/ INCOME TAX

CORPORATE AND PROFESSIONAL UPDATE MARCH 28, 2016

CORPORATE AND PROFESSIONAL UPDATE MARCH 28, 2016 DIRECT TAX Income Tax: Correction of statement cum challan relating to TDS on sale of property u/s 194IA – CPC-TDS has enabled functionality for online correction in form 26QB from 29/02/2016. Income Tax: TDS u/s 194I – whether the tour operators/travel agents were required to deduct TDS under Section 194-I …

Continue Reading
/ INCOME TAX

CORPORATE AND PROFESSIONAL UPDATE MARCH 26, 2016

CORPORATE AND PROFESSIONAL UPDATE MARCH 26, 2016

www.caindelhiindia.com; PRIVATE LIMITED
www.caindelhiindia.com; CORPORATE UPDATES

DIRECT TAX

  • Income Tax: Penalty u/s 271E – Company has directly repaid the loan taken from Director to Bank – violation of section 269T – The assessee has demonstrated that under the compulsion the payment was directly credited in the bank account of the Director. Strictly it was not paid in cash – No penalty .
  • Income Tax: Non collection of TCS (tax collection at source) – main husk is a by-product and the same cannot be considered as scrap and waste as provided in the Explanation to Section 206C of the Income-tax Act.
  • Income Tax: Non collection of TCS (tax collection at source) – DOC is a by-product and it certainly cannot be categorized as scrap and waste and it has its own market value – AO has erred in categorizing DOC as scrap within the meaning of Explanation to Section 206C

INDIRECT TAX

  • Cenvat credit – service tax paid by the sub-broker – there is no evidence to elevate such suspicion to a level to come to an inference that the higher commission (than the commission received by the appellant) was paid to sub-brokers in respect of goods other than the goods for which it received commission from its clients – credit allowed- (M/s N.R. Wires Pvt. Ltd. Versus Commissioner of Central Excise, Raipur – 2016 (3) TMI 714 – CESTAT NEW DELHI).
  • CENVAT Credit – eligibility of input services – By denying credit on all the input services it seems to appear that the appellants has not availed any input service for providing output service during the relevant period which is not possible- (M/s Conexant Systems Pvt Ltd, Hyderabad Versus Commissioner of Central Excise And Service Tax, Hyderabad-II – 2016 (3) TMI 713 – CESTAT HYDERABAD).
  • Service Tax: Liability of Service tax on TDS amount absorbed by the assessee on foreign remittance – Reverse charge – Service Tax liability needs to be discharged on amounts which have been billed by the service provider – Demand set aside.
  • Service Tax: Sharing of resources and cost / expenses with the group companies – The activities carried out by the Appellant enables the Participating Group Companies to share the common services, the best available talent and resources required for carrying out their business activities. No taxable service is provided by the appellant – No service tax liability.

DATES 

  • Company e-forms revised on MCA portal w.e.f. 03.2016.Download the latest version of forms from company forms download page on the MCA portal.

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  011-233-43-333

(more…)

Continue Reading
/ Company Law Compliances

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 22, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 22, 2016

www.caindelhiindia.com; value added tax
www.caindelhiindia.com; value-added tax

DIRECT TAX

  • Income Tax: Wherever under the DTAA’s. Make available clause is found, then as there is no imparting, the payment in question is not ‘FTS’ under the Treaty and when there is no ‘FTS’ clause in the treaties, the payment falls under Article 7 of the Treaty and is business income. – Tri
  • Income tax ; TDS u/s 192 or 194J : The difference between this clause in two types of agreements itself goes to prove that doctors who are engaged on retainer ship basis are not the servants of the assessee since they are allowed to do whatever they want except joining the similar business while other doctors who are on the pay roll of the assessee are debarred from doing any other activity apart from that of the assessee- (The A.C.I.T. (TDS) , Chandigarh Versus M/s Fortis Healthcare Ltd. – 2016 (3) TMI 629 – ITAT CHANDIGARH)

