CORPORATE AND PROFESSIONAL UPDATE APRIL 14, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 14, 2016 DIRECT TAX: Income Tax: Refundable amount utilized by the Department hence interest was payable under Section 244(1A) –M/S. Jyotsna Holdings (P) Ltd. CIT, Delhi-II (2016 (4) TMI 390 – Supreme Court) Income Tax:  Exemption u/s 10(37) allowed on compensation received from the Surat Municipal Corporation for acquisition of lands -Dipak Kalidas Pauwala […]

CORPORATE AND PROFESSIONAL UPDATE APRIL 13, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 13, 2016

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DIRECT TAX:

  • Income Tax: Refundable amount utilized by the Department hence interest was payable under Section 244(1A) –M/S. Jyotsna Holdings (P) Ltd. CIT, Delhi-II (2016 (4) TMI 390 – Supreme Court)
  • Income Tax:  Penalty u/s 271D – cash transactions of the assessee with the directors and share holders of the company due to business expediency. Nobody has doubted the genuineness of the transactions – No Penalty -M/s Chawla Chemtech Pvt. Ltd. Vs. CIT, Gobindgarh (2016 (4) TMI 378 – ITAT Chandigarh)
  • Income Tax:  Depreciation carried forward and set off against the profits and gains of subsequent years without any limit whatsoever allowed –K. Lakshmi Cement Ltd. Vs. CIT (2016 (4) TMI 376 – ITAT Kolkata)
 INDIRECT TAX :
  • Service Tax: Date for deposit of Service tax by cheque – VCES Scheme 2013 – With the cheque having been realized the date on which the service tax should be taken to have been paid is deemed to be the date of presentation of the said cheque in terms of Rule 6(2A) of the ST Rules -Disha Securities & Manpower Pvt. Ltd. Vs. ACST(2016 (4) TMI 374 – Delhi High Court)
  • EXCISE : As long as an assessee had manufactured goods, mere fact that he used trade or brand name of another individual, would not disentitle him from exemption – [2016] 68 Taxmann 7 (Andhra Pradesh)
  • VAT : Period of limitation – Invokation of Section 61(1) of the Bombay Sales Tax Act 1959 – an order of court cannot override the legal provision which is specific in nature – period of limitation statutorily prescribed cannot be waived -Raskamal Food & Fruit Pvt. Ltd. Vs. CST, State of Maharashtra (2016 (4) TMI 319 – Bombay High Court)

 “Every exit has an entry somewhere. Every end has a new beginning. Every black cloud has a silver lining. Never leave hope, life means possibilities.”

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Glimpse of Real Estate (Regulation and Development) Act, 2016

Glimpse of Real Estate (Regulation and Development) Act, 2016

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Real Estate (Regulation and Development) Act, 2016 received the assent of the President on 25th March 2016, which substantially amends the original Real Estate Bill, 2013. This act will apply from a date to be notified in official gazette. The Act largely seeks to protect the interest of the allottees/purchasers by promoting transparency, accountability and efficiency in the construction and execution of real estate projects by promoters. Key Highlights of Real Estate Act, 2016 are given below: –

Registration

  • Every promoter shall register every real estate project with Real Estate Regulatory Authority established under this Act except where the area of land proposed to be developed does not exceed 500 square meters or the number of proposed apartments does not exceed 8 (All phases). Promoters cannot advertise or sell any plot or apartment in any real estate project without registration.
  • No registration is required if completion certificate is received for a project before commencement of this Act. In case of ongoing projects, the promoter shall register the project within a period of 3 months from the date of commencement of this Act.
  • All real estate agents shall also get registered with the Authority. Every registered real estate agent shall be granted a registration number by the Authority, which shall be quoted by the real estate agent in every sale facilitated by him.

Obligation

  • 70% of the amounts realised for the real estate project from the allottees shall be deposited in a separate account to be maintained in a scheduled bank to cover the cost of construction and the land cost and shall be used only for that purpose. The promoter shall withdraw the amounts from the separate account, to cover the cost of the project, in proportion to the percentage of completion of the project. The amounts from the separate account shall be withdrawn only after it is certified by an engineer, an architect and a CA in practice that the withdrawal is in proportion to the percentage of completion of the project.
  • A promoter cannot accept more than 10% of the cost of the apartment as an advance or application fee from any person without entering into a written agreement for sale with such person.
  • The agreement for sale shall specify the all particulars of development of the project like dates by which payments towards the cost of the apartment are to be made by and the possession date & the rates of interest etc.
  • The proposed project shall be developed and completed by the promoter in accordance with the sanctioned plans and specifications as approved by the competent authorities. The promoter shall not make any other alterations in plans of the buildings or common areas within project without previous written consent of at least 2/3rd of the allottees.
  • The promoter shall not transfer or assign his majority rights and liabilities in respect of a project to a 3rd party without prior written consent from 2/3rd allottees and the Authority.

