CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 25,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 25,2016

Major Changes in VAT vide Haryana Budget 2016-17

State Finance Minister Capt. Abhimanyu on Monday presented Haryana Budget 2016-17 with the motto of – “Sabka Sath, Sabka Vikas”. It is second budget of Chief Minister M L Khattar led BJP government. The Budget of this year is increased by 28.4 percent to Rs. 88,781.96 as compared to previous year budget of Rs. 69,140 crore.

Rate of Tax :- No new taxes are proposed in the budget. However the tax rates are proposed to be reduced for some industries, which is expected to have beneficial impact across the sectors of the state economy. To be precise, below mentioned changes are proposed:-

  • Reduction in tax rate on footwear having MRP above Rs. 500/- from 12.5 per cent to 5 per cent and exempting shoe uppers from VAT to give boost to the footwear industry.
  • To encourage agro-based industries in the State, Tax exemption on ‘Khal’, ‘Binola’, ‘Besan’ and ‘cotton yarn manufactured in the State and Tax reduction on Vermicelli (Sewian) from 12.5 percent to 5 per cent to give incentive to industries, which use agriculture produce of the State for manufacturing.
  • To promote clean environment, tax rate reduction from 12.5 per cent to 5 per cent on sale of electrical vehicles.
  • Exemption on “Chhota Toka” (leafy vegetable cutter for kitchens) in order to provide relief to households and to encourage the Micro and Small Enterprises in the State.

Amnesty Scheme : -An ‘Amnesty Scheme’ for granting relief in respect of tax, interest, penalty and other dues to the affected registered dealers whose goods have been lost or destroyed during the reservation agitation in February 2016 is also proposed to be introduced as a relief for Violence-hit Traders.

Submit Bill, Get Prize Scheme :- To encourage the customers to obtain bills / invoices for goods purchased, the Government proposes to introduce “Submit Bill, Get Prize Scheme”. This will enhance compliance on the part of the sellers / dealers, resulting in more revenue to the State exchequer.

Real-estate sector : Deen Dayal Jan Awas Yojana is being implemented in the State to encourage the development of high-density plotted colonies with density of 240-400 persons per acre with project size of 5 to 15 acres with 65 per cent saleable area in Low and Medium Potential towns of the State, wherein small plots are made available through a liberal policy framework.

Further, the Licence fee and EDC rates have been reduced substantially, while the conversion charges & IDC stands waived off to attract developers to implement such projects in small towns. This policy shall put a check on development of unauthorised colonies on one hand and on the other it will make it possible to achieve the target of ‘Housing for All’.

The liberal and transparent New Integrated Licensing Policy (NILP) is expected to unleash a momentum of investment in real estate sector, ensuring enough supply of houses for all at economical prices. The Government has also initiated the process of Transferable Development Rights (TDR) for enabling small landowners to participate in the process of infrastructure development. The Government has also announced the Transit Oriented Development (TOD) 30 Policy providing for higher concentration of population with upgraded infrastructure around the Metro routes.

E-facilities : The State Government has started the online facility of e-Registration, e-Payment of tax and e-Filing of returns, e-tendering and issuance of C-Forms. The Government has launched e-Permits and e-Pass system for the excise licensees, to streamline the movement of liquor and to curb illegal business of it in the State.

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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 22,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 22,2016

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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  enactment/provision /notification  is arbitrary, discriminatory or violative of Article 14 of the Constitution of India, it cannot be declared to be un constitutional. – 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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 21,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 21,2016

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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

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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 19,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 19,2016

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DIRECT TAX

  • INCOME TAX: CBDT directs reopening assessments in claim of bogus capital gains / loss in penny investment scam by taxpayers vide 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 Taxmann 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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 18,2016

