CORPORATE AND PROFESSIONAL UPDATE JUNE 29, 2016

Professional Update For the Day:

29

DIRECT TAX:


Income Tax: Amounts deposited in “golaks” in Gurudwara doesn’t amount to anonymous donations but charity [TS-343-ITAT-2016(ASR)]

Income Tax: CBDT issued an addendum circular to Circular No. 22/2016 clarifying that no TCS u/s 206C(1D) will be levied if the cash receipt does not exceeds two lakh even if the sale consideration exceeds two laks rupees and also the tax is required to be collected at source on cash component of sale consideration not on whole of sale consideration. Vide Circular No. 23/2016 dated 24.06.2016.

Income tax : CBDT issued Income Tax (16th amendments) Rules, 2016 vide Notification No. 49/2016 dated 22th June 2016.CBDT made the amendment in Rule 10U Application of general Anti Avoidance Rule of Income tax Rules, 1962. As per the Amendments made in the 10U (1)(d) the date “30th August 2010” has been substituted with “1st day of April 2017”. Similarly, In Rule 10U (2) the date “1st day of April 2015” has been substituted with the date “1st day of April 2017”

Reopening invalid if AO records satisfaction in mechanical manner & without application of mind via {M/S Banke Bihari Properties Pvt. Ltd Vs ITO (ITAT New Delhi)}

Demolition/Redevelopment not amounts to transfer, so no withdrawal of 54F via {Shri Dilip Manhar Parekh Vs The Dy. CIT}

No TDS on commission paid outside India for services received outside India by Non-Residents via {DCIT vs. M/s Sess Resources Ltd. (ITAT Panaji)}

Denies Sec. 80P deduction to labour cooperative society outsourcing labour work [TS-342-HC-2016(P & H)]

Income Tax: Where assessee sold shares in a company and Assessing Officer, after considering all relevant facts relating to sale price of shares, taxed gain from such sale as capital gain, reopening of assessment on ground that part of consideration received by assessee was non-compete fee assessable as business income, was not justified – [2016] 70 taxmann 258 (Delhi)

Income Tax: Failure to issue notice under sec. 143(2) couldn’t be cured by resorting to deeming fiction of sec. 292BB Sanjeev Aggarwal v. Deputy Commissioner of Income-tax, Circle-1(1), Chandigarh [2016] 70 taxmann.com 265 (Chandigarh – Trib.)

Income tax : New monetary threshold for filing appeals before High Court is also applicable to pending cases Commissioner of Income-tax v. Smt. Manbhar Devi Meena [2016] 70 taxmann.com 275 (Rajasthan)

Income Tax: For purpose of considering whether shares acquired by assessee by way of gift, are long-term capital assets or not, date on which donor acquired shares is relevant and not date on which assessee acquired shares in question – [2016] 70 taxmann 258 (Delhi)

The Hon’ble Bombay High Court in the case of co-owner Smt. Chhaya B Parekh in Income Tax Appeal No. 1583 of 2012 vide judgment dated 24th January, 2013 had held that demolition of residential bungalow will not tantamount to transfer and hence the same will not be hit by provisions of section 54F(3) of the Act.( Shri Dilip Manhar Parekh Vs The Dy. CIT)

CBDT has issued Income tax (17th Amendment) Rules, 2016. It has provided  conditions for relaxation of higher TDS U/s 206AA of the Income Tax Act for  non availability of PAN card in case of Non Resident/Foreign Companies.

Income Tax : ITAT Mumbai held that CIT cannot revise assessment for making afresh examination of an issue already examined by the AO who has taken one of the possible views because there has been no erroneous order which could ordered to be revised. (M/s. Rachana Finance & Investments Pvt. Ltd. vs. CIT ) ITAT Mumbai

Income Tax : No TDS on commission paid outside India for services received outside India by Non-Residents.[DCIT vs. M/s Sess Resources Ltd. (ITAT Panaji)].

Income Tax : CBDT has issued clarification on the Income declaration scheme, 2016. Queries have been received from the public about various provisions of the Scheme. The Board has considered the same and the clarifications issued vide Circular No. 24/2016 dated 27.06.2016

Income Tax: No TDS u/s 206AA on some payments to non-residents without PAN if TIN & other specified details & documents furnished. Notification 53 of  Dated :24.6.16.

 Auditor’s opinion on Section 80P interpretation cannot be a information for reopening u/s 147. [Jaipur Sahakari Kraya Vikraya Samiti Ltd. vs. ITO (ITAT Jaipur)].

INDIRECT TAX:


Excise : Goods bearing brand name of others are ineligible for SSI-exemption and are liable to duty; hence, SSI-units can avail exemption for unbranded goods simultaneously with Cenvat credit against duty-paid on branded goods – [2016] 70 Taxmann 244 (Punjab & Haryana)

Excise : Simultaneous availment of SSI exemption on unbranded goods and credit of duty on branded goods aren’t barred  Commissioner, Central Excise Commissionerate, Panchkula v. Cure Quick Remedies (P.) Ltd. [2016] 70 taxmann.com 244 (Punjab & Haryana)

Service tax : CBEC has exempt service tax on taxable services by way of transportation of goods by a vessel from outside India up to customs station in India with respect to which the invoice for the service has been issued on or before 31st May, 2016 subject to the condition of production of customs certified copy of the import manifest or import report required to be delivered under section 30 of the Customs Act, 1962 vide Notification No. 36/2016dated 23.06.2016