INDIRECT TAX

  • Service Tax: Exemption from service tax on construction service provided in case of religious use but not to charitable purpose – clause 13(c) of Notification No. 25/2012-ST, dated 20.6.2012 – in the absence of petitioner’s demonstration that the enactment/provision/notification is arbitrary, discriminatory or violative of Article 14 of the Constitution of India, it cannot be declared to be unconstitutional. – HC
  • Service Tax: The appellants are eligible for refund under Rule 5 of CCR read with Notfn No.12/2003 as amended on the input services i.e. Company Secretary Service, Chartered Accountant service , Security service, Legal Consultancy service, ITS service, GTA service – Tri
  • Service Tax: When the assesse is not disputing his liability for discharging the statutory obligations and has paid the entire tax alongwith the interest and 25% of the penalty and there after discharging his obligations as a tax payer, in view of the provisions of Section 73(4A) the proceeding should be deemed to have been concluded – Tri
  • Service Tax: Imposition of penalties for the period 2007-08 to 2010-11 – Sections 76 & 78 of the Finance Act, 1994 – if the show cause notices are issued after the date of amendment, penalties under Section 76 and 78 simultaneously cannot be imposed and hence setting aside the penalty under Section 76 is uninterferable – Tri
  • Service Tax: Liability of tax on extended warranty service between October 2005 and September 2010 – Mere coverage by the extended warranty scheme does not, of itself, create an intention to use the service of the dealer. – Tri
  • Central Excise: Valuation of goods sold through dealers – inclusion of the expenditure incurred by the wholesale dealers in the assessable value of the goods sold by the appellant to such wholesale dealers – Not to be included – Tri
  • Central Excise: Eligibility of quantity discount – as cash discount is something which is “known” at or prior to the clearance of the goods, being contained in the agreement of sale between the assessee and its buyers, and must therefore be deducted from the sale price in order to arrive at the value of excisable goods “at the time of removal”. – Tri
  • VAT and Sales Tax: Principles of natural justice – it was the assessee, who invited the attention of the Tribunal to the balance sheet – the Tribunal is entitled to come to its own conclusion from what was produced. It is not part of the principles of natural justice to expect the Tribunal to confront the person producing the document with what is found by the Tribunal – HC

MCA UPDATES

  • Companies Law: If contract expressly bars award of interest pendente lite, the same cannot be awarded by the Arbitrator. – the bar to award interest on delayed payment by itself will not be readily inferred as express bar to award interest pendente lite by the Arbitral Tribunal, as ouster of power of Arbitrator has to be considered on various relevant aspects – SC

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  011-233-43-333 (more…)

Continue Reading
/ INCOME TAX

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 21, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 21, 2016

www.caindelhiindia.com; CORPORATE UPDATES
www.caindelhiindia.com; CORPORATE UPDATES

DIRECT TAX

  • Income Tax: Where assessee-NBFC provided security in form of cash collateral for loans purchased by purchaser-bank but did not book said amount as its income, levy of concealment penalty was justified – [2016] 67 163 (Chennai – Trib.)
  • Income Tax: Where assessee received gifts from two persons on behalf of his daughters on occasion of their marriage, since said gifts were made by demand drafts and genuineness of same was confirmed by bank in which person making gifts had their accounts, impugned addition made under section 69A was to be set aside – [2016] 67 168 (Punjab & Haryana)
  • Income Tax: Substitution of ‘full value of consideration received’ with ‘stamp value’ in terms of section 50C, is applicable in hands of seller of property who has to compute capital gains under section 48 pursuant to transfer of a capital asset in nature of land or building or both; same cannot be extended in case of purchaser to estimate undisclosed investment – [2016] 67  166 (Kolkata – Trib.)
  • Income Tax: Where assessee, a joint venture, executing civil contract works, having received contract by Irrigation Department of State Government, assigned same to one of its constituents on back to back basis, since income from contract entered into with State Government was assessable only in hands of assessee and not in hands of sub-contractor, credit for tax deducted at source from bills of assessee was required to be given to assessee alone and same could not be denied by invoking Rule 37BA(2)(i) of Income-tax Rules, 1962, on ground that no real work was carried on by assessee – [2016] 67  224 (Andhra Pradesh)

