CORPORATE AND PROFESSIONAL UPDATE SEPT 8, 2016

Professional Update For the Day:

Untitled8DIRECT TAX:

Rajasthan High Court in the below citied case held that once it has been held as deemed income of the assessee or an addition u/s.68, has been made the character of the said amount/addition will not remain as a loan or deposit and section 269-SS will not be applicable. Hence no penalty u/s 271D shall be imposed. (Gyarsi Lal Vijay Vs. CIT & Others)

Madras High Court in the below citied case held that In between agricultural land and the nearest municipality, if there is a mountain, or lake or private lands or government properties, and in such other cases, where the public has no access to reach the municipality, the distance has to be measured only through the access road and not in a straight line or horizontal plane.(The CIT, Chennai Vs. Dr. R. Rangarajan)

CBDT has entered 20 unilateral advance pricing agreements (APAs) with Indian taxpayers on 29-30 Aug 2016 in order to reduce litigation by providing certainty in transfer pricing.

INDIRECT TAX:

CBEC amended the Notification No. 25/2012- Service Tax dated 20/06/2012 vide Notification no. 39/2016 dated on 02/09/2016. In the said notification, in the first paragraph, in entry 62, for the words and figures “during the financial year 2015-16”, the words, figures and letters “during the period prior to 1st April, 2016” shall be substituted. (Click here to view)

Where only service of Clinical Research is provided then such service would be not taxable under the Act in light of Rule 3 of the Place of Provision of Services (POP) Rules 2012 as the applicant renders said services to its customers and the place of provision is located outside India (M/s Steps Therapeutics Limited, Hyderabad Versus Commissioner of Customs)-2016 (9) TMI 143 – AUTHORITY FOR ADVANCE RULINGS – Service Tax

All religious places shall be considered to fall within the purview of clause (a) of entry 5 of Notification No. 25/2012- Service Tax, to be exempted from payment of service tax. No. 40/2016-Service Tax.  [F. No.3354/45/2016 -TRU]

MCA UPDATE:

MCA: The Ministry of Corporate Affairs has amended the Investor Education and protection Fund Authority (Appointment of Chairperson and Members, holding of meeting and provision for offices and officers) Rules, 2016. These rules may be called the Investor Education and protection Fund Authority (Appointment of Chairperson and Members, holding of meeting and provision for offices and officers) Amendment Rules, 2016. They shall come into force on the date of their publication in the Official Gazette. In the said rule after rule 3, Rule 3A inserted.

“3A. The Authority shall be a body corporate by the name aforesaid having perpetual succession and a common seal with power to acquire, hold and dispose of property both movable and immovable, and to contract and shall, by the said name, sue or be sued.”

MCA: IEPF Forms are likely to be available on the IEPF portal w.e.f 7th Sep 2016.

MCA: The Central Govt. designates as Special Courts for Chhattisgarh, Rajasthan, Punjab, Haryana, UT of Chandigarh, UT of Puducherry, Manipur and some Distrct of Tamilnadu for the purposes of providing speedy trial of offences punishable with imprisonment of two years or more under the Companies Act, 2013 – F. No. 01/12/2009-CL-I (Vol-IV), dt.01.09.2016.

MCA made Annual filing forms available for Companies Act, 1956 – Form 23AC, Form 23ACA, Form 23B, Form 20B, Form 21A, Form 66 on MCA21 Forms Download page. Further, IEPF Forms are likely to be available on the IEPF portal with effect from 07.09.2016.

Provisions of Companies Act, 2013 relating to IEPF (Investors Education and Protection Fund) to be effective from 07.09.2016.

CLB if inclined to injunct appellants from using information derived from statutory records, would have to first deal with the submission that it would have no jurisdiction to prevent them from using information. [Jasmohan Singh vs. Freeze King Ind (P.) Ltd. High Court Of Delhi].

GST UPDATE:

Under GST, registration required in each state from where supplies to be made. File 3 Returns p.m. for each Registration & 1 Annual Return. (Min 37 per regn)

Under GST, Department  to nominate Chartered / Cost Accountant for Special Audit if in scrutiny etc it seems that value has not been correctly declared or excess credit is availed.

Under GST, mandatory audit of books of account of all registered persons shall be carried on by Chartered/ Cost Accountant, if the turnover in Financial Year exceeds the specified limit.

OTHER UPDATE

DIPP has clarified that Internet broadcasting companies shall also come under the purview of statutory licensing under section 31D of the Copyright Act.

ESIC raises wage threshold to Rs 21,000 w.e.f 1st October, 2016.

IDBI entitled to auction property if it had issued notice to borrower prior to attachment order passed by TRO Suresh Kumar Goyal v. Chief Commissioner of Income-tax-2 [2016] 73 taxmann.com 10 (Delhi)

COMPAT rejected time barred complaint of unfair trade practices Wing Commander S.K. Puri v. Swatantra Land & Finance (P.) Ltd. [2016] 72 taxmann.com 336 (CAT – New Delhi)

Appellant couldn’t be held guilty of unauthorized dealing in Forex in absence of any evidence Prakash Bafna v. Special Director , Directorate of Enforcement [2016] 72 taxmann.com 354 (ATFFE – New Delhi)

DGFT has amended the Clause 3(1)(i)(h) of Foreign Trade to allow individuals to import CIF value of consumer electronic items at any one time for personal use upto Rs. 50,000/-.

Last date for MEF 2016-17 is 10.09.16. Members are requested to apply at www.meficai.org.

