RBI Governor Press Announcements highlights: RBI reduces the rate, extends the loan relief

Announcements: RBI of the Government: 22/05/2020

  1. Term loan moratorium extends to August 31, 2020-The debt moratorium will be continued to August 31 , 2020. Which gives it a six-month moratorium.
  2. Interest deferral on working capital-Interest on working capital is deferred by another 3 months, i.e. until 31 August 2020.
  3. Conversion of interest on working capital to fixed-term loans-Loan agencies is permitted to turn accrued interest on working capital facilities over the deferment period (until August 31, 2020) into a secured interest-term loan (repayable by March 31, 2021).
  4. The margin for Working Capital – Drawing Power – Lending institutions was required to return working capital margins to the original amount by 31 March 2021.
  5. Reduce the repo rate by 40 bps to 4%. The interest rate should then be reduced.
  6. Export Credits-Maximum Allowable Export Credit (Pre and Post Shipping) extended from 12 months to 15 months.
  7. Payment against imports-Extension of the time limit to allow payments against imports from 6 months to 12 months
  8. Help to EXIM Bank-Facility of Rs 15.000 crore credit line for 90 days for US dollar swap facility will be given to EXIM Bank.
  9. Extension of Resolution Timelines-Deferment or moratorium time shall be removed when measuring the 180-day resolution deadline.
  10. Group Financing -Group exposure increased from 25% to 30%
  11. SIDBI support – In order to provide greater flexibility to SIDBI, a further 90-day extension of the 90-day loan facility will be offered.
  12. Trade Impact -Loan moratorium shall have no effect on improvements in asset classification, financial history, and aging requirements, etc.
  13. Trade Impact-The The volume of world trade can fall by 13 percent-32% this year.

    Post by Rajput Jain & Associates

    Disclaimer: The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances; before making any decisions do consult your Professional / tax advisor. For misrepresentation or interpretation of act or rules Author does not take any responsibility. Neither the author nor the firm accepts any liability for the loss or damage of any kind arising out of information in this document or for any action taken in reliance there on. carajput.com is committed to helping entrepreneurs and small business owners to start, manage and grow their business with peace of mind. Our goal is to support the entrepreneur on legal and regulatory requirements and to be a partner throughout the entire business life cycle, offering support to the company at every stage to ensure that it is compliant and consistently growing. Hope the information will assist you in your Professional endeavors. For query or help, contact: info@carajput.com or call at 09811322785/4 9555 5555 480)

10 things to know when Unauthorized banking transactions in banks resulting in erroneous debits to accounts of customers.

Unauthorized banking transactions: 10 things to know

Image result for RBI

RBI has issued draft Circular to review the criteria for determining customer’s liability, considering the recent surge in unauthorized transactions in banks resulting in erroneous debits to accounts of customers.

The highlights of the draft circular are given here under:

  1. RBI has proposed zero liability for customers where fraud or negligence is on the part of bank.
  2. In case of third party breach (i.e., where the fault lies neither with the bank nor the customer but lies elsewhere in the system)the liability for customer is summarized as follows:
  3. A) Fraudulent transaction is reported Within 3 working days – Customer’s liability is zero
    B) Fraudulent transaction is reported Within 4-7 working days of receiving the communication – Customer’s liability is the transaction value or Rs 5,000 , whichever is lower
    C) Fraudulent transaction is reported Beyond 7 working days of receiving the communication – Customer’s liability is as per bank’s board approved policy
  4. Where negligence is on the part of customer, e.g., as where he has shared the payment credentials, he will bear the entire loss until he reports the unauthorized transaction to the bank. Any loss occurred after reporting of unauthorized transaction shall be borne by bank.
  5. Banks at their discretion may also waive off any customer’s liability in case of unauthorized electronic banking transactions even in cases of customer’s negligence.
  6. In case of zero liability or limited liability of customer, the bank shall credit the amount involved in the unauthorized electronic transaction to the customer’s accountwithin 10 days from date of notification by such customer.
  7. Burden of proving customer’s liability in case of unauthorized electronic banking transactions shall lie on the bank.
  8. Banks shall ask their customers to mandatorily register for alerts for electronic banking transactions. The alerts shall be sent to the customers through different channels(email or SMS) offered by banks.
  9. Banks must provide customers 24×7 access through multiple channels for reporting of fraudulent transactions.
  10. The loss or fraud reporting system shall also ensure that immediate response (including auto response) is sent to the customers acknowledging the complaint along with the registered compliant number.
  11. The communication system used by banks to send alerts and receive responses thereto must record the time and date of delivery of the message and receipt of customer’s response, if any, to them.

