CORPORATE AND PROFESSIONAL UPDATES 9TH JULY 2018

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  • Delhi ITAT deletes Sec. 40(a)(i) disallowance of Rs. 120 cr. for airfreight payments made by assessee (a logistic and Cargo handling company) without TDS to non-resident parties during AY 2014-15; Observes that assessee did not claim the airfreight as expenses in the P & L account as the payments were made on behalf of its Indian clients/customers (who reimbursed the amount to assessee); [TS-354-ITAT-2018( DEL)]
  • Kolkata ITAT allows the long term capital loss claim on off-market sale of shares by assessee to its group company during AY 2009-10; Rejects Revenue’s stand that the off market transaction with group company was a colourable device only to claim the loss and reduce the tax burden;Observes that in present case, the share-sale transaction was duly supported by the required documentary evidence, delivery instructions were also issued to the depository participant evidencing that there was actual delivery of shares; [TS-349-ITAT-2018(Kol)]
  • CBDThas issued Final Notification (applicable from AY 2017-18) for exception, modification and adaptation in respect of a foreign company said to be resident in India due to its place of effective management (POEM) being in India, u/s 115JH of IT Act.
  • When the revenue has accepted the amount as loan in the hands of other party, it cannot take up a contrary stand and treat the same loan in the hands of the assessee as a gift or a sum received without consideration taxable u/s-56(2)(vii)(a) – ITO Vs. Shri Paramveer Abhay Sancheti (2018 (7) TMI 215 – ITAT Nagpur).

Indirect Tax:

  • CBEC has amended the Central Goods and Services Tax Rules, 2017. These rules may be called the Central Goods and Services Tax (Seventh Amendment) Rules, 2018, which shall be deemed to have come into force with effect from the 12th day of June, 2018. Vide notification no 29/2018, dated 6th July 2018.
  • GST: CBIT notifies CGST (Seventh Amendment) Rules, 2018 and amended Rules 125, 129, 130, 131, 132 & 133 effective from 12.06.2018 –N.29/2018-CT, dt.06.07.2018.
  • Alternate accommodation to be paid to the tenant of the old building by the developer / owner – compensation for alternate accommodation / damages for delayed handover of possession of the new premises – Levy of GST confirmed – AAR, in Zaver Shankarlal Bhanushali (2018 (7) TMI 227).
  • CBIC has developed a mobile app ‘GST Verify’ to protect interest of consumers. It is an android app to verify if the person collecting GST from the consumer is eligible to collect it or not. It also provides the details of the person collecting GST.
  • Electricity bills can have GST component at times. Non-tariff charges, which include application fee for releasing connection, rentals charged against metering equipment and labour charges for shifting of meters and service lines, are liable to taxed at 18% under the GST.

FAQ on GST AUDIT:

  • Query: Is a summary assessment order always passed against the taxpayer?
  • Answer:No, the order is not always passed against the taxpayer. If the goods are being transported or stored in a warehouse, the taxpayer cannot be held responsible for them. In such cases, the order is passed against the person in charge of the goods at that point, per Section 64 of the CGST/SGST Act.

RBI UPDATES

  • RBI has decided to put in place a graded enforcement action framework to enable appropriate action in respect of statutory auditors for any lapses observed in conducting a bank’s statutory audit. The framework would cover, instances of divergence identified in asset classification and provisioning during the RBI inspection vis-à-vis the audited financial statements of banks above the threshold specified etc.

SEBI UPDATES

  • SEBI reviewed the mechanism of dividend adjustment for stock options and allowed alteration in strike price. According to the regulator, adjustment in strike price will be carried out in case dividend declared by a company is above 5 per cent of the underlying stocks.

OTHER UPDATES 

  • IBBIhas notified, the IBBI (IRP for Corporate Persons) (Third Amendment) Reg., 2018.
  • DGFThas Notified the office address of DGFT and its Regional Authorities and their Jurisdiction and Private SEZs under the Foreign Trade Policy, 2015-20.