Rights/Relief to buyers

  • Where any person makes an advance or a deposit on the basis of the information contained in the advertisement, prospectus or any model apartment and sustains any loss or damage by reason of any incorrect statement, he shall be compensated by the promoter. If the affected person intends to withdraw from the proposed project, he shall be returned his entire investment along with interest and compensation.
  • In case any defect in workmanship or quality of services as per the agreement for sale and it is brought to the notice of the promoter within a period of five years by the allottee from the date of possession, it shall be the duty of the promoter to rectify such defects without further charge, within 30 days. In the event of promoter’s failure to rectify such defects within such time, the aggrieved allottees shall be entitled to receive appropriate compensation.
  • If the promoter fails to complete or is unable to give possession of an apartment, plot or building in accordance with the terms of the agreement for sale or duly completed by the date in agreement or due to discontinuance of business or for any other reason, he shall be liable on demand to the allottees. In case the allottee wishes to withdraw from the project promoter shall return the amount received by him in respect of that apartment with interest and compensation. Where an allottee does not intend to withdraw from the project, he shall be paid, by the promoter, interest for every month of delay, till the handing over of the possession, at prescribed rate.

Opportunities for Chartered Accountants

  • Amounts from the separate account shall be withdrawn by the promoter only after it is certified by an engineer, an architect and a CA in practice that the withdrawal is in proportion to the percentage of completion of the project.
  • Promoter shall get his accounts audited within six months after the end of every financial year by a CA in practice, and shall produce a statement of accounts duly certified and signed by such CA and it shall be verified during the audit that the amounts collected for a particular project have been utilised for the project.
  • The appellant may appoint a Chartered Accountant or Company Secretary or Cost Accountant or Legal practitioner or any of its officers to present its case before the Appellate Tribunal or the Regulatory Authority.

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

CORPORATE AND PROFESSIONAL UPDATE APRIL 12, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 12, 2016

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DIRECT TAX:

  • Income Tax: Exemption u/s 54 on unregistered property purchased from son of the assessee allowed – transferee gets the right over the property and has become the owner of the property therefore for the purpose of deduction U/s 54 read with Section 2(47)(V) of the Act the property has been transferred to him – Rajesh Sharma Vs. ITO W- 2(4), Jaipur (2016  – ITAT Jaipur)
  • Income Tax: TDS u/s 194C – No TDS on contractual payments of cutting and transporting of sugarcane from the fields to the factory gate as the payments were not given for carrying out the work of harvesting cutting and transporting on behalf of the assessee – Shree Chalthan Vibhag Khand Udyog Mandli Ltd. Vs. ITO, Surat (2015  ITAT Ahmedabad)
  • Income Tax: Procedure for registration and submission of statement as per clause (k) of sub section (1) of section 285BA of Income-tax Act, 1961 read with Sub rule (7) of Rule 114G of Income-tax Rules, 1962 – Notification

INDIRECT TAX

  • Service Tax: Refund of Service Tax – Goods exported under claim of drawback – While fixing all industry rate of drawback the average duties and service tax paid in respect of inputs and input services are taken into account and the condition of Notification No. 41/2007 – ST has to be strictly construed – Refund inadmissible -M/s Sankalp International  CCE, Jaipur-1 (2016 CESTAT New Delhi)
  • EXCISE : As long as an assessee had manufactured goods, mere fact that he used trade or brand name of another individual, would not disentitle him from exemption – [2016]

KEY DATES :

  • Advance information for 2nd fortnight of APR of functions with booking cost> Rs. 1 Lakh in Banquet, Hotels, Hotels etc. for D VAT in Delhi: 12/04/2016

“Those who dream by day are cognizant of many things which escape those who dream only by night.”

