{"id":720,"date":"2015-12-19T10:11:19","date_gmt":"2015-12-19T10:11:19","guid":{"rendered":"http:\/\/caindelhiindia.com\/blog\/?p=720"},"modified":"2021-07-14T12:01:31","modified_gmt":"2021-07-14T12:01:31","slug":"corporate-professional-update-december-13-2015","status":"publish","type":"post","link":"https:\/\/www.caindelhiindia.com\/blog\/corporate-professional-update-december-13-2015\/","title":{"rendered":"CORPORATE & PROFESSIONAL UPDATE DECEMBER 13, 2015"},"content":{"rendered":"

CORPORATE & PROFESSIONAL UPDATE DECEMBER 13, 2015<\/strong><\/span><\/h2>\n
\"www.caindelhiindia.com;<\/a>
www.caindelhiindia.com; Service Tax registration<\/figcaption><\/figure>\n

INCOME TAX ACT<\/strong><\/span><\/p>\n

SECTION 9<\/span><\/p>\n

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA<\/strong><\/p>\n

Penalty as ordered by US Court :\u00a0<\/strong>An amount levied as penalty by an order of US Court can never attract any tax nor would such a payment made by applicant attracts any tax liability –\u00a0[2015] 64\u00a0 162 (AAR – New Delhi)<\/p>\n

Royalty :\u00a0<\/strong>Where assessee company reimbursed its foreign associate licence fees and charges for software used for report generation as said expenditure was incurred by foreign associate, there could be no TDS liability on assessee –\u00a0[2015] 63\u00a0 341 (Mumbai \u2013 Trib)<\/strong><\/em><\/p>\n

SECTION 36(1)(vii)<\/span><\/p>\n

BAD DEBTS<\/strong><\/p>\n

Write off :\u00a0<\/strong>Where assessee had placed details with regard to parties to whom advances had been given and later written off and authorities below had not made any inquiry from such parties, amount written off could not be disallowed –\u00a0[2015] 64\u00a0 15 (Ahmedabad – Trib.)<\/strong><\/p>\n

SECTION 37(1)<\/span><\/p>\n

BUSINESS EXPENDITURE – YEAR IN WHICH DEDUCTIBLE<\/strong><\/p>\n

Additional remuneration to managing director :\u00a0<\/strong>Where approval for additional remuneration paid to MD of assessee was received in succeeding year, such payment could not be allowed in current year –\u00a0[2015] 64\u00a0 15 (Ahmedabad – Trib.)<\/strong><\/p>\n

BUSINESS EXPENDITURE – ALLOWABILITY OF<\/strong><\/p>\n

Compensation :\u00a0<\/strong>Where on one hand Tribunal held that amount paid by assessee, a production company, to exhibitors of its films, for loss incurred by them, was capital in nature and on other hand held that it was compensation paid to stay afloat in business, since Tribunal was giving two divergent views, matter was to be readjudicated –\u00a0[2015] 63\u00a0 340 (Madras)<\/strong><\/p>\n

SECTION 40(a)(i)<\/span><\/p>\n

BUSINESS DISALLOWANCE – INTEREST, ETC., PAID TO NON-RESIDENT WITHOUT DEDUCTION OF TAX AT SOURCE<\/strong><\/p>\n

Depreciation :\u00a0<\/strong>Depreciation is not an outgoing expenditure and, therefore, provisions of section 40(a)(i) are not attracted on such deduction –\u00a0[2015] 63\u00a0 341 (Mumbai \u2013 Trib.)<\/strong><\/p>\n

SECTION 40(a)(ia)<\/span><\/p>\n

BUSINESS DISALLOWANCE – INTEREST, ETC., PAID TO A RESIDENT WITHOUT DEDUCTION OF TAX AT SOURCE<\/strong><\/p>\n

Payment of TDS :\u00a0<\/strong>In view of decision of Smt. J. Rama v. CIT [2012] 344 ITR 608\/[2010] 194 Taxman 37 (Kar.), assessee was liable to deduct tax at source from payments made to taxi owner; matter was to be remitted back to find out whether TDS payments were made within time –\u00a0[2015] 63\u00a0347 (Karnataka)<\/strong><\/p>\n

SECTION 54F<\/span><\/p>\n

CAPITAL GAINS – EXEMPTION OF, IN CASE OF INVESTMENT IN RESIDENTIAL HOUSE<\/strong><\/p>\n

Ownership of more than one house :\u00a0<\/strong>Where Assessing Officer rejected assessee’s claim for deduction under section 54F on ground that assessee owned more than one residential house property at time of sale of long term capital asset, since assessee was a mere co-owner in one of said residential property, impugned order passed by him deserved to be set aside –\u00a0[2015] 63\u00a0\u00a0366 (Delhi)<\/strong><\/p>\n

