Comprehensive Understanding Regarding the current Further Issue Of Share Capital On Under Right Issue Basis Section 62 of the companies act 2013

Comprehensive Understanding Regarding the current Further Issue Of Share Capital On Under Right Issue Basis Section 62 of the companies act 2013

www.carajput.com; Reliance industry

www.carajput.com; Reliance industry

Shareholders who, at any time, plan to increase their subscribed share capital the increase their share capital by selling shares to their current shareholders who, at the date of the bid, are the holders of the share capital of the company. In basic words, the right issue is an offer to the existing shareholders to buy the equity of the company in proportion to the current stock. It is the best way to encourage capital in a business. It is up to the owners whether or not they support it.

Unless the terms of the Article of the Company do not provide otherwise, the current owner still has the right to revoke this privilege for the benefit of some other individual. The firm sends the Letter of Offer to the owners of the company stating the number of shares offered and the time period during which the bid is to be approved. The time period recommended will not be less than 15 days, but not more than 30 days. In the case that no notice has been obtained from the shareholder side within the specified time period, the bid is considered to have been rejected.

The existing shareholder of the company to purchase additional shares at discounted prices in proportion to their existing holdings. A shareholder entitled to receive the share on the basis of the offer rate prescribed in the letter of offer. For eg, the bid ratio is 1:2 which means that the shareholder owning two shares is able to receive one share if he only has 3 shares and is entitled to receive 1 share. If he has 4 shares, he is entitled to 2 shares. Through this offer, corporations give shareholders the right, but not the duty, to buy new securities at a discount on the existing stock price.

In the case of non-acceptance of such a bid, the Board of Directors shall have the right to dispose of it in a manner that is not adverse to the owners and the company.

If, at any point, a company with a share capital intends to raise its registered capital through the issuing of additional shares; those shares shall be offered—

ON RIGHT BASIS: to existing shareholders in proportion to the company’s paid-up equity capital owned by them by means of a letter of offer.

PROCEDURE FOR ALLOTMENT OF SHARES On RIGHT ISSUE BASIS:

  • Note in writing to each Director at least seven days prior to the meeting of the Board of Directors. [Sec 173(3)] Pass the vote of the Board to accept the “Statement of Bid” The letter of bid also contains the right of renunciation.
  • Dispatch of the Letter of Offer to all current shareholders by registered post or speed post or by online means at least three days before the opening of the issue.
  • Convene a decision of the Board of Directors of the Pass Board to approve allocation and issue of shares.
  • Receive approval, renunciation, denial of rights of shareholders
  • Meeting of the Directors and Notification of Meeting of the Board of Directors given at least seven days prior to the meeting of the Board of Directors (Section 179(3)).
  • The meeting of the Board of Directors will be held in compliance with SS-1 to accept the Board of Directors’ Decision on the adoption of the “Letter of Bid.”
  • Letter of offer will be submitted to existing shareholders by registered post or by fast post or by online means, with proof of delivery to all current shareholders at least three days before the opening of the issue.
  • For the case of the “Public Business” file MGT-1 within 30 days from the date of the vote of the Council.
  • Register the return of allotment with Registrar in E-Form PAS-3 within 30 days of allotment of shares.
  • Register the return of allotment with Registrar in E-Form PAS-3 within 30 days of allotment of shares.
  • File E-form MGT 14 within 30 days of issuance of securities.
  • Addition to the E-Form PAS-3 I Board resolution on distribution and question of interest. (ii) Letter of Offer (iii) List of Allottes
  • List of Allottes attached to E-Form PAS-3 shall state the names, address, profession, if any, of the owner and the number of shares assigned to each of the allottes, and the list shall be certified as complete and accurate by the signatory of Form PAS-3 in accordance with the company’s records.
  • Issue of the share certificate over a span of two months from the date of issuance in the form-SH-1. Stamp duty paid within 30 days of the date of issue. Reasonable
  • In the case of a listed firm – Unless otherwise mentioned, SEBI (ICDR) Regulation 2009 shall apply where the aggregate value of the stated offer is fifty lakh roupies or more. Provided that provision of this Regulation does not apply to securities issued pursuant to Regulation 9(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011.

FEMA provisions allow Indian companies to issue, if any, the right shares to existing non-resident shareholders, subject to the sectoral cap. Furthermore, this concern will also be concerned with in accordance with the other statute. (a) In the case of shares of a company listed on a recognized stock exchange in India, at a price as decided by the company; (b) In the case of shares of a company not listed on a recognized stock exchange in India, at a price not less than the price at which the right-based bid is made to a resident shareholder.

It is appropriate to receive prior permission from RBI for Right Issue to former OCBs. An investor may allocate an additional right share out of the unsubscribed portion, subject to the condition that the total issue of the shares to non-residents in the company’s total paid-up capital does not exceed the sectoral cap.

RECENT RIGHT ISSUE Reliance Industries (RIL) which is India’s most popular corporation propose to collect Rs 53,125 crore by giving Rs.1,257 a share discount of 14 per cent. Existing RIL shareholders may buy One share for every 15 shares owned The target to raise this issue is to decrease the net debt to zero by 31 March 2021.

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)

Due Date for Annual Return OF COMPANY

www.carajput.com; due-date-for-annual-return

www.carajput.com; due-date-for-annual-return

All companies registered in India must file annual return each year, irrespective of business turnover or activity. Annual return must be filed in Form MGT-7 and Form AOC-4 is also filed along with the annual return. In this article, we look at the due date for annual return for a company.

Filing Annual Return

A company’s annual return has to be filed with the MCA within 60 days from the date of Annual General Meeting. All companies are required to conduct an Annual General Meeting within 6 months of closing of financial year. Hence, the last date for conducting Annual General Meeting would be 30th September and the due date for filing annual return would be 29th November.

If a company cannot hold Annual General Meeting in any year, the annual return still has to be filed within 60 days from the date on which Annual General Meeting should have been held together with the statement specifying the reasons for not holding the Annual General Meeting. Hence, a company cannot excuse itself from filing annual return on the plea of the Annual General Meeting not having been held.