RBI Updates:-

RBI issued a Master Directions on Core Investment Companies (Reserve Bank) Directions, 2016 vide Master Direction DNBR. PD. 003/03.10.119/2016-17 dated 25/08/2016.

RBI issued a master direction on Exemption from the provision of RBI Act, 1934 vide Master Direction No. DNBR.PD. 001/03.10.119/2016-17 dated 25/08/2016.
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IT: There cannot be a notice for re-assessment inasmuch as the question of re-assessment arises only when there is an assessment in the first instance – M/s Standard Chartered Finance Ltd. Vs. CIT, Bangalore & Anr (2016 (3) TMI 150 – Supreme Court)
IT – VDS’ 2016: Cases where notices have been issued or search has taken place or individuals against whom Govt. has prior information from another Country won’t be eligible for scheme.
INCOME ACCRUEL OF INTREST :Where assessee was following mercantile system of accounting, once interest amount had been credited to assessee and tax had also been deducted by payer, assessee could not take plea of not offering it as income on ground that he had not actually received same – [2016]  (Mumbai – Trib.)
• CBDT notifies 15% depreciation allowance on Oil Wells. Notification 13/2016.


ST: Management Maintenance and Repair Services – Whether notional interest to be taken as value of service – prima facie case is against the appellant since Notional interest is to be included in the value of services – Satya Prakash Builders Pvt. Ltd. Vs. CCE&ST, Jaipur-I (2016 (3) TMI 137 – CESTAT New Delhi
• 6% Tax on online advertisement / Google Tax, Such provisions are applicable from 1st June, 2016.The levy clearly is targeted to tax various online advertisements companies like YouTube , Google , Facebook , Twitter etc.


Bank Branch Statutory Audit: Banks have received the lists from RBI and commenced sending emails to the prospective Auditors.

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



The Ongoing Controversy On Erroneous Applicability Of Dividend Distribution  Tax Finally Ends    

During the past quarters, the provisions of law regarding buy-back of shares since introduction of dividend distribution tax (‘DDT’) under section 115Q of the Act w.e.f. 01.04.2003 till 31.05.2013 are being interpreted in a conflicting manner by the tax authorities and taxpayers, thereby giving rise to disputes on this issue. It has been contended that subsequent to introduction of section 115QA in the Act , the income-tax authorities, in some cases have sought to re-characterize the purchase consideration received on account of buy-back of shares, undertaken prior to 01.06.2013, as dividend and accordingly, subjecting the amounts so distributed by the companies to DDT. This has lead to un-ended litigation and undue harassment to the tax payers.

In a welcome move, the CBDT has come up with a clarification so far as income arising to the shareholder on but back of shares between the period 01.04.2000 till 31.05.2013 would be taxed as capital gains in the hands of the recipient in accordance with section 46A of the Act and no such amount shall be treated as dividend in view of provisions of section 2(22)(iv). The ongoing controversy is enclosed herewith along with the latest CBDT Circular No. 03/2016 dt. 26th Feb 2016.

