CORPORATE AND PROFESSIONAL UPDATES 8TH OCT 2018

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Direct Tax:

  • Bombay High court held that reassessment for non-disclosure of bank A/C which was disclosed during original assessment is invalid. Akshar Developers Vs Assistant Commissioner of Income-tax (Bombay High Court)
  • Demand of Interest U/S Section 234 A illegal once due date has been extended : Income Tax Department cannot demand interest U/S Section 234 A, once due date of ITR has been extended, Kerala High Court admits writ petition.
  • Income Tax Dept has notified norms for applicability of concessional long-term capital gain tax. This will benefit investments made in IPOs and follow-on public offerings (FPOs). The new norms will come into effect from April 1, 2019, and will apply in relation to assessment year 2019-20 and subsequent assessment years.

INDIRECT TAX.   

  • Form GSTR-9C released. Due date of filing GSTR -9C yet to be notified.

  • Extension of Due date for GSTR-3B only for newly migrated taxpayers for months July 2017 to Nov 2018 till 31st December 2018. The due dates remain unchanged for rest of the taxpayers.
  • Extension of Due date for GSTR-1 in case of taxpayers with turnover above Rs 1.5 crores in previous FY or Current FY
    • Regular taxpayers : for months from July 2017 to September 2018 extended till the 31st October 2018.
    • Newly migrated taxpayers : for months from July 2017 to November 2018 extended till the 31st December 2018.

  • Extension of Due date for GSTR-1 in case of taxpayers with turnover upto Rs 1.5 crores in previous FY or Current FY

a.Regular taxpayers :

Quarter                                    New Due date

July – September 2017            31st October 2018

October – December 2017      31st October 2018

January – March 2018             31st October 2018

April – June 2018                    31st October 2018

July – September 2018            31st October 2018

October – December 2018      31st January 2019

January – March 2019             30th April 2019

  • Newly migrated taxpayers : For all quarters from July 2017 to September 2018 extended till 31st December 2018.

  • For flood-affected regions of Kodagu, Mahe and Kerala : Above table of dates remain the same except for quarter July 2018 to September 2018 extended till 15th November 2018.

  • Due date of TRAN-1 and TRAN-2 is extended for certain taxpayers who could not complete filing due to tech glitch, to 31st March 2019 and 30th April 2019 respectively.

  • CBIC released formats of GSTR -9 & GSTR -9A.

  • GST council waives the late fees for the following :

  • Taxpayers whose GSTR -3B for the month of October 2017 was submitted but not filed on the common portal.

  • Taxpayers whose GSTR -4 was filed for the period of October to December 2017 within due date but late fees were mistakenly charged.

  • Input service distributors who paid late fees for GSTR-6 for any tax period between 1st Jan 2018 to 23rd Jan 2018.

FAQ on GST Audit:

  • Query:If a taxable person fails to  file  the return  required  under  law  (under  section  39 ( monthly/ quarterly), or  45  ( final return), what legal recourse is available to the tax officer?
  • Answer:The proper officer has to first issue a notice to the defaulting taxable person under section 46 of CGST/SGST Act requiring him to furnish the return within a period of fifteen days. If the taxable person fails to file return within the given time, the proper officer shall proceed to assess the tax liability of the return defaulter to the best of his judgment taking into account all the relevant material available with him. (Section 62).

MCA UPDATES

  • Constitution of National Financial Reporting Authority:In exercise of the powers conferred under Companies Act, 2013 the Central Government hereby appoints the 1stOctober, 2018 said Act shall come into force.
  • MCA has issued circular regarding Relaxation of additional fees and extension of last date of in filing of forms MGT-7 (Annual Return) and Aoc-4 (Financial statement) under the Companies Act, 2013- State of Kerala. Vide circular no 09/2018, dated 5th October 2018.

RBI UPDATES

  • Reserve Bank of India (RBI) Wednesday relaxed policy on borrowing from overseas to allow state-owned fuel retailers to raise up to USD 10 billion external debt for working capital needs.
  • Banks move to alert ED on exporters whose payments have been delayed:In the past few days, banks have shared with the Enforcement Directorate the names of thousands of exporters who have not received payments against shipment of goods

KEY DUE DATES

October 2018 Due Dates:

  • 14th October- ADT 1 for Appointment of Auditor
  • 15th October- TCS Return for Jul to Sep 2018 -Tax Audit & ITR for FY 2017-18
  • 18th October- GSTR 4 for Composition Dealer for Jul 2017 to Sep 2018
  • 20th October- GSTR 3B – Sep 2018 Month
  • 30th October- AOC 4 for FY 2017-18
  • 31st October- GSTR 1 for July 2017 to Sep 2018
  • 31st Oct- TDS Return for Jul to Sep 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 5TH OCT 2018

Image result for corporate and professional updatesDirect Tax:

