYDERABAD
IT : Payment made by assessee-company to its non-executive directors for giving suggestions for better performance of company, did not amount to ‘commission or brokerages’ requiring deduction of tax at source under section 194H [2016] 68 taxmann.com 204 (Pune – Trib.) DCIT v. Kirloskar Oil Engine Ltd.
No reassessment if income was computed on estimated basis during original assessment IT/ILT: Where loss attributable to Indian operations of assessee, a UK based company, operating BBC World Channel had been accepted after examining relevant vouchers and statement of loss provided by assessee, reassessment could not be made merely because while assessing income in respect of business in question for other assessment years, Assessing Officer had not relied on accounts produced by assessee and had estimated assessee’s income on a presumptive basis BBC Worldwide Ltd. v. Assistant Director of Income-tax, Circle 1(1), International Taxation, New Delhi [2016] 68 taxmann.com 219 (Delhi)
IT: TDS liability – No disallowance could be made u/s 40(a)(ia) for short deduction of tax at source – Nice Projects Pvt. Ltd. Vs. DCIT, Cir-13(1), New Delhi (2016 (4) TMI 825 – ITAT Delhi)
No penalty under sec. 271D if cash in excess of Rs. 20,000 was received from director to meet business exigency
IT : Where assessee had sufficiently proved that share application money was taken in cash from a director to meet urgent and immediate requirement of business and there was a reasonable cause to take ‘loan’ or deposit otherwise than by account payee cheque or account payee bank draft, penalty under section 271D could not have been levied [2016] 68 taxmann.com 202 (Chandigarh – Trib.) Valley Extraction (P.) Ltd. v. JCIT Customized PVC door fittings are classifiable as ‘door’ under excise [2016] taxmann.com 207 (New Delhi – CESTAT) Plasopan Engineers (India) (P.) Ltd. v. Commissioner of Central Excise
No capital gain on unaccrued contingent deferred consideration.[CIT vs. Mrs. Hemal Raju Shete (Bombay HC)].
Sec.153A : Addition without incriminating material with respect to completed assessment not valid. [DMA Investment Pvt. Ltd. vs. DCIT ( ITAT) Delhi].
Sec.263: Revision for starting fishing and roving enquiries not valid.[Rachana Finance & Investments Pvt. Ltd. and Repute Properties Pvt. Ltd. vs. CIT(ITAT Mumbai)].
INDIRECT TAX:
Entitlement for abatement of 40 – Notification No. 1/2006-ST – Held that – the Ld. Commissioner has not given proper finding as regard the abatement available to the appellant to the extent of 40 from the gross value as provided under Notification No. 1/2006-ST. On perusal of the books of accounts of the appellant, it is found that the gross receipt shown in the balance sheet/profit and loss account is inclusive of catering / food. As per Notification No. 1/2006-ST the abatement of 40 is allowed subject to condition that the gross amount charge is inclusive of food items. As the cost of the food item is inclusive in the gross amount charged by the appellant, they are entitled for the abatement.(M/s Renuka Mangal Seva Kendra Versus Commissioner of Central Excise And Customs, Aurangabad)- 2016 (4) TMI 728- CESTAT MUMBAI
Company Law:
Query: A Private Limited company accepted unsecured loan from its existing two Directors. This is exempt deposit under section 73 of the Companies Act, 2013. Subsequently above two Directors resigned from the Directorship of the Company. Is the loan becomes deposits after their resignation? Is the loan becomes repayable after resignation not to attract deposit Rules ?
Answer: Rule 2(c)(viii) of the Companies (Acceptance of Deposits) Rules 2014 provides that any amount received from a person who, at the time of receipt of amount, was director of Company shall not be treated as Deposits. So, there is no necessity to repay the loan as at the time of acceptance of loan the person who has given loan were directors and the money can be retained till the date of maturity.
Other Update
ICAI inviting public comments on the draft amendments in the Chartered Accountants Regulations,1988 arising out of Revised Scheme of Education and Training.
KEY DATES:
Issue of TDS Certificate in case of payment/credit made in March for purchase of property u/s 194A:22/04/2016
Issue of certificate for deduction made in March in DVAT-43: 22/04/2016
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