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 011-233 433 33




(Income Tax & Service Tax)

Part-I: Amendments Proposed in the Income Tax

  • No change in Tax rates or Income slabs.
  • Tax Rebate u/s 87A has been increased from Rs.2,000 to Rs.5,000 for the taxable income Upto Rs.5,00,000. (No Tax up to an Income of Rs.3 Lac)
  • Deduction for Rent paid u/s 80GG increased from existing Rs.24,000 PA to Rs. 60,000 PA.
  • Tax Audit Limit U/s 44AB for the Professionals increased from Rs.25 Lac to Rs.50 Lac
  • Increase in turnover limit under Presumptive Taxation scheme u/s 44AD from Rs.1 Crore to Rs. 2 Crores
  • Extension of Presumptive Taxation to Professionals – 50% of Gross Receipts upto Rs.50 Lac
  • Accelerated depreciation under Income Tax will be limited to maximum of 40%
  • Benefit of deductions for Research would be limited to 150% from 01.04.2017 and 100% from 1.4.2020
  • Benefit of section 10AA to new SEZ units will be available to those units which commence activity before 31.03.2020.
  • The weighted deduction under section 35CCD for skill development will continue up to 01.04.2020
  • New manufacturing companies incorporated on or after 1.3.2016 to have an option to be taxed at 25% + SC + Cess but no profit linked or investment linked deductions and do not avail of investment allowance and accelerated depreciation but subject to MAT.
  • Lower the corporate tax rate for the next financial year for relatively small enterprises, i.e, Companies with turnover not exceeding Rs.5 crore (in the financial year ending March 2015) to 29% + SC + Cess.
  • 100% deduction of profits for 3 out of 5 years for startups setup during April, 2016 to March, 2019, however MAT will apply in such cases.
  • 10% rate of tax on income from worldwide exploitation of patents developed and registered in India by a resident.
  • Non-banking financial companies (NBFCs) shall be eligible for deduction to the extent of 5% of its income in respect of provision for bad and doubtful debts.
  • Long Term Capital Gain Benefit in case of securities of unlisted companies – Holding Period reduced  to 2 years from 3 Years
  • Non Corporate Assessees to pay Advance Tax in 4 installments on 15thJune – 15%, 15th Sep – 45%, 15thDec-75% & 15th Mar-100% (similar to the Corporate)
  • New condition for conversion of a company into Limited Liability Partnership (LLP). The value of the total assets in the books of accounts of the company in any of the three previous years preceding the previous year in which the conversion takes place, should not exceed five crore rupees
  • Processing of  I T Returns u/s 143(1) be mandated before assessment u/s 143(3)
  • Time limit for assessment, reassessment and recomputation – the period, for completion of assessment u/s 143 or 144 be changed from existing two years to twenty one months from the end of the assessment year in which the income was first assessable. Now Assessment by Dec 31stinstead of 31st
  • Determination of residency of foreign company on the basis of Place of Effective Management (POEM) is proposed to be deferred by one year.
  • Commitment to implement General Anti Avoidance Rules (GAAR) from 01.04.2017.
  • Withdrawal up to 40% of the corpus at the time of retirement to be tax exempt in the case of National Pension Scheme (NPS). Annuity fund which goes to legal heir will not be taxable.
  • In case of superannuation funds and recognized provident funds, including EPF, the same norm of 40% of corpus to be tax free will apply in respect of corpus created out of contributions made on or from 01.04.2016.
  • Limit for contribution of employer in recognized Provident and Superannuation Fund of  1.5 lakh per annum for taking tax benefit.
  • 100% deduction for profits to an undertaking in housing project for flats upto 30 sq. metres in four metro cities and 60 sq. metres in other cities, approved during June 2016 to March 2019 and completed in three years. MAT to apply.
  • Additional interest deduction of Rs.50,000 PA for loans up to Rs.35 Lac sanctioned in 2016-17 for first time home buyers, where house cost does not exceed Rs.50 Lac.
  • Distribution made out of income of SPV to the REITs and INVITs having specified shareholding will not be subjected to Dividend Distribution Tax, in respect of dividend distributed after the specified date.
  • Dividend Receipts in excess of Rs.10 Lac to be taxed @ 10%
  • Individuals with Income above 10 Lac to pay 15% Cess against 12%
  • TCS / TDS @ 1 % on purchase of luxury cars exceeding value of Rs.10 Lac and purchase of goods and services in cash exceeding Rs. 2Lac
  • Securities Transaction tax in case of ‘Options’ is proposed to be increased from 0.017% to 0.05%.
  • Equalization levy of 6% of gross amount for payment made to non- residents exceeding ` 1 Lac a year in case of B2B transactions.
  • Domestic VDS Scheme for undisclosed income @ 45%.
  • New Dispute Resolution Scheme – No penalty in respect of cases with disputed tax up to Rs.10 Lac in other cases 25% of the minimum imposable penalty.
  • No discretion of AO on imposition of Penalty.
  • Penalty rates to be 50% of tax in case of underreporting of income and 200% of tax where there is misreporting of facts.
  • Disallowance will be limited to 1% of the average monthly value of investments yielding exempt income, but not exceeding the actual expenditure claimed under rule 8D of Section 14A of Income Tax Act.
  • Mandatory stay of demand once the assessee pays 15% of the disputed demand, while the appeal is pending before CIT (Appeals).
  • Monetary limit for deciding an appeal by a single member Bench of ITAT enhanced from Rs.15 Lac to Rs.50 Lac.
  • No higher TDS for non-residents if alternative documents to PAN card provided.
  • Expansion of e-assessments Scheme to assessees in 7 mega cities in the coming years.
  • Interest at the rate of 9% PA against normal rate of 6% PA for delay in giving effect to Appellate order beyond ninety days.
  • ‘e-Sahyog’ to be expanded to reduce compliance cost, especially for small taxpayers.