KEY DUE DATES

  • GSTR-3B (Jun 2018)-Jul 20th, 2018
  • GSTR-5 (Jun 2018)-Jul 20th, 2018
  • GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018
  • GSTR-4 (Apr-Jun, 2018)-Jul 18th, 2018
  • GSTR-5A (Jun 2018)-Jul 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 2018
  • Turnover exceeding Rs. 1.5 Crores or opted to file monthly Return GSTR-1 (Jun 2018)- Jul 10th, 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)

CORPORATE AND PROFESSIONAL UPDATES 03TH JULY 2018

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Direct Tax :

  • Delhi ITAT allows deduction u/s. 37 for foreign exchange fluctuation losses arising to PE  (project office – PO)of assesses (a Spanish company) during AY 2014-15 on account of advance/loan received from the Head Office (‘HO’) in foreign currency towards meeting the working-capital requirement for project execution; Observes that the utilization of the amounts received from HO did not bring any capital asset into existence for the PO; Rejects AO’s contention that since PE is never assessed as an independent entity, investment/remittance by HO cannot be considered as loan, but should be treated as a capital contribution by someone in its own business; [TS-339-ITAT-2018(DEL)]
  • Delhi ITAT confirms CIT(A)’s findings upholding FTS taxability on gross basis for professional fees received by assessee-individual (an NRI residing in UK) from Indian companies during AYs 2006-07 to 2009-10; Notes that assessee had returned these income on net basis in his returns of income and had also filed the TDS certificates issued by companies alongwith, rejects assessee’s stand that he mistakenly offered the receipts to tax and that these were commercial receipts for services rendered outside India, not taxable in India absent PE;  [TS-338-ITAT-2018(DEL)]
  • CBDT launched the allotment of e-PAN. The facility will be available free of cost. This facility, open for a limited period of time, is available only for resident individuals holding a valid Aadhar. No physical document is required to be submitted and you simply need to fill your Aadhar and upload the signature.
  • Due date to link Aadhaar with PAN extended till 31.03.2019.
  • CBDT clarified that foreign companies that have their place of effective management (POEM) in India will be taxed at 40%, plus applicable surcharge and cess.
  • Income Tax Due Date for Payment of TDS for the month of June, 2018 is 7th July, 2018.
  • Furnishing of PAN by the transporters (GTA) – S.194C(6) and 194C(7) are independent of each other and cannot be read together to attract disallowance u/s.40(a)(ia) r.w.s.194C of the Act – ACIT Vs. Eagle Steel Industries Pvt. Ltd. (2018 (6) TMI 1509 – ITAT Ahd.)

INDIRECT TAX

  • FM Jaitley hints at rationalizing GST Rates as Revenue Surge to almost 1 Lac a month as India celebrates the 1stAnniversary of GST launch, on 1st July, 2018.

FAQ on E-WAY BILLS:

  • Query:  Which types of transactions that need the e-way bill?
  • Answer:For transportation of goods in relation to all types of transactions such as outward supply whether within the State or interstate,  inward supply whether from within the State or  from interstate including from an unregistered persons or for reasons other than supply also e-way bill is mandatory.

RBI Update:

  • The Reserve Bank has launched the 2017-18 round of the annual survey of ‘Foreign Liabilities and Assets of Mutual Funds and Asset Management Companies.
  • The Reserve Bank of India has released the data on External Commercial Borrowings (ECB), Foreign Currency Convertible Bonds (FCCB) and Rupee Denominated Bonds (RDB)both, through Automatic Route and Approval Route, for the month of May 2018.
  • RBI Enforcement action framework in respect of statutory auditors for the lapses in the statutory audit of commercial banks. – vide Press Release: 2017-2018/3425 – (29/06/2018)
  • RBI Due Date of filing of Return on Foreign Liabilities and Assets (FLA) is 15th July, 2018.

MCA UPDATES

  • MCA notified that Every Director (including Disqualified Director) who has been allotted DIN on or before 31st March, 2018 and whose DIN is in ‘Approved’ status, would be mandatorily required to file form DIR-3 KYC on or before 31st August, 2018.
  • With an intent to update the registry, MCA would be conducting KYC of all Directors of all companies annually through a new eform viz. DIR-3 KYCto be notified and deployed shortly on the MCA portal.