Key Dates:

E-Payment of TDS/TCS deduced/collected for the month of August: 07/09/2016

Submission of Form No. 27C (TCS) received in August to IT Commissioner: – 07/09/2016

ER-1 Return for Non SSI assessee for the month of August: – 10/09/2016

ER-2 Return for EOUs for the month of August: – 10/09/2016

TDS Return for June quarter in DVAT-48:- 10/09/2016

The key to happiness is not that you never get angry, upset, frustrated, irritated or depressed it is actually, how fast you get out of it.

Education is the key to unlock the golden door of freedom.  – George Washington Carver

Our hopes and dreams should be like hair and nail, no matter how many times they get cut, but they never stop growing.

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Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

  Continue reading

CORPORATE AND PROFESSIONAL UPDATE SEPT 5, 2016

Professional Update For the Day:

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DIRECT TAX:

SAFEMA : It is only when link or nexus of properties with convict/detenue or to income from such illegal activity is established, properties standing even in name of a relative can be forfeited Competent Authority v. M. Khader Moideen[2016] 72 taxmann.com 283 (Madras)

IT: Eligibility of exemption u/s 54F(4) – the entire amount which was subject to capital gain tax had not been utilized for the purpose of construction of new house nor were the unutilized amounts deposited in the notified Bank Accounts – No exemption – Humayun Suleman Merchant Vs The CCIT-XVII, Mumbai and Anr. (2016 (9) TMI 70 – Bombay High Court)

IT: Without using the services of the directors the key decisions of the business cannot be taken. Therefore it is essential to give remuneration as per Rules and Regulations of the company. In view of this expenditure is allowable as business expenditure – Rangoli Projects Pvt. Ltd. Vs ITO, Ward-15 (2), New Delhi (2016 (9) TMI 67 – ITAT Delhi)

University not wholly or substantially financed by government is not eligible for exemption u/s 10(23)(iiiab). [Visvesvaraya Technological University vs. ACIT (Supreme Court of India)].

INDIRECT TAX:

Refund will be allowed where the contract is for a fixed amount and it has been categorically recorded in the impugned order that no excise duty incidence has been passed on by the respondent to NHAI. NHAI also categorically certified to that effect. (CCE, Raipur Versus M/s Ircon International Ltd.)- 2016 (8) TMI 1022 – CESTAT NEW DELHI – Central Excise

where on account of delay in delivery of manufactured goods is liable to pay a lesser amount that the generically agreed price as a result of a clause (in the agreement), stipulating variation in the price, on account the liablility to “liquidated damages”, irrespective of whether the clause is titled “penalty” or “liquidated damages”, the resultant price would be the “transaction value.( M/s Kalpana Chemicals Versus CCE, C & ST, Hyderabad – III) – 2016 (8) TMI 1024 – CESTAT HYDERABAD – Central Excise

ST: CENVAT credit – an assessee cannot be denied the benefit of Cenvat Credit of duty on the ground that no manufacturing activity was involved when the assessee has admittedly cleared its final product on payment of duty – M/s. Hindustan Unilever Ltd. Versus C.E. & S.T. Jabalpur (2016 (9) TMI 96 – CESTAT New Delhi)

Full receipt of Singaporean sub-contractor to develop ‘T3 Terminal’, Delhi Airport is taxable AUTHORITY FOR ADVANCE RULINGS (INCOME TAX) NEW DELHI MERO Asia Pacific (P.) Ltd., In re[2016] 73 taxmann.com 17 (AAR – New Delhi)

GST UPDATE

GST exemption for traders having turnover up to 25 lakhs: Revenue Secretary Source: www.businesstoday.in

RBI UPDATES:-

RBI on Thursday directed credit information companies (CIC) to provide free credit reports in full to individuals whose credit score is maintained with the agency, effective January 1.

RBI has issued a master circular – Non-Banking Financial Company –Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions, 2016 vide Master Direction No.  DNBR.PD.007/03.10.119/2016-17 dated 01/09/2016.

RBI has issued a master circular – Non-Banking Financial Company-Systemically Important Non-Deposit taking Company and deposit taking company (Reserve Bank) Directions, 2016vide Master Direction No.  DNBR.PD.008/03.10.119/2016-17 dated 01/09/2016.

MCA UPDATE:

Ministry of Corporate Affairs vide General Circular No. 8/2016 dated 29.07.2016, has extended the date to file financial Statements or Annual Returns on or before 29.10.2016, where due date for holding of AGM is on or after 1st April, 2016, without payment of additional fees.

KEY DATES:

E-Payment of Service Tax for August by Companies: 06/09/2016

E-Payment of TDS/TCS deduced/collected for the month of August: 07/09/2016

Submission of Form No. 27C (TCS) received in August to IT Commissioner:- 07/09/2016

Intelligence is the ability to adapt to change.       -Stephen Hawking

We make a living by what we get, but we make a life by what we give.

Discipline is the bridge between goals and accomplishment.        -Jim Rohn

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FOR FURTHER QUERIES CONTACT US:

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Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

CORPORATE AND PROFESSIONAL UPDATE SEPT 3, 2016

Professional Update For the Day:

Untitled8

Direct Tax:

IT: TDS u/s 194C – non tds on Vehicle / dumper Hire Charges – No contract either verbal or written is entered into with the owners / drivers in these cases of purely temporary transporting arrangements – No disallowance – ACIT, Cir-1, Asansol Vs. Raja Transport (2016 (8) TMI 1046 – ITAT Kolkata)

CBDT: Income Tax Notices mandatorily to have email IDs & contact details to reduce interaction with the officials.