TDS limits increased as below

  •  192A – Payment of accumulated balance due to an employee  from 30,000 to 50,000
  • 194BB – Winnings from Horse Race from Rs. 5,000 to Rs. 10,000
  • 194C – Payments to Contractors – from Aggregate annual limit of 75,000 to Aggregate annual limit of 1,00,000
  • 194LA – Payment of Compensation on acquisition of certain Immovable Property – from 2,00,000 to Rs. 2,50,000
  • 194D – Insurance commission from Rs. 20,000 to 15,000
  • 194G – Commission on sale of lottery tickets from 1,000 to 15,000
  • 194H – Commission or brokerage  from Rs. 5,000 to 15,000

TDS Rates reduced as below

  • 194DA – Payment in respect of Life Insurance Policy – from 2% to 1%
  • 194EE  – Payments in respect of NSS Deposits – from 20% to 10%
  • 194D – Insurance commission – from 10% to 5%
  • 194G – Commission on sale of lottery tickets – from 10% to 5%
  • 194H – Commission or brokerage – form 10% to 5%.

TDS Sections Omitted w.e.f. 01.06.2016 as below

  • 194K Income in respect of UnitS
  • 194L Payment of Compensation on acquisition of Capital Assets

 Part-II: Amendments Proposed in Service Tax Law

Exemption of Service Tax on 

  • Services provided under Deen Dayal Upadhyay Grameen Kaushalya Yojana
  • Services provided by Assessing Bodies empanelled by Ministry of Skill Development & Entrepreneurship.
  • General Insurance Services provided under ‘Niramaya’ Health Insurance Scheme launched by National Trust for the Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disability.
  • Annuity services provided by NPS and Services provided by EPFO to employees.
  • Exemption from service tax on construction of affordable houses up to 60 square metres under any scheme of the Central or State Government including PPP Schemes.
  • Reduce service tax on Single premium Annuity (Insurance) Policies from 3.5% to 1.4% of the premium paid in certain cases.
  • Krishi Kalyan Cess, @ 0.5% on all taxable services, w.e.f. 1 June 2016 – CENVAT credit available. Total ST now 15% as against 14.50 % earlier.
  • Assignment of right to use the spectrum and its transfers has been deducted as a service leviable to service tax and not sale of intangible goods.
  • Additional options to banking companies and financial institutions, including NBFCs, for reversal of input tax credits with respect to non- taxable services.
  • The power to arrest is being restricted only to situations where the tax payer has collected the tax but not deposited it to the credit of central government, and that too above a threshold of Rs.2 crore. The monetary limit for launching prosecution is being increased to Rs. 2 crore of Service Tax evasion.