Statutory Fee for Filing Annual Return

Statutory fee for filing is based on the authorized capital of the Company as follows:

For submitting, filing, registering or recording any document Rs. by this Act required or authorised to be submitted, filed, registered or recorded Rs.
In respect of a company having a nominal share capital of up to  Rs. 1,00,000  Rs.200
In respect of a company having a nominal share capital of Rs. 1,00,000 or more but less than Rs.5,00,000.  Rs.300
In respect of a company having a nominal share capital of Rs. 5,00,000 or more but less than Rs. 25,00,000 Rs.400
In respect of a company having a nominal share capital of Rs.25,00,000 or more but less than Rs. 1 crore or more. Rs.500
In respect of a company having a nominal share capital of Rs. 1 crore or more. Rs.600

Penalty for Late Filing Annual Return

In case a company files its annual return after 60 days of date of Annual General Meeting or after 29th November, a penalty would be applicable date of the event and date of filing. Further, the Ministry of Corporate Affairs has proposed to increase the penalty for late filing of annual return multi-fold as follows from the year 2018:

Number of Days Default Current Penalty Proposed Penalty
Up to 15 days Rs.400 Upto Rs.3,000
More than 15 days and up to 30 days  Rs.800 Upto Rs.6,000
More than 30 days and up to 60 days Rs.1600 Upto Rs.12,000
More than 60 days and up to 90 days  Rs.2400 Upto Rs.18,000
More than 90 days and up to 180 days Rs.4000 Upto Rs.36,000
More than 180 days and up to 270 days  Rs.4800 Upto Rs.54,000
More than 270 days Rs.100 per day penalty Rs.200 per day penalty

Note: The above chart has been worked for a company with a capital of share capital of Rs.1,00,000. The new penalty proposed by the MCA from the year 2018 for late filing of annual return is Rs.100 per day per filing. Since, a company will have to file MGT-7 and AOC-4, the penalty for day of default would be Rs.200.

The MCA announcement about the upcoming changes to the penalty structure has been published on the website as under:

“It is proposed to amend shortly, the Companies (Registration Offices and Fees) Rules 2014 to levy additional fee @Rs.100 per day for filings under Section 92 (Annual Return) or 137 (Annual Financial Statement) of the Companies Act, 2013. Once notified, the additional fee @Rs.100 per day (beyond the normal date of filing) shall become payable in respect of 23AC,23ACA,23AC XBRL,23ACA XBRL,20B,21A, MGT-7, AoC-4,AoC-4 XBRL and AoC-4 CFS. Stakeholders are advised to take note and plan accordingly.”

Know more about the increase in penalty for late filing annual return.

Filing Annual Return

Rajput Jain & Associates provides an easy and online process for Entrepreneurs to file their annual return and income tax return along with financial statement and board meeting documents preparation at just Rs.19899. Talk to an Rajput Jain & Associates  Advisor to know more and file Annual Return for your company easily.

Annual Compliance Package for Private Limited Companies Starting @ just 5k

Rajput Jain & Associates offers this unique package starting at an affordable price for the Chartered Accountants who are focussed on taxation aspects rather than on secretarial compliances. This package is specifically offered to the Chartered Accountants who want to outsource the Annual Filing and other secretarial work of their clients. In today’s world it is important to form partnerships in order to expand your reach and attract more clients. Outsourcing your secretarial functions to us will help you to free up time to focus on your core professional services.

We help you meet all the necessary compliance so that you can focus on your core professional activities without worrying about any legal and secretarial hassles. We take care of your compliances and our scope of annual filing services include:

  • Drafting secretarial documents including board report, minutes of AGM, Notices, etc.
  • Providing necessary certifications where required.
  • Filing of ROC returns i.e. AOC-4, MGT-7 and ADT-1.

What we require from your end:

  • Certified Financial Statement of the Client Company.
  • Certified Auditor Report.
  • Any other information regarding the directorship, shareholding, charges or any other material information about the company.

To know more about the scope of service you can contact us on the Email Ids and Numbers given below. We look forward to serving you.For query or help, contact:   info@carajput.com or call at 09811322785/4 9555 5555 480)

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)

CORPORATE AND PROFESSIONAL UPDATE JULY 18, 2016

Professional Update For the Day:

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

DIRECT TAX:

Income Tax : No denial of Sec. 54F relief if taxpayer is unable to get possession of flat due to builder’s fault
Rajeev B. Shah v. Income-tax Officer, Ward-19 (2) (1), Mumbai
[2016] 71 taxmann.com 198 (Mumbai – Trib.)

Income Tax: The Government of India has given Relaxation of time schedule for making payments under the Scheme the Income Declaration Scheme 2016: (I) a minimum 25% of the tax, paid by 30.11.2016; (ii) further 25% by 31.3.2017; and balance on or before 30.9.2017.

Income tax : In a bid to end taxpayers harassment, the CBDT has prescribed revised format for Scrutiny Notice u/s 143(2) of the Income Tax Act’1961 in “three new formats” that will clearly stipulate if the inquiry against them is “limited, complete or manual”. All scrutiny notices, shall henceforth, be issued in these revised formats. Further, Taxpayers residing in cities of Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Mumbai can opt for paperless/E-Assessment (if their case falls under scrutiny) as part of a new pilot project that the CBDT is running in this regard.

Income tax : Where activities of assessee-society in organising seminars/conferences and Auto Expo were performed with prior object of promotion of growth of automobile industry in India which is an object of general public utility, such activities would not come within ambit of proviso to section 2(15) even if some income was generated from such activities – [2016] 71 taxmann.com 138 (Delhi – Trib.)