SECTION 92C<\/span><\/p>\n

TRANSFER PRICING – COMPUTATION OF ARM\u2019S LENGTH PRICE<\/strong><\/p>\n

For the purposes of Chapter X of the Act, the Transfer Pricing Adjustment envisaged is “price adjustment” (substitution of transaction price of international transaction with ALP) and not a “quantitative adjustment” by first determining whether the AMP spend of the Assessee on application of the bright line test (BLT), is excessive, thereby evidencing the existence of an international transaction involving the Associated Enterprises. –\u00a0[2015] 64\u00a0150 (Delhi)<\/strong><\/p>\n

Comparable and adjustments \u2013 Comparables :\u00a0\u00a0<\/strong>Persistent loss making means continuous loss making for more than 3 years; company which earned profit in one of last three years could not be considered as loss making entity so as to exclude same from comparability analysis –\u00a0[2015] 63\u00a0\u00a0339 (Pune – Trib.)<\/strong><\/p>\n

TNMM :\u00a0<\/strong>TNMM is appropriate method to benchmark international transaction pertaining to receipt of commission for marketing machines of AE –\u00a0[2015] 63\u00a0 339 (Pune – Trib.)<\/p>\n

SECTION 145<\/span><\/p>\n

METHOD OF ACCOUNTING – SYSTEM OF<\/strong><\/p>\n

Hybrid system :\u00a0<\/strong>As per section 145, Hybrid system of accounting is not allowable –\u00a0[2015] 64\u00a0\u00a015 (Ahmedabad \u2013 Trib.)<\/strong><\/p>\n

SECTION 145A<\/span><\/p>\n

METHOD OF ACCOUNTING IN CERTAIN CASES<\/strong><\/p>\n

Section 145A of the Act was brought into statute in 1998 when MODVAT scheme was prevalent which allowed credit\/set off on specified inputs used in manufacture of excisable goods apart from capital goods but now with Cenvat Scheme in operation which allows both manufacturers and service providers to take input credits on goods and services apart from capital goods across cross sectors without any one to one correlation and the Apex Court already holding in Eicher Motor that cenvat credit once validly taken cannot be effaced and creates an accrued right in favour of the enterprise, there is a need to align Section 145A of the Act with the present regime of indirect taxation which Parliament alone in its wisdom can do to keep pace with the developments taking place in economy –\u00a0[2015] 64\u00a0 161 (Mumbai \u2013 Trib.)<\/strong><\/p>\n

KAR VIVAD SAMADHAN SCHEME, 1998<\/strong><\/p>\n

SECTION 95<\/span><\/p>\n

SETTLEMENT OF TAX DISPUTES – SCHEME NOT TO APPLY IN CERTAIN CASES<\/strong><\/p>\n

Constitutional validity :\u00a0<\/strong>Where Finance Act, 1998 had introduced KarVivadSamadhan Scheme for settlement of tax disputes pending as on 1-9-1998 and section 95(iii) thereof excluded a class of persons, against whom prosecution for offence of cheating under Chapter XVII of IPC had been launched, from benefit of scheme, such class of persons had been rightly excluded from benefit of scheme –\u00a0[2015] 64 28 (Bombay)<\/p>\n

COMPANIES ACT<\/strong><\/span><\/p>\n

SECTION 394<\/span><\/p>\n

AMALGAMATION<\/strong><\/p>\n

Where Court in principle agreed to sanction scheme of amalgamation whereby entire undertaking of transferor company was proposed to be transferred to transferee company but found exchange ratio to be unfair and unjust and not based on market realities, Registrar of Companies was to be directed to examine matter through experts and determine a fair and just exchange ratio –\u00a0[2015] 64\u00a0 11 (Gauhati)<\/strong><\/p>\n

SERVICE TAX<\/strong><\/span><\/p>\n

SECTION 68<\/span><\/p>\n

PAYMENT – SERVICE TAX<\/strong><\/p>\n

Section 12B of Excise Act, providing for presumption of transfer of burden of taxes, is incorporated in service tax law tax; therefore, section 64A of Sale of Goods Act is also impliedly made applicable and accordingly, service provider may recover levy\/increase of service tax from service recipient –\u00a0[2015] 63\u00a0 354 (Delhi)<\/strong><\/p>\n

SECTION 78<\/span><\/p>\n

PENALTY – FOR EVASION OF DUTY\/TAX<\/strong><\/p>\n

Penalty is levied only where any service tax has not been paid by reason of fraud, etc.; hence, when assessee’s activity is held to be not liable to service tax, question of penalty or imposition of penalty cannot arise –\u00a0[2015] 64\u00a0 35 (Allahabad)<\/strong><\/p>\n

CENTRAL EXCISE ACT<\/strong><\/span><\/p>\n

SECTION 2(d)<\/span><\/p>\n

EXCISABLE GOODS \u2013 MARKETABILITY<\/strong><\/p>\n

Friction cloth arising at intermediate stage in manufacture of V-belts is non-marketable and non-excisable product; therefore, same is not includible in turnover limit for SSI-exemption purposes –\u00a0[2015] 64\u00a040 (New Delhi \u2013 CESTAT)<\/strong><\/p>\n