  • ITAT Mumbai held that set-off of long-term capital loss on sale of unquoted equity shares against gain on sale of property. Chandra N. Hingorani Vs ITO (ITAT Mumbai)
  • Calcutta High Court held that payment by tenant for removal of sub-tenants from property is capital expenditure. nited Spirits Limited Vs Commissioner of Income Tax (Calcutta High Court)
  • The ITAT Delhi in ITO vs. Gisil Designs Pvt. Ltd has held that the AO was negligent in filing the remand report before the CIT(A). The same attitude has continued at the stage of filing appeal to the ITAT as condonation of delay was filed for 92 days. The excuse that the appeal was not filed due to the AO being busy with time barring assessment is not acceptable. The AO deliberately overlooked the impugned order and did not file appeal before the Tribunal within the period of limitation. Even the authorization by Pr. CIT to file the appeal has been granted after the period of limitation. Hence sufficient cause is not shown – [2018-ITRV-ITAT-DEL-027]
  • The ITAT Delhi in ITO vs. Virat Credit & Holdings Pvt.Ltd has held that the grant of approval by the CIT with the words “Yes. I am satisfied” proves that the sanction is merely mechanical and he has not applied independent mind while according sanction as there is not an iota of material on record as to what documents he had perused and what were the reasons for his being satisfied to accord the sanction to initiate the reopening of assessment u/s 148 of the Act – [2018-ITRV-ITAT-DEL-031]
  • The Delhi High Court in Pr. CIT vs. N. C. Cables Ltd has held that mere appending of the word “approved” by the CIT while granting approval u/s 151 to the reopening u/s 147 is not enough. While the CIT is not required to record elaborate reasons, he has to record satisfaction after application of mind. The approval is a safeguard and has to be meaningful and not merely ritualistic or formal – [2017-ITRV-HC-DEL-181]

INTERNATIONAL TRANSATIONS / TRANSFER PRICING

  • The Karnataka High Court in PCIT vs. Softbrands India P. Ltd has explained the entire law on when transfer pricing disputes constitute “substantial questions of law” for challenge in the High Court explained. Transfer Pricing Adjustments on the basis of the comparables are a matter of estimate of broad and fair guess-work of the Authorities based on relevant material. The exercise of fact finding or ‘Arm’s Length Price’ determination or ‘Transfer Pricing Adjustments’ should become final with a quietus at the hands of the final fact finding body, i.e. the Tribunal. The ITAT’s findings of fact cannot be challenged in the High Court unless it is shown that the findings are ex-facie perverse and unsustainable and exhibit total non-application of mind by the Tribunal to the relevant facts of the case and evidence before it – [2018-ITRV-HC-KAR-025]
  • The ITAT Ahmedabad in ACIT vs. Veer Gems has explained the important law on meaning of expression “associated enterprise” u/s 92A. The mere fact that an enterprise has de facto participation in the capital, management or control over the other enterprise does not make the two enterprises “associated enterprises” so as to subject their transactions to the rigors of transfer pricing law – [2017-ITRV-ITAT-AHD-179]
  • The ITAT Ahmedabad in Quick Flight Limited vs. ITO has held that in case where payments have been made to deductees on the strength of the beneficial provisions of s. 115A(1)(b) of the Act or as per DTAA rates r.w.s. 90(2) of the Act, the provisions of s. 206AA cannot be invoked by the AO insisting to deduct tax @ 20% for non-availability of PAN – [2017-ITRV-ITAT-AHD-180
  • Delhi High Court has issued notice in a plea seeking a direction to the CBDT to extend the date of filing of ITR and Tax Audit Report for AY 2018-2019 by assessees who are required to file the same by Sept 30, 2018

INDIRECT TAX

  • Finance ministry expects the GST collections to cross Rs 1 trillion in November and December on account of festive season demand and the anti-evasion measures initiated by the revenue department. GST) revenue rose to Rs 944.42 billion in Sept.
  • ICAI is clarified that an Internal Auditor of an entity cannot undertake GST Audit of the same entity.

FAQ on GST Audit:

  • Query:What would be the action by the proper officer upon conclusion of the audit?
  • Answer:The proper officer shall, on conclusion of audit, within 30 days inform the taxable person about his findings, reasons for findings and the taxable person’s rights and obligations in respect of such findings.

MCA UPDATES

  • Standard Operating Procedure by MCA for Grievance Redressal Mechanism: Complaint on MCA website through link http://www.mca.gov.in/mcafoportal/usercompaintDetails.doshould be raised by the Stakholders/professionals.
  • Form 1 and Form 2 (along with Form 17 & Form 18) which are pending processing as on 1st October 2018 shall be marked under resubmission.  All forms shall be resubmitted by using new service RUN-LLP for name reservation or FiLLiP for incorporation only.  All names which have been approved and against which incorporation form is not filed, shall be allowed to be used to file form FiLLiP for incorporation.  All names which have been approved and against which change of name Form 5 is not filed, shall be allowed to be used to file in revised Form 5 only.