INDIRECT TAX:

Service tax : While dismissing appeal as time-barred, appellate authority cannot go into merits; hence, if appellate authority, while dismissing appeal as time barred, has entered into merits of case and dismissed same, on merits, then, such an act of appellate authority would be an illegality, which can be set aside in writ – [2016] 71 taxmann.com 113 (Madras)

Vat & sales tax : TEAM STBA with their efforts has done:(i) CDT Form 9, For 2015-16 put on site, also allows forms details of 12-13, 13-14 & 14-15 to be filed.(ii) Like 2013-14 VATO allowed to correct 2A/2B details of 2014-15 where Name/TIN needs correction without change in amount

COMPANY  LAW UPDATES :

Query: In one of our Company, shareholders have appointed their respective nominees as per Section 72 of the Companies Act 2013. Now, one of the shareholder died and his nominee wants to transfer shares to third party. Now, our question is – Can the nominee sell the shares without registration in `his favour. If yes, what is the procedure?

Answer: Yes, a nominee can sell the shares to a third party, without registration of shares in his favour. However, the usual procedure for transfer of shares will have to be followed.

OTHER UPDATES:

SEBI : Carrying on CIS on or after 25-1-1995 without obtaining registration certificate has been prohibited: SAT
Securities and Exchange Board of India v. Gaurav Varshney
[2016] 71 taxmann.com 197 (SC)

SEBI (Listing Obligations and Disclosure Requirements) (Second Amendment) Regulations, 2016 – Insertion of Regulation 43A – NOTIFICATION NO.SEBI/LAD-NRO/GN/2016-17/008, DATED 17-6-2016

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

“If you can’t explain it simply, you don’t understand it well enough”

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

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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

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)

CORPORATE AND PROFESSIONAL UPDATE APRIL 8, 2016

CORPORATE AND PROFESSIONAL UPDATE APRIL 8, 2016

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DIRECT TAX:

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

INDIRECT TAX :

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

KEY DATES :

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

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

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

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 Continue reading

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)

CORPORATE AND PROFESSIONAL UPDATE JANUARY 15,2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 15,2016

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INCOME TAX ACT

SECTION 2(15)

CHARITABLE PURPOSE

Object of general public utility/Trade promotion association : Where assessee-association was formed with an object to promote leather trade, in view of fact that assessee’s receipt of rent from non-members by allowing them to keep their stalls in trade fairs organised by assessee was negligible in comparison to total trade receipts, assessee’s case could not be said to be covered under proviso to section 2(15) – [2015] 406 (Kolkata – Trib.)

SECTION 10(23C)

EDUCATIONAL INSTITUTIONS

Profit motive : At stage of registration, under section 10(23C) authority is only required to examine nature, activity and genuineness of institution and mere existence of some profit does not disqualify applicant if sole purpose of its existence is not profit making but educational activities – [2016] 30 (Allahabad)

SECTION 44AD

CIVIL CONSTRUCTION BUSINESS

Merely because, assessee’s income from civil construction work had been accepted at six per cent of contract receipt in earlier year, it could not be ground to claim that for relevant year also, assessee’s income was to be assessed at six per cent of contract receipt – [2016]  19 (Patna – Trib.)

SECTION 69

UNEXPLAINED MONEY

Seized books : Addition to assessee’s income merely on basis of papers seized from possession of assessee’s brother was unjustified when material sought to be relied on was not corroborated – [2016]  29 (Calcutta)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments – Method of computation/RPM v. TNMM : Where Tribunal held in earlier year in assessee’s case that RPM was appropriate method as assessee was distributor, but prima facie facts of relevant year suggested that assessee was not merely a distributor, matter should be reconsidered afresh –[2016]  21 (Mumbai – Trib.)

SERVICE TAX

SECTION 65(25b)

TAXABLE SERVICES – COMMERCIAL OR INDUSTRIAL CONSTRUCTION SERVICES

Abatement in respect of construction services cannot be denied where ‘minor credit’ inadvertently taken by assessee has been reversed with interest – [2016]  27 (Ahmedabad – CESTAT)

SECTION 80

PENALTY – NOT TO BE IMPOSED IN CERTAIN CASES

Where internal auditor of company perpetrated fraud by booking ‘service tax due’ as ‘income’/’commission’ in books of account and it was found that directors of company were aware thereof, company was liable to evasion penalty for consequent non-payment of service tax – [2016] 25 (Mumbai – CESTAT)

Where delayed payment was not due to any bona fide confusion occurring in prevalent statue and related provisions were quite crystal clear, penalty cannot be waived merely on ground of ignorance of law, as it is not a reasonable cause under section 80 – [2016]  23 (Ahmedabad – CESTAT)

CST & VAT

SECTION 8 OF KERALA VALUE ADDED TAX ACT, 2003

TAX INCIDENCE AND LEVY – COMPOUNDED TAX RATES

Where for assessment years 2005-06 and 2006-07, assessee applied for payment of tax on compounded basis at lower rate under section 8(a)(i) and in meanwhile section 8(a)(i) was amended on 28-8-2005 with effect from 1-4-2005 and assessee in order to satisfy conditions laid down in amended section 8(a)(i) applied for cancellation of its central sales registration for assessment year 2005-06 after 28-8-2005 and for assessment year 2006-07 at commencement of said year, assessee was not entitled to concessional rate of tax for assessment year 2005-06 but not for assessment year 2006-07 – [2016]  22 (Kerala)

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – INSURANCE SERVICES

Mediclaim of employees is in nature of welfare measure and is voluntary and is not taken in compliance with any statutory requirement; therefore, a provider of advertising services cannot take input service credit of mediclaim insurance premium – [2016]  26 (Ahmedabad – CESTAT)

STATUTES

CORPORATE LAWS

Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Amendment Regulations, 2016 – Amendment in Regulations 5, 6, 9, 13, 14, Schedule I & Form I and Omission of Regulation 31 – NOTIFICATION F.NO.CCI /CD /AMEND / COMB.REGL./2016, DATED 7-1-2016

Establishment of Local Office of SEBI at Jammu – NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/028, DATED 1-1-2016

Payment of Contribution by Employers by 15th of following Mont H – Removing of Grace Period of 5 Days –CIRCULAR  NO.WSU/9(1)2013 / SETTLEMENT, DATED 8-1-2016