INDIRECT TAX

  • Service Tax: Where assessee-bank was utilizing services rendered by SWIFT essentially to transmit financial messages internationally, such services amounted to a taxable service classifiable under category of banking and other financial services and were liable to service tax – [2016] 67 162 (Mumbai – CESTAT)
  • Service Tax: Helping vehicle-buyers to avail registration with RTO under Motor Vehicle Act does not amount to Business Auxiliary or Business Support Services; hence, differential amount earned over and above actual RTO registration fees cannot be charged to service tax – [2016] 67 174 (Mumbai – CESTAT)
  • Service Tax: For appeal filed prior to 6-8-2014, if assessee’s appeal is dismissed for pre-deposit default, Tribunal may restore such appeal, if sufficient compliance is shown later; more so, when, on merits, case is prima facie in favour of assessee – [2016] 67  173 (Madras)
  • Excise Duty: Where certain percentage of expenses incurred on advertisement by dealers was reimbursed by assessee manufacturer because these advertisements indirectly helped assessee, reimbursed amount would not form part of trading transaction value
  • Excise Duty; EXPORT – WITHOUT PAYMENT OF DUTY : Having filed export applications with department, assessee cannot later claim that ‘applications were filed in anticipation of export order and goods in question were never manufactured’; assessee must show proof of export within 6 months or else, bear duty with interest and penalty – [2016] 67 171 (Kerala)

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  011-233-43-333 (more…)

Continue Reading
/ INCOME TAX

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 18, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 18, 2016

14

DIRECT TAX

  • INCOME TAX : CBDT directs reopening assessments in claim of bogus capital gains / loss in penny investment scam by taxpayersvide letter dated 16.03.2016
  • INCOME TAX : TDS-Credit of TDS won’t be denied to a contractor even if entire work has been sub-contracted to others [2016] 67 224 (Andhra Pradesh)
  • INCOME TAX ; CHARITABLE PURPOSE : Where assessee-trust conducted courses and seminars to help its members in preparation of a foreign certification course, assessee’s activity was not of education but of advancement of any other object of general public utility and involved trade, commerce or business, hence, not entitled for exemption under section 11 – [2016] 67 140 (Chennai – Trib.)
  • INCOME TAX ; CAPITAL GAIN-TRANSFER : Where under Joint Development Agreement, builder would get 47 per cent and landowner 53 per cent of built up area and during current year landowner handed over entire land to developer, though sale deed was executed in next year, in current year itself there was transfer of capital assets for consideration being cost of 53 per cent of built up area – [2016] 67 147 (Bangalore – Trib.)

 INDIRECT TAX          

  • SERVICE TAX : Helping vehicle-buyers to avail registration with RTO under Motor Vehicle Act does not amount to Business Auxiliary or Business Support Services; hence, differential amount earned over and above actual RTO registration fees cannot be charged to service tax
  • SERVICE TAX : Where assessee entered into system delivery agreement with a customer to provide for a system comprising of a complete set of various machines/ equipments which were required to be installed and commissioned at site of customer and overall operation and maintenance processes shall be responsibility of customer, transaction qualified as a transfer of right to use goods and, consequently, be outside definition of service – [2016] 67  142 (AAR – New Delhi)
  • CENTRAL EXCISE : As per rule 7(4) of Central Excise Rules, 2002, interest is payable only when any amount is payable consequent to order of finalization of provisional assessment; hence, where duty is paid prior to finalization of assessment and no amount is payable consequent to finalization, interest under rule 7(4) ibid would not be attracted – [2016] 67  150 (Chennai – CESTAT).

OTHER UPDATES

  • COMPETITION ACT : Identical price quoted by respondent manufacturers for supply of AMDBS, a critical safety item required for railway coaches, did not constitute sufficient evidence of cartel formation and in absence of other plus-factors, it was not possible to record a finding that respondents had acted in violation of section 3(3)(d), read with section 3(1) – [2016] 67  146 (CAT – New Delhi)

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  011-233-43-333 (more…)

Continue Reading
/ Direct Tax

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17, 2016

www.caindelhiindia.com; Corporate updates
www.caindelhiindia.com; Corporate updates

