CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5, 2016

Direct Tax

• Clarification issued on taxability of surplus on sale of shares and securities-Capital Gains or Business Income-Instructions  in order to reduce litigation vide circular no. 06/2016 –
• Clarification issued by clarifying TDS provisions by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements vide circular no. 05/2016
• Clarification issued by central government for payment by broadcasters or television channels to production houses for production of content or programme for telecasting vide circular no. 04/2016
• Notification of Income-Tax (3rd Amendment) Rules , 2016 by Central Government
• Addition u/s. 68 – CIT(A) should not have rubbished the affidavit without going into the merits. Therefore in the interest of justice and fair play we restore this issue to the files of the A.O- (Shri Dinesh Tarachand Kasat and Others Versus The Dy. Commissioner of Income-Tax, Central Circle-1 (3) , Ahmedabad and Vica-Versa – 2016 (3) TMI 91 – ITAT AHMEDABAD)
• Applicability of the provisions of sec.50 – transaction of sale of land and building – When an asset has not entered the block then the question of application of Explanation 5 to sec. 32(1) shall not have application- (M/s Firoz Tin Factory Versus Asstt. Commissioner of Income Tax 19 (3) , Mumbai and Vica-Versa – 2016 (3) TMI 78 – ITAT MUMBAI)
• Assessee following mercantile system of accounting has to offer income to tax on accrual basis even if not received [2016] 295 (Mumbai – Trib.) Girish M. Kothari v. Joint Commissioner of Income-tax.
• CBDT releases list of cases getting time barred on March 31, 2016 for reference of the AOs

Indirect Tax

• Central Government issues instructions for reduction of government litigation through withdrawal of appeal by the department before CESTAT by instruction no. F.No.390/ Misc./163/2010-JC
• Invokation of Section 80 of the Finance Act 1994 and immunity from penalty under Section 78 of the Act – Levy of service tax being an indirect tax mechanism hardship is faced by the tax payer if incidence of tax is not realised from the service recipient. Considering such aspect and taking into consideration that a part of the penalty amount has been discharged the balance of the penalty is waived- (M/s Sathyabhama Enterprises Versus Commissioner of Service Tax, Chennai – 2016 (3) TMI 71 – CESTAT CHENNAI)
• Service Tax : 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) HIGH COURT OF GUJARATNice Constructionv. Union of India
• Govt. further extends due date of filing DVAT Form DP-1 to March 31, 2016

Company Law

• Query: I have a query regarding incorporation of OPC- As per page 7 of instruction kit for eForm INC-2, “It is suggested that eForm DIR-12 should be filed together at the time of filing of eForm INC-2 if the member is not the sole director of the Company.”
  Does it mean that DIR-12 is not to be filed with INC-2 if the member is the sole director of the Company, however it should be filed after incorporation? Or it means that DIR-12 is to be filed neither with INC-2 nor after incorporation?
• Answer: If member is the sole director of the Company, Form DIR-12 is not required to be filed neither with Form INC-2 nor after incorporation.

Other Update

• President clears two bills to enroll new voters consequent upon redefining of boundaries with Bangladesh

Key Dates

E-Payment of Service Tax for Feb by companies: 06/03/2016

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