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




Taxability of Dividend in the hands of Shareholders- Union Budget 2016

Taxation of dividends has seen several twists and turns over the years. In order to reduce cost of collection and curb tax evasion through non-reporting of dividends by shareholders, Government had introduced section 115-O in the Income-tax code through Finance Act, 1997. The section presently provides for 15% tax on dividends distributed by a domestic company. After considering grossing up, surcharge and cess, the effective rate of dividend distribution tax (‘DDT’) stands at approximately 20%.

Finance Bill, 2016 has introduced a concept of progressive taxation of dividends. Proposed section 115BBDA seeks to tax dividends in excess of INR 1 Million @ 10% (plus surcharge and cess) in the hands of individuals, HUFs, partnership firms and LLPs resident in India.

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




Direct Tax

  • TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE: Where assessee had benchmarked its international transactions on TNMM basis and TPO had neither disputed assessee’s claim that TNMM was most appropriate method, nor comparables selected by assessee, it was not open for TPO to reject benchmarking done by assessee and make adhoc ALP additions in value of international transactions – [2016]  16 (Mumbai – Trib.)
  • ON BORROWED CAPITAL: Where assessee paid interest on borrowed capital which was used for acquisition of windmill for extension of existing business of generation of electricity through windmill, interest could not be allowed till capital asset acquired by assessee was put to use – [2016] INTEREST 277 (Chennai – Trib.)
  • UTILIZATION OF CAPITAL GAINS : Where assessee purchased a vacant site but couldn’t complete construction of house within prescribed period of three years to avail exemption from capital gain, whole of capital gain was liable to be taxed in previous year in which period of three years expired from date of sale of original asset

Indirect Tax

  • Following activities undertaken by the applicant would not amount to manufacture or deemed manufacture under Section 2(f) of the Central Excise Act 1944 namely; Inspection testing and installing batteries Cleaning lint brushing and deodorizing Touching up and re-stitching Filing debundling and jewellery correction Activities related to spectacles and frames Folding hanging and ironing Polishing shinning and coating Tagging Freebies Protective stickering Placing the products in original box Inserting warranty card Inserting moisture absorbing tablets Inserting books mark and Replacing shoe laces- (/s Amazon Seller Services Private Limited, Bangalore Versus The Commissioner of Central Excise, Thane-I – 2016 (3) TMI 69 – AUTHORITY FOR ADVANCE RULINGS).
  • Claim of interest on delayed Refund – delay in grant of refund – relevant date to be computed from the date of application of refund or from the date of rectification of defect in the refund application – The adjudicatory process by no stretch of imagination can be carried on beyond three months. It is required to be concluded within three months – Interest allowed from the date of application- (Union of India & Others Versus M/s Hamdard (Waqf) Laboratories – 2016 (3) TMI 68 – SUPREME COURT)

MCA Updates

SHARES – POWER OF COMPANY TO PURCHASE ITS OWN SECURITIES: In law, petitioner is entitled to buy back its own shares by means of a scheme under section 391 read with sections 100 – 104 of the Companies Act, 1956 , scheme cannot be said to be a colourable device to evade income tax, it is a legally permissible procedure which petitioner is entitled to follow to buy back its shares

