TAX UPDATE NOV 19, 2015

TAX UPDATES

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Permanent Establishment : In order to determine question as to whether assessee owing rig had PE in India, Tribunal rightly concluded that unless rig owned by assessee was actually used for a period of 120 days in India, it would not be sufficient to attract article 5(2)(j) of India [2015]  123 (Uttarakhand)

SECTION 10(10C)

VOLUNTARY RETIREMENT PAYMENTS

Where jurisdictional Tribunal had allowed assessee’s claim for exemption under section 10(10C) by following its earlier order which had been accepted by revenue by not preferring an appeal there against, then it was not open to revenue to challenge Tribunal’s order without giving reasons for taking a different view – [2015] 343 (Bombay)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Comparables – Illustrations : A company, performing diversified functions, like, consulting, application design, development, re-engineering and maintenance, system integration, package evaluation and implementation and business process management, etc., cannot be compared with a purely software development company – [2015]  303 (Delhi – Trib.)

Comparables and adjustments/Comparables – Illustrations : Matter was remanded for fresh adjudication where a comparable was rejected on ground of absence of current year financial data but later such data was found available – [2015]  303 (Delhi – Trib.)

BLOCK ASSESSMENT IN SEARCH CASES – PROCEDURE FOR

In case of survey : There being no search under section 132, block assessment invoking provisions of section 158BC would not arise – [2015] . 10 (Madras)

COMPANIES ACT

SECTION 108

TRANSFER OF SHARES – NOT TO BE REGISTERED EXCEPT ON PRODUCTION OF INSTRUMENT OF TRANSFER

Mere fact that share certificates along with duly executed transfer deeds are not lodged with company or that such transfers are not registered in record of company does not detract from completeness of transfer as between transferor and transferee – [2015] . 35 (Bombay)

SECTION 536

WINDING UP – AVOIDANCE OF TRANSFERS, ETC., AFTER COMMENCEMENT OF

Once original pledge by company-in-liquidation in favour of applicant was held to be valid, its subsequent enforcement could not be faulted on ground that it amounted to a fraudulent preference or invalid transfer during pendency of winding up – [2015] .35 (Bombay)

SERVICE TAX

SECTION 80

PENALTY – NOT TO BE IMPOSED IN CERTAIN CASES – SERVICE TAX

Since taxability of business auxiliary service for which commission was paid to bank and insurance company and business support services for which handling charges was paid for RTO registration of vehicle, were subjudice in various forums, penalty could not be imposed for failure to deposit in government exchequer amount of service tax deducted; however, in respect of services of motor vehicle where assessee failed to deposit service tax, penalty was to be imposed – [2015]  348 (Mumbai – CESTAT)

CENTRAL EXCISE TARIFF ACT

SECTION 2

CLASSIFICATION

‘Base Frame’ is not an essential part of ‘Industrial Pump’, as industrial pump may be sold separately; therefore, base frame was not classifiable under heading 8413 but only under heading 8485 – [2015] 62 taxmann 371 (Mumbai – CESTAT)

CUSTOMS ACT

SECTION 129E

APPEALS – DEPOSIT, PENDING APPEAL, OF DUTY/TAX DEMANDED OR PENALTY LEVIED

Commissioner (Appeals) has power to extend due date for making pre-deposit and he does not become functus officio as regards extension till due date for making pre-deposit – [2015]  372 (Madras)