DIRECT TAX

  • Income Tax: Income-tax (5th Amendment) Rules, 2016) – Rules in respect of fund manager regime under section 9A of the Income-tax Act, 1961 – Notification
  • Income Tax: Addition u/s 68 – merely because the bank statement an ITR of the lender were not submitted, in spite of submitting balance sheet and profit and loss account of the company, confirmation stating its PAN and also transactions are through account payee cheques and in absence of any inquiry, we are of the view that no addition can be made in the hands of the assessee – Tri
  • Income Tax: Penalty u/s 271C – non deduction of tds u/s 194LA – there was no mala fide intention on the part of the assessee for non-deduction of TDS since it had recovered the TDS from the concerned as soon as the violation of law was brought into assessee’s notice – Tri
  • Income Tax: Agricultural lands in terms of Sec 2(14) – Though the circumstance that the land is classified as Agricultural in the revenue records and the Village Panchayats President, Navallur, has certified that the land is away from municipality, other circumstances proves otherwise – Held as not an agriculture land – Tri
  • Income Tax: The assessee had a dividend income (income from other sources). Thus the assessee fell within the purview of the exception carved out in the explanation to Section 73 and that consequently the assessee would not be deemed to be carrying on a speculation business for the purpose of Sec. 73(1). – Tri
  • Income Tax: Addition made on inflation of purchases of raw material u/s. 69 – CIT(A) has wrongly relied on the input output consumption ratio – addition deleted – Tri

INDIRECT TAX

  • Service Tax: Validity of Tribunal’s order waiving the penalty – the question of applicability of section 80 w.e.f. 14-5-2015 has not been examined by the Tribunal at all. There is rather no reference to Section 80 of the Finance Act, 1994. As the Tribunal’s order is cryptic and the reasons are wholly unsatisfactory, needs to be quashed and set aside – HC
  • Central Excise: Differential duty demand – demand arose on account of the fact that the appellant cleared the goods from its depot at a price higher than the price at which the duty was paid at the time of clearance from the factory – demand confirmed – Tri
  • Central Excise: SSI Exemption – The notification as amended was very clear and unambiguous. In the era of self assessment, it is the responsibility of the assessee to correctly determine the duty as per law. It is seen that the appellant failed to do so in this case – Tri
  • Central Excise: Denial of Cenvat credit on capital goods – stock taking was done by way of eye estimation – the allegation of shortage of raw materials, does not stand. – demand set aside – Tri
  • Central Excise: Refund claim – duty liability subsequent to clearance of their products – unjust enrichment – when duty is paid after clearance of goods, on insistence of anti-evasion branch, burden of duty is not passed on to the customers – refund allowed – Tri
  • Central Excise: Differential duty – as the appellant was clearing the goods on payment of duty and subsequently on their own revised the price and discharged the differential duty there seems to be no violation of any provisions – Demand on interest confirmed – But, no penalty be levied – Tri
  • Central Excise: MRP based valuation – removal of goods without packing – It is not the packaging that determines the applicability of mandate of affixing the ‘retail sale price’ but the product itself. Consequences of non-conforming packaging are not escapement from the mandate but the enforcement of penal detriment – appellant is eligible for the abatement – Tri
  • Central Excise: The duty can be demanded from a manufacturer of the goods as it is a factum record that the impugned goods have been fabricated on job work basis by the contractors, therefore, as per the Central Excise provision, the appellant cannot be the manufacturer of the said goods. – Tri
  • Customs: Rejection of refund claim – Period of limitation – Once the appellant has been given acknowledgement unless until this held to be fake or forged, the said acknowledgement has to be accepted as proof of filing the refund claim. – Tri

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  011-233-43-333 (more…)

Continue Reading
/ GST

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 16, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 16, 2016

www.caindelhiindia.com; Corporate updates
www.caindelhiindia.com; Corporate updates

DIRECT TAX

  • Income Tax: Disallowance of Privilege fee paid u/s 40(a)(ii) or (iii) – sharing of revenue with the state – The privilege fee payable by the petitioner to the State Government would be taxable with effect from 1.4.2014 and not prior thereto – HC
  • Income Tax: Adoption of Profit Level Indicator (PLI) of OP/TC to determine ALP – , in the absence of identification or segregation of capital employed with regard to AE’s transaction and those with others, the RoCE method would not indicate the appropriate margin for determining the ALP. – HC
  • Income Tax: Disallowance of interest u/s 36(1)(iii) – it can be said that amount invested in the subsidiaries company was arising out of commercial expediency and was thus for the purpose of business of the assessee. – Tri
  • Income Tax: Sale of factory land at Guindy, Chennai – Capital Gain OR business profit – without bringing any material on record merely based on some remote circumstances, an inference cannot be drawn that the Assessees indulged in an adventure in the nature of business or trade. – Tri
  • Income Tax: Penalty u/s 271(1)(c ) – after taking into consideration the human conduct and preponderance of probability clearly indicate that the assessee became a willing party to nefarious black money racket for obtaining bogus gifts. Such acts cannot be taken lightly as they lead to scourge of black money in the country. – Tri

