/ Company Law Compliances

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 14, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 14, 2016

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

INCOME TAX ACT

SECTION 2(47)

CAPITAL GAINS – TRANSFER

Sale of partnership business as going concern to company : Sale of business of assessee-firm as a going concern to company for consideration of paid up share capital does not amount to transfer liable to tax as capital gains – [2016] 249 (Gujarat)

SECTION 10(10C)

VOLUNTARY RETIREMENT PAYMENTS

Where assessee’s appeal before Tribunal against denial of exemption under section 10(10C) was filed after delay of 1737 days, keeping in view fact that assessee would be otherwise entitled to benefit of deduction under section 10(10C) as per CBDT Instruction and keeping in mind circumstances in which appeal of assessee was filed belatedly, delay in filing appeal was to be condoned – [2016] 248 (Kolkata – Trib.)

SECTION 28(i)

BUSINESS INCOME – CHARGEABLE AS

Business income v. Capital gains – Dealing in Land : Where an individual engaged in manufacture and sale of pharmaceutical products and, also earned income from sale of undivided share of land and construction of flats on said land, income would be treated as business income – [2016]250 (Madras)

SECTION 69C

UNEXPLAINED EXPENDITURE

Construction of flats : Where Assessing Officer had no case that assessee had received any excess consideration from flat buyers, nor was it case of any flat buyers that something more was realized from them, no addition on account of unexplained expenditure could be made – [2016]  250 (Madras)

SECTION 80-IA

DEDUCTIONS – PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS

Condition precedent/Setting off losses : Where loss of eligible business undertaking was already absorbed against other income of business enterprises, assessee was entitled to claim deduction under section 80-IA –[2016] 251 (Madras)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment – General : When audited financial statements were available in public domain, computation of ALP based on interim and unaudited financial statements could not be accepted – [2016] 265 (Delhi – Trib.)

CENTRAL EXCISE ACT

SECTION 11A

RECOVERY – OF DUTY OR TAX NOT LEVIED/PAID OR SHORT-LEVIED/PAID OR ERRONEOUSLY REFUNDED – CLANDESTINE REMOVAL OF EXCISABLE GOODS

Charge of clandestine removal without payment of duty cannot be sustained merely based on stock shortages/excesses found on test-check basis by statutory auditors. – [2016]  270 (Kolkata – CESTAT)

CUSTOMS TARIFF ACT

SECTION 3

CHARGE/LEVY – ADDITIONAL DUTY OF CUSTOMS/SPECIAL CVD

Even if special CVD on imports was paid using balance lying in DEPB scrips, same is refundable “in cash” on resale of goods; Circulars denying/restricting refund of Special CVD in such cases are ultra vires Notification No. 102/2007-Cus. and are void. – [2016] 253 (Delhi)

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – GENERAL

Works contract services availed for minor repairs of premises as well as equipments, etc., are eligible for input service credit to exporter of ‘software services’ – [2016]  255 (Bangalore – CESTAT)

STATUTES

DIRECT TAX LAWS

Section 139A of the Income-tax Act, 1961 – Permanent Account Number – Processing of core field updation requests – Identification of duplicate Pans allotted to A Person and Resolution by RCC – ITBA-PAN INSTRUCTION NO.3 [F.NO.PDGIT(S)/ADG(S)-1/ITBA-PAN INSTRUCTIONS/0001/2016], DATED 24-2-2016

Section 190 of the Income-tax Act, 1961 – Administration of TDS – Redressal of taxpayer grievances raised due to TDS mismatches – LETTER, DATED 15-2-2016

Economic Survey 2015-16 – PRESS RELEASE, DATED 26-2-2016

CORPORATE LAWS

Circular on Mutual Funds – CIRCULAR NO.SEBI/HO/IMD/DF2/CIR/P/ 2016/37, DATED 25-2-2016

Know Your Customer (KYC) Direction, 2016 – CIRCULAR DBR.AML.BC. NO.81/14.01.001/2015-16, DATED 25-2-2016

Alteration in name of Bank Internasional Indonesia to PT Bank may Bank Indonesia TBK in Second Schedule of RBI Act, 1934 – CIRCULAR DBR.NO.RET.BC.80/12.07.104A/2015-16, DATED 25-2-2016

Inclusion of National Bank of Abu Dhabi PJSC in Second Schedule of RBI Act, 1934 – CIRCULAR DBR.NO.RET.BC.79/12.07.138A/2015-16, DATED 25-2-2016