Securities Contracts (Regulation) (Stock Exchanges and Clearing Corporations) (Amendment) Regulations, 2016 – Amendment in Regulation 2 – NOTIFICATION NO.SEBI/LAD-NRO/GN/2015-16/29, DATED 11-1-2016

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

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)

CORPORATE AND PROFESSIONAL UPDATE JANUARY 6, 2016

CORPORATE AND PROFESSIONAL UPDATE JANUARY 6, 2016

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INCOME TAX ACT

SECTION 2(15)

CHARITABLE PURPOSE

Object of general public utility : Where assessee-society was providing latest information and training to those persons who were already in relevant field of advertising communication, etc. and in such process if certain persons became super-specialists in particular field and institution was charging fee, case would not fall under proviso to section 2(15)

SECTION 37(1)

BUSINESS EXPENDITURE – ALLOWABILITY OF

Commission : Foreign export commission paid through banking channels to foreign commission agent, who sold assesse’s product in foreign countries, could not be disallowed as unverifiable

SECTION 80-IA

DEDUCTIONS – PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS

The use of non-obstante clause in section 80-IA(2A) would show that tax holiday to undertaking providing telecommunication services is in respect of “profits of eligible business” and not restricted to “profits derived from eligible business” as mentioned in section 80-IA(1)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Export of commodities to AE at the same price at which those were purchased from local market did not call for transfer pricing adjustment if transaction was made by assessee to retain the status of Star Export House

Comparables and adjustments/Comparables – Illustration Leading provider of business process outsourcing service cannot be compared to company rendering technical support services by its own

Comparables and adjustments/Adjustments – Risk adjustment : Where an assessee, a captive service provider does not assume any risk or takes lesser risk as compared to comparable company which undertakes higher risks, it is entitled to some risk adjustments

SECTION 145

METHOD OF ACCOUNTING

Rejection of accounts : Books of account were rejected, where majority of purchases were found to be not verifiable

COMPETITION ACT

SECTION 4

PROHIBITION OF ABUSE OF DOMINANT POSITION

Where OP, distributor of natural gas, invoked ‘pay for if not taken’ liability under gas sales agreement (GSA) with informant, conduct of OP was not abusive as GSA was entered into by parties after thorough negotiation

SERVICE TAX

SECTION 65(64)

MANAGEMENT, MAINTENANCE OR REPAIR SERVICE

Since there was difference of opinion between two members of Tribunal as to whether services provided by assessee engaged in exporting software consultancy, development of software, maintenance or repair of software and management consultancy in relation to ERP software implementation were taxable under head ‘management maintenance or repair’ service or ‘consulting engineers’ service and to what extent same was taxable, matter was to be referred to Third Member

SECTION 67

VALUATION OF TAXABLE SERVICES – EXCLUSIONS

Interest was excluded from ‘taxable value’ vide Explanation 1(viii) to section 67 from 10-9-2004; since insertion of said Explanation had removed an anomaly that existed earlier, it should be treated as clarificatory in nature and retrospective from 16-8-2002

CENTRAL EXCISE ACT

SECTION 3

CHARGE/LEVY

Toilet preparations containing alcohol are subject to excise duty under Medicinal and Toilet Preparations (Excise Duties) Act, 1955 and said duty is collected by States; duty cannot be demanded thereon under Central Excise Act

In case clearance by EOU to job-workers in DTA, local sale price in India cannot be regarded as ‘customs value’ under proviso to section 3(1) of Central Excise Act, 1944; value is to be determined as per customs law

SECTION 11A

RECOVERY – OF DUTY OR TAX NOT LEVIED/PAID OR SHORT-LEVIED/PAID OR ERRONEOUSLY REFUNDED

When first notice had merely raised issue of exemption, second notice raised upon new facts regarding valuation, can validly invoke extended period of limitation

CST & VAT

SECTION 8 OF CENTRAL SALES TAX ACT, 1956

RATE OF TAX – CONCESSIONAL RATE OF TAX

Where assessee, a works contractor, applied for inclusion of construction equipment, plant, machinery and tools used in process of execution of works contract in certificate of registration under Central Sales Tax Act, said items were eligible for inclusion

CENVAT CREDIT RULES

RULE 2(l)

CENVAT CREDIT – INPUT SERVICE – CAB SERVICES

Cab services utilised by a BPO company for transportation of its employees to and from work place and their homes, are eligible for input service credit

RULE 3

CENVAT CREDIT – REMOVAL OF INPUTS/CAPITAL GOODS

No cenvat reversal can be demanded on exchange of inputs with associate/related companies, as demand is revenue neutral; however, for infraction of procedural rule 3(5) of CENVAT Credit Rules, 2004, penalty is leviable

RULE 9

CENVAT CREDIT – DOCUMENTS ON WHICH CREDIT MAY BE TAKEN

Non-mentioning of registration number of service provider cannot be ground to deny input service credit for those services which are eligible

STATUTES

DIRECT TAX LAWS

Section 115JB, read with sections 115JA and 271(1)(c), of the Income-tax Act, 1961 – Minimum Alternate Tax – Penalty under section 271(1)(c) wherein Additions/ Disallowances made under normal provisions of the said Act but Tax levied under MAT provisions under sections 115JB /115JC, for Cases prior to Assessment Year 2016-17

Section 153C, read with section 158BD, of the Income-tax Act, 1961 – Search and Seizure – Assessment of income in case of other person – Recording of Satisfaction note under section 158BD/153C of said Act

Income-tax (Twenty Second Amendment) Rules, 2015 – Substitution of rules 114B, 114C, 114D, 114E, Form No.60, 61 and 61A xes, Tax assistant Group C posts, Recruitment Rules, 2015

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)

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 26, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 26, 2015

2

INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Business income : In absence of any material on record as to whether non-resident agents appointed by assessee rendered services abroad and they had no business connection in India, question regarding assessee’s obligation of deduction of tax at source on payment of sales commission to them was to be disposed afresh –[2015] 64  253 (Chennai – Trib.)