RBI UPDATES

  • The Reserve Bank of India has issued notification regarding External Commercial Borrowings (ECB) Policy. Vide notification no RBI/2018-2019/54, dated 3rdOctober 2018.

OTHER UPDATES

  • NFRA IS CHALLENGED IN THE COURT: ICAI, in Hon’ble High Court, after hearing the counsels the high court passed the order to stay any disciplinary action against any member, next date of hearing is 16.01.2019
  • Govt is mulling permitting 100% FDI in insurance broking to give a boost to the sector. The FDI policy, at present, allows 49% foreign investment in the insurance broking, insurance cos, third party administrators, surveyors and loss assessors

KEY DUE DATES

October 2018 Due Dates:

  • 5th October- DIR 3 KYC of Directors
  • 7th October- TDS Deposit – Sep 2018 Month
  • 14th October- ADT 1 for Appointment of Auditor
  • 15th October- TCS Return for Jul to Sep 2018
  • - Tax Audit & ITR for FY 2017-18
  • 18th October- GSTR 4 for Composition Dealer for Jul 2017 to Sep 2018
  • 20th October- GSTR 3B – Sep 2018 Month
  • 30th October- AOC 4 for FY 2017-18
  • 31st October- GSTR 1 for July 2017 to Sep 2018
  • 31st Oct- TDS Return for Jul to Sep 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 4TH OCT 2018

Image result for corporate and professional updatesDirect Tax:

  • ITAT Cuttack held that remuneration to partners cannot be disallowed merely because share of partners not fixed or deed not provides for manner of qualification of such remuneration. Panda Fuels Vs ITO (ITAT Cuttack)
  • Recovery of dues – attachment of property – Period of limitation – The incompetent authority, therefore, cannot prejudice legal rights of petitioner flowing from statutory provisions or eclipse the same in any manner. Notice is, therefore, beyond period of three years and, therefore, hit by Rule 68B( 1)  – Bombay High Courtin case of [M/SRambilas Gulabdas (HUF) , Vs. Tax Recovery Officer, Range-7, CIT (Vidarbha) Nagpur M/S Rambilas Gulabdas(HUF) , Vs. Tax Recovery Officer, Range-7, CIT (Vidarbha) Nagpur]
  • TDS u/s 194H – credit card commission expenses – payments to banks on account of utilization of credit card facilities would be in the nature of bank charge and not in the nature of commission within the meaning of sec. l94H  – ITAT Bangalore  in case of [Velankani Information Systems Ltd. Vs. The DCIT, Circle 7 (1) (2) ,Bangalore And Vice-Versa]
  • Diversion of income by overriding title at source – This is where we feel the tax avoidance effort has been made by the parties and we cannot uphold the same in the overall analysis of the facts and legal position applicable to the facts of the present case  – Karnataka High Courtin case of The Pr. CIT Vs. M/S. Chamundi Winery AndDistillery]
  • Rejection of books of accounts – GP estimation – Fall in gross profit ratio could be due to various reasons, and cannot be the sole and only ground to reject the book results in entirety and frame best judgment assessment – Delhi High Court  in case of [The Pr. CIT-9 Vs. IBILT Technologies Ltd.]
  • Rajasthan High Court gave directions to CBDT for further extension of Income Tax Return filing date and Tax Audit Return filing date to 31st October-2018 and waiver of interest u/S 234A of the Income Tax Act.

Indirect Tax:

  • CBEC has issued circular regarding Modification to the Guidelines for Deductions and Deposits of TDS by the DDO under GST as clarified in Circular No. 65/39/2018-DOR dated14.09.2018. Videcircular no 67/41/2018.
  • CGST/Tamil Nadu GST: Where petitioner could not avail input tax credit in view of lack of clarity in new transitional provisions under GST Act, it was directed to place all material facts in accordance with Circular No. 39/13/2018-GST, dated 3-4-2018 before Jurisdictional Officer, who would forward same to Nodal Officer.

FAQ on GST Audit:

  • Query:Can documents which had earlier been filed with some wrong information be revised under this Scheme?
  • Answer:Reason being, Scheme clearly specifies that only overdue documents due for filing upto 30.06.2017 should be filed under this Scheme and therefore revision of previously filed annual filing e-forms shall not be taken on record.

MCA UPDATES

  • MCA plans to put in place a stricter disclosure framework for independent directors, including providing details about their resignation from companies, as part of continuing efforts to bolster corporate governance standards.
  • Form DIR-12 is likely to be revised on MCA21 Company Forms Download page w.e.f 4th OCT, 2018.Stakeholders are advised to check the latest version before filing.
  • As part of process re-engineering of LLP incorporation forms, Form 1,
    Form 2, Form 2A, Form 17, Form 18 and Form 5, web-service/revised forms
    (RUN-LLP, FiLLiP, Addendum to FiLLiP, Form 17, Form 18 and Form 5) shall be available on portalw.e.f 2nd October 2018.