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CORPORATE AND PROFESSIONAL UPDATE APRIL 8, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 8, 2016

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DIRECT TAX:

  • Income Tax: Treatment of agricultural income – as seen from the documents placed in the paper-book, these are not lease rentals received from the agricultural lands, but sale proceeds, which are stated to have been transferred from the place of agricultural lands to the assessee through clerk – additions confirmed- (Shri K.S.N. Raju, Hyderabad Versus Dy. Commissioner of Income-tax, Circle 6 ( (1) , Hyderabad – 2016 ITAT HYDERABAD).
  • Income Tax: Where assessee-company received certain advance from ‘J’ Ltd., even though assessee owned 95 per cent shares in ‘V’ Ltd. which in turn owned 99 per cent shares of ‘J’ Ltd., still assessee itself was not a shareholder in lender company, loan amount in question could not be added to assessee’s income as deemed dividend under section 2(22)(e)  – [2016] (Karnataka)
  • Income Tax: Having lost the right to file revised return of income, the assessee could not have made good the same by filing revised computation of income and thus claim carry forward of loss. The said action of the assessee, in our view, defeats the statutory mandate prescribed in sec. 139(5) r.w.s 139(3)- (ITO – 11 (2) (2) , Mumbai Versus Dr. Dhruman Desai – 2016 ITAT MUMBAI)

INDIRECT TAX :

  • Service Tax: Since definition of Mandap keeper’s services in section 65(105)(m) includes services provided as a caterer; hence, catering services provided by a hotel (Mandap keeper) would form part of Mandap keeper’s services. -[2016] (New Delhi – CESTAT)
  • EXCISE : Change of classification – manufacturer of home appliances like Mixer Grinder Juice Extractors Hand Blenders etc. – the said mixer would be classifiable under heading 8509 –(Commissioner of Central Excise, Aurangabad Versus M/s Waluj Components Pvt Ltd – 2016 – CESTAT MUMBAI)

KEY DATES :

  • Excise returns ER-1 for non SSI assessee for March: 10/04/2016
  • Excise returns ER-2 for Eou or March: 10/04/2016
  • Excise returns ER-6 by units paying duty > Rs. 1 Crore (Cenvat + PLA for March): 10/04/2016

“Stone is broken with the last stroke of hammer. This does not mean that first stroke was useless. Similarly success is the result of continuous efforts.”

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CORPORATE AND PROFESSIONAL UPDATE APRIL 7, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 7, 2016

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DIRECT TAX:

  • Income Tax: Where action of assessee-company to make advances to group companies at a lower rate of interest than interest rate at which assessee-company borrowed such funds, was not shown to be in any manner actuated by business expediency, disallowance of differential interest was justified – [2016] (Gujarat)
  • TDS u/s 194J – Tribunal was justified in law in holding that the amounts paid to the doctors is not in the nature of salary and liable for deduction of tax at source as required under section 194J as Professional fees even when assessee engaged the doctors as consultants- (CIT TDS, BANGALORE AND ITO TDS, BANGALORE Versus M/s TELERADIOLOGY SOLUTIONS PVT LTD – 2016- KARNATAKA HIGH COURT)
  • Income Tax: Where assessee, a UK based company, entered into agreement with BCCI for capturing and delivering of live audio and visual coverage of cricket matches, since assessee’s did not retain ownership of program content, payment received for rendering aforesaid services was to be taxed as business profits and not as royalty – [2016] (Mumbai – Trib.) CBDT releases e-filing vault: new facility to add higher security to e-filing accounts of taxpayers, press release dated 04-04-2016.

INDIRECT TAX :

  • Service Tax: Date of filing refund claim is first date of filing of refund claim; therefore, when claim was first filed on 7-1-2011 but was returned for re-submission and was finally re-submitted with relevant documents in November 2011, date of filing of refund claim would be 7-1-2011 – [2016] (Chennai – CESTAT)
  • EXCISE : Where Appellate Tribunal directed assessee to approach Committee on Dispute (Cod) constituted under Supreme Court to raise its grievance but subsequently Apex Court set aside constitution of Cod as it was not at all functional, Tribunal, when approached by assessee again by filing application should have revisited matter and afforded opportunity to assessee to be heard on merit – [2016]  (Rajasthan)
  • VAT and Sales : Where Assessing Authority passed reassessment order on assessee and subsequently taking view that reassessment order was prejudicial to interest of revenue, he issued on assessee a notice under section 41(1) proposing to rectify reassessment order, it was Revisional Authority, who was vested with such power to reopen proceedings – [2016] (Karnataka)

KEY DATES :

  • Payment of TDS u/s 194IA deducted on purchase of property/TCS collected in March: 07/04/2016
  • Submission of Forms received in March to IT Commissioner: 07/04/2016- Form No. 27C(TCS).

