Corporate and Professional Update November 23, 2015
SECTION 2(47)
CAPITAL GAINS – TRANSFER
Rights in a property couldn’t be deemed as transferable capital assets when such property was neither in existence nor its building plan or specifications were approved from the Municipal Corporation and neither any construction activity nor commencement of the project had started – [2015] 184 (Mumbai – Trib.)
SECTION 36(1)(iii)
INTEREST ON BORROWED CAPITAL
Repayment of subsequent loan : Where assessee borrowed funds for repaying old borrowings which had been duly used for purpose of business, interest paid on subsequent borrowings was to be allowed as deduction – [2015] 63 54 (Kolkata – Trib.)
SECTION 37(1)
BUSINESS EXPENDITURE – ALLOWABILITY OF
Contributions : Contribution made by assessee firm to International Fiscal Association, in which one of its partners was a member of Executive Body, towards constructing a meetings hall in its name to hold meetings, conferences etc, was an allowable business expenditure – [2015] 6390 (Delhi)
SECTION 40(b)
BUSINESS DISALLOWANCE – INTEREST, SALARY ETC. PAID BY FIRM TO PARTNER
Salary : Where partnership deed executed provides that each partner shall be entitled to an annual salary equivalent to his percentage share of profits ‘multiplied by’ ‘Allocable Profits’, salaries paid to partners was in accordance with section 40(b) not to be disallowed – [2015] 90 (Delhi)
SECTION 45
CAPITAL GAINS – CHARGEABLE AS
Business income vs Capital gains: Share dealings : Where assessee earned profits on sale of shares, in view of fact that number of share transactions entered into during relevant year was not high and moreover 75 per cent of profits came up from shares held for more than nine months, amount in question was to be taxed as short-term capital gain – [2015] 325 (Bombay)
In whose hand : No capital gains tax on assessee just because property docs not mutated in name of wife pursuant to family settlement – [2015] 54 (Kolkata – Trib.)
SECTION 132
SEARCH AND SEIZURE
Conversion of survey into search : Where during survey conducted under section 133A, department found huge cash and incriminating documents and director of assessee-company failed to provide explanation with regard to cash and dubious entries in seized documents, survey could be converted into search under section 132 after due approval of competent authority – [2015] 88 (Allahabad)
SECTION 271(1)(c)
PENALTY – FOR CONCEALMENT OF INCOME
Disallowance of claim, effect of : Auditor’s report cannot override provisions of Act and, thus, merely because assessee’s false claim for deduction is supported by a Chartered Accountant’s opinion, this fact per se cannot absolve assessee from penalty under section 271(1)(c) – [2015] 89 (Chennai – Trib.)
CENTRAL EXCISE ACT
SECTION 4
VALUATION UNDER CENTRAL EXCISE – TRANSACTION VALUE
Transaction value is determined at time of clearance of goods at factory; hence, installation and commissioning charges for Erection, Commissioning, Installation, etc. of machines at buyer’s site cannot be included in value –[2015] 83 (SC)
SECTION 4A
VALUATION UNDER CENTRAL EXCISE – RETAIL SALE PRICE/MRP BASED
In case three different MRPs are affixed on ‘same package’ even though for ‘different areas’, goods will be assessed to duty as per Explanation 2(a) to section 4A taking highest MRP as the basis. – [2015] 84 (SC)
SECTION 11D
DUTY OF EXCISE COLLECTED FROM BUYER TO BE DEPOSITED WITH CENTRAL GOVERNMENT
Assessee, being only a “dealer” and not a “manufacturer” was not liable to pay differential amount of excise duty under section 11D on fluctuation in rate of petroleum products – [2015] 51 (SC)
SECTION 32K
SETTLEMENT COMMISSION – POWER TO GRANT IMMUNITY FROM PROSECUTION AND PENALTY
Settlement Commission is entitled to exercise its discretion in imposing penalty on company as well as against its directors on recording elements of mens rea in concealing duty liability – [2015] 52 (Calcutta)
SECTION 35F
DEPOSIT – OF DUTY DEMANDED OR PENALTY LEVIED
Section 35F, as substituted by the Finance (No. 2) Act, 2014, mandating pre-deposit of 7.5% or 10% as a pre-condition for filing appeal is valid. – [2015] 163 (Karnataka)
STATUTES
DIRECT TAX LAWS
Clarification on Unautheticated Reports on Conciliation in Vodafone Case – PRESS RELEASE, DATED 18-11-2015
CORPORATE LAWS
Instructions for obtaining certificate of registration under IRDAI (Registration of Corporate Agents) Regulations, 2015 – CIRCULAR NO. IRDA/CAGTS/GDL/LCE/202/11/2015, DATED 18-11-2015
FEM (Permissible Capital Account Transactions) (Fourth Amendment) Regulations, 2015 – Amendment in Regulation 4 – NOTIFICATION [NO.FEMA.345/2015-RB]/GSR 859(E), DATED 16-11-2015
FEM (Transfer or Issue of Security by A Person Resident Outside India) (Eleventh Amendment) Regulations, 2015 – Amendment In Regulations 2, 5, 9 & 12 and Insertion of Schedule 11 – NOTIFICATION [NO.FEMA.355/2015-RB]/GSR 858(E), DATED 16-11-2015
Prevention of Money-Laundering (Maintenance of Records) Fourth Amendment Rules, 2015 – Amendment in Rule 9A – NOTIFICATION NO. GSR 882(E) [NO.8/2015 (P.12011/15/2011-S.O. (ES CELL)], DATED 18-11-2015
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