OTHER UPDATES

  • SBI has lowered the ATM cash withdrawal limit to Rs 20,000 a day, from Rs 40,000. The lower limit will be effective from October 31. “In view of the increase in the number of complaints received by banks around fraudulent transactions at ATMs.

KEY DUE DATES

October 2018 Due Dates:

  • 5th October- DIR 3 KYC of Directors
  • 7th October- TDS Deposit – Sep 2018 Month
  • 14th October- ADT 1 for Appointment of Auditor
  • 15th October- TCS Return for Jul to Sep 2018 – Tax Audit & ITR for FY 2017-18
  • 18th October- GSTR 4 for Composition Dealer for Jul 2017 to Sep 2018
  • 20th October- GSTR 3B – Sep 2018 Month
  • 30th October- AOC 4 for FY 2017-18
  • 31st October- GSTR 1 for July 2017 to Sep 2018
  • 31st Oct- TDS Return for Jul to Sep 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 2ND OCT 2018

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Direct Tax:

  • ITAT Indore held that profit from sale of land with well thought business project is business income.Smt. Anita Singh Vs ACIT (ITAT Indore)
  • ITAT Chandigarh held that 100% deduction under section 80IC allowable on substantial expansion of eligible unit.  Friends Alloys VsAsstt. CIT (ITAT Chandigarh)
  • Gujarat High court held that tax cannot be levied on gain from sale of agricultural land based on intention of buyer to use the land for business purpose.  Principal CIT Vs Heenaben Bhadresh Mehta (Gujarat High Court)
  • ITAT Jaipur held that interest on income tax refund not eligible for deduction under section 80IE. M/s. OMIL JSC (JV) Kameng Kota. Vs Dy. CIT (ITAT Jaipur)

INDIRECT TAX

  • GST Offline utility of Form GSTR-10 (Final Return) is now available in the download section of GST portal. The excel based offline utility is designed to help taxpayers to prepare their Form GSTR-10 offline.
  • CBIC extends Mandatory RFID sealing due date to 01.11.2018. References have been received regarding Circular 19/2018-Customs dated 18th June 2018 seeking a postponement in the date for mandatory RFID sealing in case of movement of goods under warehousing bond.
  • GST Council set up a committee of seven state finance ministers to examine the legality and recommend the methodology for levying an ‘additional tax’ to raise revenue for floods-ravaged Kerala.

FAQ on GST Audit:

  • Query: What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?
  • Answer:Section 47 of MGL provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non-payment of tax relates.

RBI UPDATES

  • RBI issued draft directions for the prohibition of abuse in the fixed income markets, stating, among other things, that market participants, either acting independently or in collusion, shall not undertake any action with the intention to manipulate the process of calculation of a benchmark rate or reference rate.
  • The Reserve Bank of India has issued notification regarding Co-origination of loans by Banks and NBFCs for lending to priority sector.

MCA UPDATES

  • MCA has A High Level Committee on CSR (HLC-2018) to review the existing framework and guide and formulate the roadmap for a coherent policy on Corporate Social Responsibility ( CSR).

KEY DUE DATES 

  • GSTR-3B (SEP 2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(SEP 2018)-OCT 31ST 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 1ST OCT 2018

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DIRECT TAX

  • Reopening of assessment – If the Assessing Officer is prevented from carrying out assessment, the serious question of such assessment getting time barred by the time the petitioner’s litigation before the Civil Court achieves finality  – Gujarat High Courtin case of [Abha Vinaykumar Jain Vs. ITOWard 4 (1) (4))
  • Assessment in the hands of representative assessee – The ITAT made a clear mistake in believing that since it was held in an earlier proceeding that the income in question arose in India, a representative assessee could not be liable because it was only liable according to it in respect of the income which was deemed to have arisen in India  – Calcutta High Courtin case of [Director Of Income Tax (International Taxation) Vs. Board Of Control For Cricket In Sri Lanka And Ors. Through Pilcom)
  • Reopening of assessment u/s 147 – bogus purchases – to what exact income had escaped assessment may be open for argument, nevertheless, would not be a ground to quash the notice of reopening  – Gujarat High Courtin case of [Lalitkumar Babubhai Patel Vs.. DY. CIT, Circle 4 (2) Or His Successor )
  • Denial of deduction/exemption under section 54EC – advance received in specified assets before the date of transfer of asset – the Board have decided that if the assessee invests the earnest money or the advance received in specified assets before the date of transfer of asset, the amount so invested will qualify for exemption under section 54E  – ITAT Ahmedabadin case of [Rahul G. Patel Vs. DCIT, CIR. 1 (2) , Baroda)
  • CBDT notifies Ex-Servicemen Contributory Health Scheme for purpose of section 80D of the Income Tax Act, 1961 vide notification number 50/2018 dated 26th September, 2018
  • Penalty under section 271B justified on Assessee who was Partner in M/s. Price Waterhouse which is a partnership firm for his Failure to get his accounts audited as his remuneration was exceeding the limit specified U/s. 44AB.Sagar Dutta Vs DCIT (ITAT Kolkata)
  • Gujarat High Court directs CBDT to respond on Tax Audit Due date Extension filed by All Gujarat Federation of Tax Consultants Versus Union of India (Gujarat High Court)
  • ITAT Kolkata held that partner to get his A/Cs audited if his remuneration from firm exceed audit limit. Sagar Dutta Vs DCIT (ITAT Kolkata)
  • ITAT Delhi held that reassessment on mere audit objections without any tangible material is invalid.Siddhi VinayakAeromatics (P) Ltd. Vs ACIT (ITAT Delhi)