Sum received from developer due to hardship caused on redevelopment of flat not a revenue receipt Jitendra Kumar Soneja v. Income-tax Officer, Ward 6(3)(3), Mumbai[2016] 72 taxmann.com 318 (Mumbai – Trib.)

Sec. 50(1)(iii) doesn’t contemplate usage of acquired property falling within the block of assets Indogem v. Income-tax Officer- 19 (1) (5), Mumbai [2016] 72 taxmann.com 315 (Mumbai – Trib.).

Secured asset rightly taken by Commissioner as tenant failed to show that tenancy existed prior to mortgage Otoklin Global Business v.State of Maharashtra [2016] 72 taxmann.com 213 (Bombay).

No tax on income from offshore supplies as supplier had no agency PE in India Ion Geophysical Corporation v. Deputy Commissioner of Income-tax, Circle-2, Dehradun [2016]2 taxmann.com 298 (Delhi – Trib.)

 IT: Reopening of assessment – the information was available only in the valuation report. Giving the information in this manner shall be of no help to the appellant as the AO was not expected to go through the said information available in the valuation report for the purpose of ascertaining the actual construction of the plot – M/s Girilal & Company Vs. ITO, Mumbai & Others (2016 (8) TMI 1010 – Supreme Court).

IT: Addition u/s 68 – the loan which has been returned to the respective creditors cannot be taxed in the hands of assessee as its income – DCIT, Cir-6(1), New Delhi Vs. Minda Investment Ltd. and Vica-Versa (2016 (8) TMI 1007 – ITAT Delhi)

SC dismisses Revenue’s appeal against Rajasthan HC ruling in Hissaria Brothers deleting penalty u/s 271D/E for Sec 269SS/T default (accepting/repaying loan in cash). HC had held that penalty order was barred by limitation under clause (c) of Sec. 275(1) which prescribes six months’ time-limit rejecting Revenue’s contention that the case would fall under clause (a) of Sec. 275(1) which provides for extended period of limitation commensurating with completion of appellate proceedings.[TS-471-SC-2016]

IT: Addition u/s 145A – inclusion of service tax as part of trading receipts – ection 145A of the Act would have no application in cases where service is provided by the Assessee – CIT-2, Mumbai Vs Knight Frank (India) Pvt. Ltd. (2016 (8) TMI 1096 – BOMBAY HIGH COURT)

IT: Exemption u/sec. 54F – net consideration computation to be invested or value fixed u/s 50C as stamp valuation – Under provisions of Sec. 54F of the Act net consideration has to be invested in the Residential property but not the deeming value being fiction – Shri. R. Srinivasan (HUF) Vs ITO, Ward-I (1), Trichy (2016 (8) TMI 1092 – ITAT CHENNAI

Indirect Tax:

ST: CENVAT credit CHA services are utilized by the appellant before the goods were loaded on to the ship and therefore the same falls within the definition of input services- Kennametal India Ltd. Vs. CST, Large Taxpayers Unit (2016 (8) TMI 1031 – CESTAT Bangalore)

No penalty will be imposed on non filling of ER-5 and ER-6 returns within the period prescribed – contravention is only a procedural violation and subsequently the required return has been filed.(M/s Dharampal Satyapal Ltd. Versus C.C.E. Delhi-II) – 2016 (8) TMI 1021 – CESTAT NEW DELHI – Central Excise

HC rules in favour of assessee, directs unconditional release of seized imported goods u/s 110(2) of Customs Act absent show cause notice within 6 months from seizure as contemplated u/s 124(a); Rejects Revenue’s ‘strange’ stand that there was no seizure at all and hence, the limitation for notice would not apply, in view of the order passed in application for provisional release u/s 110-A. [TS-336-HC-2016(MAD)-CUST]

FAQ on Company Law:

Query :  One of our client companies is a section 8 company, and its AGM is scheduled to be conducted in September, and company has sent notice of AGM with proxy form. A member of the company has appointed another as proxy to present in AGM on his behalf and such person is not a member of the section 8 company. Whether such person can be appointed as proxy or membership is precondition to be eligible to be proxy ?

Answer : As per SS-2, a member of section 8 company may appoint proxy on his behalf to another person if such person is also a member of the section 8 company, no other person can be appointed as proxy if such person is also not a member.

Therefore, only a member of the section 8 company may be appointed as proxy for another member.

Here, in this case, member of the company cannot appoint such person.

Query:   An Indian registered Private Limited company has transferred their shares, which were rightly held by its two directors equally, to an Australian company and company further wants to issue shares to that Australian company also, means FDI which is covered under automatic route.

Now my question is whether company required to open share application account separately for that transaction or can get share capital in its current account. Is it mandatory to open share application account?

Answer:  After the transfer of shares to that Australian company, that company has become the shareholder of the company.

Now, if company allots further shares to it through Rights issue of shares, then there shall not be any requirement of opening any account separately.

But if company wants to allot shares through Private placement, then as per section 42(6) of the companies act 2013, monies received on application shall be kept in a separate bank account in scheduled bank and which shall not be utilized for any purpose other than –

(i)    For adjustment against allotment of securities; or

(ii)  For the repayment of monies where the company is unable to allot securities.