Review of Prudential Guidelines – Revitalizing Stressed Assets in Economy – CIRCULAR DBR.BP.BC.NO.82/21.04.132/2015-16, DATED 25-2-2016

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

Extension of date for filing return in GE-II for first three quarters of 2015-16 – NOTIFICATION NO.F.3(619)/POLICY/VAT/2016/1496-1506, DATED 25-2-2016

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…)

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 11, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 11, 2016

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

DIRECT TAX

  • Income Tax: Qualification for exemption u/s 10(5) – LTC paid to the employees involving foreign travel – TDS on the payment of LTC to the employees – Revenue has rightly held the assessee to be in default, as the assessee has not deducted TDS intentionally on the reimbursement of expenditure incurred on LTC/LFC.
  • Income Tax: TDS u/s 195 – the assessee can not be said to have paid the consideration for use of or the right to use copyright but has simply purchased the copyrighted work embedded in the CD- ROM which can be said to be sale of ‘good’ by the owner. The consideration paid by the assessee thus as per the clauses of DTAA can not be said to be royalty
  • Income Tax: Non service of notice u/s 143(2) – Apparently, the notice was sent on the wrong address as the assessee has categorically given his address in the relevant return of income – Presumption can only be raised against the assessee for service of notice u/s 143(2) when the notice was sent on the correct address.
  • Income Tax: Rejection of books of accounts – denial of natural justice – Assessing Officer has not provided sufficient opportunity of being heard to the assessee rather rejected the books of accounts arbitrarily and declared the bills filed by the assessee as bogus unilaterally. – Matter remanded back –
  • Income Tax: Revision u/s 263 – AO has to consider the provisions applicable under Rule 8D effective from assessment year 2008-09. But the AO made disallowance by following Co-ordinate Bench decision for earlier assessment year. It is apparent from facts and circumstances the order of the Assessing Officer is erroneous and prejudicial to the interest of Revenue – Revision proceedings are correct
  • Income Tax: Penalty u/s 271(1)(c) – the money has been appropriated by ICICI Bank after collection and the assessee has claimed the deficiency in realization as Bad debts. The income of 2% was not considered in profit and loss account by assessee. – The explanations given by the assessee cannot be considered as bonafide and assessee tried to conceal the income by misrepresenting the case – penalty confirmed
  • Income Tax: Eligibility of deduction u/s 80IC on freezing charges – freezing charges earned by the assessee is an integral part of the processing of vegetables and therefore is eligible for deduction u/s 80IC of the Act
  • Income Tax: Capital gains – calculation of number of trees – The evidence filed by the assessee in terms of certificate of Tehsildar or that of a retired IAS officer is of no evidentiary value, specially in the presence of Jamabandi, which is an actual proof of land holding and cultivation thereon.

INDIRECT TAX

  • Service Tax: ST-3 return form amended to insert the columns related to Swachh Bharat Cess – Service Tax (Second Amendment) Rules, 2016 – Notification
  • Central Excise: Extended period of limitation – When the material facts are disclosed, a particular classification followed by the appellant will not make a case for suppression – the appeal in so far as it relates to extended period is allowed.
  • Central Excise: SSI Exemption – Manufacture and clearing dutiable goods with the brand name or trade name of another person – for denial of exemption the brand name or trade name has a wider connotation, registration being not mandatory
  • Central Excise: Demand of duty for clearance of waste and scrap – the transparency in the appellant’s dispatch of waste and scrap and receiving the granules back cannot be questioned only on the ground that the Notification 214/86-CE is not applicable to waste and scrap.
  • Central Excise: Liability to pay the excise duty – consignee does not sent the certificate of re-warehousing within the period of 90 days – department cannot ask the appellant to pay the duty as the department cannot recover the duty twice for the same consignment and moreover as per the sub-clause (3) of Rule 20 it is the responsibility of the buyer to pay the duty
  • Customs: Valuation – as the Supply Agreement is consistent with the Technology Transfer Agreement, and the supplier had the right to terminate the supplies in case of non-payment of royalties, the payment of royalty is a condition of sale and includible in the assessable value
  • Customs: Invokation of Rule 9(1)(c) – Royalty and Technical know-how fee paid on domestic sale – Whether includible or not in the value of goods imported – Held that: Not to be included
  • Customs: Contravention of provisions of Regulation 13(e) and 13(o) of CHA Licensing Regulation, 2004. – CHA has not even claimed that it had ever verified the existence of the importer at the given address which means the appellant has failed to fulfil the requirement of Regulation 13(o) ibid. – Action against CHA sustained
  • Customs: Entitlement – Benefit of Notification No. 12/2012-Cus, – beyond doubt that ‘bulk drugs’ are also ‘drugs’ – benefit of exemption allowed

