CORPORATE AND PROFESSIONAL UPDATE SEPT 2, 2016
Table of Contents
CORPORATE AND PROFESSIONAL UPDATE SEPT 2, 2016
DIRECT TAX:
IT: Applicability of Article 8 visavis Article 24 of DTAA – income assessable to tax at Singapore on the basis of accrual or remittance – The contention of the revenue that the certificate of the Singapore revenue authorities is opposed to provisions of section 10 of the Singapore Income Tax Act cannot be accepted. The Revenue does not question genuineness of the certificate – Benefit of DTAA to be extended – M.T. MAERSK MIKAGE AND 4 Vs DIT (International Taxation) (2016 (9) TMI 19 – Gujarat High Court)
IT: Penalty u/s 271B – Failure to get the books of accounts audited u/s 44AB – assessee was himself ill due to which he could not maintain essential books hence same constitutes a reasonable cause. Penalty deleted -Shri Parthsarthi Naidu Vs ITO, Ward-2 (1), Indore. (2016 (9) TMI 11 – ITAT Indore)
CBDT extended the due dates for submission of Form 15G / 15H received during 1 OCT 2015 to 31 MAR 2016 and the due date for Q1/Q2 of FY2016-17 to 31 OCT 2016 and 31 DEC 2016 respectively. Notfn.No.10/2016, dt.31.08.2016..
IT: Transfer pricing adjustment – the TPO was required to give reasons for discarding the CUP method qua each of the transactions as all the 12 international transactions entered into by the appellant were distinct -Honda Motorcycle and Scooters India Pvt. Ltd. Vs. ACIT, Cir-2, Gurgaon (2016 (8) TMI 1049 – Punjab & Haryana High Court)
Gujarat High Court in the below citied case held that It is true that the Court cannot legislate the Act, however, the Assessing Officer also cannot be given unfettered powers, which he can exercise even beyond the reasonable period of four years. [CIT(TDS) Vs. Anagram Wellington Assets Management Co Ltd.]
Penalty proceedings for contravention of Sections 269SS & 269T are not related to the assessment proceeding but are independent of it. Therefore, the completion of appellate proceedings arising out of the assessment proceedings has no relevance. Consequently, the limitation prescribed by s. 275(1)(a) does not apply. The limitation period prescribed in s. 275(1)(c) applies to such penalty proceedings.[CIT Vs. Hissaria Brothers (Supreme Court)]
Bombay High Court in the below citied case held that mere non filing of return of income does not give jurisdiction to the Assessing Officer to re-open the assessment unless the person concerned has total income which is assessable under the Act exceeding maximum amount which is not chargeable to Income Tax.[General Electoral Trust Vs. ITO, Mumbai & Others]
IT: Tribunal was right in confirming the set-off of MAT Credit under Section 115JAA brought forward from earlier years against tax on total income including surcharge and education cess instead of adjusting the same from tax on total income before charging such surcharge and education cess – M/s. Srei Infrastructure Finance Ltd. Vs. DCIT, CIR-11(2), Kolkata – 2016 (8) TMI 967 – Calcutta High Court
IT: Mere non filing of return of income does not give jurisdiction to the AO to re-open the assessment unless the person concerned has total income which is assessable under the Act exceeding maximum amount which is not chargeable to Income Tax – General Electoral Trust Vs. ITO-20(1)(2), Mumbai & Ors (2016 (8) TMI 959 – Bombay High Court)
ITAT Mumbai in the below citied case deleted the penalty imposed u/s 271(1)(C) the order was unsigned and the unsigned order has no legal sancity. ( Rajesh A. Yagnik Vs. ACIT)
Mumbai ITAT allows assessee’s (a member of cooperative housing society) appeal, holds corpus fund received from developer on redevelopment as a non taxable capital receipt for AY 2007-08. It rejected Revenue’s stand that cash compensation received by assessee was nothing but his share in profits earned by the developer which were essentially revenue in nature. [TS-459-ITAT-2016(Mum)]
ITAT Mumbai in the below citied case held that Wife need not pay tax on sale of joint property purchased by husband out of his own income.[ Income-tax Officer v. Dr. Vandana Bhulchandani.]