Key Dates

E-Payment of Service Tax for Feb by companies: 06/03/2016

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




Direct Tax

  • New Form 35 for Appeal to the Commissioner of Income-tax (Appeals) introduced vide CBDT NOTIFICATION dated 01.03.16.
  • Last day to pay advance tax is 15th March for payment of 100% of income tax for FY 15-16.
  • Time Limit for completion of property acquired or constructed with the borrowed capital increase from 3 year to 5 years for getting exemption u/s 24(b) in respect of Self Occupied House Property
  • Contributions made on or after the 1st day of April, 2016 by an employee participating in a recognised provident fund and superannuation fund, up to 40 % of the accumulated balance attributable to such contributions on withdrawal shall be exempt from tax.
  • 68 : No addition where creditability of creditors established. [Mahalaxmi Housing & Finstock Pvt. Ltd. vs. ACIT (ITAT Ahmedabad)].
  • CBDT notifies 15% depreciation allowance on Oil Wells. Notification 13/2016.
  • IT: Deduction u/s. 10B – Even though an estimation of excess stock in the middle of the year while accepting the Books of Accounts of the year is not generally permitted by various decisions of the ITAT since Assessee is eligible for deduction u/s. 10B on the additions/disallowance made on these units we are of the opinion that the same amount can be allowed for deduction u/s. 10B as the stock pertains to Hosur and Ongole units which are eligible for deduction u/s. 10B – Madhucon Granites Ltd. Vs. DCIT, Hyderabad (2016 (3) TMI 83 ITAT Hyderabad)
  • IT: Addition u/s. 68 – CIT(A) should not have rubbished the affidavit without going into the merits. Therefore in the interest of justice and fair play we restore this issue to the files of the A.O. – Shri Dinesh Tarachand Kasat and Others Versus The Dy. Commissioner of Income-Tax, Central Circle-1 (3) , Ahmedabad and Vica-Versa (2016 (3) TMI 91 – ITAT Ahmedabad)

Indirect Tax

  • Services of transportation of passengers by stage carriage excluded from Negative List (applicable w.e.f.1st June’ 2016) such services by a non-air-conditioned contract carriage will continue to be exempted, notification No. 09/2016-S.
  • Education services deleted from Negative List (Applicable w.e.f. the enactment of Finance Bill’ 2016)  but the service tax exemption on them is being continued by incorporating them in the general exemption notification (Notification No. 25/2012-ST) – notification No. 09/2016-ST.
  • CCI doubles limit of value of assets & turnover for determining entities combination. NOTIFICATION S.O. 675(E).
  • Prior permission to transfer Cenvat Credit after Amalgamation / Merger. [M/s. S.C. Johnson Products (P) Ltd. vs.  C.C.E. (CESTAT Delhi)]
  • Cenvat Credit can be claimed on the basis of photocopy of duty payment document.[Arbes Tools P. Ltd. vs. CCEx (CESTAT Mumbai)].
  • Increase in clean energy cess (Notification No. 1 & 2/2016 dated 29th Feb, 2016) applicable from 1st March, 2016.
  • DVAT: Due date for filing online Form 9 for FY 2014-15 has been extended to 31 MAR 2016.
  • DVAT: Digital Signatures made mandatory for filing DVAT-16 and DVAT-17 w.e.f. Q4-FY 2015-16 returns for dealers with GTO exceeding Rs.50 Lac in FY 2014-15.

MCA Updates

  • MCA: As the National Company Law Tribunal (NCLT) and its Appellate Authority is at an advanced stage of constitution and after its constitution, it is proposed to commence the provisions relating to Revival of Sick Companies (Chapter XIX) of Companies Act, 2013. The draft Rules for the Revival of Sick Companies (Chapter XIX) of Companies Act, 2013, have been prepared by a Committee consisting of Ministry officials and Experts drawn from various fields.

Other Updates

  • RBI has issued Know Your Customer Direction, 2016 for all Banks or entities licensed u/s 22 of Banking Regulation Act, 1949, Etc.

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







Comparables and adjustments/Adjustments – Illustrations : Where business operation of assessee could not be carried on without services in question and same was to be outsourced and ostensible benefits were received from services rendered by AE, value of payments made to AE could not be taken as nil; consequent addition was to be deleted – [2016] 221 (Jaipur – Trib.)

