CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 3, 2016

CORPORATE AND PROFESSIONAL UPDATE FEBRUARY 3, 2016

INCOME TAX ACT

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Deferred revenue expenditure : Where decision to abandon project was taken in relevant year, balance deferred revenue expenditure relating to said project would be deemed to arise in relevant year and would be allowed as such – [2016] 65 311 (Calcutta)

SECTION 68

CASH CREDIT

Share capital : Where it was alleged that on-money received in cash by real estate companies from flat purchasers was routed back in those companies in form of share capital/ unsecured loans, etc. using assessee as a conduit, unless identity and creditworthiness of concerned fund owner were confirmed, addition made in hands of assessee could not be deleted – [2016] 65  310 (Delhi)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Comparables – Illustrations : In case of assessee rendering software development services and market support services to its AE, a company primarily engaged in event management, could not be accepted as valid comparable while determining ALP – [2016] 65  297 (Mumbai – Trib.)

SECTION 254

APPELLATE TRIBUNAL – POWERS OF

Power to recall : Where assessee was prevented by sufficient cause from appearing before Tribunal, Tribunal was justified in recalling its ex parte order and rehearing appeal already disposed of on merit – [2016] 65  311 (Calcutta)

COMPANIES ACT

SECTION 166 OF COMPANIES ACT, 2013

DIRECTOR – PROHIBITION OF ASSIGNMENT OF OFFICE BY

SECTION 433Director’s grievance against company./co-director does not justify violation of his/her fiduciary duties under section 166 of the Companies Act,2013 by carrying on a business competing with that of the company. If he/she had any grievances, he/ she can avail the remedy but there is hardly any justification to start parallel/similar to the business of the company. In the present case, the defendant No.1 being a director in running the business in which she was participating in all activities still chose to start her independent business in competing the business of her own company. The act of the defendant No.1 was prima facie not bonafide as it was done for monetary purposes – [2016] 66  18 (Delhi)

WINDING UP – CIRCUMSTANCES IN WHICH A COMPANY MAY BE WOUND UP

Mere filing of application for recovery of debt before Tribunal under provisions of Recovery of Debts due to Banks and Financial Institutions Act, 1993 would not entail a bar in law to laying a winding up petition under provisions of Companies Act where conditions provided therefor are proved to have been satisfied – [2016] 65 312 (Rajasthan)

COMPETITION ACT

SECTION 36

POWER OF COMMISSION TO REGULATE ITS OWN PROCEDURE

Where penalty was imposed upon appellant-cement manufacturer on basis of findings of another order in related matters, when said order had been set aside, order imposing penalty in instant case was also to be set aside – [2016] 65 307 (CAT)

SARFAESI ACT

SECTION 15

MANNER AND EFFECT OF TAKE OVER OF MANAGEMENT

SARFAESI Act, 2002 prevails over the Sick Industrial Companies (Special Provisions) Act, 1985 to the extent of inconsistency therewith. Section 15(1) proviso 3 of the Sick Industrial Companies (Special Provisions) Act, 1985. 3 covers all references pending before the BIFR, no matter whether such reference is at the inquiry stage, scheme stage, or winding up stage. This being so, it is clear that in any case the present reference under Section 15(1) of the Appellant No. 1 company has abated inasmuch as more than 3/4th of the secured creditors involved have taken steps under Section 13(4) of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 – [2016] 66  17 (SC)

CENTRAL EXCISE ACT

SECTION 4

VALUATION UNDER CENTRAL EXCISE – TRANSACTION VALUE

In case of clandestine removal of excisable goods, amount received by assessee must be regarded as cum-duty and excise duty liability must be worked out accordingly – [2016] 65  299 (Mumbai – CESTAT)

SECTION 5A

EXEMPTIONS – CENTRAL EXCISE – SSI/THRESHOLD EXEMPTION

If department wants to deny SSI-exemption on ground that brand name used by assessee is of another person, department must prove case and assessee cannot be asked to prove that brand name does not belong to any other person – [2016] 65 298 (Mumbai – CESTAT)

SECTION 11A

RECOVERY – OF DUTY OR TAX NOT LEVIED/PAID OR SHORT-LEVIED/PAID OR ERRONEOUSLY REFUNDED – ADJUDICATION OF DEMAND

Where different laboratories give different chemical report over composition of product manufactured by assessee and Department seeks to reply upon report of Chief Chemist in its favour, assessee is justified in seeking response to queries and also cross-examination of Chief Chemist; hence, non-grant of opportunity to cross-examine would violate principles of natural justice – [2016] 65  313 (Gujarat)

SECTION 35

APPEALS – APPEALS TO COMMISSIONER (APPEALS)

Where Assistant Commissioner rejected refund claim of assessee and Commissioner (Appeals) allowed claim and thereafter department reviewed said order and found to be correct and as a result Assistant Commissioner vide his order granted refund and subsequently department again reviewed said order and filed appeal before Commissioner (Appeals) on an altogether different ground, appeal was rightly rejected by Commissioner (Appeals) – [2016] 65 314 (Bangalore – CESTAT)

SECTION 35G

APPEALS – APPEALS TO HIGH COURT (JURISDICTIONAL COURT

Where assessee’s unit was situated at Silvassa within Union Territory of Dadra, Nagar and Haveli, even if Adjudicating Authority, Vapi [Gujarat] had issued show cause notice and part of investigation had taken place at Vapi, writ petition against assessment order could be brought before Bombay High Court – [2016] 65  315 (Gujarat)

STATUTES

CORPORATE LAWS

Report of Companies Law Committee – PRESS RELEASE

FDI – Reporting under FDI Scheme, mandatory filing of Form ARF, FDGPR and FCTRS on E-Biz Platform and Discontinuation of Physical Filing From 8-2-2016 – A.P. (DIR SERIES 2015-16) CIRCULAR NO.40, DATED 1-2-2016

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

Andhra Pradesh Pradesh Value Added Tax (Amendment) Act, 2016 – Amendment In Sections 2, 4, 13, 21, 22, 31, 32, 34, 38, 39, 45 & 47 And Insertion Of Section 4A –[ACT NO.4 OF 2016], DATED 12-1-2016

Bihar Value Added Tax Ordinance, 2016 – Amendment in Sections 3A, 14 & 70 –NOTIFICATION NO.LG-01-01/2016/04LEG., DATED 28-1-2016 

Submission of Form DP-1 online by all Dealers – Extension of date thereof –NOITIFICATION NO.F.3(352)POLICY/VAT/2013/1395-1405

Inclusion of show cause notice’s issued in relation to levy of CVD on Vessels imported for breaking in call-book – CIRCULAR NO.1014/2/2016-CX

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