OTHER UPDATES

  • North Delhi Municipal Corporation has extended the last date for payment of property tax and availing the rebate of 15% from June 30 to July 15.

KEY DUE DATES

  • GSTR-3B (Jun 2018)-Jul 20th, 2018
  • GSTR-5 (Jun 2018)-Jul 20th, 2018
  • GSTR-6 (Jul’17 – Jun’18)- Jul 31st, 2018
  • GSTR-4 (Apr-Jun, 2018)-Jul 18th, 2018
  • GSTR-5A (Jun 2018)-Jul 20th, 2018
  • Quarterly return for registered persons with aggregate turnover up to Rs. 1.50 Crores- GSTR-1 (Apr-Jun, 2018)-Jul 31st, 2018
  • Turnover exceeding Rs. 1.5 Crores or opted to file monthly Return GSTR-1 (Jun 2018)- Jul 10th, 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)

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 21, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 21, 2015

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DIRECT TAXES:

IT: Where Assessing Officer received information from Enforcement Directorate that in books of assessee there were huge cash deposits which were not explained, he could not reopen assessment on basis of said information alone without even examining as to whether amount in question was reflected in return filed by assessee [2015] 64 257 (Delhi) CIT v. Indo Arab Air Services

IT: Payment of money by inflating purchases cannot be construed as loan or advance within meaning of section 2(22)(e)

IT: Where Commissioner (Appeals) held that investment in properties were made out of borrowed funds, but details of borrowed funds and its nexus for making investments were not examined, addition under section 69 could not be made [2015] 64 88 (Chennai – Trib.) ACIT v. Padmasingh Isaac

IT: Additions of Bank deposits made u/s 68 – Once it is held that the impugned deposits may represent sales collection then the question of estimation of profit would arise. – the provisions of sec. 44AF shall not have application in the facts and circumstances of the case (Shri Suharsh R Joshi Vs ITO-21(2)(4), Mumbai (ITAT Mumbai)

IT: In terms of section 68, assessee is liable to disclose only source(s) from where he has himself received credit and it is not burden of assessee to show source(s) of his creditor nor is it burden of assessee to prove creditworthiness of source(s) of said sub-creditors [2015] 64 329 (Delhi) Commissioner of Income-tax v. Shiv Dhooti Pearls & Investment Ltd.

IT: Before levying penalty under section 271(1)(c), it is incumbent upon Assessing Officer to state whether penalty was being levied for concealment of income or for furnishing of inaccurate particulars of income [2015] 64 155 (Kolkata – Trib.) IN THE ITAT KOLKATA BENCH ‘B’Chandra Prakash Bubna v. ITO

MCA: Annual Filing of Forms – Just 2 days (29 Dec & 30 Dec) left without payment of Additional Fees. Thereafter, Normal Additional Fee, effective from day 1 of delay would be applicable.

SUBSIDY: No LPG subsidy for consumers with Taxable Income of more than Rs.10 Lac.

IT: Addition under Section 68 – ITAT was fully justified in coming to the conclusion that there exists no evidence to establish that there was any re-routing of the money collected by the Respondent-Companies. None of the shareholders denied having contributed to their share capital. – No addition – CIT-VIII Vs. SVP Builders (India) Ltd. And Ors (2015 (12) TMI 1185 – Delhi High Court)

CBDT issues Draft Guidelines for Determination of Place of Effective Management (POEM) of a Company. Suggestions invited by 02 JAN 2016. – F.No.142/11/2015-TPL, dt.23 DEC 2015.