Key Dates:

Filing of ITR returns by Individuals, HUF (With Audit): 30/09/2016

Filing of ITR returns by all companies (except TP audit): 30/09/2016

E-Payment of Service Tax for August by Companies: 06/09/2016

E-Payment of TDS for August : 07/09/2016

Success is not Accidental, It Is hard work, perseverance, learning, studying, sacrifice and most of all, love of what you are doing.

Everyone may not be nice but there is something nice in everyone.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

REQUIREMENT OF REGISTRATION LIABILITY UNDER GST LAW (SCHEDULE III) :

REQUIREMENT OF REGISTRATION LIABILITY UNDER GST LAW (SCHEDULE III) :GST FIRST LOOK

  1. Every supplier shall be liable to be registered under GST Act in the State from where he makes a taxable supply of goods and/or services if his aggregate turnover in a financial year exceeds [Rs. 9 (Nine) lakh] [The threshold limit of Rs. 4 (four) lakh will apply only if the taxable person conducts his business in any of the North East States including Sikkim.]

North Eastern State includes Seven Sister States (Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, and Tripura), and the Himalayan state of Sikkim.

The supplier shall not be liable to registration if his aggregate turnover consists of only goods and/or services which are not liable to tax under this Act.

  1. Every person who is already registered or holds a license under an earlier law (like Excise Law, VAT Law, CST Law etc), shall be liable to be registered under this Act with effect from the appointed day.
  1. The following categories of persons shall be compulsorily  required to be registered under GST Act: (Limit of Rs.9 lakh /4 lakh is not available to following)

(i) persons making any inter-State taxable supply,

(ii) casual taxable persons,

(iii) persons who are required to pay tax under reverse charge,

(iv) non-resident taxable persons,

(v) persons who are required to deduct tax under section 37;

(vi) persons who supply goods and/or services on behalf of other registered

taxable persons whether as an agent or otherwise,

(vii) input service distributor;

(viii) persons who supply goods and/or services, other than branded services, through electronic commerce operator,

(ix) every electronic commerce operator,

(x) an aggregator who supplies services under his brand name or his trade name, irrespective of the threshold limit of 9 lakh/4 lakh and

(xi) such other person or class of persons as may be notified by the Central Government or a State Government on the recommendations of the Council.

GST OTHER UPDATE

Under GST, apply for registration in 30 days to get input tax credit for period prior to registration. Else get ITC from data of registration.

Under GST; TDS @ 1% will be applicable on notified supplies for contracts exceeding Rs. 10 lacs in value. TDS deposit by 10th of next month.

Under GST no refund up to 1000 in GST. Only declaration for refund less than 5 lacs. Prescribed documents for refund of 5 lacs & above.

Under GST, refund of ITC allowed at end of Tax Period for exports & where ITC accumulated due to input tax rate higher than output tax rate.

GST will make consumer goods cheaper, boost jobs: CBEC Spelling out benefits of the Goods and Services Tax (GST), the revenue department on Monday said it will make consumer goods cheaper, increase consumption and generate more employment by enhancing economic activity.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

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Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

GOODS AND SERVICES TAX CONSTITUTIONAL AMENDMENT BILL (GST BILL), ONE STEP FORWARD

GOODS AND SERVICES TAX CONSTITUTIONAL AMENDMENT BILL (GST BILL), ONE STEP FORWARD

India, how beneficial is it with goods and service tax(GST)

Till now 16 states have ratified the GST Constitutional Amendment Bill (GST Bill) after it was passed in the RAJYA SABHA on 3 August. Just 2 away from the magic number of 16 required to complete this step of constitution amendment process. Next Step, assent by President of India.

Constitutional Amendment Bill on 01.09.2016, the Central Govt. may seek President’s assent on it. Let’s take a stock of which all states have ratified the GST Bill and where are the remaining states in terms of ratifying the GST Bill. 14 states that have ratified the Bill include

1. Assam,
2. Bihar,
3. Jharkhand,
4. Himachal Pradesh,
5. Chhattisgarh,
6. Gujarat,
7. Madhya Pradesh,
8. Delhi,
9. Nagaland,
10. Mahrashtra,
11. Haryana,
12. Telangana,
13. Mizoram,
14. Sikkim

15 . Goa

16 Odisha

 

The Central Govt. is planning to advance the winter session of parliament to pass GST Bill as the ratification of the GST Constitutional Amendment Bill by at least 50% States is expected to be completed by 10th Sep’ 2016. Eight States have already ratified the same. The State of West Bengal has put on HOLD the ratification indefinitely.

We look forward for your valuable comments. www.carajput.com

FOR FURTHER QUERIES CONTACT US:

W: www.carajput.com         E: info@carajput.com       T: 011-233-4-3333, 9-555-555-480

Disclaimer:

All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications.

 

CORPORATE AND PROFESSIONAL UPDATE SEPT 2,2016

Professional Update For the Day:

Untitled21A

DIRECT TAX:

No tax on income from offshore supplies as supplier had no agency PE in India.

No cancellation of trust’s registration just because its main income was from interest and miscellaneous receipt.

CBDT Extends due date for quarterly furnishing of Form 15G/155H

Income Tax Authorities must mention official e-mail Ids & phone/fax no in all notices/letters issued to taxpayers. F No 225/214/2016/ITA.II of 30-8-2016.

No tax on income from offshore supplies as supplier had no agency PE in India.

The CBDT vide Circular no. 30/2016 dated. 26 Aug. 2016 has streamlined the process for ‘Port Clearance/ No Objection Certificates and Voyage Return/ Assessment’ in the case of foreign shipping companies

No cancellation of trust’s registration just because its main income was from interest and miscellaneous receipt.