SECTION 10(23C)

EDUCATIONAL INSTITUTIONS

Sub-clause (iiiab): Where assessee-society running educational institutions filed its return claiming exemption under section 10(23C)(iiiab) in view of fact that Government was substantially financing and interested in management of assessee, its claim for exemption was to be allowed – [2015] 64  312 (Punjab & Haryana)

SECTION 68

CASH CREDITS

In terms of section 68, assessee is liable to disclose only source(s) from where he has himself received credit and it is not burden of assessee to show source(s) of his creditor nor is it burden of assessee to prove creditworthiness of source(s) of said sub-creditors – [2015] 64  329 (Delhi)

Donations : Where assessee claiming himself to be a Sewadar of Historic Dera, deposited donations received in name of Dera in his own bank account and, moreover, he failed to prove that any charitable activity in terms of section 2(15) was ever carried out by him, authorities below were justified in making addition to his income under section 68 in respect of donations in question – [2015] 64  311 (Punjab & Haryana)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Bright line test (BLT) is not a valid method for either determining the existence of international transaction or for the determination of ALP of such transaction – [2015] 64  328 (Delhi)

Comparables and adjustments/Adjustments-Interest : ALP of an international loan transaction, which was designated in hard currency, is to be ascertained, interest rate on rupee transactions in India is not relevant –[2015] 64  251 (Bangalore – Trib.)

Comparables and adjustments/Adjustments-Interest : In case of interest on outstanding interest from loan transactions, that was designated in hard currency, rate of interest and terms applicable in materially similar situation of delay in payment of interest to Exim Bank would apply mutatis mutandis for determining ALP –[2015] 64  251 (Bangalore – Trib.)

SECTION 92CA

TRANSFER PRICING – REFERENCE TO TPO

Where value of international transactions entered into between assessee and its AE exceeded Rs. 5 crores, Assessing Officer was required to refer matter to TPO for determining ALP – [2015] 64  252 (Madras)

SECTION 151

INCOME ESCAPING ASSESSMENT – SANCTION FOR ISSUE OF NOTICE

Recording of satisfaction : SLP dismissed against High Court’s ruling that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid – [2015] 64  313 (SC)

SECTION 153C

SEARCH AND SEIZURE – ASSESSMENT OF INCOME OF ANY OTHER PERSON

Applicability of : Even in cases where Assessing Officer of person searched and assessee who is sought to be assessed under section 153C is same, still Assessing Officer is required to record his satisfaction that assets/documents seized belong to a person (assessee) other than searched person – [2015] 64 309 (Delhi)

SECTION 269UC

PURCHASE OF IMMOVABLE PROPERTY BY CENTRAL GOVERNMENT – RESTRICTIONS ON TRANSFER OF PROPERTY

Where immunity certificate issued by department under KVSS to vendor covered impugned transaction of sale of property, non-filing of form 37-I by vendor would not entitle department to launch prosecution under sections 269UC and 276AB against her – [2015] 64  254 (Madras)

SECTION 271(1)(c)

PENALTY – FOR CONCEALMENT OF INCOME

Recording of satisfaction : Before levying penalty under section 271(1)(c), it is incumbent upon Assessing Officer to state whether penalty was being levied for concealment of income or for furnishing of inaccurate particulars of income – [2015] 64  155 (Kolkata – Trib.)

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where evidences showed that exhibition of Tamil and Malayalam films to Informant theatre were denied at behest of OP association representing film theatres in Kerala and OP held position of strength in film industry in Kerala, conduct of OP was anti-competitive and penalty was to be imposed on it – [2015] 64  207 (CCI)

PML ACT

SECTION 45

SPECIAL COURTS – OFFENCES TO BE COGNIZABLE AND NON-BAILABLE

Where applicant was arrested for schedule offence of fraudulent remittance of foreign currency and he failed to prove money received by him was not crime money, bail could not be granted to him during period of investigation – [2015] 64  249 (Gujarat)

SERVICE TAX

SECTION 78

PENALTY – FOR EVASION OF DUTY/TAX

For computing reduced penalty of 25 per cent in section 78, ‘service tax assessed or determined under section 73(2)’ is taken, which shall include both : (a) sums paid prior to issuance of notice and appropriated in adjudication order; as well as (b) further sums confirmed as payable in adjudication order – [2015] 64 243 (Allahabad – CESTAT)

CENTRAL EXCISE ACT

SECTION 3A

CHARGE/LEVY – EXCISE DUTY BASED ON PRODUCTION CAPACITY

Since section 3A does not itself provide for levying of interest, rules 96ZO, 96ZP and 96ZQ cannot do so and none of other provisions of Act can come to aid of revenue; hence, demand for interest was set aside on merits. – [2015] 63  310 (SC)

CUSTOMS TARIFF ACT

SECTION 2

CLASSIFICATION – VIRGINIAMYCIN

Virginiamycin, a pure chemical, is classifiable as ‘Vitamin’ and cannot be classified as ‘animal feed’, as same is not imported in premix condition – [2015] 64  242 (SC)

CENTRAL EXCISE RULES

RULE 4

DUTY PAYABLE ON REMOVAL

Without giving any reason, Commissioner could not deny extension of permission to store goods without payment of duty outside factory premises, when both Range Superintendent and Division Officer found case genuine – [2015] 64  59 (Mumbai – CESTAT)

STATUTES

DIRECT TAX LAWS

Section 119 of the Income-tax Act, 1961 – Income-tax Authorities – Instructions to Subordinate Authorities – Facilitating Taxpayers’ Electronic Interface with the Department

Section 115JB of the Income-tax Act, 1961 – Minimum Alternate Tax (MAT) – Applicability of MAT on Foreign Companies for period prior To 1-4-2015 – INSTRUCTION NO.18/2015 [F.NO.153/12/2015-TPL], DATED 23-12-2015

CORPORATE LAWS

Special Deposit Scheme, 1975 – Payment of Interest for Calendar Year 2015 – CIRCULAR DGBA.GAD.NO.2023/15.01.001/2015-16, DATED 23-12-2015

Withdrawal of all old series of Banknotes issued prior to 2005

Reporting of Compliance with Indian Ownership and Control

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

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)

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 25, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 25, 2015

5INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Business income : In absence of any material on record as to whether non-resident agents appointed by assessee rendered services abroad and they had no business connection in India, question regarding assessee’s obligation of deduction of tax at source on payment of sales commission to them was to be disposed afresh –[2015] 64  253 (Chennai – Trib.)