INDIRECT TAX

  • Internal Auditor cannot undertake GST Audit simultaneously : ICAI in an announcement dated 28th September 2018 has clarified that Internal Auditor cannot undertake Goods and Service Tax (GST) Audit simultaneously.
  • Union Cabinet, chaired by the Prime Minister Shri Narendra Modi has approved increasing of Government ownership in Goods and Services Tax Network (GSTN) and change in the existing structure with transitional plan.

FAQ on GST Audit:

  • Query:Is summary assessment order to be necessarily passed against the taxable person?
  • Answer: In certain cases, like when goods are under transportation or are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax (proviso to Section 64 of CGST/SGST Act).

RBI Update:

  • The Reserve Bank of India (RBI) has imposed, by an order dated September 25, 2018, a monetary penalty of Rs 50 million on KarurVysya Bank Limited (the bank) for non-compliance with the directions issued by RBI on Income Recognition and Asset Classification (IRAC) norms, reporting of frauds, and on need for discipline at the time of opening of current accounts. This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

SEBI UPDATES

  • The Securities and Exchange Board of India (Sebi) has sent letters to mutual funds seeking details about their exposure to all NBFCs and housing finance companies, regulatory and industry sources said.

OTHER UPDATES

  • Finance Minister launched a transformative initiative in MSME credit space. The webportal  psbloansin59minutes.comwill enable in principle approval for MSME loans up to Rs. 1 crore within 59 minutes from SIDBI and 5 Public Sector Banks (PSBs).

KEY DUE DATES 

  • GSTR-3B (SEP  2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(SEP 2018)-OCT 31ST  2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 29TH SEP 2018

Image result for corporate and professional updatesDIRECT TAX

  • Income Tax :  Disallowance of artificial loss made on account of fictitious transactions – CIT(A) has deleted the addition merely by observing that the books of accounts of the assessee were audited and have not been rejected by the AO. – Matter restored before the CIT(A)  – ITAT Mumbai  in case of [ACIT 12 (2) (2) , Mumbai Vs. M/S. Highland Industries Ltd.]
  • Income Tax : TDS Credit – Wherever the payer-deductor had made the payment to the company but by error deposited tax in the account of the firm, the petitioner company must get benefit of such tax deducted at source  – Gujarat High Court in case of [Anish Infracon India Pvt. Ltd. Vs. DCIT]
  • Income Tax : Claim of credit of TDS deducted on salary – Employer failed to deposit the TDS amount with the Government – Department cannot deny the benefit of tax deducted at source by the employer of the petitioner during the relevant financial years. Credit of such tax would be given to the petitioner for the respective years  – Gujarat High Courtin case of [Devarsh Pravinbhai Patel Vs. ACIT Circle5 (1) (1)]
  • Income Tax: Addition u/s 41 – remission or cessation of liability – when the software library was capitalized, it cannot be said that any benefit or remission or cessation of liability occurred  – Madras High Courtin case of [The CIT Vs. Smt. R. Radhika]
  • Credit of TDS deducted from salary – Revenue directed to give the credit even if employer failed to deposit TDS amount with the Government – Devarsh Pravinbhai Patel Vs ACIT (2018 (9) TMI 1635 – Gujarat High Court).

Calculation of Turnover for Tax Audit  u/s 44 AB of Income Tax Act, 1961: 

  • For Assessee in share trading business to give them clear understanding whether they are liable to get their accounts audited for tax audit u/s 44AB of the Income Tax Audit. So, let’s check what law dictates about it.

Tax Audit Applicability under section 44AB:

  •  An individual who is engaged in business and the annual turnover of his/her business is Rs 1 crore and above.
  • Determination of turnover u/s 44ab of income tax act,1961, in case of trading of shares either on speculation or non speculation basis
  • “As per Section 43(5) of the Income Tax Act, 1961, INTRA-DAY TRADING shall be considered as SPECULATIVE BUSINESS TRANSACTIONS and the income therefrom would be either speculation gains or speculation losses. Income from speculation gains is taxed at the normal rates.”
  • However, Income from trading F&O (both intraday and overnight) on all the exchanges is considered as NON-SPECULATIVE BUSINESS TRANSACTIONS as it has been specifically defined this way.
  • Income from shorter term equity delivery based trades (held for between 1 day to 1 year) are also best to be considered as non-speculative business income if frequency of such trades executed by you is high or if investing/trading in the markets is your main source of income.

