CORPORATE & PROFESSIONAL UPDATE DECEMBER 11, 2015
Corporate & Professional Update December 11, 2015
INCOME TAX ACT
SECTION 2(1A)
AGRICULTURAL INCOME
Income from coffee business: Where assessee was selling only sun dried coffee seeds and was not engaged in other processing activities, its income from coffee estate had to be computed by applying Rule 7B – [2015] 175 (Chennai – Trib.)
SECTION 2(15)
CHARITABLE PURPOSE
Education: SLP granted against High Court’s ruling that where assessee-trust generated income by giving hall and premises of its educational institution on rentals and said income was used for the educational institution itself, such income could not be brought to tax – [2015] 326 (SC)
SECTION 10A
FREE TRADE ZONE
Reassessment: Where Assessing Officer issued notice for reassessment on ground that excessive deduction was taken by assessee under section 10A and said action was not confirmed by Tribunal, since revenue did not file appeal against order of Tribunal and still revenue had time to file an appeal, reassessment proceedings could not be sustained till filing of an appeal – [2015] 200 (Delhi)
SECTION 13
CHARITABLE OR RELIGIOUS TRUST – DENIAL OF EXEMPTION
Sub-section (1)(d) : SLP dismissed against High Court’s ruling that in case of a trust registered under section 12AA, only such part of income which is violative of section 13(1)(d) can be brought to tax at maximum marginal rate and entirety of income cannot be denied exemption under section 11 – [2015] 324(SC)
SECTION 32
DEPRECIATION – ALLOWABILITY OF
Trust : SLP granted against High Court’s ruling that where assessee-trust acquired assets from income of trust and claimed deduction on account of application of income, depreciation claimed on user of these assets would be a permissible deduction – [2015] 326(SC)
SECTION 40(a)(ia)
BUSINESS DISALLOWANCE – CONTRACTOR OR SUB-CONTRACTOR
Conditions precedent: Only an amount outstanding at end of close of assessment year can be disallowed under section 40(a) (ia) – [2015] 288 (Chennai –Trib)
SECTION 44
INSURANCE BUSINESS
Reassessment : Where in case of assessee carrying on general insurance business, assessment order was passed accepting assessee’s claim that in view of omission of clause (b) of rule 5 of First Schedule of Income-tax Act w.e.f. 1-4-1989, profit from sale of investment was exempt from tax, Assessing Officer subsequently could not reopen assessment merely on basis of change of opinion that aforesaid income was liable to tax – [2015] 171 (Delhi)
SECTION 92C
TRANSFER PRICING – COMPUTATION OF ARMS LENGTH PRICE
Comparable and adjustments/Adjustment – AMP expenditure : Where details of advertising, marketing and promotion functions performed by assessee were not available on record and functions of comparables had also not been analyzed by TPO and he applied bright line test for determining value of International transaction, matter be reconsidered afresh – [2015] 63 367 (Delhi – Trib.)
SECTION 220
COLLECTION AND RECOVERY OF TAX – WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED DEFAULT
Computation of interest : Where pursuant to High Court’s order, impugned order passed by Tribunal granting refund to assessee was set aside and demand of tax was restored, assessee was liable to pay interest under section 220(2) on unpaid tax liability from date of original order to order passed by Assessing Officer giving effect to order of High Court – [2015] 365 (Bangalore – Trib.)
SECTION 271AAA
PENALTY – WHERE SEARCH HAS BEEN INITIATED
Scope of : Provisions of sections 271AAA and 271(1)(c) are mutually exclusive and, thus, once penalty is initiated under section 271AAA for ‘specified previous year’, there cannot be any occasion to impose penalty under section 271(1)(c) – [2015] 363 (Ahmedabad – Trib.)