Extension of due dates of Form 15G/H received during 1.10.2015- 31.3.2016 & for Q1 of 2016-17, to31.10.2016; & for Q2 of 2016-17, to 31.12.2016. CBDT notification no 10/2016.

SC dismisses review petition against its earlier order dated April 22, 2016 denying exemption u/s 10(23C)(iiiab) to Visvesvaraya Technological University (‘VTU’ ) on the ground that it doesn’t satisfy the condition of being an institution ‘wholly or substantially financed by the Govt.’ for AYs 2004-05 to 2009-10. It Rejected VTU’s contention that ‘fees of all kinds collected’ must be regarded as receipts from Govt.[TS-465-SC-2016]

ITAT pune in the below citied case held that The payments made by assessee to Gensler-USA were merely for project specific drawings & designs without transfer of technology or know-how or even title in drawing & designs and not in the nature of “Royalty” or “Fee for Technical Services u/s 195.[Gera Developments Pvt. Ltd. Vs. DCIT, (Int. Tax), Pune]

INDIRECT TAX:

Recovery of CENVAT credit imposition of interest and penalty machine tool accessories, tips and Inserts CHA service for export of goods Held that – the ownership of the goods and the risk related thereto remains with the appellant up to the loading of the goods on the ship at the port of shipment. Further, Section 4 of the Central Excise Act, 1944, inter alia, states that the place of removal is any other place from where the excisable goods are to be sold after the clearance from the factory. ( Kennametal India Ltd. Versus Commissioner of Central Excise, Large Taxpayers Unit) – 2016 (8) TMI 1031 – CESTAT BANGALORE – Service Tax

Cenvat credit – manpower supply services – availed the input service in their manufacturing activity – whether 75% of service tax payable by the respondent should be considered as ineligible for credit when the provider of service was to pay only 25% of service tax having been paid 100 of the service tax – Held that – 75% of the service tax, which is sought to be denied is admittedly paid to the Government by the provider of service instead of recipient of service.( M/s. Prime Ispat Ltd. Versus CC and CE, Raipur) – 2016 (8) TMI 1026 – CESTAT NEW DELHI – Central Excise

The state of Jammu & Kashmir CBDT further extends the ‘due-date’ for filing Return of Income from 31st August, 2016 to 30th September, 2016.

COM VAT issued the notification:

  • Order dt.31/8/16 enhancing DVAT Refunds jurisdiction of AO’s, Addl. Com/JC’s & Spl.Com.
  • No.658 dated 24/8/16 reg. Withdrawal of mandatory requirement of filing DVAT return with Digital Signatures.
  • Circular No.13 dated.31/08/2016 extending the Q1 2016-17 DVAT returns up to 10/09/2016.

DVAT Last date extended for filing the return for Q1 2016-17 by 10 days and also to find out the ways to improve the system STBA.

GST UPDATE

GST: The Central Govt. is planning to advance the winter session of parliament to pass GST Bill as the ratification of the GST Constitutional Amendment Bill by at least 50% States is expected to be completed by 10th Sep’ 2016. Eight States have already ratified the same. The State of West Bengal has put on HOLD the ratification indefinitely.

GST: With Odisha has become the 16th States to ratify the GST Constitutional Amendment Bill on 01.09.2016, the Central Govt. may seek President’s assent on it. The complete list of States are: 1. Assam; 2. Bihar; 3. Jharkhand; 4. Himachal Pradesh; 5. Chhattisgarh; 6. Gujarat; 7. Madhya Pradesh; 8. Delhi; 9. Nagaland: 10. Maharashtra; and 11. Haryana; 12. Telengana; 13. Mizoram; 14. Sikkim; 15. Goa; and 16. Odisha.

Under GST; TDS @ 1% will be applicable on notified supplies for contracts exceeding Rs. 10 lacs in value. TDS deposit by 10th of next month.

Under GST, refund of ITC allowed at end of Tax Period for exports & where ITC accumulated due to input tax rate higher than output tax rate.

GST will make consumer goods cheaper, boost jobs: CBEC Spelling out benefits of the Goods and Services Tax (GST), the revenue department on Monday said it will make consumer goods cheaper, increase consumption and generate more employment by enhancing economic activity.

FAQ on Company Law:

Query:  One of our client company has appointed Additional Director during the year subject to vacation of office upto ensuing annual general meeting of the company. AGM of the company was scheduled to be called on 15th Sept, but due to unforeseen reasons, company was not able to conduct AGM till 30th September. Our query is whether such Additional Director may hold office afterwards as well as AGM has not been held?

Answer:  As per the provision of Section 161 of Companies Act 2013, the articles of a company may confer on its Board of directors the power to appoint, other than person who fails to get appointed as a director in general meeting, as an Additional Director at any time who shall hold office upto the date of next annual general meeting or the last date on which Annual general meeting should have been held, whichever is earlier.

Here, in this case, AGM was not held upto due date of AGM, i.e 30th September but as per provisions, he may hold office upto the date of AGM or the day on which AGM should have been held , whichever is earlier. Therefore, he shall not hold office afterwards.

Query:  We have a query as whether a company is required to consolidate the financials of LLP, which is its subsidiary, along with its financials?

Answer:   As per Rule 6 of Companies (Accounts) Rules, 2014, it is provided that consolidation of financial statements of a company shall be done in accordance with the provisions of Schedule III to the Companies Act, 2013 and the applicable Accounting Standards.

