CORPORATE AND PROFESSIONAL UPDATE MARCH 29, 2016

CORPORATE AND PROFESSIONAL UPDATE MARCH 29, 2016

DIRECT TAX

• Income Tax: Disallowance being 1/10th Global Depository Receipts – whether the GDR is nothing but increase in the capital and expenses relating to the same is capital in nature? – Section 35D(2)(iv) categorically deals with the expenses in connection with the issue, or public subscription of shares and debentures of the Company. – grievance of the AO is ill conceived.
• Income Tax: Interest accruing on FDRs treated as income from other sources – since the assessee is not having any other source of income de horse this business undertaking which was not set up, interest income earned by the assessee till 31/03/2011 cannot be brought to tax – to be reduced from the cost of project.
• Income Tax: Reopening of assessment – receipt of accommodation entries – without forming a prima facie opinion, on the basis of such material that income has escaped assessment the AO can not assume valid jurisdiction to initiate proceedings and to issue notice u/s 147/148 – Notice u/s 148 quashed.

INDIRECT TAX

• Service Tax: Transport of passengers on domestic routes through its helicopters – the contracts were invariably between the appellant and the charter parties who hired appellant’s helicopters for the purpose of transporting passengers. – prima facie services clearly fall within the ambit of STGU.
• Service Tax: Eligibility for refund of accumulated CENVAT credit – Rule 5 of CCR – there was no taxability of any service provided by respondent prior to registration. Accordingly, input credit was not possible to be utilized for which that was accumulated. – credits were accumulated prior to registration – No refund can be granted.
• Central Excise: SSI Exemption – Clubbing of clearance value of the proprietary ship firm with the private limited company -, it is evident from the records that there was no manufacturing activity in other units – clubbing upheld
• Customs: Seeking conversion of free shipping bills to Drawback shipping bills – a power given by Sec 149 of the Customs Act 1962 to the officers under a statute can not be curtailed by a Circular issued by CBEC .
• VAT and Sales Tax: Adequate rebut of Legal presumption – Deemed sale drawn by the authorities under Section 46(15)(d) of the AGST Act – the authorities have failed to discharge the obligation – HC

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