SECTION 10(23C)

EDUCATIONAL INSTITUTIONS

Sub-clause (iiiab) : Where assessee-society running educational institutions filed its return claiming exemption under section 10(23C)(iiiab) in view of fact that Government was substantially financing and interested in management of assessee, its claim for exemption was to be allowed – [2015] 64  312 (Punjab & Haryana)

SECTION 68

CASH CREDITS

In terms of section 68, assessee is liable to disclose only source(s) from where he has himself received credit and it is not burden of assessee to show source(s) of his creditor nor is it burden of assessee to prove creditworthiness of source(s) of said sub-creditors – [2015] 64  329 (Delhi)

Donations : Where assessee claiming himself to be a Sewadar of Historic Dera, deposited donations received in name of Dera in his own bank account and, moreover, he failed to prove that any charitable activity in terms of section 2(15) was ever carried out by him, authorities below were justified in making addition to his income under section 68 in respect of donations in question – [2015] 64  311 (Punjab & Haryana)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Bright line test (BLT) is not a valid method for either determining the existence of international transaction or for the determination of ALP of such transaction – [2015] 64  328 (Delhi)

Comparables and adjustments/Adjustments-Interest : ALP of an international loan transaction, which was designated in hard currency, is to be ascertained, interest rate on rupee transactions in India is not relevant –[2015] 64  251 (Bangalore – Trib.)

Comparables and adjustments/Adjustments-Interest : In case of interest on outstanding interest from loan transactions, that was designated in hard currency, rate of interest and terms applicable in materially similar situation of delay in payment of interest to Exim Bank would apply mutatis mutandis for determining ALP –[2015] 64  251 (Bangalore – Trib.)

SECTION 92CA

TRANSFER PRICING – REFERENCE TO TPO

Where value of international transactions entered into between assessee and its AE exceeded Rs. 5 crores, Assessing Officer was required to refer matter to TPO for determining ALP – [2015] 64  252 (Madras)

SECTION 151

INCOME ESCAPING ASSESSMENT – SANCTION FOR ISSUE OF NOTICE

Recording of satisfaction : SLP dismissed against High Court’s ruling that where Joint Commissioner recorded satisfaction in mechanical manner and without application of mind to accord sanction for issuing notice under section 148, reopening of assessment was invalid – [2015] 64  313 (SC)

SECTION 153C

SEARCH AND SEIZURE – ASSESSMENT OF INCOME OF ANY OTHER PERSON

Applicability of : Even in cases where Assessing Officer of person searched and assessee who is sought to be assessed under section 153C is same, still Assessing Officer is required to record his satisfaction that assets/documents seized belong to a person (assessee) other than searched person – [2015] 64 309 (Delhi)

SECTION 269UC

PURCHASE OF IMMOVABLE PROPERTY BY CENTRAL GOVERNMENT – RESTRICTIONS ON TRANSFER OF PROPERTY

Where immunity certificate issued by department under KVSS to vendor covered impugned transaction of sale of property, non-filing of form 37-I by vendor would not entitle department to launch prosecution under sections 269UC and 276AB against her – [2015] 64  254 (Madras)

SECTION 271(1)(c)

PENALTY – FOR CONCEALMENT OF INCOME

Recording of satisfaction : Before levying penalty under section 271(1)(c), it is incumbent upon Assessing Officer to state whether penalty was being levied for concealment of income or for furnishing of inaccurate particulars of income – [2015] 64  155 (Kolkata – Trib.)

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where evidences showed that exhibition of Tamil and Malayalam films to Informant theatre were denied at behest of OP association representing film theatres in Kerala and OP held position of strength in film industry in Kerala, conduct of OP was anti-competitive and penalty was to be imposed on it – [2015] 64  207 (CCI)

PML ACT

SECTION 45

SPECIAL COURTS – OFFENCES TO BE COGNIZABLE AND NON-BAILABLE

Where applicant was arrested for schedule offence of fraudulent remittance of foreign currency and he failed to prove money received by him was not crime money, bail could not be granted to him during period of investigation – [2015] 64  249 (Gujarat)

SERVICE TAX

SECTION 78

PENALTY – FOR EVASION OF DUTY/TAX

For computing reduced penalty of 25 per cent in section 78, ‘service tax assessed or determined under section 73(2)’ is taken, which shall include both : (a) sums paid prior to issuance of notice and appropriated in adjudication order; as well as (b) further sums confirmed as payable in adjudication order – [2015] 64 243 (Allahabad – CESTAT)

CENTRAL EXCISE ACT

SECTION 3A

CHARGE/LEVY – EXCISE DUTY BASED ON PRODUCTION CAPACITY

Since section 3A does not itself provide for levying of interest, rules 96ZO, 96ZP and 96ZQ cannot do so and none of other provisions of Act can come to aid of revenue; hence, demand for interest was set aside on merits. – [2015] 63  310 (SC)

CUSTOMS TARIFF ACT

SECTION 2

CLASSIFICATION – VIRGINIAMYCIN

Virginiamycin, a pure chemical, is classifiable as ‘Vitamin’ and cannot be classified as ‘animal feed’, as same is not imported in premix condition – [2015] 64  242 (SC)

CENTRAL EXCISE RULES

RULE 4

DUTY PAYABLE ON REMOVAL

Without giving any reason, Commissioner could not deny extension of permission to store goods without payment of duty outside factory premises, when both Range Superintendent and Division Officer found case genuine

