CORPORATE AND PROFESSIONAL UPDATE MARCH 8, 2016

CORPORATE AND PROFESSIONAL UPDATE MARCH 8, 2016

INCOME TAX ACT

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016] 16 (Mumbai – Trib.)

Comparables & adjustments/Comparables–Illustrations:Comparab le can be rejected on ground that it has exceptionally high profit margins as compared to assessee – [2016] 296 (Bangalore – Trib.)

Comparables and adjustments/Others : Where TPO benchmarked international transaction by using CUP method and DRP upheld this action of TPO, by following its findings and decision in assessee’s case for preceding assessment year, in view of fact that in preceding year, on similar facts, matter was remitted back to DRP by co-coordinating bench of Tribunal, matter for current assessment year also was to be remitted back to DRP for fresh adjudication – [2016]  325 (Mumbai – Trib.)

SECTION 148

INCOME ESCAPING ASSESSMENT – ISSUE OF NOTICE FOR

Recording of reasons : In case of notice issued under section 148 in respect of transfer pricing issue, recording of reasons for issuing reopening notice had to be on basis of Assessing Officer’s reasons and TPO’s reasons on merits much after issue of reopening notice did not have any bearing on serving reasons recorded upon party i.e. assessee whose assessment was being sought to be reopened – [2016] 335 (Bombay)

SECTION 271(1)(c)

PENALTY – FOR CONCEALMENT OF INCOME

 Where notice was issued under section 274 proposing to levy penalty under section 271(1)(b) whereas order was passed under section 271(1)(c), it clearly indicated that there was no application of mind by Assessing Officer while issuing notice and, thus, impugned penalty order was to be set aside – [2016]  334 (Karnataka)

COMPANIES ACT

SECTION 77A

SHARES – POWER OF COMPANY TO PURCHASE ITS OWN SECURITIES

In law, petitioner is entitled to buy back its own shares by means of a scheme under section 391 read with sections 100 – 104 of the Companies Act, 1956 , scheme cannot be said to be a colourable device to evade income tax, it is a legally permissible procedure which petitioner is entitled to follow to buy back its shares –[2016]  1 (Bombay)

SARDAR SAROVAR NARMADA NIGAM LIMITED (CONFERMENT OF POWER TO REDEEM BONDS) ACT

SECTION 1

CONSTITUTIONAL VALIDITY

Where Provisions of impugned Sardar Sarovar Narmada Nigam Limited (Conferment of Power to Redeem Bonds) Act, 2008 are irreconcilable with Central legislation occupying field, impugned Act is constitutionally invalid – [2016]  297 (Gujarat)

CONSTITUTION OF INDIA

ARTICLE 226

WRIT PETITION – MAINTAINABILITY OF

Where assessee never filed any reply to notices and not even participated in adjudication hearings, then, no writ would be maintainable against ex parte adjudication order after expiry of time-limit for filing appeal to Commissioner (Appeals) – [2016] 292 (Gujarat)

CENTRAL EXCISE ACT

SECTION 11A

RECOVERY OF DUTY NOT LEVIED OR NOT PAID OR SHORT LEVIED OR SHORT PAID OR ERRONEOUSLY REFUNDED

Matter remanded to Tribunal to determine whether advance sum received by assessee from certain customers against supply of goods had effect of depressing sale price resulting in short payment of duty – [2016]326 (SC)

CBEC Circulars fixing monetary limits for adjudication are merely administrative; therefore, any order passed by Central Excise Officer is valid as per section 11A of the Central Excise Act, 1944, even if same is in violation of monetary limits set out in CBEC Circulars – [2016] 333 (Chennai – CESTAT)

STATUTES

DIRECT TAX LAWS

Promotion of payments through cards and digital means – OFFICE MEMORANDUM [F.NO.01/02/2015-CY.I], DATED 29-2-2016

CORPORATE LAWS

Notice Inviting Comments on Draft Rules With Reference to Revival and Rehabilitation of Sick Companies –PRESS RELEASE, DATED 2-3-2016

Clarifications on IRDAI (Registration of Insurance Marketing Firm) Regulations, 2015 – CIRCULAR NO.IRDA/INT/CIR/IMF/041/03/2016, DATED 2-3-2016

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

Delhi VAT Act. 2004 – Extension of last date of filing return in form CR-II –  NOTIFICATION NO. F.3(628)POLICY/VAT/2016/1572-1584, DATED 1-3-2016

Delhi VAT Act, 2004 – Filing of returns through digital signatures – NOTIFICATION NO.F.3 (643)POLICY/VAT/2016/1585-1597, DATED 1-3-2016

Delhi VAT Rules, 2005 – Filing of reconciliation return in Form 9 for year 2014-15 –CIRCULAR NO.39 OF 2015-16, DATED 29-2-2016

Delhi VAT Act, 2004 – Extension of last date for filing Form DP-1 – NOTIFICATION NO.F.3(352)POLICY/VAT/2013/1559-1571, DATED 1-3-2016

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