SECTION 11B<\/span><\/p>\n

LEVY AND COLLECTION OF DUTY<\/strong><\/p>\n

Even date of filing of refund claim before wrong authority could be taken as date of filing for purpose of determining limitation –\u00a0[2015] 63 359 (Bangalore \u2013 CESTAT)<\/strong><\/p>\n

CST & VAT<\/strong><\/span><\/p>\n

SECTION 8 OF CENTRAL SALES TAX ACT, 1956<\/span><\/p>\n

DECLARATION FORM – FILING OF<\/strong><\/p>\n

Where assessee failed to produce Forms ‘C’ and ‘F’ before Assessing Authority and it approached Tribunal seeking opportunity to produce declaratory forms before it and Tribunal taking view that reasons assigned by assessee in not having produced forms before Assessing Authority were not acceptable, rejected appeal, assessee was to be permitted to establish reasons assigned in not producing declaratory forms before Assessing Authority –\u00a0[2015] 64\u00a0\u00a027 (Karnataka)<\/strong><\/p>\n

CENVAT CREDIT RULES<\/strong><\/span><\/p>\n

RULE 2(l)<\/span><\/p>\n

CENVAT CREDIT – INPUT SERVICE – INSURANCE SERVICES<\/strong><\/p>\n

Medical insurance of employees is an ‘activity relating to business’ and therefore, a manpower supplier is eligible to take input service credit thereof –\u00a0[2015] 64\u00a0\u00a026 (New Delhi \u2013 CESTAT)<\/strong><\/p>\n

RULE 5<\/span><\/p>\n

CENVAT CREDIT – REFUND OF<\/strong><\/p>\n

As per relevant notifications, read with section 11B, Cenvat refund claim must be filed ‘quarterly’ but within 1 year from ‘date of export’ –\u00a0[2015] 64\u00a0 53 (Jharkhand)<\/strong><\/p>\n

RULE 11<\/span><\/p>\n

CENVAT CREDIT – REVERSAL AND LAPSING OF CREDIT WHEN EXEMPTION CLAIMED<\/strong><\/p>\n

Rule 11(3) of CENVAT Credit Rules providing for ‘lapsing of credit’ applies only if final products are totally exempted; same is inapplicable in case of conversion of DTA unit into EOU because DTA clearances by EOU are not exempt. Therefore, unutilized credit balance lying in hands of DTA unit can be carried over by EOU and used for payment of duty on DTA clearances –\u00a0[2015] 64\u00a0 36 (Mumbai \u2013 CESTAT)<\/strong><\/p>\n

STATUTES<\/strong><\/span><\/p>\n

DIRECT TAX LAWS<\/strong><\/p>\n

Section 268A of the Income-tax Act, 1961 – Filing of appeal or application for Reference by Income-tax Authority – Revision of monetary limits for filing of appeals by the Department beforeIncome Tax Appellate Tribunal, High Courts and Supreme Court –\u00a0CIRCULAR NO.21\/2015 [F. NO. 279\/MISC. 142\/2007-ITJ (PT.)], DATED 10-12-2015<\/strong><\/p>\n

CORPORATE LAWS<\/strong><\/p>\n

Maintenance of Statutory Liquidity Ration (SLR) –\u00a0CIRCULAR DBR.NO.RET.BC.64\/12.01.001\/2015-16, DATED 10-12-2015<\/strong><\/p>\n

Fourth Bi-Monthly Monetary Policy Statement, 2015-16 \u2013 SLR Holdings under held to maturity category –CIRCULAR DBR.NO.BP.BC.65\/21.04.141\/2015-16, DATED 10-12-2015<\/strong><\/p>\n

Guidelines on Trading of Currency Futures and Exchange Traded Currency options in recognized Stock Exchanges \u2013 Introduction of cross Currency futures and Exchange traded option Contracts –\u00a0A.P. (DIR SERIES 2015-16) CIRCULAR NO.35, DATED 10-12-2015<\/p>\n

INDIRECT TAX LAWS (ST.\/EX.\/CUS. & (CST & VAT))<\/strong><\/p>\n

Report on Revenue Neutral Rate and structure of rates for Goods and Service Tax (GST) –\u00a0PRESS RELEASE, DATED 4-12-2015<\/strong><\/p>\n

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\u00a0endeavors. For query or help, contact:\u00a0info@caindelhiindia.com<\/a>\u00a0or call at\u00a0011-233 433 33.<\/p>\n

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CORPORATE & PROFESSIONAL UPDATE DECEMBER 13, 2015 INCOME TAX ACT SECTION 9 INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA Penalty as ordered by US Court :\u00a0An amount levied as penalty by an order of US Court can never attract any tax nor would such a payment made by applicant attracts any tax liability …<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[647,142,146],"tags":[502,501,569,572,179,180,561,214,181,194,541,562,560,550,538],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/720"}],"collection":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/comments?post=720"}],"version-history":[{"count":6,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/720\/revisions"}],"predecessor-version":[{"id":3123,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/posts\/720\/revisions\/3123"}],"wp:attachment":[{"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/media?parent=720"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/categories?post=720"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.caindelhiindia.com\/blog\/wp-json\/wp\/v2\/tags?post=720"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}