CORPORATE AND PROFESSIONAL UPDATE JANUARY 16, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 16, 2016

INCOME TAX ACT

SECTION 2(15)

CHARITABLE PURPOSE

Object of general public utility : SLP granted against order of High Court wherein it was held that since dominant objective of ICAI was to regulate profession of Chartered Accountancy in India, it was a charitable institution and conduction of coaching classes and campus placements for a fee by it could not be held to be business, trade or commerce – [2016]  63 (SC)

SECTION 10(23C)

EDUCATIONAL INSTITUTIONS

Deemed Approval : Where assessee has not received approval from prescribed authority under section 10(23C)(vi), it cannot be said that non-disposal of an application under section 10(23C)(vi) would result in deemed grant of approval to assessee, enabling it to claim deduction under section 10(23C)(vi) – [2016]  73 (Pune – Trib.)

SECTION 43(1)

ACTUAL COST

Explanation 3 : SLP dismissed against High Court’s ruling that where at time of transfer of assets, assessee had no income to reduce its tax liabilities by way of such transfer, Assessing Officer was in error in invoking Explanation 3 to section 43 for determining actual cost in said deal – [2016] 66 (SC)

SECTION 49

CAPITAL GAIN – COST WITH REFERENCE TO CERTAIN MODES OF ACQUISITION

Inheritance : Where assessee acquired tenancy rights on death of his father, cost of acquisition of such rights would be deemed to be cost for which assessee’s father acquired it and if such cost could not be ascertained, cost of acquisition to assessee’s father would be fair market value on date of acquisition – [2016]  61 (Mumbai – Trib.)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment – Interest : Where amount of loan or borrowing were recovered after stipulated credit period, such recovery of dues in international transaction with its associated enterprises was to be benchmarked by applying CUP method of international bank rates – [2016]  44 (Pune – Trib.)

SECTION 158BC

BLOCK ASSESSMENT IN SEARCH CASES – PROCEDURE FOR

Validity of search : SLP granted against High Court’s ruling that Tribunal has power to look into a validity of a search for purpose of determining jurisdiction for making a block assessment – [2016] 64 (SC)

SECTION 220

COLLECTION AND RECOVERY OF TAX – WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT

Stay : Where for prior period, income of assessee, a local authority constituted under provisions of Gujarat Town Planning and Urban Development Act, 1976, had been assessed at nil and it was sought to be brought into tax dragnet only by resorting to proviso to section 2(15), it should be granted stay of demand till disposal of appeal against assessment order by Commissioner (Appeals) – [2016] 59 (Gujarat)

SERVICE TAX

SECTION 65(31)

TAXABLE SERVICES – CONSULTING ENGINEER’S SERVICES

Body corporates were not liable to service tax under Consulting Engineer’s services during period prior to 1-5-2006, as only ‘firms’ were covered under scope of said service – [2016] 102 (New Delhi – CESTAT)

CST & VAT

SECTION 36A OF DELHI VALUE ADDED TAX ACT, 2004

RETURNS, ASSESSMENT AND TAX ADMINISTRATION – TDS – IN CASE OF WORKS CONTRACT

Where Tax Authority passed an order under section 36A(8) on assessee, it was only Commissioner who could pass an order under section 36A(8) unless and until power of Commissioner had been delegated under section 68 to Tax Authority – [2016] 103 (Delhi)

CENVAT CREDIT RULES

RULE 3

CENVAT CREDIT – SUO MOTU RE-CREDIT

Where assessee has paid duty pending adjudication using credit balance, said payment is payment of ‘duty’ and not mere ‘deposit’; therefore, said payment cannot be taken as suomotu credit, same has to be claimed as refund under section 11B – [2016] 101 (Ahmedabad – CESTAT)

STATUTES

CORPORATE LAWS

FEM (Export of Goods & Services) Regulations, 2015 – NOTIFICATION [NO.FEMA 23(R)/2015-RB]/GSR 19(E), DATED 12-1-2016

Sovereign Gold Bond Scheme, 2016 – PRESS RELEASE, DATED 14-1-2016

Revised position limits for currency derivatives contracts – CIRCULAR NO.MRD/DP/02/2016, DATED 15-1-2016

INDIRECT TAX LAWS (ST./EX./CUS. & (CST & VAT)

Section 5A of the Central Excise Act, 1944 – Amendment in Notification No.12/2012-C.E., dated 1-3-2012 –NOTIFICATION NO.2/2016-C.E., DATED 15-1-2016

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