Turnover or gross receipts in respect of transactions in shares,securities and derivatives may be determined in the following manner:

  • As per  Para 5 of “Guidance Note on Tax Audit under Section 44AB of the Income Tax Act,1961″ issued by The Institute of Chartered Accountants of India (ICAI):

(a) For Speculative Transactions:

“The Turnover is net of all positive and negative income from various transaction and not total of all Sales transaction.So if your Net Income > 1 Crores rs., you are liable to tax audit.”

(b) Derivatives, Futures And Options (Non- Speculative Transactions)

“The turnover in such types of transactions is to be determined as follows:
(i) The total of favourable and unfavourable differences shall be taken as turnover.(i.e suppose in 1st transaction you have incurred loss of Rs 65 Lacs and after that you entered in profit transaction in which you have earned Rs 36 lacs, Then as per this guidance note you are liable to tax audit because total of  of Profit and Loss a/c exceed Rs 1 Crore)

(ii) Premium received on sale of options is also to be included in turnover.(Call or Put Premium paid/received)

(iii) In respect of any reverse trades entered, the difference thereon, should also form part of the turnover.”

INDIRECT TAX

  • MoF issues a circular clarifying applicability of GST on Residential programs or camps meant for advancement of religion, spirituality or yoga by religious and charitable trusts – Circular No. 66/2018, dt.26.09.2018.
  • Marg Sudharan Shulk – charged and collected by applicant for the maintenance of forest road, from non-government, private and commercial vehicles engaged in mining work in lieu of use of forest road – Levy of GST confirmed – AAR, UK in Divisional Forest Officer, Dehradun (2018 (9) TMI 1647).
  • CBEC has issued circular regarding GST on Residential programmers or camps meant for advancement of religion, spirituality or yoga by religious and charitable trusts. Vide circular no 66/40/2018-GST, dated 26th September 2018.
  • GST: Post GST regime, the pending refund claim of CENVAT credit under Central Excise, if sanctioned, will necessarily have to be paid in cash –Toshiba Machine (Chennai) Pvt. Ltd. Vs CCE (2018 (9) TMI 1576 – CESTAT Chennai).

FAQ on GST Audit:

  • Query:What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?
  • Answer: Section 63 of CGST/SGST Act provides that in such a case, the proper officer can assess the tax liability and pass an orderto his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date for furnishing the annual return for the financial year to which non-payment of tax relates.

RBI Update:

  • The Reserve Bank of India has issued notification regarding Voluntary Transition of Primary (Urban) Co-operative Banks (UCBs) into Small Finance Banks (SFBs). Vide notification no RBI/2018-19/52, dated 27th September 2018.

OTHER UPDATES

  • ICAI Elections 2018: Nominations for 32 Central Council (CC) Seats and 64 Regional Council (RC) Seatshave been completed y’day. The Region wise list of valid candidates is expected soon.
  • ICAI has launchedA unique and exclusive Job Portal for Chartered Accountants https://cajobs.icai.org where no. of companies and vacancies increasing every day. Members can find a best job on this portal that matches their interest.

KEY DUE DATES 

  • GSTR-3B (SEP 2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- OCT 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(AUG 2018)-OCT 31ST 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 28TH SEP 2018

Image result for CARPORATE

Direct Tax:

  • ITAT Delhi held that reassessment on mere audit objections without any tangible material is invalid.Siddhi Vinayak Aeromatics (P) Ltd. Vs ACIT (ITAT Delhi)
  • ITAT Pune held that AO cannot set-off of brought forward loss before allowing remuneration to partner. Rajmal Lakhichand Vs JCIT (ITAT Pune)

Date of submission of ‘Tax Audit Report and Income Tax Return’ has been extended to 15th of October 2018. Effects of the same would be:

  • Late Fees, of Rs.1000/- and 500/-, u/s 234F will not be levied in case ITR is filed on or before 15th of October 2018
  • Expenses u/s Sec 43B, which are allowed on the basis of actual payment made, will be allowed if paid on or before 15th of October 2018.
  • TDS, which has already been deducted on or before 31st of March 2018, deposited on or before 15th of October 2018 will not result into  disallowance of expenses u/s 40(a)(i) & 40(a)(ia).
  • Loss under the head “Business of Profession” and “Capital Gains” can be carried forward even ITR is filed after 30th of Sep., 2018 but on or  before 15th of October 2018.
  • Profit Linked deductions (Section 80-IA to 80-IE), deduction under Section 10AA of the Income tax Act, 1961 will be allowed even if ITR is filed after 30th of Sep., 2018 but on or before 15-Oct-2018.