As per the definition of subsidiary as defined under Accounting Standard (AS) 21, an enterprise controlled by the parent is required to be consolidated. The term ‘enterprise’ includes a company and any enterprise other than a company. Therefore, under AS also, LLPs and partnership firms are required to be consolidated.

Query:  Whether Form DIR-11 is required to be filed in case of vacation of director under Se3ction 167 of Companies Act 2013?

Answer: No, as per  Section 168 (1) of the Companies Act, 2013 read with Rule 16 of Companies (Appointment and Qualification of Directors) Rules, 2014,  Form DIR-11 is required to be filed in case of resignation of director from his office within a period of thirty days from the date of resignation.

RBI UPDATE

RBI has issued Master Directions for NBFC Cos on six subjects. The subjects on which Master Directions have been issued are Exemptions from the provisions of RBI Act, 1934.

ICAI Update

Last date for MEF 2016-17 is 10/09/16. Members are requested to apply at www.meficai.org.

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All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.
The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

CORPORATE AND PROFESSIONAL UPDATE JULY 16, 2016

Professional Update For the Day:

blog-rja-with-image

DIRECT TAX:

Income Tax : Penalty levied for excess claim of unabsorbed depreciation u/s 115JB; ITAT denies theory of carry backward of losses SBI DFHI Ltd. v. Assistant Commissioner of Income-tax, Range-2 (1), Mumbai [2016] 71 taxmann.com 178 (Mumbai – Trib.)

Income Tax : Sec. 11 amendment which debars dual deduction to trust on purchase of asset doesn’t have retro-effect Commissioner of Income-tax (Exemptions), Bangalore v. Bangalore Baptist Hospital Society [2016] 71 taxmann.com 192 (Karnataka)

Income Tax: Exemption u/s 11 will be allowed on the income generated out of the auditorium which is held under trust of the society for the purpose of generating fund. ITAT Chennai held that the income generated out of the auditorium was used to the objects of the trust. [M/s The Association of Surgeons of India, C/o Shri S. Sridhar, Advocate Vs. The DDIT (Exemptions) – I, Chennai]

INDIRECT TAX:

Excise : CBEC has issued a circular on procedure regarding duty free shop vide circular no. 32/2016 dated 13.07.2016. It may be noted that the Special Warehouse (Custody & Handling of Goods) Regulations, 2016 prescribe maintenance of a computerized system for accounting. Accordingly, a system of accounting of receipt, storage, operations and removal of goods with regard to Duty Free Shops is prescribed in the notification.

Service tax : No service tax on profit earned by principal as it can’t be said to be promoting business of job worker Radico Khaitan Ltd. v. Commissioner of Service Tax, Delhi [2016] 71 taxmann.com 141 (New Delhi – CESTAT)

COMPANY ACT UPDATE :

MCA21 will remain temporarily unavailable from 9:00 PM (16 July) to 9:00 AM (17 July). Stakeholder are advised to plan accordingly.

E-Form AOC-04 for filing Annual Financial Statement is likely to be amended w.r.t filing of CSR expenditure details. The revised AOC-04 E-Form is likely to be available on MCA portal by 3rd week of Jul-2016. Stakeholders are requested to note that filing CSR details are mandatory. Therefore, Annual filing may be planned as per revised AOC-04.

OTHER UPDATES:

SEBI : SEBI has made an amendment in the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 vide notification No. SEBI/ LAD-NRO/GN/2016-17/008 dated 08/07/2016.SEBI introduce regulation relating to “Dividend distribution Policy”.

Key dates :

Payment of ESI for the month of June-21/07/2016

E-payment of DVAT & CST for the month/quarter ended June-21/07/2016

“The search for happiness is the main reason for unhappiness. Accept life the way it comes, as a result, you will find happiness in every moment of your life.”

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Disclaimer:
All efforts are made to keep the content of this site correct and up-to-date. But, this site does not make any claim regarding the information provided on its pages as correct and up-to-date. The contents of this site cannot be treated or interpreted as a statement of law. In case, any loss or damage is caused to any person due to his/her treating or interpreting the contents of this site or any part thereof as correct, complete and up-to-date statement of law out of ignorance or otherwise, this site will not be liable in any manner whatsoever for such loss or damage.

The visitors may visit the web site of Government site Like Income Tax Department, Services Tax, Excise, Etc for resolving their doubts or for clarifications. Continue reading

CORPORATE AND PROFESSIONAL UPDATE JULY 4, 2016

Professional Update For the Day:

trademark-patent-startup-india-incentive-1050x600

DIRECT TAX:

Income Tax : Mumbai ITAT allows Sec.11 exemption on profits earned by assessee hospital from pharmacy business for AY 2006-07, upholds assessee’s claim that pharmacy business was an integral part of hospital business;  [TS-350-ITAT-2016(Mum)]

Income Tax : ITAT: Retention bonus for arresting employee attrition deductible as revenue expenditure [TS-349-ITAT-2016(DEL)]

Income Tax: Transfer-fees from outgoing member not taxable for co-operative housing society applying ‘mutuality’  [TS-346-HC-2016(BOM)]

CBDT issued 3rd clarification in the form of FAQs on the Income Declaration Scheme, 2016 Vide Circular No. 25 of 2016 dated 30.06.2016 Under the ‘Income Declaration Scheme’ tax of forty-five per cent of such undisclosed income is there. The IDS is effective from June 1, 2016 and will remain open up to September 30, 2016. The declarant is required to pay tax up to November 30, 2016. In the recent FAQs issued on June 30, 2016 the CBDT has clarified that once the person had declared undisclosed income, no question will be asked from where such income or tax is coming from. So the effective rate of tax will be 31% as you have to pay 45% on 145 i.e. amount declared and tax paid thereon.

