/ Company Law Compliances

TAX UPDATE NOV 7,2015

INDIRECT TAXES:

  • Activity of converting /assembling Gas Generating Sets (Gensets ) comprising of engine (prime mover) coupled with Alternator on common base frame into Power Pack after certain processes – Activity is amount to manufacturing activity- (M/s Quippo Energy Private Ltd, Shri Montu Patwa Versus Commissioner, Central Excise & Service Tax, Ahmedabad, CESTAT AHMEDABAD).
  • Activity of blending to increase the viscosity of the product- Appellants had mixed Guar Dal Flour/Powder (75%), Guar Dal Powder/Saw Dust (5-10%) and TKP (10-15%) in a blender – Activity is a manufacturing activity- (M/s Krap Chem P. Ltd. Versus Commissioner, Central Excise & Service Tax, Daman, Rajkot, CESTAT AHMEDABAD (LB).

DIRECT TAXES:

  • Credit for foreign tax paid in Mauritius – whether should not be excluded while computing interest
  • under section 234C? – The payment of taxes in Mauritius cannot be considered as advance tax. It makes ‘no difference, under what circumstances the taxes were paid- (M/s. Larsen and Toubro Ltd. Versus Deputy Commissioner of Income Tax, Business Circle Tambaram, ITAT CHENNAI).
  • Good work reward – it was an ex gratia payment or some sort of reward given to an employee for the good work done by him and would therefore, fall within the category of expenditure incurred for the purpose of business expediency and for improving the working of the assessee. – it would not fall u/s 36(1)(ii) but would fall u/s 37- (Ralson (India) Ltd Versus Income Tax Officer, New Delhi, ITAT DELHI).

FAQ ON COMPANY LAW:

Query: Are we required to prepare Consolidated Financial Statements (CFS) in case of Company having Associate company but no subsidiary company. Please clarify?

Answer: Section 129(3) of the Companies Act 2013 Act provides for the preparation of Consolidated Financial Statement (CFS) in case of Companies having one or more subsidiaries. Further Explanation to Section 129(3) provides that for the purpose of this sub-section, the word “subsidiary” shall include associate company and joint venture.

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