Better to pay Self Assessment Tax till 30th of Sep., 2018 in order to save interest u/s 234A of the Act and File Income Tax Return on or before 15th of October 2018.

INDIRECT TAX

  • Amazon, Google, Apple and other foreign companies operating in the ecommerce space will have to register themselves for GST in all the states in the next 10-12 days. The government has said ecommerce companies need to collect tax at source from October 1.

  • The Authority for Advance Rulings (AAR), Maharashtra ruled that 12 percent GST would be applicable to the services provided by sub-contractors to the main contractors in respect of Works Contract Services pertaining to Railways.

FAQ on GST Audit:

  • Query: Is summary assessment order to be necessarily passed against the taxable person?
  • Answer: No. In certain cases, like when goods are under transportation or are stored in a warehouse, and the taxable person in respect of such goods cannot be ascertained, the person in charge of such goods shall be deemed to be the taxable person and will be assessed to tax (proviso to Section 64 of CGST/SGST Act).
  • Query: Under what circumstances can a best judgment assessment order issued under section 60 are withdrawn?
  • Answer: The best judgment order passed by the Proper Officer under section 62 of CGST/SGST Act shall automatically stand withdrawn if the taxable person furnishes a valid return for the default period (i.e. files the return and pays the tax as assessed by him), within thirty days of the receipt of the best judgment assessment order.

RBI Update:

  • The Reserve Bank of India has Issued notification regarding Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure Standards. Vide Notification No 4/21.04.098/2018-19, dated 27th September 2018.

 KEY DUE DATES 

  • GSTR-3B (sep 2018)-oct 20th, 2018
  • GSTR-5 (sep 2018)-oct 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (sep 2018)-oct 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(sep 2018)-31st oct 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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CORPORATE AND PROFESSIONAL UPDATES 27TH SEP 2018

Image result for corporate and professional updatesDirect Tax:

  • ITAT Ahmedabad held that deduction under section 54 cannot be denied proportionately merely for joint ownership. Shri Chitrang M. Dave Vs the DCIT (ITAT Ahmedabad)
  • ITAT Mumbai held that assets holding period should be computed from the date of allotment letter.Shri Sanjaykumar Footermal Jain Vs ITO (ITAT Mumbai)
  • Registration u/s 12A – Condonation of delay – Ignorance of law is no excuse. The provision of Section 12A, being a beneficial provision to the Assessee, requires strict interpretation. Therefore, the Assessee should have been in a position to explain the delay, which is more than 18 years in the instant case – CIT Vs. Hemla Trust (2018 (9) TMI 1413 – Madras High Court).
  • Share capital cannot regard undisclosed income of the company u/S 68 of the Income Tax Act in V. R. Global Energy Pvt. Ltd Vs ITO (Madras High Court) when there was no cash involved in the transaction of allotment of shares, provisions of Section 68 of the said Act treating it as unexplained cash credit are not attracted.
  • ITR /TAR: Though the CBDT has extended the Due Date for filing of TAR & ITR from 30 SEP 2018 to 15 OCT 2018*, the Liability to pay interest u/s 234A of IT Act will remain applicable. Hence to save a month interest, pay the taxes by 30 SEP 18.

INDIRECT TAX

  • Jurisdiction – Competency to issue SCN – Officers appointed under State GST Act are authorized to be proper officers for the purpose of IGST – Advantage India Logistics Pvt. Ltd. Vs Union Of India & Others (2018 (9) TMI 1417 – Madhya Pradesh High Court).
  • Last date to furnish ITC 04 for compliance of goods sent to *job worker* and received back there after is 30th September 2018* the period covered is 1st of July 2017 till 30th June 2018.
  • The Government has made some new enhancements in the E-Way Bill (EWB) generation form and is being released on 1st of Oct. 2018. Read more at: http://www.taxscan.in/e-way-bill-form-modified-changed-form-rollout-1st-october/28839/

FAQ on GST Audit:

  • Query: Under what circumstances can a best judgment assessment order issued under section 46 be withdrawn?
  • Answer: The best judgment order passed by the Proper Officer under section 46 of MGL shall automatically stand  withdrawn if the taxable person furnishes a valid return for the default period (i.e. files the return and pays the tax as assessed by him), within thirty days of the receipt of the best judgment assessment order.