No denial of sec. 54F relief due to two houses if taxpayer had partial interest in one of the houses  Mrs. V.R. Usha v. Income-tax Officer, Business Ward-XV(1), Chennai[2016] 70 taxmann.com 340 (Chennai – Trib.)

Interest on FD was includible in operating profit as FD was made from advances received from buyers Deputy Commissioner of Income-tax, Circle- 8 (1), Mumbai v. Bunge India (P.) Ltd. [2016] 70 taxmann.com 323 (Mumbai – Trib.)

INDIRECT TAX:

Vat & sales tax : Dealers having gross turnover above Rs. 1 Cr in F.Y. 2015-16, are required to attach DSC with form DVAT 16/DVAT 17 for Q1 of 2016-17 and onwards. Notification of 1.6.16

Excise : CBEC specified the procedure and conditions for supply of bunker fuel without payment of Central Excise duty from the warehouse of the OMCs to the eligible ships/vessels Vide Circular No. 1034/22/2016 – CX dated 01.07.2016  Excise: The time limit for taking Central excise registration of an establishment by a jeweller  is being extended up to 31.07.2016.

Custom : Clearance of bunker fuels to Indian ship/vessel carrying containerized cargo—reg. vide Circular No. 1034/22/2016-CX dated 1st July, 2016.

Excise: Time limit for excise registration by jewellers extended up to July 31, 2016 Circular No. 1033/21/2016 – CX. Dated  July 1, 2016 F. No. 354/25/2016–TRUExcise: Refund of tax paid on non-taxable services is also governed by time limit of section 11B Giriraj Construction v. Commissioner of Central Excise & Customs, Service Tax, Nasik [2016] 70 taxmann.com 303 (Mumbai – CESTAT)

Service tax : No recovery of service tax without adjudication even if tax was collected from customers: HC  Union of India v. Mrs. Prashanthi [2016] 70 taxmann.com 346 (Karnataka)

OTHER UPDATES:

RBI: As per new guideline given by RBI spelling should be written in LAKH not LAC on cheque and Bank Mandate.

Companies  (Removal of difficulties) Third Order, 2016 released by MCA. MCA order dated 30.06.2016.

Bank of Baroda invites proposal for appointment of concurrent auditors of the bank for Branches/RBOs/CBOs/Other Units vide RFP for 545 of its Branches, 22 CBOS, 13 RBOs and 3 Other Units Last date : – 21/07/2016.

Employees drawing salary of Rs.1.2Cr p.a. / 8.5Lac p.m. to be disclosed in board report. Companies (Appt. and remuneration of managerial personnel) amendment rules, 2016.

Invalid transfer of shares didn’t become valid just because petitioner didn’t dispute her sign on transfer docs Ms. Sulochana Neelkanth Kalyani v. Takle Investments Co. [2016] 70 taxmann.com 351 (Bombay)

KEY DATES

E- Payment of service tax for June: 06/07/2016

Payment of TDS for the month of June: 07/07/2016

“Knowledge is being aware of what you can do. Wisdom is knowing when not to do it.”

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CORPORATE AND PROFESSIONAL UPDATE APRIL 17, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 17, 2016
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Direct Tax:

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Royalty : Where on date of agreement entered by assessee, US company, with Indian company for providing data transmission service was in knowledge of Assessing Officer to invoke section 44D still he assessed receipt as royalties under section 9(1)(vi) at rate of 15 per cent, reopening of assessment to tax said receipt at rate of 20 per cent under section 44D was not sustainable – [2016] 68 taxmann.com 51 (Delhi – Trib.)

Very important case, in the pretext of Last Date Fiascos

NSDL releases e-TDS/TCS RPU version 1.5 from FY 2007-08 onwards on 13/04/2016.

SECTION 44BB

NON-RESIDENTS – MINERAL OIL, BUSINESS FOR PROSPECTING/EXPLORATION ETC., IN CASE

Business income : Where assessee, a Norway based company, earned revenue from contract of providing crew on vessel, since entire payments were intricately linked to services rendered in India, assessee was not justified in not offering a part of revenue to tax in India on ground that when ship was beyond 200 nautical miles from Indian shoreline, it could not be presumed to be located in India – [2016] 68 taxmann.com 135 (Delhi – Trib.)

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Adjustment – Method of computation : Where Assessing Officer considered both TNMM and also CPM and Commissioner (Appeals) decided case only under TNMM, inevitable conclusion would be that TNMM was accepted by authorities below as most appropriate method – [2016] 68 taxmann.com62 (Delhi – Trib.)

Comparables and adjustments/Adjustments/CUP/TNMM : Where purchaser, manufacturer as well as intermediary are all AEs and components purchased which constituted 86 per cent of total raw material is imported from intermediary not from manufacturer, job of TPO extends to critically evaluating materials and onus is clearly on assessee to offer a convincing and reasonable explanation – [2016] 68 taxmann.com 55 (Delhi)

Comparables and adjustments/Adjustment – Capacity/utilization : Where adjustments on account of under-utilization of capacity and difference in depreciation are factors which are likely to materially affect price or cost charged or paid, or profit arising from, such transactions in open market, Assessing Officer/TPO should allow adjustments on account of under-utilisation of capacity and also difference in depreciation method adopted by assessee and comparable companies – [2016] 68 taxmann.com 50 (Hyderabad – Trib.)

