CORPORATE AND PROFESSIONAL UPDATE ON DECEMBER 6, 2015

CORPORATE AND PROFESSIONAL UPDATE ON DECEMBER  6, 2015

DIRECT TAX

• No reassessment beyond 4 years to tax deemed dividend if material facts of such income were disclosed in assessment [2015]  104 (Gujarat) Viren Sureshchandra Shah v. ACIT. 
• Personal loan given by a company to its shareholder holding substantial interest in it would be taxable as deemed dividend [2015]  97 (Madras) Sunil Kapoor v. CIT.
• In case of industrial unit of assessee, covered under West Bengal Incentive Scheme, 1999, sales tax subsidy received from Government was capital receipt and, thus,not liable to tax [2015]  96 (Chandigarh – Trib.) DCIT v. Bhushan Ltd.
• Income of business run by assessee as Karta of HUF after his father’s demise can’t be taxed inhis individual capacity [2015]  93 (Karnataka)  CIT v. Manish Kumar Pajwani.
• AO couldn’t tax interest on accrual basis if recovery of principal amount of loan is doubtful.
• Where assessee was in fact not receiving any interest on loan advanced and it had to write off said loan finally in subsequent year, no addition could be made on account of accrued interest just because assessee was following mercantile system of accounting[2015]  98 (Guwahati – Trib.) Cachar Drug Distributors v. ITO.
• No reassessment beyond 4 years to tax deemed dividend if material facts of such income were disclosed in assessment [2015]  104 (Gujarat)  Viren Sureshchandra Shah v. ACIT.
• Personal loan given by a co. to its shareholder holding substantial interest in it would be taxable as deemed dividend [2015]97 (Madras) Sunil Kapoor v. CIT

INDIRECT TAX

• CST & VAT: Delhi VAT– Where penalty order under section 86(10) was passed by Assessing Authority without service of prior notice on assessee and without affording it an opportunity of being heard, said order was liable to be set aside [2015]  81 (Delhi) Bansal Dye Chem (P.) Ltd. v. Commissioner VAT.
• Sales tax subsidy received under West Bengal Incentive Scheme, 1999 was a capital receipt.
• Delhi Government. mandates full reduction of tax-credit on stock transfer of Cigarettes outside Delhi.
• Indirect Tax Ombudsmen to hold meetings with trade and industry associations to hear problems of taxpayers.
• Sales tax subsidy received under West Bengal Incentive Scheme, 1999 was a capital receipt.

OTHERS

• Extraordinary item of cash flow statement should have been recognised in statement of profit and loss as such.

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