CORPORATE AND PROFESSIONAL UPDATE MAY 30, 2016
Today updates:
DIRECT TAX:
No Addition u/s 68 if identity, creditworthiness & genuineness established[DCIT Vs. M/s Overseas Infrastructure Alliance (I) Pvt. Ltd. (ITAT MUMBAI)].
Wheeling charges and transmission charges are neither contractual payments nor fee for technical services u/s. 194C or 194J – No TDS required – ITAT Kolkata in case of [DCIT Vs. West Bengal State Electricity Distribution Co. Ltd.].
Delhi high court explaining at length concept of income chargeability of capital receipt vs capital gains vs other sources etc (ass fav detailed order). Delhi high court fresh tangible material in reopening after 143(3) _Ass_Fav. (Order Attached with Mail).
Estimated profit u/s 44AD – remuneration to partners – the statute itself in section 44AD of the Act, allowed separate deductions towards interest on capital accounts and remuneration to partner’s, after estimation of net profit from the gross receipts – ITAT Visakhapatnam in case of [M/s. K. Venkata Raju Vs. ACIT].
With effect from June 1, 2016, the seller/service provider is required to collect tax at source at the rate 1% of the total consideration, if the amount of (single) bill is more than Rs. 2 lakh and consideration (or any part of it) is received in cash. This rule is applicable regardless of the fact whether seller/service provider is subject to audit under section 44AB.
Chairman/ MD and executive director of a private bank held to be public servant for the purposes of prosecution under the Act. Supreme court via ( Ranjan Gogoi & Prafulla C Pant).
Waiver of loan is taxable u/s 28(iv) given by madras high court via (CIT v/s Ramaniyam Homes Pvt. Ltd).
Raising of invoices per se would not result in accrual of income via (Bechtel International Inc. vs. DDIT-3(2), Mumbai (ITAT Mumbai))
Levy of luxury tax on DTH operators while exempting cable operators is discriminatory via (Bharati Telemedia Ltd. vs. Union of India , State of Kerala & others (Kerala HC), Writ Petition No-17351/2010 , 08/12/2015 ).
INDIRECT TAX:
An open ground or a garden or an existing building prepared or arranged for an official, social or business function is ‘Pandal or Shamiana’ and light decoration therein is taxable under ‘Pandal or Shamiana Contractor Services’ [2016] 69 288 (New Delhi – CESTAT) Hargovind Electric Decorators v. Commissioner of Central Excise.
HC disallows input tax credit to Karnataka Dealer for its default in maintaining books and producing tax invoices [2016] 69 299 (Karnataka) Nav Bharat Steel v. State of Karnataka. Ltd
Order relating to rebate on goods supplied from DTA to SEZ isn’t appealable before CESTAT , Excise & Customs: In terms of clause (b) of proviso to section 35B of Central Excise Act, appeal against order relating to rebate on goods supplied from DTA to SEZ within India would not lie to TribunalSai Wardha Power Ltd. v. Commissioner of Central Excise, Nagpur [2016] 69 333 (Mumbai – CESTAT
MCA Updates:
Form URC 1 (Application by a company for registration under section 366 of Companies Act, 2013) is likely to be modified with effect from 1st June, 2016. Only new version of e-forms will be acceptable and stakeholders are requested to plan accordingly.
CLB’s didn’t err in declaring directors’ appointment as bad ‘in law’ as such appointment was in an oppressive manner : CL: Where minority had oppressed majority under one pretext or other, consequential direction issued by CLB declaring appointment of respondents and removal of petitioners as bad in law could not be said to be erroneous or beyond scope of its power HIGH COURT OF KARNATAK v. Astrix Technologies (P.) Ltd.[2016] 69 334 (Karnataka)
MCA has recently issued Companies (Corporate Social Responsibility Policy) Amendment Rules, 2016 vide Notification dated 23/05/2016.
SEBI
SEBI has made amendments to the existing Takeover Regulations and issued the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) (Second Amendment) Regulations, 2016 which shall come into force on the date of their publication in the Official Gazette (Amendment Regulation attached). Through this amendment definition “willful defaulter” of has been be inserted, which means any person who is categorized as a willful defaulter by any bank or financial institution or consortium thereof, in accordance with the guidelines on willful defaulters issued by the Reserve Bank of India and includes any person whose director, promote or partner is categorized as such. Further the restriction has been imposed, that no person who is a willful defaulter shall make a public announcement of an open offer for acquiring shares or enter into any transaction that would attract the obligation to make a public announcement of an open offer for acquiring shares under these regulations.
RBI relaxes norms on payment of consideration on transfer of shares to a non-resident. In case of transfer of shares between a resident buyer and a non-resident seller or vice-versa.
KEY DATES:
AIR by Assesses liable to Tax Audit receiving cash above 2 lacs against sales, Banks, Credit Card companies etc for FY 2015-16: 31/05/2016
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