CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 21, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 21, 2016

DIRECT TAX

• Income Tax: Where assessee-NBFC provided security in form of cash collateral for loans purchased by purchaser-bank but did not book said amount as its income, levy of concealment penalty was justified – [2016] 67 163 (Chennai – Trib.)
• Income Tax: Where assessee received gifts from two persons on behalf of his daughters on occasion of their marriage, since said gifts were made by demand drafts and genuineness of same was confirmed by bank in which person making gifts had their accounts, impugned addition made under section 69A was to be set aside – [2016] 67 168 (Punjab & Haryana)
• Income Tax: Substitution of ‘full value of consideration received’ with ‘stamp value’ in terms of section 50C, is applicable in hands of seller of property who has to compute capital gains under section 48 pursuant to transfer of a capital asset in nature of land or building or both; same cannot be extended in case of purchaser to estimate undisclosed investment – [2016] 67  166 (Kolkata – Trib.)
• Income Tax: Where assessee, a joint venture, executing civil contract works, having received contract by Irrigation Department of State Government, assigned same to one of its constituents on back to back basis, since income from contract entered into with State Government was assessable only in hands of assessee and not in hands of sub-contractor, credit for tax deducted at source from bills of assessee was required to be given to assessee alone and same could not be denied by invoking Rule 37BA(2)(i) of Income-tax Rules, 1962, on ground that no real work was carried on by assessee – [2016] 67  224 (Andhra Pradesh)

INDIRECT TAX

• Service Tax: Where assessee-bank was utilizing services rendered by SWIFT essentially to transmit financial messages internationally, such services amounted to a taxable service classifiable under category of banking and other financial services and were liable to service tax – [2016] 67 162 (Mumbai – CESTAT)
• Service Tax: Helping vehicle-buyers to avail registration with RTO under Motor Vehicle Act does not amount to Business Auxiliary or Business Support Services; hence, differential amount earned over and above actual RTO registration fees cannot be charged to service tax – [2016] 67 174 (Mumbai – CESTAT)
• Service Tax: For appeal filed prior to 6-8-2014, if assessee’s appeal is dismissed for pre-deposit default, Tribunal may restore such appeal, if sufficient compliance is shown later; more so, when, on merits, case is prima facie in favour of assessee – [2016] 67  173 (Madras)
• Excise Duty: Where certain percentage of expenses incurred on advertisement by dealers was reimbursed by assessee manufacturer because these advertisements indirectly helped assessee, reimbursed amount would not form part of trading transaction value
• Excise Duty; EXPORT – WITHOUT PAYMENT OF DUTY : Having filed export applications with department, assessee cannot later claim that ‘applications were filed in anticipation of export order and goods in question were never manufactured’; assessee must show proof of export within 6 months or else, bear duty with interest and penalty – [2016] 67 171 (Kerala)

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