COMPETITION ACT
SECTION 4
PROHIBITION OF ABUSE OF DOMINANT POSITION
Where findings recorded by Supreme Court clearly established that respondent Nos. 3 to 5 had formed a cartel for procuring contract of liaisoning work for procurement of Coal for state power generation company, cancellation of contract awarded to lowest bidder would make a prima facie case warranting an investigation into matter – [2015] 63 368 (CAT)
SARFAESI ACT
SECTION 14
CHIEF METROPOLITAN MAGISTRATE OR DISTRICT MAGISTRATE TO ASSIST SECURED CREDITOR IN TAKING POSSESSION OF SECURED ASSET
Order passed by Chief Metropolitan Magistrate under section 14, appointing Court Commissioner to take possession of secured assets could not be faulted as in absence of any registered agreement of tenancy being placed on record, Chief Metropolitan Magistrate had no knowledge of any valid and lawful tenancy in favour of petitioners with respect to said assets and equally Bank could not be said to be guilty of suppression for not having made a declaration on that behalf – [2015] 361 (Bombay)
SERVICE TAX
SECTION 65(19)
TAXABLE SERVICES – BUSINESS AUXILIARY SERVICES
Cutting of trees and converting ‘cutwood’ into ‘billets’ for use in ‘pulp plant’ amounts to ‘processing of goods’ and if said activity does not amount to manufacture under Central Excise laws, it would be liable to service tax under Business Auxiliary Services – [2015] 63 319 (Bangalore – CESTAT)
SECTION 65(68)
TAXABLE SERVICES – MANPOWER RECRUITMENT OR SUPPLY AGENCY’S SERVICES
Work of welding, and gas cutting on various locations of service recipient cannot be regarded as ‘manpower supply service’, as it involves execution of work, not merely supply of manpower – [2015] 6 (Mumbai – CESTAT)
SECTION 93
EXEMPTIONS – SERVICE TAX – REFUND OF TAX PAID ON SERVICES USED FOR EXPORT GOODS
A refund claim of service tax filed beyond time-limit specified in concerned exemption notification is time-barred and not maintainable, even if same is within time-limit specified in section 11B of the Central Excise Act, 1944 –[2015] 10 (New Delhi – CESTAT)
CENTRAL EXCISE ACT
SECTION 11AA
INTEREST – ON DELAYED PAYMENT OF DUTY/TAX
Even in case of retrospective amendment barring use of credit of AED(GSI) accrued prior to 1-4-2000 for payment of BED, interest on credit used in contravention of said bar would be payable from date of wrong utilization, not from date of such retrospective amendment – [2015] 63 315 (Punjab & Haryana)
CUSTOMS ACT
SECTION 111
CONFISCATION – SMUGGLING/ILLEGAL IMPORT
Where importer declared country of origin as USA as per supplier’s declarations, importer’s assessment cannot be reopened alleging misdeclaration on ground that goods bore Australia marking, especially when department had not raised such objection at time of import – [2015] 356 (SC)
CENVAT CREDIT RULES
RULE 5
CENVAT CREDIT – REFUND OF
In case of refund claim filed under rule 5 of the CENVAT Credit Rules, 2004, read with Notification 17/2009-ST, ‘date of filing of refund claim’ would be ‘date on which refund claim in filed with department in proper form’ and not ‘date on which documents called for by Department, are furnished’ – [2015] 9 (New Delhi – CESTAT)
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; Hope the information will assist you in your Professional endeavors. For query or help, contact: info@caindelhiindia.com or call at 011-233 433 33
**********************************************************
If this article has helped you in any way, i would appreciate if you could share/like it or leave a comment. Thank you for visiting my blog.
Legal Disclaimer:
The information / articles & any relies to the comments on this blog are provided purely for informational and educational purposes only & are purely based on my understanding / knowledge. They do noy constitute legal advice or legal opinions. The information / articles and any replies to the comments are intended but not promised or guaranteed to be current, complete, or up-to-date and should in no way be taken as a legal advice or an indication of future results. Therefore, i can not take any responsibility for the results or consequences of any attempt to use or adopt any of the information presented on this blog. You are advised not to act or rely on any information / articles contained without first seeking the advice of a practicing professional.