OTHER UPDATES

  • EPS: The Union Govt. after exempting EPF, considering a proposal to make it mandatory for Employer to route most of its saving to Employee Pension Scheme (EPS) a move for creating pensioned society.

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…)

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CORPORATE AND PROFESSIONAL UPDATE MARCH 8, 2016

CORPORATE AND PROFESSIONAL UPDATE MARCH 8, 2016

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

INCOME TAX ACT

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016] 16 (Mumbai – Trib.)

Comparables & adjustments/Comparables–Illustrations:Comparab le can be rejected on ground that it has exceptionally high profit margins as compared to assessee – [2016] 296 (Bangalore – Trib.)

Comparables and adjustments/Others : Where TPO benchmarked international transaction by using CUP method and DRP upheld this action of TPO, by following its findings and decision in assessee’s case for preceding assessment year, in view of fact that in preceding year, on similar facts, matter was remitted back to DRP by co-coordinating bench of Tribunal, matter for current assessment year also was to be remitted back to DRP for fresh adjudication – [2016]  325 (Mumbai – Trib.)

SECTION 148

INCOME ESCAPING ASSESSMENT – ISSUE OF NOTICE FOR

Recording of reasons : In case of notice issued under section 148 in respect of transfer pricing issue, recording of reasons for issuing reopening notice had to be on basis of Assessing Officer’s reasons and TPO’s reasons on merits much after issue of reopening notice did not have any bearing on serving reasons recorded upon party i.e. assessee whose assessment was being sought to be reopened – [2016] 335 (Bombay)

SECTION 271(1)(c)

PENALTY – FOR CONCEALMENT OF INCOME

 Where notice was issued under section 274 proposing to levy penalty under section 271(1)(b) whereas order was passed under section 271(1)(c), it clearly indicated that there was no application of mind by Assessing Officer while issuing notice and, thus, impugned penalty order was to be set aside – [2016]  334 (Karnataka)

COMPANIES ACT

SECTION 77A

SHARES – POWER OF COMPANY TO PURCHASE ITS OWN SECURITIES

In law, petitioner is entitled to buy back its own shares by means of a scheme under section 391 read with sections 100 – 104 of the Companies Act, 1956 , scheme cannot be said to be a colourable device to evade income tax, it is a legally permissible procedure which petitioner is entitled to follow to buy back its shares –[2016]  1 (Bombay)

SARDAR SAROVAR NARMADA NIGAM LIMITED (CONFERMENT OF POWER TO REDEEM BONDS) ACT

SECTION 1

CONSTITUTIONAL VALIDITY

Where Provisions of impugned Sardar Sarovar Narmada Nigam Limited (Conferment of Power to Redeem Bonds) Act, 2008 are irreconcilable with Central legislation occupying field, impugned Act is constitutionally invalid – [2016]  297 (Gujarat) (more…)

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 8, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 8, 2016

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

INCOME TAX ACT

SECTION 2(47)

CAPITAL GAINS – TRANSFER

Sale of partnership business as going concern to company : Sale of business of assessee-firm as a going concern to company for consideration of paid up share capital does not amount to transfer liable to tax as capital gains – [2016] 

SECTION 10(10C)

VOLUNTARY RETIREMENT PAYMENTS

Where assessee’s appeal before Tribunal against denial of exemption under section 10(10C) was filed after delay of 1737 days, keeping in view fact that assessee would be otherwise entitled to benefit of deduction under section 10(10C) as per CBDT Instruction and keeping in mind circumstances in which appeal of assessee was filed belatedly, delay in filing appeal was to be condoned – [2016] 

SECTION 28(i)

BUSINESS INCOME – CHARGEABLE AS

Business income v. Capital gains – Dealing in Land : Where an individual engaged in manufacture and sale of pharmaceutical products and, also earned income from sale of undivided share of land and construction of flats on said land, income would be treated as business income – [2016]