“Happiness is a delicate balance between “what you want” and “what you have”. Its inner joy that can be “sought and caught” but can never be “taught and bought”

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CORPORATE AND PROFESSIONAL UPDATE APRIL 6, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 6, 2016

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DIRECT TAX:

  • Income Tax: Addition u/s 68 – creditor from the foreign country – Even the AO has also not disputed the identity source and genuineness of share capital. We are also of the view that it is unnecessary burden upon the assessee by pressuring it to bring the creditor from the foreign country which is contrary to the facts of the case as well as evidence produced by the assessee- (M/s Vam-Hi-Fashion Garments Pvt. Ltd. Versus ACIT, Range-17, New Delhi- 2016  ITAT DELHI).
  • Income Tax : Stay application – looking at the manner in which the petitioner has been dealt with by the AO in regard to its stay application it would be in the interest of justice that the application for stay filed by the petitioner be heard by another Officer different from the Assessing Officer- (Piramal Fund Management Pvt. Ltd. Versus Deputy Commissioner of Income Tax Mumbai And Others – 2016 BOMBAY HIGH COURT).
  • CBDT enables electronic filing of forms-ITR 1, 4S, 15CA, 15CB & 15CC; other ITR forms to be enabled shortly, CBDT press release dated 04-04-2016.
  • CBDT releases e-filing vault: new facility to add higher security to e-filing accounts of taxpayers, press release dated 04-04-2016.

INDIRECT TAX :

  • Service Tax: Selling/supplying coffee and tea, through vending machines installed at their customer’s premises and charging consideration at fixed rate per cup, prima facie, amounts to sale and not liable to service tax under outdoor catering
  • Service Tax: Exchange rate notified vide notification no. 47/2016 dated 04/04/2016 Cenvat Credit allowability on the inputs used in the manufacture of exempted goods or non dutiable goods – Cenvat Credit on the inputs used in the process which does not amount to manufacture is admissible- (Commissioner of Central Excise & Customs, Aurangabad Versus M/s Fine Packaging Pvt Ltd – 2016 CESTAT MUMBAI)
  • VAT and Sales : Tax Selling/supplying coffee and tea, through vending machines installed at their customer’s premises and charging consideration at fixed rate per cup, prima facie, amounts to sale and not liable to service tax under outdoor catering, so it will be chargeable under VAT not on see service tax.

OTHER UPDATES

  • RBI cuts repo rate by 25 bps to 6.5%, being lowest repo rate in 6 years, CRR kept unchanged at 4%.

KEY DATES :

  • Payment of TDS u/s 194IA deducted on purchase of property/TCS collected in March: 07/04/2016
  • Submission of Forms received in March to IT Commissioner: 07/04/2016- Form No. 27C(TCS).

“Reflection Cannot Be Seen In Boiling Water,  The Same Way, Truth Cannot Be Seen In A State Of Anger.”

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CORPORATE AND PROFESSIONAL UPDATE APRIL 5, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 5, 2016

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DIRECT TAX:

  • Income Tax: Revision u/s 263 – denial of benefit U/s 11 and 12 and not allowing depreciation -AO has formed one of the view but the ld CIT(Exemption) has formed another view on same facts and circumstances, therefore, change of opinion is not permissible under the law – revision set aside – Tri
  • Income Tax: Interest earned on NSCs taxed – Since in the present case the NSCs were due way back on the date of maturity, therefore, the interest earned on the said NSCs are required to be added to the income of the assessee in the current assessment year. – Tri
  • Income Tax: Disallowance of depreciation on software purchased by assessee – assessee could not produce the details whether it has hardware strength of installing such software – It is also not established that what are the compelling reasons for the assessee to waive the compensation of the software destroyed which are not of small value – additions confirmed – Tri

 INDIRECT TAX :

  • Service Tax: Rejection of refund claim on the ground that services exported are not taxable services – Unutilized CENVAT credit filed under Rule 5 of CCR, 2004 – Refund allowed – Tri
  • EXCISE : Central Excise:Power of review of Commissioner (Appeals) order or order of Principal Commissioner/ Commissioner as an adjudicating authority vests with the Committee of Commissioners and Committee of Chief Commissioners respectively and there is no provision for reviewing the same order twice.
  • VAT and Sales Tax: Condonation of delay – . It does not demonstrate that the Government or the Department concerned was vigilant, serious and attentive and did its best to protect the public revenue. Therefore, delay cannot be condoned – HC

KEY DATES

  • Payment of TDS u/s 194IA deducted on purchase of property/TCS collected in March: 07/04/2016
  • Submission of Forms received in March to IT Commissioner: 07/04/2016- Form No. 27C(TCS).