Insurer cannot claim compensation against theft from insurance company in absence of any forcible entry.-[2016] 72 Taxmann.com 296 (SC
Gujarat High Court in the below citied case held that no additions can be made on amount paid by the assessee on behalf of its sister concern regarding disallowance u/s 40A(2)(b) as The assessee route collection and payment of excise duty through its trading and profit and account.( The CIT Vs. Babul Products Pvt. Ltd.)
INDIRECT TAX:
Mere payment of VAT on lease charges doesn’t mean that service tax can’t be recovered: HC Quippo Energy Ltd. v. Union of India [2016] 72 taxmann.com 219 (Gujarat).
ST: Refund claim – reduction in value – credit notes raised by the Assessee subsequent to the sale/removal of goods – trade discounts given to its buyers including the component of excise duty – refund allowed – CST, Madras Vs. M/s Addison & Co. Ltd. (2016 (8) TMI 1071 – Supreme Court)
ST: Coercive action including threat of arrest against officials for recovery of alleged service tax dues – The DGCEI acted with undue haste and in a reckless manner – proceedings quashed – eBIZ. COM Pvt. Ltd. Vs Union of India & Ors. (2016 (9) TMI 53 – Delhi High Court)
No transfer u/s 2(47) as shares were transferred during liquidation without relevant approval under Companies Act Bijal Investment Co. (P.) Ltd. v. Income-tax Officer [2016] 72 taxmann.com 243 (Gujarat)
Full input credit of raw material can be claimed even if resultant by-product is exempt from Gujarat VAT Arya Lumbers (P.) Ltd. v. State of Gujarat [2016] 72 taxmann.com 241 (Gujarat)
Hiring isn’t different from renting; even hiring of cab is liable to service tax under rent-a-cab services: HC Express Tours & Travels (P.) Ltd. v. Commissioner of Central Excise & Customs [2016] 72 taxmann.com 217 (Gujarat)
Recovery proceedings u/s 87 of the Finance Act, 1994 – Demand of tax with interest and penalty stay of further coercive measures on payment of demanded amount Held that – there will be no further coercive measures against the petitioner under Section 87 of the Finance Act, 1994, till such time the adjudication pursuant to a show cause notice issued to petitioner, it shall not be greater than six weeks petition dismissed decided in favor of petitioner. (Rakesh Brothers Versus The Assistant Commissioner of Service Tax )- 2016 (8) TMI 991 – DELHI HIGH COURT – Service Tax
CENVAT credit demo cars capital goods input Held that – nothing is demonstrated today that a demo car falls in any of the Chapters dealing with capital goods. Therefore, the claim of capital goods fails. Further, plea of input is inconceivable for the reason that this does not aid in providing output service demo cars neither capital goods nor input CENVAT credit not available. (M/s. A.R.A.S. Motors Pvt. Ltd. Versus CCE, Madurai – 2016 (8) TMI 987 – CESTAT CHENNAI – Service Tax
GST UPDATE
Under GST, apply for registration in 30 days to get input tax credit for period prior to registration. Else get ITC from data of registration.
Under GST; TDS @ 1% will be applicable on notified supplies for contracts exceeding Rs. 10 lacs in value. TDS deposit by 10th of next month.
Under GST no refund up to 1000 in GST. Only declaration for refund less than 5 lacs. Prescribed documents for refund of 5 lacs & above.
OTHER UPDATE
Insurance for cars to be made mandatory
• The Madras High Court has made bumper-to-bumper insurance mandatory for all new car purchases for a period of five years. However, this revised rule may cause car prices to rise.
Bharat series (BH-series)
• The ministry of transport has launched the “Bharat series (BH-series)” as a new registration mark for new automobiles. As a result, any vehicle with this registration mark will not require a new registration mark even if it moves from one state to another across the country.
REGARDS
INDIAN FINANCIAL CONSULTANCY PRIVATE LIMITED
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