STATUTES

DIRECT TAX LAWS

Section 119 of the Income-tax Act, 1961 – Income-tax Authorities – Instructions to Subordinate Authorities – Facilitating Taxpayers’ Electronic Interface with the Department 

Section 115JB of the Income-tax Act, 1961 – Minimum Alternate Tax (MAT) – Applicability of MAT on Foreign Companies for period prior To 1-4-2015 5

CORPORATE LAWS

Special Deposit Scheme, 1975 – Payment of Interest for Calendar Year 2015

Withdrawal of all old series of Banknotes issued prior to 2005

Reporting of Compliance with Indian Ownership and Control

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

           

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)

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 24, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 24, 2015

7

INCOME TAX ACT

SECTION 4

INCOME – CHARGEABLE AS

Capital receipt : In case of issue of FCCB, increase or decrease in liability on account of fluctuation in foreign exchange as on date of balance sheet would be on capital account and, therefore, any gain or loss is not taxable – [2015] 64  256 (Bangalore – Trib.)

SECTION 14A

EXPENDITURE INCURRED IN RELATION TO INCOME NOT INCLUDIBLE IN TOTAL INCOME

Variable ‘A’ prescribed in the formula in Rule 8D(2)(ii) (to make disallowance in case of common interest expenditure) would exclude both interest attributable to tax exempt income as well as taxable income. – [2015] 64  340 (Delhi)

SECTION 35D

PRELIMINARY EXPENSES

Deduction : Shares acquired cannot be treated as land or building, plant or machinery etc., but only as ‘cost of project’ for purpose of allowing deduction under section 35D – [2015] 64  256 (Bangalore – Trib.)

SECTION 68

CASH CREDITS

Deposits : Where Assessing Officer received information from Enforcement Directorate that in books of assessee there were huge cash deposits which were not explained, he could not reopen assessment on basis of said information alone without even examining as to whether amount in question was reflected in return filed by assessee  – [2015] 64  257 (Delhi)

SECTION 80-IA

DEDUCTIONS – PROFITS AND GAINS FROM INFRASTRUCTURE UNDERTAKINGS

Power generation : Benefit under section 80-IA cannot be denied to assessee, merely because power generated by its power undertaking was consumed at home or by other business of assessee and was not sold to outsiders – [2015] 64  214 (Calcutta)

COMPETITION ACT

SECTION 3

PROHIBITION OF AGREEMENTS – ANTI-COMPETITIVE AGREEMENTS

Where a drug manufacturer had unilaterally and voluntarily stopped supply of drugs to informant distributor for a short span of time due to business exigencies it could not be said that it was in contravention of provisions of section 3 – [2015] 64  250 (CCI)

CENTRAL EXCISE ACT

SECTION 3

CHARGE/LEVY – EXCISE DUTY ON DTA CLEARANCES BY 100 PER CENT EOU

For computing excise duty equal to customs duty on DTA clearances by EOU, CVD component of notional customs duty would be taken as Nil, if excise duty in India is exempt on ‘no-cenvat condition’ – [2015] 64 247 (Allahabad – CESTAT)

SECTION 4

VALUATION UNDER CENTRAL EXCISE – TRANSACTION VALUE – EXCLUSION OF COST OF TRANSPORT/TRANSIT INSURANCE

There is no provision in excise law to deny benefit of exclusion of ‘freight beyond place of removal’ merely because same is not shown separately in excise invoice; hence, freight is not includible in value even if not shown separately in invoice – [2015] 64  248 (Allahabad – CESTAT)

SECTION 35C

APPEALS – ORDERS OF – APPELLATE TRIBUNAL

Where Tribunal held assessee’s contentions to be correct without assigning any reasons and, without even recording revenue’s contentions, dismissed revenue’s appeals, said order was liable to be set aside and matter remanded back for consideration afresh – [2015] 64  245 (Karnataka)

STATUTES

CORPORATE LAWS

Section 4 of the Special Economic Zones Act, 2005 – Hindalco Industries Ltd.

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

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)

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 22, 2015

CORPORATE AND PROFESSIONAL UPDATE DECEMBER 22, 2015

18INCOME TAX ACT

SECTION 9

INCOME – DEEMED TO ACCRUE OR ARISE IN INDIA

Interest : Where assessee-company paid interest on FCCBs issued by it to bond-holders outside India, said income squarely fell under exclusion clause of sub-section (1)(v)(b) of section 9, and, consequently, it could not fall within ambit of section 5(2) – [2015] 64  114 (Ahmedabad)

SECTION 10(10D)

INSURANCE POLICY, SUM RECEIVED UNDER

Keyman Insurance Policy : Stipulations in IRDA circulars have no role to play in deciding whether premium on insurance policies paid are covered by scope of ‘keyman insurance policy’ under section 10(10D) – [2015] 64 139 (Amritsar – Trib.)

SECTION 28(i)

BUSINESS INCOME – YEAR IN WHICH TAXABLE

Advances : Where assessee-contractor was regularly showing mobilization advance received against contracts in subsequent assessment year against bills raised in that year on completion of work and revenue had not raised any objection to such treatment, mobilisation advance received in relevant year could not be treated as revenue receipt of relevant year – [2015] 63  335 (Gujarat)

SECTION 45

CAPITAL GAINS – CHARGEABLE AS

Business income v. capital gain – Share dealing : Where assessee maintained two separate accounts in respect of its dealing in mutual funds and shares, i.e., one in respect of its trading and other in respect of its investment, and there were no allegations of shifting of scrips from trading to investment or vice versa, assessee’s claim of capital gain on sale of shares held as investment was to be allowed – [2015] 64 137 (Bombay)

SECTION 68

CASH CREDIT

Gift : Where assessee did not have any close relation with alleged donors and no cogent material had been brought on record to prove their financial capacity, gifts received by assessee in his capital account could not be treated as genuine and would be added to his income under section 68 – [2015] 64  180 (Gujarat)

SECTION 80HHC

DEDUCTION – EXPORTERS

Reassessment : Where assessee claimed deduction under section 80HHC on ‘service income’ on which Assessing Officer had applied his mind at time of assessment, subsequent judgment of Apex Court would not give Assessing Officer jurisdiction to reopen assessment – [2015] 64  181 (Punjab & Haryana)

SECTION 92C

TRANSFER PRICING – COMPUTATION OF ARM’S LENGTH PRICE

Comparables and adjustments/Comparables – Illustrations : Where assessee, engaged in manufacturing cassia gum powder, rendered marketing support services to its AE, company involved in high end niche market segment of financial contents and company which outsourced its ITES to third party vendors, could not be accepted as valid comparables while determining ALP – [2015] 64  135 (Ahmedabad – Trib.)

