CORPORATE & OTHER LAWS UPDATE NOVEMBER 22, 2015

Corporate and Professional Update November 22, 2015

Untitled20AINCOME TAX ACT

SECTION 12AA

CHARITABLE OR RELIGIOUS TRUST – REGISTRATION PROCEDURE

Cancellation of registration : Mere non-intimation of amendments in trust deed to department cannot ipso facto lead to cancellation of registration under section 12AA(3) - [2015] . 56 (Mumbai – Trib.)

SECTION 28(i)

BUSINESS INCOME – CHARGEABLE AS

Share dealing : Where assessee borrowed funds for purchase of shares, transactions was carried out with many brokers and transactions had resulted in crores of rupee, income earned on such transactions was to be assessed as ‘business income’ – [2015] .57 (Bombay)

SECTION 10B

EXPORT ORIENTED UNDERTAKING

Manufacture : Where only a part of manufacturing activities was got done by assessee from outside agency and that too under direct control and supervision of managerial and technical staff available with assessee, assessee was entitled to exemption under section 10B – [2015] 23 (Allahabad)

SECTION 145

METHOD OF ACCOUNTING – ESTIMATION OF INCOME

Reassessment : Where reasons recorded for reassessment were not supplied to assessee at time of assessment but during appellate proceedings, there was violation of principle of natural justice – [2015] 361 (Calcutta)

SECTION 115BB

LOTTERY, CROSSWORD, PUZZLES, HORSE RACES, ETC., TAX ON

Computation of : Where assessee suffered loss in business, said loss could not be set off against betting income and total betting income was liable to be taxed under section 115BB – [2015] 37 (Madras)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustments – Royalty : Where assessee, engaged in business of manufacturing pre-engineered building system products, made certain royalty payments to its AE, since said payments were periodically approved by RBI, TPO was not justified in determining ALP of same at nil – [2015] .55 (Hyderabad – Trib.)

CENTRAL EXCISE ACT

SECTION 5A

EXEMPTIONS – CENTRAL EXCISE – PRIMARY GOLD

‘Gold bar’ recovered from ‘gold mud’ is a ‘primary gold’ derived from ‘mud form of gold'; hence, same is exempt from duty and exemption cannot be denied merely because ‘gold mud’ was, in turn, recovered from ‘anode slime’ – [2015] 49 (SC)

SECTION 4

VALUATION UNDER CENTRAL EXCISE – TRANSACTION VALUE – GENERAL

Where, vide interim orders of High Court, ‘controlled prices’ of sugar were enhanced and assessees were allowed to sell sugar at ‘higher prices’, excise duty was also payable based on ‘higher prices’ – [2015] .48 (SC)

CENTRAL EXCISE TARIFF ACT

SECTION 2

CLASSIFICATION – PLASTIC LAMINATED JUTE FABRICS

Plastic laminated jute fabrics, meant for floor coverings, are dominantly jute products; hence, they are classifiable as ‘floor covering made of jute with plastic coating’ under Heading 5904 and not as ‘plastic product’ under Chapter 39 - [2015] . 50 (SC)

CLASSIFICATION – LIFTING MACHINERY

Where issue involved is an important question having reasonably wide ramifications, appellant may be allowed to raise new grounds for first time before Supreme Court – [2015]  47 (SC)

SEBI ACT

SECTION 11B

POWER AND FUNCTIONS OF BOARD

Where plaintiff was aware from September 2013 about its non-inclusion as part of promoter and promoter-company of defendant No. 1 in shareholding pattern filed by defendant No. 1 with stock exchange, but it did not approach SEBI when there was discussion about Letter of Offer or issue of right shares by defendant-company, suit filed by plaintiff to pass a decree declaring Letter of Offer issued by defendant as unlawful, null and void ab-initio for depriving plaintiff of its special right as prompter was to be dismissed. – [2015]  185 (Delhi)

COMPANIES ACT

SECTION 391

COMPROMISE AND ARRANGEMENT

Where main purpose of proposed scheme of amalgamation between trnsferee company and transferor companies was to streamline affairs of companies,tax planning and scheme did not in any manner affect interest of any of stake holders, including public,proposed scheme of amalgamation was to be sanctioned. -[2015] . 203 (Andhra Pradesh)

STATUTES

DIRECT TAX LAWS

Finance Minister’s Budget Announcement – Phasing out plan of deductions under Income-tax Act – PRESS RELEASE, DATED 20-11-2015

CORPORATE LAWS

Prior Approval for Acquisition of Shares or voting rights in Private Sector Banks : Directions, 2015 – MASTER DIRECTION DBR.PSBD.No.56/16.13.100/2015-16, DATED 19-11-2015

Review of provision of factoring services by banks – CIRCULAR DBR.No.FSD.BC.58/24.01.007/2015-16, DATED 19-11-2015

Non-Operative Financial Holding Company (NOFHC) – Application of Capital Adequacy Norms – CIRCULAR DBR.No.57/21.06.201/2015-16, DATED 19-11-2015

Prevention of Money-Laundering (Maintenance of Records) Third Amendment Rules, 2015 – Amendment in Rules 2 and 7 – NOTIFICATION NO. GSR 730(E) [NO.7/2015 (P.12011/1/2013-SO (E.S. CELL)], DATED 22-9-2015

IRDAI (Other Forms of Capital) Regulations, 2015 – NOTIFICATION F.NO.IRDAI/REG/20/110/2015, DATED 13-11-2015

Internet banking facility for customers of Regional Rural Banks - CIRCULAR DBR.RRB.BC.No.59/31.01.001/2015-16, DATED 19-11-2015

CCI imposes penalties upon Airlines for concerted action in Fixing Fuel Surcharge (FSC) on Cargo transport -PRESS RELEASE, DATED 17-11-2015

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