MCA Update:

  • MCA has amend the companies (Registered valuers and Valuation) Rules, 2017. These rules may be called the companies (Registered valuers and Valuation) Third Amendment Rules, 2018 which shall come into force on the date of their publication in the official Gazette.
  • DIR-3 KYC: As you are aware the last date for filing form DIR-3 KYC without fee has expired on 15th September 2018. The process of deactivating the non-compliant DINs has since been completed and their status has been updated as ‘Deactivated due to non-filing of DIR-3 KYC’. However, the non-compliant DIN holders may file DIR-3 KYC with a fee of Rs.500 from 21 SEP till 5 OCT 2018 (both days inclusive) to get their DINs reactivated. From 6th OCT 2018 onwards, a fee of Rs.5000 becomes payable for reactivation.
  • MCA is likely to deregister another 50,000 companies this fiscal because These firms have not been carrying out business activities for long.

SEBI UPDATES

  • SEBI has told credit rating agencies some of which were blindsided by the aura and size of IL&FS to review borrowers as soon as their bond prices crash, and even place such securities on ‘rating watch’ if prices continue to languish.

OTHER UPDATES

  • ICAI Membership/COP fees not paid* Please pay your Membership / COP Fees for the year 2018-19 latest by *30th September, 2018. http://memfee.icai.org/memfee.htm

KEY DUE DATES 

  • GSTR-3B (SEP 2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(AUG 2018)-OCT 31ST 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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corporate and professional updates 25TH DAY OF SEP 2018

Image result for corporate and professional updatesDirect Tax:

  • Gujarat High court held that tax cannot be levied on gain from sale of agricultural land based on intention of buyer to use the land for business purpose.  Principal CIT Vs Heenaben Bhadresh Mehta (Gujarat High Court)
  • ITAT Jaipur held that interest on income tax refund not eligible for deduction under section 80IE. M/s. OMIL JSC (JV) Kameng Kota. Vs Dy. CIT (ITAT Jaipur)
  • No Income Tax sec. 68 addition if assessee failed to produce persons who had applied as shareholders; SC dismissed SLP. CIT v. Jalan Hard Coke Ltd. in SLP Civil Diary No. 16078 of 2018.
  • Assessee filed details of share capital money before AO showing that there are number of share applicants who applied for allotment of shares and most of them were residing in Delhi and each application was for Rs.2 lakhs each and payment was made by DDs.
  • Gujarat High Court Just Admited  Petition and issue notice to CBDT, CHIEF COMMISSIONR AND UNION OF INDIA by  of All Gujarat  Federation of Tax Consultants, to extend Due date from 30 Sept to 30 Nov, as 3cd 3cb and other forms keeps changes. Next Date of hearing is Listed 26.09.2018
  • SLP filed before the SC against the order of HC has been dismissed. [2018] 95 com331.
  • CBDT extends due dt for filing of Income Tax Returns & audit reports from 30th Sept,2018 to15th Oct, 2018 for all assessees liable to file ITRs for AY 2018-19 by 30.09.2018,after considering representations from stakeholders. Liability to pay interest u/s234A of ITAct will remain .

INDIRECT TAX

  • The Authority for Advance Rulings (AAR), Maharashtra ruled that 12 percent GST would be applicable to the services provided by sub-contractors to the main contractors in respect of Works Contract Services pertaining to Railways.

FAQ on GST Audit:

  • Query:What is the legal recourse available in respect of a person who is liable to pay tax but has failed to obtain registration?
  • Answer:Section 47 of MGL provides that in such a case, the proper officer can assess the tax liability and pass an order to his best judgment for the relevant tax periods. However, such an order must be passed within a period of five years from the due date of filing of the annual return for the financial year to which non-payment of tax relates.

MCA UPDATES

  • Assessee also filed photocopies of share applications. AO required assessee to produce all persons/share applicants for examination.
  • Assessee expressed its inability to produce share applicants, however, submitted that since share application had been received from identifiable persons having capacity and creditworthiness of making share application, no addition u/s 68 should be made.
  • High Court by impugned order held that view taken by Tribunal in deleting the addition was just and proper as assessee could not have been assessed to tax to find out person who had applied as shareholder.

RBI Update:

  • The Reserve Bank of India has issued notification regarding Co-origination of loans by Banks and NBFCs for lending to priority sector.

KEY DUE DATES 

  • GSTR-3B (SEP 2018)-OCT 20th, 2018
  • GSTR-5 (SEP 2018)-OCT 20th, 2018
  • GSTR-6 (JULY 17 – AUG’18)- SEP 30TH, 2018
  • GSTR-4 (JULY-SEP, 2018)-OCT 18th, 2018
  • GSTR-5A (SEP 2018)-OCT 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (JULY- SEP, 2018)-OCT 31ST, 2018.
  • Quarterly return for registered persons with aggregate turnover more than Rs. 1.50 Crores- GSTR-1-(SEP 2018)-OCT 31ST 2018

Disclaimer:

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; Before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. The author is a Chartered Accountant and the Chief Gardener & Founder Director of Rajput Jain & Associates , a leading Tax & Investment Planning Advisory Service Provider. His blog can be found at http://carajput.com/blog/For any query you can write to info@carajput.com. Hope the information will assist you in your Professional endeavors. For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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