CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 17, 2016

CORPORATE & PROFESSIONAL UPDATE FEBRUARY 17, 2016

INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Capital gain : Where assessee, a Netherlands based company, tendered part of shares in an Indian company under scheme of buy back on direction of High Court, said arrangement did not fall under definition of ‘reorganization’ under article 13(5) of India & Netherlands DTAA particularly when object of arrangement was not financial restructuring – [2016] 66  164 (Mumbai – Trib.)

SECTION 10A

FREE TRADE ZONE

Computation of deduction : For purpose of computing deduction under section 10A expenses incurred in foreign currency for providing software development services outside India could not be excluded from export turnover; and foreign exchange fluctuation loss had to be reduced from total turnover – [2016] 66 165 (Karnataka)

SECTION 35D

PRELIMINARY EXPENSES

Prior period expenses : Where assessee claimed deduction on account of prior period expenses settled during year but Assessing Officer had disallowed said claim for want of supporting evidence, since Tribunal had restored issue to Assessing Officer to allow prior period expenditures subject to verification and satisfaction of genuineness of claim, no fault can be found with said order – [2016] 66  166 (Bombay)

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Directors, expenses for : Where expenditure was incurred by assessee on lease of aircraft which satisfied conditions of section 37(1), it could not be disallowed merely because it was claimed in revised return – [2016] 66 166 (Bombay)

SECTION 41(1)

REMISSION OR CESSATION OF TRADING LIABILITY

Lease expenses : Where assessee had made a provision for expenses likely to be incurred on re-delivery of aircrafts taken on lease, but lease was extended for further period along with liability, said provision could not be said to have ceased for purpose of invocation of section 41(1)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparable and adjustments/Comparables-Illustration:Companies having huge presence of brand value and intangible R&D activities etc. cannot be chosen for comparability analysis with a captive service provider company – [2016] 66  163 (Mumbai – Trib.)

Comparables and adjustments/Comparables –Illustrations : Where assessee company was rendering engineering drawing and design support services, neither a company providing comprehensive services nor a company engaged in providing engineering consultancy, could be comparable; Government company was also to be excluded from list of comparables – [2016] 66 160 (Delhi – Trib.)

SECTION 120

INCOME TAX AUTHORITIES – JURISDICTION OF

Annual confidential report : Where competent authority while confirming ratings in Annual Confidential Reports (ACRs) of respondent Commissioner (Appeals) had not adverted to elaborate representation made by respondent, his order was liable to be quashed and matter be remanded for fresh consideration – [2016] 66 158 (Punjab & Haryana)

SECTION 245R

ADVANCE RULING – PROCEDURE ON RECEIPT OF APPLICATION FOR

Exemption to PSUs from bar on maintainability of advance ruling application is not unconstitutional – [2016] 66 217 (Delhi)

SECTION 253

APPELLATE TRIBUNAL – APPEAL TO

Tax effect : In view of CBDT Circular No. 21/2015 revising monetary limit for filing revenue’s appeals all appeals of revenue before Tribunal having tax effect below Rs. 10 lakhs would be dismissed without going into merits of case – [2016] 66 169 (Kolkata – Trib.)

COMPANIES ACT

SECTION 456

WINDING UP – CUSTODY OF COMPANY’S PROPERTY

Where Official Liquidator appointed applicant as security agency for protecting assets and properties of company-in-liquidation but failed to pay security charges, Official Liquidator was to be directed to pay same to applicant –[2016] 66 162 (Gujarat)

COMPETITION ACT

SECTION 18

COMMISSION – DUTIES OF

Where CCI relying upon report of DG concluded that appellant associations had indulged in anti-competitive acts by following practice of NOC necessarily required to be taken from them for appointment of a new/additional stockist and it had neither considered nor assigned any reason for not considering appellants’ challenge to findings recorded by D.G, matter required re-adjudication – [2016] 66 171 (CAT – New Delhi)

CENTRAL EXCISE RULES

RULE 7

ASSESSMENT – PROVISIONAL ASSESSMENT

Where assessee sought for provisional assessment for year 2009, rejection of request on ground that assessee had not provided records for finalizing provisional assessment for earlier period 1996 to 2008 was unjustified –[2016] 66  174 (Mumbai – CESTAT

STATUTES

DIRECT TAX LAWS

Small Savings Schemes – Interest Rates on said Schemes to be Recalibrated W.E.F. 1-4-2016 – PRESS RELEASE, DATED 16-2-2016

Section 282 of the Income-tax Act, 1961 – Service of notice generally – Procedure, Formats and Standards for ensuring secured transmission of electronic communication – NOTIFICATION NO.2/2016 [DGIT(S)/DIT(S) -3 /AST/PAPERLESS ASSESSMENT – OCEEDINGS/96/2015-16], DATED 3-2-2016

CORPORATE LAWS

IRDAI (Registration of Corporate Agents) Regulations, 2015 – Clarifications Thereon – CIRCULAR NO.IRDA/CAGTS/CIR/LCE/029/02/2016, DATED 10-2-2016

Notice inviting comments on the draft companies (Indian Accounting Standards) Amendment Rules 2016 –PRESS RELEASE, DATED 16-2-2016

Notice inviting comments on the draft companies (Accounting Standards) Amendment Rules 2016 – PRESS RELEASE, DATED 16-2-2016

Implementation of section 51A of Unlawful Activities Prevention Act (UAPA), 1967 – Updates to ISIL (DA’ESH) & Al-Qaida sanctions list – CIRCULAR DBR.AML.NO.10293/14.06.001/2015-16, DATED 15-2-2016

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