Comparables and adjustments/Methods – General : Where in respect of international transactions entered into with AE, assessee was changing its stand with regard to application of most appropriate method from stage to stage, i.e., from TP study report to proceedings before Assessing Officer and DRP, matter was to be remanded back for disposal afresh – [2016] 234 (Pune – Trib.)



Computation of book profit : While computing book profit under section 115JB, Assessing Officer has no power to embark upon a fresh enquiry with regard to entries made in books of account of assessee-company; he has to rely upon authentic statements of accounts of company, being scrutinized and certified by statutory auditors – [2016]233 (Karnataka)




Where pursuant to increase in their shareholding petitioners sought for reconstitution of board of directors but same was refused, petitioners were entitled to seek redressal under sections 397 & 398 against act of oppression and mismanagement – [2016]  219 (Bombay)




No penalty could be imposed on failure to make disclosure of ‘sale’ under regulation 7(1A) within two days –[2016]  224 (SAT – Mumbai)




Where prima facie quantification of duty shows alleged evasion of duty of Rs. 10 crores, offence is cognizable and non-bailable; therefore, arrests can be made by Intelligence Officers of department – [2016]  226 (Jharkhand)



In case of arrested persons, only Superintendent and higher officers of Central Excise have power to send them to Magistrate as per sections 19 and 21; since Intelligence Officers have not been empowered in this behalf, judicial remand ordered at request of Intelligence Officers is void – [2016]  226 (Jharkhand




Assessee was converting spent catalyst into support catalyst (‘goods’) for its customers. It received spent catalyst from various customers from outside and within the State of Maharashtra and after processing the same, support catalyst were returned back to the customers. The assessee claimed that it had charged only for job work done for the customers and goods were not sent back by way of sale –  261 (Bombay)




In absence of any specific provision for levy of penalty under Automobile Cess Rules or under parent Act Industries (Development and Regulation) Act, 1951, no penalty can be levied for failure to pay automobile cess –[2016] 227 (Jharkhand)



Section 10(46) of the Income-tax Act, 1961 – Exemptions – Statutory Body/Authority/Board/Commission – Notified Body or Authority – NOTIFICATION NO. SO 530(E) [NO.8/2016 (F.NO.196/32/2014-ITA-I)], DATED 19-2-2016

Section 80CCD of the Income-tax Act, 1961 – Deduction – Contribution to Pension Scheme of Central Government – Notified Pension Scheme – NOTIFICATION NO. SO 529(E) [NO.7/2016 (F.NO.173/394/2015-ITA-I)], DATED 19-2-2016

Section 10(15) of the Income-tax Act, 1961 – Exemptions – Interest on Bonds, Debentures, Securities, etc. – Notified Bonds or Debentures issued by public sector Companies under section 10(15)(iv)(h) – NOTIFICATION NO. SO 520(E) [NO.6/2016 (F.NO.178/1/2016-ITA-I)], DATED 18-2-2016

Income-Tax (Second Amendment) Rules, 2016 – Amendment in Rules 10THB, 10THC 10THD and Form No.3CEFB – NOTIFICATION NO.SO 502(E) [NO.5/2016 (F.NO.142/7/2014-TPL)], DATED 17-2-2016


Insurance (Appeal to Securities Appellate Tribunal) Rules, 2016 – NOTIFICATION NO. GSR 179(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

Insurance (Procedure for Holding Inquiry by Adjudicating Officer) Rules, 2016 – NOTIFICATION NO. GSR 178(E) [F.NO.12018/1/2015-INS.II], DATED 17-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Second Amendment) Regulations, 2016 – Amendment in Regulations 2, 14, Schedule 1, Schedule 9 and Substitution of Schedule 11 –NOTIFICATION [NO.FEMA.362/2016-RB]/GSR 166(E), DATED 15-2-2016

