TAXATION UPDATE NOV 15,2015

• Indirect Taxes:

Refund of Service Tax – input services used for export of goods – service tax paid by MIAPL is under category which was not classified under Notification 17/2009-ST – refund denied –(Hindustan Petroleum Corpn. Ltd. Versus Commissioner of Service Tax, Mumbai-I, CESTAT MUMBAI).

Valuation – Reimbursement Expenses – Legal position is clear that expenses actually incurred and reimbursed by service recipient are not to form part of assessable value of services – (M/s. Expera India Pvt. Ltd. and others Versus Commissioner of Central Excise, Customs and Service Tax Hyderabad-II, CESTAT BANGALORE).

Confiscation u/s 111 (b) and (d)- Gold Bars – chemical examiner can only give percentage of gold in gold bars but cannot say whether seized goods are of foreign origin and purity of gold has been certified to be 99.92% to 99.96% – Seized goods cannot be considered to be of foreign origin- (Sri Nand Kishore Sumani, Sri Rakesh Somani, Shri Krishna Roy And Shri Manoj Gattani Versus Commr. of Customs, Central Excise & Service Tax-Siliguri, CESTAT KOLKATA).

Recovery of duty credit granted under Served From India Scheme – brand ‘Four Seasons’ is not an Indian brand – Not permissible for authorities adjudicating claims arising to recover from Petitioner SFIS benefits granted till 2007-08 and they are falling within earlier policy framework – (Provenance Land Private Ltd. Versus The Union of India, Through The Ministry of Commerce And Industry And Others, BOMBAY HIGH COURT).

• Direct taxes:

Transfer of the property by way of distribution of assets on retirement of two partners – there is no error or illegality in the order of the CIT(A) in allowing the claim of the assessee regarding capital gain as long term capital gain u/s 45(4) arising from the land retained by the assessee which was purchased in the year 1960 – (Deputy Commissioner of Income-tax 24 (3) , Mumbai Versus M/s. S.C. Brothers, ITAT MUMBAI).

Delays in remittance of TDS amounts – Assessee could never be faulted for delay on the part of the bank or the clearing house, whatever may be the rules governing receipts and payments into the Central Government account. – (Income-Tax Officer (TDS) Versus M/s Broadcom Communication Technologies Pvt Ltd Formerly Known As M/s Broadcom India Research Pvt Ltd, ITAT BANGALORE).

Offences punishable under Section 276B r.w.s. 278B – failure to remit TDS – Though Section 278B of the Act contemplates such vicarious liability, the basic requirement is, there must be specific allegation to that effect in the complaint which is lacking in the present case- (Sri Kunnasagaran Chinniah, S/o. Sri Riaki Chinniah Versus The Income-Tax Department By Income Tax Officer (TDS) , Office Of The Commissioner of Income Tax (TDS), KARNATAKA HIGH COURT).

Depreciation on the written down values of assets after including the gratuity liability taken over – ITAT allowed the claim – The gratuity liability taken over by the respondent does not fall under any of those categories specified in section 32 – No depreciation- (C.I.T. (CENT-I) , CAL Versus HOOGHLY MILLS LTD., CALCUTTA HIGH COURT).

• Company Law:

Query: We have a query regarding preparing Form MGT-7 (Annual Return) of a Private Limited company as whether shall we enter the detail regarding shares issued to persons other than Promoters of the Company as in Form MGT-7, there are only categories for entering the shareholding detail which are – Promoters & Public. Please clarify.

Answer: You are required to enter the shareholding detail of members other than Promoters of the Company in the Promoter Category only under the sub category –Others in case of a Private Limited company.

Query: We have a query regarding as – whether loan given to director of Company shall be considered as Related Party transaction for the purpose of preparing Form AOC-2. Please clarify.

Answer: No, loan given to director of Company shall not be considered as Related Party transaction for the purpose of preparing Form AOC-2.

Further, transactions mentioned in Section 188 of the Companies Act 2013 only shall be considered while preparing Form AOC-2.

• Key Dates:

E Payment of Service Tax for October by Companies: 06/11/2015.

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