 “Just when I think I have learned the way to live, life changes.” 

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CORPORATE AND PROFESSIONAL UPDATE APRIL 4, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 4, 2016

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DIRECT TAX:

  • Income Tax: Security deposit collected from its members refundable – whether receipts does not partake the character of income? – Held No- ( Gulmohar Greens Golf and Country Club Ltd. Versus DCIT, Ahmedabad – 2016 ITAT AHMEDABAD).
  • Income Tax: Exemption u/s 54B – assessee has purchased agricultural land in the name of his wife and the payment was made by the assessee from his own source through banking channel – assessee is entitled for the benefit of deduction u/s 54B- (Jai Prakash S/o. Sh. Girdhari Lal Versus ITO Ward-1  ITAT DELHI)

INDIRECT TAX :

  • Service Tax : ST counted from date of receipt of export proceeds and not from date of export Cenvat Credit : Export of services is complete only after receipt of consideration towards same; hence, service exporters may claim refund of utilized Cenvat credit within time-allowed under section 11B, viz., 1 year from date of receipt of consideration [2016] (Bangalore – CESTAT) Infosys Technologies Ltd. v. Commissioner of Service Tax.
  • Service Tax : Benefit of SSI Exemption – Appellant s name of the company itself is M/s. Elac Marketing Pvt. Ltd. The company name itself has the word Elac which is part of the company s name and the appellants cleared the goods indicating their company name Elac followed with Excel . Therefore it cannot be construed that they have affixed brand name of other person- (M/s. Elac Marketing Pvt. Ltd. And Shri K.S. Ganesh, Director Versus Commissioner of Central Excise, Chennai-II – 2016  CESTAT CHENNAI).
  • Service Tax : Interest on refund – respondent-assessee is not entitled to interest on delayed refund because the department has sanctioned the refund within a period of three months from the date of receipt of the application for refund as per the requirement in law- (Commissioner of Central Excise, Pune-III Versus Suresh Enterprises – 2016 (3) TMI 1045 – CESTAT MUMBAI)

KEY DATES:

  • Payment of TDS u/s 194IA deducted on purchase of property/TCS collected in March: 07/04/2016
  • Submission of Forms received in March to IT Commissioner: 07/04/2016- Form No. 27C(TCS).

Never stop learning. If you learn one new thing every day, you will overcome 99% of your competition

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CORPORATE AND PROFESSIONAL UPDATE APRIL 2, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 2, 2016

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DIRECT TAX:

  • Income Tax: Tax Dept notifies new ITRs : People with an income of more than Rs. 50 lakh per annum and having the pleasure of owning a yacht, aircraft or valuable jewellery will now have to disclose these costly assets with the I-T department notifying a new set of Income Tax Return (ITR) forms for assessment year 2016-17
  • Income Tax: First time home buyers from April 1st will get additional tax benefit for purchase of residential properties of value up to Rs 50 lakh. The government’s proposal coming into force from April 1st  is  aimed at promoting its ‘housing for all’ scheme and bolster the real estate sector which is facing a huge slowdown for last three-four years.)

 INDIRECT TAX :

  • Service Tax : CBEC specifies ‘point of taxation’ for change in reverse charge liability POINT OF TAXATION (SECOND AMENDMENT) RULES, 2016 – AMENDMENT IN RULE 7 NOTIFICATION NO.21/2016-ST,  DATED 30-3-2016.
  • Service Tax : Since company is a separate and independent entity, service tax dues payable by director (or director’s proprietorship firm) cannot be recovered from company; hence, attachment of company’s bank account was raised – [2016] 67 taxmann 273 (Madras)

KEY DATES :

  • Payment of TDS u/s 194IA deducted on purchase of property/TCS collected in March: 07/04/2016
  • Submission of Forms received in March to IT Commissioner: 07/04/2016- Form No. 27C(TCS).

“Heart is a bottle of perfume.  If you never open it, nobody knows the fragrance inside.  If always kept open, you lose your fragrance. Open it for People who touch your Heart”

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