FEM (Transfer or Issue of Security by A Person Resident Outside India) (Amendment) Regulations, 2016 – Amendment in Regulations 2, 5 and Substitution of Schedule 3 & Schedule 4 – NOTIFICATION [NO.FEMA.361/2016-RB]/GSR 165(E), DATED 15-2-2016

Section 46 of the Prevention of Money-Laundering Act, 2002 – Special Courts – Application of Cr. PC, 1973 to proceedings before Special Court – Appointment of Special Public ProsecutorS – NOTIFICATION NO. S.O. 506(E) [F.NO.C-18016/7/2015-AD.ED], DATED 17-2-2016

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




Direct Tax

  • Unless and until the capital asset is used as a tool for carrying out the business of the assessee and the assessee becomes the owner this Tribunal is of the considered opinion that the assessee may not be eligible for depreciation – Tri – M/s Hinduja Foundries Ltd. (formerly known as M/s Ennore Foundries Ltd.) Versus The Assistant Commissioner of Income Tax – 2016 (2) TMI 706 – ITAT CHENNAI
  • Controlled by Delhi based CA firm held as resident in India [2016]283 (Delhi)Commissioner of Income-tax, Delhi v. Mansarovar Commercial (P.) Ltd.
  • IT: CPU alone cannot be described as computer; routers and switches being input/output devices, are integral part of computer and, hence, entitled to higher rate of depreciation at 60 per cent[2016]239 (Mumbai – Trib.) IBAHN India (P.) Ltd. v. DCIT
  • Investment in house property need not be sourced from capital gains only for availing of sec. 54F relief
  • IT : For availing exemption under section 54F, amount invested in new asset need not be entirely sourced from capital gain [2016] 191 (Punjab & Haryana) CIT v. Kapil Kumar Agarwal
  • Deemed dividend addition u/s. 2(22)(e) – loan or advance to a non-shareholder cannot be taxed as Deemed Dividend in the hands of a non-shareholder. Since the Assessee in the present case is not a shareholder in the lender company addition to be deleted. – Tri – M/s. Jet Age Securities Pvt. Ltd. Versus D.C.I.T., Circle-7 (1) , Kolkata – 2016 (2) TMI 703 – ITAT KOLKATA
  • CL: Sales tax dues of company-in-liquidation could not be termed as taxes in relation to property hence, Appellants who had purchased property of company-in-liquidation in court auction were not required to pay same[2016] 220 (Gujarat) Readymix Concrete Ltd. v. Official Liquidator of Beclawat of India Ltd.
  • Controlled by Delhi based CA firm held as resident in India.

Indirect Tax

  • Demand of service tax on Management Maintenance or Repair service collected from Flat owners. – In this fact the appellant is not liable for service tax – Tri – M/s Omega Associates Versus Commissioner of Service Tax, Mumbai – 2016 (2) TMI 690 – CESTAT MUMBAI
  • Valuation – Business auxiliary service (BAS) – inclusion of reimbursement of expenses – the entire amount received from M/s Indian Oil Corporation is liable to be taxed – Tri – Sanjeev Chaudhari Versus Commissioner of Central Excise Chandigarh – 2016 (2) TMI 688 – CESTAT NEW DELHI
  • Purchaser of assets of liquidating -co. in a auction wasn’t liable to pay sales taxes dues of such Co.- HC
  • Cenvat credit available of Service tax paid on construction of commercial complex used for renting of immovable property.

Company Law

Query: In a Private Limited Company, there are two directors since the date of incorporation of the company in around 1985. Now both the director’s age is more than 70 years. Is directors are disqualified or any forms need to be filed with ROC.

Answer: No provision on age limit has been prescribed in the Companies Act 2013 regarding the appointment or disqualification of directors.

However in case of Managing director/Whole-time director/Manager, Section 196(3) of the Companies Act 2013 provides that –“No company shall appoint or continue the employment of any person as MD/WTD/Manager who is below the age of 21 years or has attained the age of 70 years. Provided the appointment of person who has attained the age of 70 years may be made by passing a special resolution in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person.”

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