INDIRECT TAX

  • Service Tax: Cenvat Credit – input service – Outdoor catering services – a notification issued in Notification No.3/2011 dated 1.3.2011 excluding the outdoor catering services came into effect on 1.4.2011 but here the period relates to a period prior to 1.4.2011. – credit allowed – HC
  • Central Excise: Reversal of CENVAT credit – whether the appellant while clearing the imported inputs which were found to be defective and unusable and later re-exported from their premises, is required to pay an amount equal to the credit availed on such inputs as per Rule 3(5) of the Cenvat Credit Rules, 2004 – Held No – Tri
  • Central Excise: Claim of exemption on Air conditioning unit, condensing unit, chillers, walk in cold rooms – the institution is not engaged in commercial activity and the goods are required for research purposes – respondent has complied with the Notification 10/97 dated 01.03.1997 – benefit of exemption allowed – Tri
  • Central Excise: New case cannot be made out after issuance of show cause notice and after passing the adjudication order. Both the lower authority have wrongly denied the Cenvat credit on the Capital goods – Tri
  • Customs: Clim of refund – Excess payment of CVD at the time of import – there was indeed no assessment order as such passed by the customs authorities – The order of the Assistant Commissioner (Refund) rejecting the refund claim of the Petitioner on the ground of maintainability was, for the aforementioned reasons, plainly erroneous. – HC
  • Customs: Import of goods – Change in standards under the FSS Act – The legitimate expectation of the importer would always subject to the policy change of the State. If the law is changed as on the date of release, the importer is bound by the law on the date of release. – HC
  • Customs: Release of property – seizure of gold and Indian currency – violation of provision of Customs Act. – the petitioner has to establish his ownership over the property before the Adjudicating Authority. Whether the adjudication proceedings are initiated legally or not, is not a question at the time of invoking the power under Section 110A of the Customs Act but what is contemplated under Section 110A is that the said person making the claim should be the owner of the goods to be released – HC

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  011-233-43-333 (more…)

Continue Reading
/ Company Law Compliances

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

www.caindelhiindia.com; Corporate updates
www.caindelhiindia.com; Corporate updates

DIRECT TAX

EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME:

Tribunal faced strong criticism for not following the judgment of jurisdictional High Court given in the case of the petitioner itself for an earlier Assessment Year on identical issue of applicability of Section 14A of the Act to partially disallow interest expenditure when interest free funds available with the Petitioner are in excess of investments made in tax free securities – [2016] 67 taxmann 42 (Bombay)

INVESTMENT IN MUTUAL FUND : Where Assessing Officer disallowed part of interest expenses under section 14A for earning exempt income which was a plausible view, Commissioner could not exercise revisionary power under section 263 to disallow whole of interest expenses – [2016] 67 taxmann 6 (Gujarat)

INTEREST ON BORROWED CAPITAL : Expansion of business : Where assessee paid interest on borrowed capital which was used for acquisition of windmill for extension of existing business of generation of electricity through windmill, interest could not be allowed till capital asset acquired by assessee was put to use – [2016] 66 taxmann 277 (Chennai – Trib.)

DEEMED DIVIDEND LOANS : Where assessee, having beneficial ownership of more than 10 per cent shares in a closely held company, claimed to have received certain amount from company for purchase of land for company but failed to prove same by furnishing relevant details, such amount would come within ambit of section 2(22)(e)-[2016] 15 (Visakapatn  Zam – Trib.)

INDIRECT TAX

WORKS CONTRACT SERVICES : Where assessee has paid service tax on full contract price of a works contract and availed credit of inputs and services and there is no revenue loss to department, department cannot seek to deny credit relying upon valuation rule 2A – [2016]

TAX REFUND : Excise duty refund received by assessee in terms of new industrial policy and concessions formulated by Central Government for State of Jammu and Kashmir vide Office Memorandum of 14-6-2002, whereby Central Government intended to eradicate social problem of unemployment in State by accelerated industries development, would be treated as capital receipt – [2016] 14 (Amritsar – Trib.)

MCA UPDATES

INCORPORATION OF COMPANY: Section 35 debars raising of any objection relating to the incorporation of the company after issuance of a certificate of incorporation by ROC – [2016]

OTHER UPDATES

Govt. approves guidelines to promote electronic payments

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  011-233-43-333 (more…)

Continue Reading