CORPORATE AND PROFESSIONAL UPDATE  DATED MARCH 18,2016

Untitled7DIRECT TAX

  • Income Tax: Addition u/s 56(2)(viia) – deemed gift – Since the transaction of sale and purchase of shares is between related parties and both the companies are companies in which the public are not substantially interested, AO was justified in examining the applicability of the provisions of section 56(2)(viia) to the transaction of transfer of shares. – Tri
  • Income Tax: Exemption u/s. 11 – helping aspiring members/members in preparing for CISA and CISM certification conducted by the parent body, ISACA, USA – assessee cannot be considered to be an “educational trust” within the meaning of section 2(15) – it is not entitled for exemption u/s. 11 and this income of the assessee is to be assessed as business income under the head AOP – Tri
  • Income Tax: Challenge to the authority of ITO to issue notices u/s 148 – the petitioning assessee was precluded by Section 124(3)(b) from questioning the authority of the assessing officer who had issued the notices u/s 148 – HC
  • Income Tax: Eligibility of deduction under section 80IB – unreasonable profits earned. – For making a comparative analysis, apples are to be compared with apples and not with oranges. – Tri
  • Income Tax: Deduction u/s 80IC – the counsel for the assessee was of the bonafide belief that along with the claim of 80IC and 80I deduction, the Form 10CCB was not required since the accounts of the assessee are audited as per the statute. The assessee cannot be penalized for the bonafide mistake of the counsel – Tri

INDIRECT TAX            

  • Service Tax: Cenvat credit – Internet service, web-hosting service and content service is wholly attributable to the activity of rendering taxable output service. Thus, the demand attributable to these input services is set aside. – Tri
  • Central Excise: Liability to pay duty on clearance of structural scrap – duty demand alleging suppression of facts – When there is no clearance of inputs or capital goods as such, question of reversal of CENVAT credit availed on such items does not arise – Tri
  • Central Excise: 100% EOU – whether the benefit of Central Excise (Removal of goods at concessional rate of duty for manufacture of Excisable goods) Rules, 2001 is available to 100% EOU – Held Yes – Tri
  • Central Excise: Ineligibility for the SSI benefit – determination of turnover – the amount which has been deducted from their account by the buyers for its delay in execution in contracts is not correct and the proposition needs to be rejected – Tri
  • Customs: Levy of anti-dumping duty – Software downloaded electronically – Absence of mechanism to levy and collect duty – no duty can be levied and collected on software downloaded electronically – Tri
  • Customs: Proper authority for issuing show cause notice – Whether DRI is or not – comparison with the price of such imports cannot cause any prejudice to the appellant because it can be nobody’s case that the price would be higher for imports of larger quantities of such goods. – Tri
  • Customs: Classification – the classification has been determined on the basis of the length of the flock fibres being between 0.45 limited to 0.5 mm which was never contested and on the basis of the HSN Explanatory Notes on classification which are standard and internationally accepted for the purpose of determining the classification of goods. Thus, Revenue has discharged its burden of proof while determining the classification. – Tri
  • Customs: Valuation – inclusion of royalty – Legality of Commissioner (Appeals) order – There was no discussions either on facts or on legal issues in his impugned order and also it had not examined in detail the agreements and amendment agreements but merely endorses the respondent’s view without any discussion – Tri
  • Customs: Rejection of declared price – when the price of similar or identical goods are same price and it was accepted by the Customs in all major Custom Houses, there is no justification for taking recourse to Rule (8) of CVR and to adopt the price of Country of Exportation. – Tri
  • Customs: Refund claim in terms of Section 27 of the Customs Act – Rejected being time barred – Anti-dumping duty paid on PVC film – limitation prescribed under Section 27 would not be applicable to the refund of excess anti-dumping duty paid in terms of the provisional notifications, which attained finality subsequently. – 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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 17,201629

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
  • 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
  • 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
  • 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).
  • 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

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
  • 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
  • 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
  • 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
  • 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
  • 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
  • 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.
  • 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.

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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 16,2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 16,2016Untitled213

DIRECT TAX

  • Income Tax: Disallowance of Privilege fee paid u/s 40(a)(ii) or (iib) – 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.
  • 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.
  • 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.

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
  • 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
  • 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.
  • 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.
  • 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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 15, 2016

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The Reserve Bank of India (RBI), it seems, has finally lent ear to millions of such prospective account holders. It has simplified the KYC documentation to make account opening less onerous.