IT: Where assessee claiming himself to be a Sewadar of Historic Dera, deposited donations received in name of Dera in his own bank account and, moreover, he failed to prove that any charitable activity in terms of section 2(15) was ever carried out by him, authorities below were justified in making addition to his income under section 68 in respect of donations in question [2015] 64 311 (Punjab & Haryana) Makhan Singh v. Income-tax officer

Transfer Pricing: An adjustment with respect to transfer pricing has to be confined to transactions with Associated Enterprises and cannot be made with respect to transactions with unrelated third parties. CIT v. Thyssen Krupp (Bombay High Court)

Commission earned by a non-resident agent who carried on business of selling Indian goods outside India cannot be said have deemed to be income which has accrued and/or arisen in India. Circular No. 23 of 1969 & Circular No.786 of 2000 were withdrawn on 22.10.2009. The withdrawal of a Circular cannot have retrospective operation. CIT v. Gujarat Reclaim & Rubber Products (Bombay High Court)

INDIRECT TAXES:

Cenvat Credit : Event management services availed by advertising agency to procure advertising space in shows, etc. organized by such event managers, is eligible for input service credit in hands of such advertising agency [2015] 64 153 (New Delhi – CESTAT) Shakun Advertising (P.) Ltd. v. Commissioner of Central Excise & Service Tax

Service Tax : For computing reduced penalty of 25 per cent in section 78, ‘service tax assessed or determined under section 73(2)’ is taken, which shall include both : (a) sums paid prior to issuance of notice and appropriated in adjudication order; as well as (b) further sums confirmed as payable in adjudication order, [2015] 64 243 (Allahabad – CESTAT)

Amit Pandey Physics Classes v. Commissioner of Central Excise & Service Tax

Service Tax : Inclusion of ‘association of persons or body of individuals, whether incorporated or not’ in meaning of word ‘person’ is constitutional.[2015] 64 204 (Punjab & Haryana) Jaswant Singh Mann v. Union of India

Excise & Customs : Domestic Milk cans are classifiable as ‘kitchen/household articles’ under Heading 73.23 and not as ‘cans’ under Heading 73.10 [2015] 64 37 (SC) Commissioner of Central Excise v. Krishna Industries

ST: Adjudicating order makes a mockery of quasi-judicial process can adversely impacting the ease of doing business environment in the country – Ahluwalia Contracts India Ltd. Vs. C.S.T., Delhi (CESTAT New Delhi)

VAT & ST: Classification – AO was of the view that in so far as Asafoetida (Hing) is concerned the tax of 4 only was being paid but the AO was of the view that it falls in the category of Packed Masala and once it is a Packed Masala it falls in the entry where levy of tax is 16 – When spices are not mixed it remains Asafoetida (Hing) only and no new product emerges - to be levied 4 – Commercial Taxes Officer Vs. Ramdev Food Products Pvt. Ltd. & Others (Rajasthan High Court)

ST: Denial of rebate claim – receipt of commission on transaction – service was received by the recipient abroad and it is partly performed in India and partly performed abroad – Refund Allowed – Enervision Services Pvt. Ltd. Vs CCEC&ST, Hyderabad-II (2015 (12) TMI 1166 – CESTAT Bangalore)

VAT & ST: Misuse of C-Forms / D-Forms – Even assuming for the sake of argument that if there is mis-utilisation of C-Forms or any of the Forms which are issued under the Act at best a dealer may invite penalties or punitive measures but sale turnover cannot be enhanced – State of Andhra Pradesh Vs. Bharat Dynamics Ltd. (2015 (12) TMI 1135 – Andhra Pradesh High Court)

Excise & Customs : Where an assessee offers cash discount for immediate payment, it is clear that interest on receivables relating to credit period offered is also inbuilt into price and therefore, assessee is entitled to deduction in respect of interest on receivables inbuilt into price [2015] 64 244 (SC) Castrol India Ltd. v. Commissioner of Central Excise

Service Tax/Excise/Customs : Where Tribunal held assessee’s contentions to be correct without assigning any reasons and, without even recording revenue’s contentions, dismissed revenue’s appeals, said order was liable to be set aside and matter remanded back for consideration afresh [2015] 64 245 (Karnataka) Commissioner of Central Excise v. GTS Alloys (P.) Ltd.

DVAT - it is only the Commissioner who can pass an order under Section 36A (8) unless and until the power of the Commissioner has been delegated under Section 68 of the said Act to the VATO. – But that has admittedly not been done. – order set aside - Yongnam Engineering & Construction (Private) Limited Versus Commissioner, Delhi Value Added Tax & Others – 2015 (12) TMI 1087 – DELHI HIGH COURT

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