SECTION 94A

TRANSFER PRICING – TRANSACTIONS WITH PERSONS LOCATED IN NOTIFIED JURISDICTIONAL AREA

India and Cyprus entered into an agreement to avoid double taxation of income and prevention of fiscal evasion since December 1994. The impugned section 94-A (1) was notified by India, as there was no information flow from Cyprus. Petitioners filed nine petitions, challenging legality of section 94-A(1), on ground that it conferred sweeping powers upon the central government to specify any country as a notified jurisdictional area in relation to transactions entered into by any assessee, irrespective of whether such country is one, with whom a bilateral treaty has already been entered into. – [2016] 68 taxmann.com 182 (Madras)

IT : Where delay of a day in filing return was only due to technical snags of website of department on last date of filing return, such delay was to be condoned; claim of carry forward of losses could not be denied[2016] 68 taxmann.com 93 (Madras)

Regen Infrastructure & Services (P.) Ltd. v. Central Board of Direct Taxes, New Delhi* Section 139, read with section 80, of the Income-tax Act, 1961 – Return of income (Condonation of delay in filing return) – Assessment year 2010-11 – Assessee filed its return of income late by a day – Assessee’s claim of carry forward loss was not granted by department – Assessee approached CBDT and sought for condonation of delay in filing of return and explained that due to last hour rush on last day of filing of return, there were technical snags in website of department and, thus, return could not be uploaded; it could only be uploaded in midnight and, hence, date of filing had been reckoned by department as next day – CBDT rejected petitioner’s contention – Whether since petitioner had not gained anything from delay and had satisfactorily explained reason for delay in filing return, CBDT should have condoned delay of one day in filing return by assessee; mere delay should not defeat claim of assessee – Held, yes [ Para 7] [In favour of assessee]

Sum paid to witness in famous ‘Best Bakery case’ for turning hostile wasn’t unexplained payment
IT :
Where, during proceedings before Supreme Court in famous ‘Best Bakery case’, a VCD was found in which assessee was alleged to have paid money to a witness for becoming hostile and, consequently, Assessing Officer treated said amount as unexplained payment made by assessee on basis of said VCD but did not corroborate said transaction by any other evidence, action of Assessing Officer was not justified [2016] 68 taxmann.com 198 (Ahmedabad – Trib.) Mahendrabhai B. Shrivastav v. Income-tax Officer

Indirect Tax:

SERVICE TAX

SECTION 65(19) : Where under multi-level marketing concept of principal, a distributor earned monthly income in three ways – (a) difference between his purchase price and sale price as his profit margin; (b) commission received depending upon volume of purchases of Amway products; and (c) monthly commission based on volume of sale made by second level distributors, only tast category would be covered by business auxiliary service – [2016] 68taxmann.com 60 (New Delhi – CESTAT)

CBEC exempts service-tax on registration services provided by Govt. For detailed notification, send text message to my number

CBEC issues instructions for discharging of quasi-judicial functions by its officials April 14, 2016 DECISION OF CESTAT FINAL ORDER NO.40344/2016 IN CASE OF COMMISSIONER OF CUSTOMS (IMPORT) V. DO BEST INFOWAY INSTRUCTION F.NO.390/CESTAT/24/2016-JC, DATED 13-4-2016

CENVAT CREDIT RULES

RULE 3 : CENVAT CREDIT – ALLOWANCE

Where assessee, a manufacturer of sugar and molasses in its factory located in remote area, constructed dormitory within factory for stay of technicians/engineers as same may be called as and when if there was a fault in plant or machinery, it was entitled to take cenvat credit on construction services of dormitory – [2016] 68taxmann.com 47 (New Delhi – CESTAT)

CENTRAL EXCISE ACT

CLASSIFICATION – MEDICAMENT: There is distinction between house mark and product mark; a monograph on ‘ayurvedic medicine’, which only identifies manufacturer would not make such medicine a ‘patent or proprietary medicine’ and therefore, said medicine continues to be exempt from duty – [2016] 68 taxmann.com 54 (New Delhi – CESTAT)

INTEREST – ON DELAYED REFUNDS  : There is no provision for payment of interest on ‘delayed payment of interest on refunds’ in Customs/Central Excise/Service Tax law or rules made thereunder and grant of interest by High Courts under its discretionary writ jurisdiction cannot be relied upon by Tribunal to grant similar interest – [2016] 68 taxmann.com 137 (New Delhi – CESTAT)

CENTRAL EXCISE RULES

ASSESSMENT – CENTRAL EXCISE – PROVISIONAL ASSESSMENT : Upon finalization of provisional assessments, assessee is entitled for adjustment of excess paid duty/tax with short-paid duty/tax during period of provisional assessments – [2016] 68 taxmann.com 136 (Bangalore – CESTAT)

COMPETITION ACT

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

SECTION 3 : Where OP-drug manufacturer and Distributors Association refused to supply medicines to informant stockist, imposed condition on informant not to seller or supply products out side area allotted to it and appointed new distributor to its detriment, conduct of OP would be anti-competitive – [2016] 68 taxmann.com 63 (CCI)

KEY DATES:

  • Payment of ESI of March for ESI: 21/04/2016
  • Payment of MVAT and WCT TDS for March for MVAT: 21/04/2016
  • MVAT return for March (10 days extra for e-returns): 21/04/2016

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