Moving ‘The Real Estate (Regulation and Development) Bill, 2015′ for consideration and passage, Urban Development Minister M Venkaiah Naidu said it aims to protect the interests of buyers and bring more transparency in the sector.

RBI has issued Know Your Customer Direction, 2016 for all Banks or entities licensed u/s 22 of Banking Regulation Act, 1949, Etc.

Govt. approves guidelines to promote electronic payments

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-

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

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.

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] 67 16 (Mumbai – Trib.)

6% Tax on online advertisement / Google Tax, Such provisions are applicable from 1st June, 2016.The levy clearly is targeted to tax various online advertisements companies like YouTube , Google , Facebook , Twitter etc.

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@carajput.com or call at 9555555480 Continue reading

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CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 13, 2016

CORPORATE AND PROFESSIONAL UPDATE DATED MARCH 13, 2016

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DIRECT TAX

  • TDS u/s 194J or 194C - payments made to various TV channels – section 194J is attracted to the facts of the instant case. Merely because in earlier years this issue was not examined and the assessee’s contention got accepted without verification, cannot give license to it claim in the later years that the correctly applicable section be put under carpet
  • TDS – granting of any license to use the software amounts to ‘royalty’ and the provisions of sec.9(1)(vi) are applicable – assessee is in default u/s.201(1)/201(1A) for non-deduction of TDS
  • Principals of mutuality – Contribution by the members of a Group Housing Society – work is done by the society for and on behalf of that member – there is no question of any income – Not taxable
  • Revision u/s 263 – Directions of the Ld.CIT given to the AO to verify the unsecured creditors, unsecured loans, the AO in his fresh assessment order passed u/s 143(3) r.w.s.263 of the Act, did not draw any adverse inference. This direction of the Ld.CIT was in the nature of directing rowing enquiries. – Revision is bad in law.
  • TDS u/s 195 - Addition u/s 40(a)(ia) – no liability for deduction of tax at source arose under Section 195 in the case of mobilization and demobilization costs reimbursed to a non-resident, not being taxable in India, hence disallowance under Section 40(a)(ia) did not arise.
  • TDS u/s 195 - Addition u/s 40(a)(ia) – no liability for deduction of tax at source arose under Section 195 in the case of mobilization and demobilization costs reimbursed to a non-resident, not being taxable in India, hence disallowance under Section 40(a)(ia) did not arise.
  • Addition u/s 68 - Notice u/s 133(6) is issued by the AO could not be served on the share applicants and Inspector’s report also shows that this companies do not exists at the given address, we are of the view that no fault can be found against the assessee for this.

INDIRECT TAX

  • ST- Refund claim – As the service was rendered to self and service tax was paid thereon, burden can only passed on to self and passing on the burden to self is not tantamount to passing it to any other person. Therefore, the appellant is not hit by the doctrine of unjust enrichment
  • ST­-Refund of Cenvat credit – input services – When the premises was occupied by the appellant and day-to-day repairs and maintenance are carried out in that premises then obviously, the said services i.e. repair, maintenance, electricity are received and used by the tenant only i.e. the appellant and not by the landlord – refund allowed
  • ST-Cenvat Credit - Amount towards Exempted service wrongly shown in ST-3 return – In the absence of identification of the exempted service provided by the appellant and in the wake of the assertion of the appellant that it had not provided any exempted services during the relevant period, the demand cannot be sustained
  • ST-Whether services of cutting, drilling, punching, bending and notching of material on job work basis, in the factory of the principal, provided by the respondent falls under the category of Manpower Recruitment or Supply Agency Services
  • Central Excise-Classification of PVC Doors and Windows – The process involved before fixing the windows or doors is a simple assembly at site as the profiles beadings and other items required are as per the specific dimensions of various windows or doors. We find that applying the Rule 2 (a) of the interpretation Rules, it is clear that the unassembled windows and doors, even incomplete or unfinished are to be classified with reference to goods which are complete or finished – under heading 3925.20
  • Central Excise- Penalty under section 11AC – clearance against the dummy challan – clandestine removal – Penalty was not confirmed under any other provision nor also invoked in the show cause notice. Accordingly, confirmation of penalty cannot be sustained.

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