SECTION 69C

UNEXPLAINED EXPENDITURE

Construction of flats : Where Assessing Officer had no case that assessee had received any excess consideration from flat buyers, nor was it case of any flat buyers that something more was realized from them, no addition on account of unexplained expenditure could be made – [2016]

SECTION 80-IA

DEDUCTIONS – PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS

Condition precedent/Setting off losses : Where loss of eligible business undertaking was already absorbed against other income of business enterprises, assessee was entitled to claim deduction under section 80-IA –[2016] 

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment – General : When audited financial statements were available in public domain, computation of ALP based on interim and unaudited financial statements could not be accepted – [2016]

CENTRAL EXCISE ACT

SECTION 11A

RECOVERY – OF DUTY OR TAX NOT LEVIED/PAID OR SHORT-LEVIED/PAID OR ERRONEOUSLY REFUNDED – CLANDESTINE REMOVAL OF EXCISABLE GOODS

Charge of clandestine removal without payment of duty cannot be sustained merely based on stock shortages/excesses found on test-check basis by statutory auditors. – [2016]

CUSTOMS TARIFF ACT

SECTION 3

CHARGE/LEVY – ADDITIONAL DUTY OF CUSTOMS/SPECIAL CVD

Even if special CVD on imports was paid using balance lying in DEPB scrips, same is refundable “in cash” on resale of goods; Circulars denying/restricting refund of Special CVD in such cases are ultra vires Notification No. 102/2007-Cus. and are void. – [2016]

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – GENERAL

Works contract services availed for minor repairs of premises as well as equipments, etc., are eligible for input service credit to exporter of ‘software services’ – [2016] (more…)

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 5, 2016

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

Direct Tax

  • Clarification issued on taxability of surplus on sale of shares and securities-Capital Gains or Business Income-Instructions  in order to reduce litigation vide circular no. 06/2016 –
  • Clarification issued by clarifying TDS provisions by television channels and publishing houses to advertisement companies for procuring or canvassing for advertisements vide circular no. 05/2016
  • Clarification issued by central government for payment by broadcasters or television channels to production houses for production of content or programme for telecasting vide circular no. 04/2016
  • Notification of Income-Tax (3rd Amendment) Rules , 2016 by Central Government
  • Addition u/s. 68 – CIT(A) should not have rubbished the affidavit without going into the merits. Therefore in the interest of justice and fair play we restore this issue to the files of the A.O- (Shri Dinesh Tarachand Kasat and Others Versus The Dy. Commissioner of Income-Tax, Central Circle-1 (3) , Ahmedabad and Vica-Versa – 2016 (3) TMI 91 – ITAT AHMEDABAD)
  • Applicability of the provisions of sec.50 – transaction of sale of land and building – When an asset has not entered the block then the question of application of Explanation 5 to sec. 32(1) shall not have application- (M/s Firoz Tin Factory Versus Asstt. Commissioner of Income Tax 19 (3) , Mumbai and Vica-Versa – 2016 (3) TMI 78 – ITAT MUMBAI)
  • Assessee following mercantile system of accounting has to offer income to tax on accrual basis even if not received [2016] 295 (Mumbai – Trib.) Girish M. Kothari v. Joint Commissioner of Income-tax.
  • CBDT releases list of cases getting time barred on March 31, 2016 for reference of the AOs

Indirect Tax

  • Central Government issues instructions for reduction of government litigation through withdrawal of appeal by the department before CESTAT by instruction no. F.No.390/ Misc./163/2010-JC
  • Invokation of Section 80 of the Finance Act 1994 and immunity from penalty under Section 78 of the Act – Levy of service tax being an indirect tax mechanism hardship is faced by the tax payer if incidence of tax is not realised from the service recipient. Considering such aspect and taking into consideration that a part of the penalty amount has been discharged the balance of the penalty is waived- (M/s Sathyabhama Enterprises Versus Commissioner of Service Tax, Chennai – 2016 (3) TMI 71 – CESTAT CHENNAI)
  • Service Tax : Where assessee never filed any reply to notices and not even participated in adjudication hearings, then, no writ would be maintainable against ex parte adjudication order after expiry of time-limit for filing appeal to Commissioner (Appeals)[2016] 292 (Gujarat) HIGH COURT OF GUJARATNice Constructionv. Union of India
  • Govt. further extends due date of filing DVAT Form DP-1 to March 31, 2016

(more…)

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