Service tax : CBEC has exempt the taxable services from whole of the Krishi Kalyan Cess leviable thereon with respect to which the invoice for the service has been issued on or before 31st May, 2016 subject to the condition that the provision of the service has been completed on or before 31st May, 2016 vide Notification No. 35/2016 dated23.06.2016

CST & vat : Where against assessment order, assessee filed writ petition and High Court declined to interfere on ground that alternative remedy under VAT Act was available and no questions of law were involved, since questions raised by assessee were pure questions of law, same could be gone into a writ petition and High Court should have decided matter – [2016] 70 Taxmann 274 (SC)

CST : Where ‘C’ Form had been validly issued to a dealer and subsequently Commissioner cancelled said Form, there is no statutory power under CST Act that permit Commissioner cancellation of ‘C’ Form that has been validly issued – [2016] 70 Taxmann 255 (Delhi)

Excise: As per rule 9(5), onus of establishing that inputs have been received is on person taking credit; hence Commissioner (Appeals) cannot place onus on revenue to establish that inputs have not been received. – [2016] 70 Taxmann 279 (Mumbai – CESTAT)

Custom: DGFT vide Notification No. 12/2015 dated 24.06.2016 has made prohibition on import of milk and milk product from China. The prohibition on import of milk and milk products (including chocolates and chocolate products and candies/ confectionary/ food preparations with milk or milk solids as an ingredient) from China ineffective till 23/06/16 as per the Notification.

Excise : In exercise of power conferred under section 9(2) of Central Excise Rules 2002 the Central Board of Excise and Customs hereby specifies that A person who is registered as First Stage Dealer shall not be required to take registration as an Importer or A person who is registered as Importer shall not be required to take registration as First Stage Dealer.

Custom : HC allows duty drawback of Basic Customs Duty on export of final product, though import duty on inputs and raw materials utilized therein paid through debit in Duty Entitlement Pass Book scrip. Gujrat High Court  [TS-250-HC-2016(GUJ)-CUST]

OTHER UPDATES :


MCA : Forms AOC-4 XBRL, GNL-1, INC-6, INC-2 and CRA-2 are likely to be revised on MCA21 Company Forms Download page w.e.f 25th June 2016. Stakeholders are advised to check the latest version before filing.

Annual filing forms for Companies Act, 1956 – 23AC, 23ACA, 23B, 20B, 21A are likely to be available on MCA21 portal by mid-August 2016.

Interest rate on PPF retains at 8.1% for quarter ending September, 2016, same as stayed in 1st Quarter of 2016-17.

MCA has changed Version of e-forms MR-1 (Return of Appointment of MD/WTD/Manager), CHG-1 (Application for Registration of Creation, Modification of charge other than those related to debenture), CHG-4 (Particulars for satisfaction of charge thereof), MGT-14 (Filing of Resolutions and Agreements to the Registrar) w.e.f 7th June, 2016. The form has been updated on MCA Portal. Only new version of e-form will be acceptable. Stakeholders are requested to plan accordingly and ensure that latest version of form is downloaded for e-filing. Form- wise date of last version change is available at on the website of MCA.

RBI: RBI has issued a Circular dated 23rd June, 2016 and detailed the format/requirements of submission of Proforma Ind AS Financials. The RBI had directed banks to submit Proforma Ind AS Financial Statements from the half-year ended September 30, 2016, latest by November 30, 2016. Banks will be guided by the Ind AS notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and the Report of the Working Group on “Implementation of Ind AS by Banks in India”.

ICAI has issued FAQs regarding requirements to prepare consolidated Financial Statement dated on 24.06.2016. These FAQs on Consolidated Financial Statements have been issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI). The purpose of these FAQs is to illustrate and to assist in clarifying the requirements regarding preparation of Consolidated Financial Statements.

RBI: RBI has issued a Circular dated 23rd June, 2016 and detailed the format/requirements of submission of Proforma Ind AS Financials. The RBI had directed banks to submit Proforma Ind AS Financial Statements from the half-year ended September 30, 2016, latest by November 30, 2016. Banks will be guided by the Ind AS notified by the Ministry of Corporate Affairs under the Companies (Indian Accounting Standards) Rules, 2015 (as amended) and the Report of the Working Group on “Implementation of Ind AS by Banks in India”.

ICAI has issued FAQs regarding requirements to prepare consolidated Financial Statement dated on 24.06.2016. These FAQs on Consolidated Financial Statements have been issued by the Accounting Standards Board (ASB) of the Institute of Chartered Accountants of India (ICAI). The purpose of these FAQs is to illustrate and to assist in clarifying the requirements regarding preparation of Consolidated Financial Statements.

RBI: The Reserve Bank of India has released the Financial Stability Report (FSR) June 2016The FSR reflects the overall assessment on the stability of India’s financial system and its resilience to risks emanating from global and domestic factors. Besides, the Report also discusses issues relating to development and regulation of the financial sector.

KEY DATES :


Advance Information for 1st fortnight of July of functions with booking cost more than Rs. 1 lakh in Banquet halls; hotels etc. in Delhi in form No. BE-2 under DVAT Act. – 27-06-2016

Return in the form 26QAA by Banks for interest up to Rs. 5000 for March Quarter in Income Tax Act-30.06.2016

E-Filling of form 15G/H in respect of the period 01.10.2015 to 31.03.2016 in Form 15G/H in Income tax act-30.06.2016

Pay difference of service tax deposited on provisional basis and actual annual service tax (Where both taxable & exempt service tax provided and input credit taken on provisional basis) in challan No. GAR-7 in Service Tax Act-30.06.2016

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