SECTION 147

INCOME ESCAPING ASSESSMENT – NON-DISCLOSURE OF PRIMARY FACTS

Information from external source : In absence of any details available on record, Assessing Officer could not initiate assessment proceedings merely on basis of information supplied by DGIT (Inv.) that assessee had made certain bogus purchases and, to said extent, income had escaped assessment – [2015] 64  179 (Gujarat.)

SECTION 153A

SEARCH AND SEIZURE – ASSESSMENT IN CASE OF

Scope of : In case of assessment made on assessee consequent to search in another case, Assessing Officer is bound to issue notice under section 153C and thereafter proceed to assess income under section 153A and if Assessing Officer had proceeded with reassessment under section 147/148 and passed assessment order under section 143(3), same would be illegal, arbitrary and without any jurisdiction – [2015] 64  159 (Visakhapatnam – Trib.)

SECTION 199

DEDUCTION OF TAX AT SOURCE – CREDIT FOR TAX DEDUCTED

Mobilisation advance : Where TDS was deducted from mobilisation advance paid to assessee-erection contractor, credit of same was to be allowed, even if no income was assessable to tax as contract was not fully executed in relevant year – [2015] 63  334 (Hyderabad – Trib.)

SECTION 222

COLLECTION OF TAX AT SOURCE – CERTIFICATE PROCEEDINGS

Auction : There is no requirement of giving opportunity of hearing to Judgment Debtor before valuation of property to be auctioned is made and its reserve price is fixed – [2015] 64  133 (Madhya Pradesh)

SECTION 234E

FEE – FOR DEFAULT IN FURNISHING STATEMENT

Intimation under section 200A : Fees under section 234E in respect of defaults in furnishing TDS statements could not be levied in course of intimation under section 200A – [2015] 63  333 (Amritsar – Trib.)

COMPETITION ACT

SECTION 4

PROHIBITION OF ABUSE OF DOMINANT POSITION

Where disputes between complainant-distributor and respondent -supplier were purely contractual in nature, allegations made by complainant in context of discontinuance of distributorship could not be treated as unfair trade practice as defined under section 36A of MRTP Act – [2015] 64  154 (CAT – New Delhi)

CONSTITUTION OF INDIA

ARTICLE 226

WRIT PETITION – SCOPE OF

Right to fair hearing and right to defence is a guaranteed right; hence, for said purpose, department must supply documents demanded by assessee, even if said documents are not relied upon in show-cause notice – [2015] 64 97 (Madras)

CENTRAL EXCISE ACT

SECTION 4

VALUATION UNDER CENTRAL EXCISE – TRANSACTION VALUE – RELATED PERSON

In case of related parties, value is determined based on sale price of buyers for same period during which goods were sold by assessee to related buyers; hence, in valuing sales for 2004-05, sale price of buyers during 2001-02 cannot be taken – [2015] 64  163 (SC)

SECTION 5A

EXEMPTIONS – CENTRAL EXCISE – DRUG FORMULATIONS

Exemption to ‘formulations’ manufactured out of ‘streptomycin’ does not mean that ‘formulations’ cannot contain any other ‘drug’; therefore, Strepto Penicillin Injection containing ‘streptomycin’ as well as ‘penicillin’ is exempt –[2015] 64  170 (SC)

SECTION 21

ARRESTS – PROCEDURE, DISPOSAL AND INQUIRY

If major shareholder of company is found actively involved in evasion of duty by company by unaccounted sales and purchases, his arrest and proceedings for confiscation and penalty against him, are valid – [2015] 64 103 (Bombay)

CST & VAT

SECTION 4 OF RAJASTHAN SALES TAX ACT, 1994

CLASSIFICATION OF GOODS – ASAFOETIDA (HING)

Where on packet of asafoetida (hing) being sold by assessee, it was printed ‘Ram Deo Super Compounded Asafoetida Ingredients: Edible Gum, Wheat Flour 30 per cent aprox’, said item would fall under Entry No. 82 of Act and was liable to tax at 4 per cent – [2015] 64  173 (Rajasthan)

CENVAT CREDIT RULES

RULE 3

CENVAT CREDIT – GENERAL

Central Excise duty equivalent to Cenvat Credit availed by original manufacturer on capital goods could not be demanded from purchaser on its sale when purchaser did not take benefit of Cenvat credit on it – [2015] 64 129 (Mumbai – CESTAT)

STATUTES

CORPORATE LAWS

Consultation paper on additional disclosure norms for retail/public issuance of Additional Tier 1 (AT1) instruments issued by banks – PRESS RELEASE, DATED 18-12-2015

Consultation paper on guidelines for public issue of units of Infrastructure Investment Trusts – PRESS RELEASE, DATED 18-12-2015

Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Compensation, Rehabilitation and Resettlement and Development Plan) Rules, 2015 – NOTIFICATION NO. GSR 985(E) [F.NO.13011/01/2015-LRD], DATED 18-12-2015

Debts Recovery Appellate Tribunal, Delhi (Court Master) Recruitment Rules, 2015 – NOTIFICATION NO. GSR 957(E) [F.NO.5/3/2015-DRT], DATED 11-12-2015

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